Numeric Citation Issue of Concern Description of Concern - AICPA

Numeric

Citation

Issue of

Concern

Description of Concern

0.000.000 Editorial

Suggestion

Modernized the Preface especially to accommodate

for members in business and part 3 members

0.100, .400.38 and

many other places

"practice of

public

accounting."

There are about a half dozen states that still use the

term "practice of public accounting" or "practice of

public accountancy" in their statutes. While this term

is no longer used in the UAA, it is still used in a very

general way in some states. Is it possible for the

AICPA to use a variation of the terms seen in the

IESBA Code of Ethics for Professional Accountants:

"Member in Public Practice" rather than the current

term "Member in the Practice of Public Accountancy."

This will require a change in the definitions of a

"firm" and "practice of public accountancy" but the

IESBA Code provides a clear roadmap for how to do

this. Such a change would be very helpful for some

state boards of accountancy.

0.100.000 Name of Topic The title of this topic is inconsistent between the

Preliminary Codificaiton Framework and the Draft

Content. Recommend the title in the Preliminary

Codification Framework be revised to read

"Strucuture of the Code of Professional Conduct".

0.100.000 Structure of

Code

Rename this title "Structure and Content of the Code of

Professional Conduct". Add a subheader called "Principles

and Rules of Conduct" to the top of the item and move .01 -

.04 of 0.200 here.


Code

I think that the first paragraph of the extant Code

provides a better introduction. Explaining the

structure is helpful but should go after the section on

applicability, rules and interpretations and

compliance.

0.100.01 Other The first paragraph of the Preface seems to be

repetitive, it should be condensed. I would propose

the following:

The Code of Professional Conduct of the American

Institute of Certified Public Accountants (AICPA Code)

consists of this preface, which applies to all members.

The term member, when used in part 1 of the AICPA

Code, applies to and means a member in the practice

of public accounting; when used in part 2 of the AICPA

Code, applies to and means a member in business;

and when used in part 3 of the AICPA Code, applies to

and means all other members.

0.100.02 Editorial

Suggestion

And apply the more restrictive provisions? This

wording is too loose; embellish on this statement.

What should members do once they consult all

applicable parts of the Code?

0.100.03 Editorial

Suggestion

Suggest some editorial revisions to the words and

that the full ET reference either be included or ET be

defined.

0.100.04 Cross

References

There should be a hyperlink for “Definitions”

0.100.04 Editorial

Suggestion

Suggest we add an example when a defined term

does not appear in italics.

0.100.05 Editorial

Suggestion

Suggest some editorial revisions to the words.

0.200.000 Editorial

suggestion

Rename this title "Application of the AICPA Code".

0.200.01 Editorial

Suggestion

Delete prior reference: Introduction since same as .02

0.200.01 Other "The principles provide the framework for the rules

that govern the performance of professional services

by members ." Does the use of "professional services"

this adequately cover members in business and

industry, educators, and other members?

0.200.01 OtherIf the Preface applies to all members, references such

as this, to professional services (as currently defined),

will not scope in all members bound by the Code.

0.200.02 Other Suggest the phrase "as with all standards in an open

society" be deleted.

0.200.02 Other The phrase "as with all standards in an open society" -

is this needed? Can it be modernized? Sounds like the

cold war.


Code

The paragraph on compliance doesn't fit well into this

section could it be included in an introduction or

under a separate heading?

0.200.03 Editorial

Suggestion

Switch the order of .03 and .04. Suggest the PCAOB be

added. Run on sentence…we had to read this several

times to be clear on the meaning. Here and

throughout the codified Code, an effort should be

made to avoid lengthy, complex paragraphs and run-

on sentences as they detract from the reader's ability

to comprehend the meaning of the guidance.

Consideration should be given to breaking up these

paragraphs and sentences into shorter sentences. We

have revised a few of these paragraphs/sentences in

the Code to demonstrate.

0.200.03 Editorial

Suggestion

Delete prior reference: Introduction since same as .04

0.200.03 Other Is the wording of this paragraph sufficiently

comprehensive? (e.g. DOL, GAO, or other

international organization? Paragraph on other

guidance belongs after the paragraph on

interpretations based on the heading.

0.200.04 Editorial

Suggestion

PEEC should be written since first occurrence of its

name

0.200.04 Editorial

Suggestion

Not sure if last sentence is necessary regarding

1/12/1988 date

0.200.04 Editorial

Suggestion

Is the last sentence still necessary and if so, is PEEC

the appropriate senior committee or is there another

senior committee that can revise the Code? If there

isn't, is there a reason why PEEC isn't used instead of

the general phrase "appropriate senior committee"?

0.200.05 Editorial

Suggestion

Paragraphs .06–.10 that follow were initially adopted

on January 12, 1988, and subsequently revised on XX

XX, 2013.

0.200.05 Editorial

Suggestion

Suggested editorial revisions.

0.200.06 Editorial

Suggestion

Don't members have to adhear to the principles and

interpretations and not just the rules?

0.200.07 Editorial

Suggestion

What is the term "section" referring to? Paragraphs .05 to

.10? Topic 0.200? Or all of Part 0? It's not clear. This should

be aligned with the standard language used in the Code to

refer to parts, topics, subtopics, etc. Also, suggest some

editorial revisions.

0.200.08 Editorial

Suggestion

Last word should be changed from herein to therein.

0.200.08 Other Is the term "professional services" broad enough to

scope in all category of members?

0.200.08 Other Does the definition of "professional services" include

members in industry?

0.200.08 b Editorial

Suggestion

Do not have link to Compliance with Standards and

Accounting Principles rules - not sure how to handle

since it goes to 2 sections?

0.200.08 c & d Editorial

Suggestion

After the term "ethics" add in "and independence

requirements" to be consistent with the phrase as it is

used later in the paragrah.

0.300.00 Other The Principles of Professional Conduct should be

reviewed to make sure that it appropriately covers

members in business.

0.300.010 Other The term "responsibilities to the public" is vague.

CPAs have a responsibility to certain users of the

financial statements, but not "the public." Logically,

"the public" is simply a collection of persons and a

collection cannot have a single, defined "public

interest."

0.300.020 Other Both terms add nothing to the paragraph. However

they do detract from the message of professionalism

by implying that, regardless of the profession's best

efforts, the "confidence" of the "public" can trump

good work, and that if the whole "collective" doesn't

pull together the CPE profession is somehow

diminished.

0.300.020.01 Editorial

Suggestion

Sugeest "sensitive professional judgments" be deleted since they don't know what it means.

0.300.020.02 Other The phase "improve the art of accounting" as well as

other lanugage in topic 0.300 seems to lean heavily

towards members in the practice of public

accounting.

0.300.030 Other Terms such as "the public interest," "public trust,"

"serving the public," etc. are not definable and thus

are invalid concepts. This acts as a detriment to the

profession and expands the scope of CPA

responsibilities well beyond logic and reason. The

adherence to professional standards and objective

reality gives rise to certain specific responsibilities to

"non-clients." Vague terms such as "collective well-

being" and "faith the public reposes" are open-ended

and imply that the responsibility of the CPA is not only

essentially unlimited in scope but undefinable. Well-

being applies only to individuals and it is not a

collective concept. Further, the profession's

excellence is based on rigorous standards and quality

performance; whether one person or another has

"faith" in the profession is totally irrelevant.

0.300.040 Other I have read many of the sections of the Ethics

Principles in the past and the new revised format

highlights the key elements which puts the reader on

better notice. The example I would cite would be to

Integrity 0-300-040.03 and .04. Each of the elements

were contained in the prior Code, they now are

highlighted in the current presentation. This same

comment applies throughout my reading of the

Revised Code.

0.300.040 Other Since the public trust cannot be defined it cannot

derive from anything. Integrity is the consistent

application of philosophical principles so the

principles must be valid. Since the public trust cannot

be defined, personal gain has no relation to this

invalid concept. The concepts of "right" and "just"

imply a standard, but the standard is not defined

here.

0.300.050 Other The term "public responsibility" should be replaced

with a reference to specific non-clients. Responsibility

is a term applicable only to individuals. Therefore, a

CPA has no "responsibility" to "the public" as an

undifferentiated mass since the nature of this

"responsibility" cannot be determined rationally.

0.300.050.01 &.04 Editorial

Suggestion

This language should be conformed to be consistent

with the Conceptual Framework - i.e., independence

of mind, in appearance. Also, to be consistent with

other areas in the Code should just use the phrase

"attestion standards" instead of "auditing and other

attestation standards".

0.300.050.03 &.04

&.05

Editorial

Suggestion

Shouldn't the term "member in public accounting" and

other such references, be to members in the practice of

public accounting, as defined?


Suggestion

They suggest a number of editorial revisions in this

paragrah from identifying what kinds of members (e.g.,

members in business v. public practice) and replacing audit

with attest and gaap with all relevent professional

standards.

0.300.060 Other The term "responsibility to the public" should be

replaced with a reference to specific non-clients.

0.300.060.02 Other As noted above, at times, this section seems to focus

heavily on members in the practice of public accounting,

probably a function of when it was written. Are PEEC and

staff sure that the language throughout appropriately

reflects the requirements that other members are obligated

to comply with?


Suggestion

Remove the term "personal".

0.300.070 Other There is no "public interest principle" that can be

defined rationally. The real issue is that professional

services should be performed in accordance with the

professional standards; this stands on its own without

reference to invalid concepts.


Suggestion

Change to "member in the practice of public

accounting".


Suggestion

Suggest edit and suggest the last sentence "No hard-

and-fast rules can be developed to help members

reach these judgments, but they must be satisfied

that they are meeting the spirit of the principles in

this regard" be deleted since it is inconsistent with

101-3.

0.300.070.04 b Editorial

Suggestion

Suggest revision to this bullet "determine, in their

individual judgments, whether the scope and nature

of other services provided to an attest audit client

would create a conflict of interest impair

independence in the performance of the attest audit

function for that client" becuase it is not in line with

101-3.

0.400.000 Other The "public interest," "public trust," etc., are not

listed in the Definitions section. Since these terms

cannot be defined, none of them should be used as if

they had a specific meaning anywhere in the Code.

0.400.01 Other Should there be a mention here about derivations? For

example, member's, client's, etc. will be called out just as

member and client will. Also, change 2012 to 201x. Also,

The placement of this guidance seems to suggest that this a

matter of great importance to members…but, is it? Perhaps

this is better placed at the end of 0.400? . In our comment

below, we were referring to the use of possessive nouns

(e.g., client's), rather than the proposed wording (e.g.,

decision of the client), and explaining at the beginning of

Topic 400 that, for purposes of the codification, derivations

carry the same meaning as the original defined term (e.g.,

client). Using derivations would, in our view, help to make

the codified language less wordy and cumbersome.

0.400.02 Cross

References

The link for “financial statement attest client” is not

functioning properly.

0.400.02 j Editorial

Suggestion

Replace "and they are" with "which is".

0.400.03 Editorial

Suggestion

Believe the definition of attest client should be

reconsidered because no other independence rule set

requires independence of the engaging party. If it

stays, recommends the "or" be replaced with "and, if

different, the person or entity".

0.400.04 Definitions The SSARS considers compilations to be attest

engagements irrespective of whether or not the

accountant's independence is impaired. Can the

definition be modified to address this inconsistency

between the two sets of standards? For example :

An attest engagement is an engagement that requires

independence, as defined in the professional

standards of the AICPA, or in the case of a compilation

performed by an accountant who is not independent,

requires disclosure in the accountant's report of that

fact.

0.400.04 Definitions Attest - Can we provide a definition of attest rather

than a general reference to where the definition can

be found? It is not clear where a comprehensive

definition of attest can be found. The UAA has a

definition but I know that that will hopefully chang to

incorporate the new SOC reporting.

0.400.04 Editorial

Suggestion

Recommend the phrase "defined in the professional

standards of the AICPA" be replaced with "set forth in

the AICPA Statements on Auditing Standards,

Statements on Standards for Accounting and Review

Services, and Statements on Standards for Attestation

Engagements (AICPA, Professional Standards AU, AR,

AT)"

0.400.06 Definitions The meaning of Beneficially owned has changed:

Prior reference states that “A financial interest is

beneficially owned when an individual or entity is not

the record owner of the interest…”

New reference states that “A financial interest is

beneficially owned when an individual or entity,

regardless of whether it is the record owner of the

interest…”

0.400.07 Definitions Item a. in the definition of client is unclear. Because

entities engaged in the practice of public accounting

are excluded from the term employer which is in turn

excluded from status as a client, it appears to follow

that members employed by CPA firms or

governmental audit entities should be considering

their employers to be clients. I am not certain that is

what was anticipated or that that interpretation

would work as it pertains to independence.NY's

definition of client is: "A client is any person or entity

that directly engages a member or a member’s firm to

perform professional services, or a person or entity

with respect to which professional services are

performed, other than the member’s employer,

student or the public." Their code can be found at

http://www.nysscpa.org/prof_library/codeconduct.pd

f

0.400.07 Definitions They recommend the phrase "or a" be replaced by

"and if different the" . Also recommend the term

"paragraph" be replaced by "definition". Also, with

respect to the item a. recommend this item apply not

just to entities engaged in the practice of public

accounting but persons as well.

0.400.10 Definitions Suggest edits to the defintion.

0.400.16 Definitions If the definition of an attest engagement is modified

as suggested above, this definition can be modified to

eliminate "when the member's compilation report

does not disclose a lack of independence." The

service should define whether or not a client is an

attest client, not the fact as to whether or not the

accountant is independent.

0.400.18 Definitions The use of the word “Firm” throughout the Code is

not clear. Does the word Firm mean Client Firm?

Does the word Firm mean Industry Employer Firm?

Does the word Firm mean Any Company? I would

like to see the word Firm have meaning specifically to

CPA firms, and I would like to see industry employers

and other companies like staffing firms and non-CPA

consulting firms included as separate definitions. At

the very minimum I would like to see incorporated a

single paragraph definition of exactly what “Firm”

means with all of its different meanings. It is

confusing to CPAs and the public in the single use of

the word “Firm” to mean CPA Firm, Industry

Employer, Staffing Firm, nonCPA Consulting Firm.

0.400.18 editorial

suggestion

.01 I believe it would be helpful and better

understood. if shown as plural, although technically

there is one Rule. Firm. A firm is a form of

organization permitted by law or regulation whose

characteristics conform to resolutions of the Council

of the AICPA and that is engaged in the practice of

public accounting . A firm includes the individual

partners thereof, except for purposes of applying the

Independence rule. For purposes of applying the

Independence rules, a firm includes a network firm

when the engagement is either a financial statement

audit or review engagement, and the audit or review

report is not restricted, as defined by professional

standards. [Prior reference: paragraph .11 of ET

section 92]

0.400.18 Editorial

Suggestion

Suggest that the phrase "as defined by professional

standards" be replaced by "as set forth in the AICPA

Statements on Auditing Standards and Statements on

Standards for Accounting and Review Services (AICPA,

Professional Standards AU, AR)"

0.400.19 & .400.39 definition of

professional

services and

definition of

holding out

The definition of professional services includes all

services performed by a member while holding out as

a CPA. Many members in large firms perform services

of licensed CPAs, but do not use CPA on their cards

and do not indicate that they are CPAs other than

they have a CPA license. Is it clear a member is

performing professional services and holding out by

the act of holding a CPA license even if they hold out

in no other way?

0.400.24 Editorial

Suggestion

Suggest this definition be removed since the term

only appears once.

0.400.26 Definitions Suggest the definiton be moved out of the definition

section and into 1.270.020.01 since the term only

appears in this interpreation.

0.400.27 Editorial

Suggestion

Given the rise of SSAE engagements, particularly the

relocation of SAS 70 to SSAE 16, the phrase "the

subject matter of the attest engagement" is very

useful. Consideration should be given to employing

this phrase in other parts of the Code (e.g.,

Interpretation 101-3 - Subtopic 1.295), rather than

solely relying on "audit-centric" language.

0.400.30 Definitions Suggest the phrase "the term" be added to the

defintion.

0.400.31 Editorial

Suggestion

Suggest a(n) be used so that the "a" and "an" can be

eliminated before each term.

0.400.34 Editorial

Suggestion

This is true in a number of situations, not just with

respect to financial institutions and broker-dealers.

The statement could therefore be misleading. As the

Code already addresses this concern, globally, in

0.200.03, we suggest that this paragraph be deleted.

0.400.36 and

1.810.020.01

Definition of

partner

The defintion of partner on p. 31 includs proprietors

and shareholders who may not be parties to a

partnership agreement, whereas only members who

are parties to a firm's partnership agreement should

hold temselves out as partners on page 153. Are

these two definitions consistent with each other? Do

they need examples for clarity?

0.400.38 Definitions The definition of the practice of public accounting is

much broader in NY and would pull in individuals that

the AICPA Code would not consider to be in the

practice of public accounting. Because of the differing

uses of the term, it is particularly important that the

AICPA code definition of the practice of public

accounting be very clear. I believe the current

language is difficult to interpret because the definition

refers to work performed for a client, and the

definition of client appears to include a CPA firm

within the term client with regard to the members it

employs. Moreover, there seems to be some

circularity in that the definition of the practice of

public accounting refers to work performed for a

client and the definition of a client refers to entities

engaged in the practice of public accounting. Their

definition can be found at:

http://www.op.nysed.gov/prof/cpa/part70.htm#defi

0.400.38 Language The paragraph refers to "litigation support services",

but the professsional literature has migrated to the

more expansive definition of "forensic accounting".

The current use of "litigation support services" is no

longer supported by the underlying structure of the

AICPA (the Forensic and Valuation Services Executive

Committee) nor by the literature that is being

disseminated by that group.

0.400.40 editorial

suggestion

I believe we should add "applicable" before

"authoritative regulatory bodies" in item (c), so that it

is understood need to pay attention if only applies to

engagement in particular.

0.400.40 Editorial

Suggestion

Public Interest Entity - prior reference should be ET

section 100-1 not 101-1

0.400.41 Definitions Safeguards - Safeguards do not necessarily eliminate a

threat or reduce a threat to an acceptable level. It

depends on the nature of the threat and the

effectiveness of the safeguard. I think that the

definition should be reworked, or you could just

remove the words "to an acceptable level".

0.400.41 Editorial

Suggestion

Safeguards - prior reference should be ET section 100-

1 not 101-1

0.400.44 Editorial

Suggestion

Source Documents - prior reference should be ET

section 101 not 101-1

0.500.01 Editorial

Suggestion

Suggest some editorial changes.

0.500.02 Editorial

Suggestion

Suggest some editorial changes.

0.600.010 bullet 18 Editorial

Suggestion

Suggest wording change.

0.600.010 bullets 1,

2 and 18

Editorial

Suggestion

Suggest wording changes to the titles of the

interpretations.


Suggestion

Suggest the first paragrah be presented before

0.600.010 as a lead in.

0.600.020 Editorial

Suggestion

Suggest wording change.

0.700.01 Editorial

Suggestion

Suggest the term "standards" be replaced by

"interpreretations".

1.000.000 Editorial

Suggestion

My concern (also shared by my colleagues at GAO) is

without specifically referring to members in

government, we do not recognize what part of the

restructured code we fall into. As you mention in the

cover letter for the pilot testers, there are three parts

divided by the member’s practice. Part 1 is applicable

to members in the practice of public accounting. I can

argue that GAO, Federal IGs, and many state and local

governments are very similar to public accounting in

what they do, but we are also employees of the

government. Part 2 is applicable to members in

business. Some may argue that CPAs that are in

internal audit functions or are in financial

management functions in the government may be in

Part 2. Part 3 is applicable to all other members such

as those who are retired or unemployed. A literal

reading of this criteria would place all CPAs in

government under part 3. This is not logical since I

think there should be government members that fall

under the other 2 parts. Without explanation of the

applicable part to the range of members in

government, the codification is difficult to apply to

these members. Since I also serve on GPAC, I need to

point out that about 12,000 members are employed

in government. Without a clear guidance on which

part of the codification applies to these members, it is

very difficult to use.

1.000.01 Editorial

Suggestion

Change the term "member" in the first sentence to

"members".

1.000.01 Editorial

Suggestion

Introduction of Part I - do not think we want to list

discussion as .01 b/c it might be confusing with

Conceptual Framework which is 1.000.010

1.000.01 Members in

government

I think the codification could provide more examples

of members in government and when members in

government would fall under "members in public

practice (my term)" vs. members in business. Existing

interpretations just need more examples so that it is

clear to members in governement, particularly for

members who work for eleted governmental

auditors.

1.000.01 Other The intro paragraph to Part 1 identifies members in

the practice of public accounting as the people to

whom the Part 1 applies. Many government auditors

perform work that this part would apply to but they

are not "in the practice of public accounting" in

accordance with the definition (0.400.38): "The

practice of public accounting consists of the

performance for a client by a member or member’s

firm, while holding out as a CPA or CPAs, the

professional services of accounting, tax, personal

financial planning, litigation support services, and

those professional services for which standards are

promulgated by bodies designated by Council."

1.000.01 Other I'm not sure where the best place is to address this is

but I'm unclear as to the applicablity of the Code to

auditors performing GAAS audits but are not

members - a description that fits many government

auditors. AU-C 200 indicates that "The auditor should

comply with relevant ethical requirements relating to

financial statement audit engagements" and

references par. .A15–.A20, which in turn says that

"The auditor is subject to relevant ethical

requirements relating to financial statement audit

engagements. Ethical requirements consist of the

AICPA Code of Professional Conduct together with

rules of state boards of accountancy and applicable

regulatory agencies that are more restrictive." Does

that mean that the Code is incorporated into the SAS

by reference for everyone, not just members? And if

it is, does that mean that non-members can disregard

the code because it only applies to "members" and

still audit in accordance with the SAS?

1.000.010 Conceptual

Framework

After reading the information here that appears to be

properly located in the guidance, I am not sure the

guidance needs to be repeated on page 54 in section

1.210.010 addressing the conceptual framework and

the listing of threats and safeguards. This just appears

to be redundant.

1.000.010 Editorial

Suggestion

Should we not include in this section that the member

needs to document their analysis if they use the

conceptual framework?

1.000.010.04/.05 Editorial

Suggestion

Why not include these definitions in 0.400

(Definitions), as with the term "Safeguards" below, as

these terms are used throughout the Code?


Suggestion

Threats. Relationships or circumstances that could

compromise a member’s compliance with the rules.


Suggestion

Suggest the term "perform" replace the term "apply"

in this sentence "Members should apply three main

steps in applying the conceptual framework

approach":


Suggestion

Bold font for headings:

a. Identify threats

b. Evaluate the significance of a threat

c. Identify and apply safeguards

1.000.010.10 Conceptual

Framework

In paragraph 10 of page 41, it might be useful to add

something to address a member or firm actively

promoting client products or services. For example, if

CPA firm has attest client that develops software and

the CPAs within the CPA firm ask their other clients to

consider using that particular software or if CPA firm

has an attest client that owns/operates several auto

dealerships and the CPAs within the CPA firm ask their

other clients to consider using those dealerships for

leasing automobiles.


Suggestion

Consistency in writing style of examples for instance b

- "a firm acts…" but c - A firm underwriting…."

Throughout section but this is just one example


Suggestion

Why address independence threats here if Topic

1.200 has its own Conceptual Framework? It will only

confuse matters for members to comingle the

discussion of ethics and independence threats. Given

the existence of a Conceptual Framework devoted

exclusively to independence matters, shouldn't this

framework focus on the threats to compliance with

the other ethics rules of the Code and the appropriate

safeguards to apply?

1.000.010.10 Language The paragraph refers to "litigation support services",

but the professsional literature has migrated to the

more expansive definition of "forensic accounting".

The current use of "litigation support services" is no

longer supported by the underlying structure of the

AICPA (the Forensic and Valuation Services Executive

Committee) nor by the literature that is being

disseminated by that group. The term litigation

support is no longer the apporpriate reference to this

area of practice

1.000.010.10 Structure of

Code

Conceptual Framework Approach - Advocacy threat -

Includes consideration of independence. Since there

is a separate conceptual framework for independence

is this needed here?

1.000.010.12, .13,

.14, .20a & b, .21f,

22h, m,n, r,s,v and

y.

Conceptual

Framework

Do you want to include an example of an

independence threat in the broad concepual

framework?

1.000.010.14 Other Self review threat is proposed to include a" member’s

immediate family or close relative" and "d. The

member’s immediate family is employed by, or

associated with, the client in a key position. " I don’t

see work that my spouse performs as a self-review

threat but rather a familiarity threat. This doesn't

seem to belong here and looks like a change from the

extant and I didn’t agree with it.

1.000.010.19 Drafting

Convention

This sentence is redundant - "In addition, threats may

be sufficiently mitigated through the application of

other safeguards not specifically identified

herein."….PwC suggests that a period replace the

semicolon and the "t" be capatalized.

1.000.010.21 editorial

suggestion

A governance structure, such as an active audit

committee,that is desinged to ensure appropriate

decision making, oversight, and communications

regarding a firm's services.


suggestion

Awkward sentence structure.

1.000.010.22 y Conceptual

Framework

In the listing, why wouldn't item 'y' apply to any

member of the attest engagement team?


Suggestion

Eliminate the phrase "or legal standards, or both."

The law is not a "standard," since standards can only

be established rationally and objectively and not

politically. Also, placing a requirement for CPAs to

adhere to "legal standards" presumes CPAs should be

experts in the law.

1.000.020.02 c. Drafting

Convention

Reference to "internal procedures" is not clear.

1.000.020.02/.03 Editorial

Suggestion

The accountancy boards require compliance with the

professional standards, not expertise in "rules and

law." There are other references in this section that

refer to potential legal issues without using the "legal

standards" phrase or implying expertise in the law.

1.000.020.04 OtherIs this reference to another "organization that employs the

member" relevant in Part 1 of the Code? If it relevant, why?

Perhaps it would be worth explaining here.

1.000.020.06 Drafting

Convention

"will in all likelihood be a violation of one or more

rules" - Not sure that this is true. Can we rephrase

this? Change to "may"? In the example in paragrahp

.01, if the member doesn't report the fraud, no

violation has occurred.

1.110.010.01 Drafting

Convention

First 2 sentences are akward.


Suggestion

Integrity & Objectivity Rule not linked to rule


Suggestion Suggest the term "has a relatinship with" be replaced by "is

associated with" and replace "relationship" with

"association". Also, note that the phrase "the client or

other appropriate parties may view as impairing the

member’s objectivity" Vs. the "reasonable and informed

third party" standard established in the definition of

"acceptable level" in 1.000.010.04. Threats to objectivity

are supposed to be measured against what a reasonable

and informed third party with knowledge of all the relevant

information would view as acceptable or not acceptable.

1.110.010.01b Editorial

Suggestion

Change "who" to "that".

1.110.010.01l Editorial

Suggestion

Suggest that the term "entity" be changed to

"company" to be consistent with item 1.110.01001k

1.110.020 editorial

suggestion

I believe you should state, director of an entity, such

as a bank….

1.110.020 editorial

suggestion

I believe the extant ER 85 was more informative, and

understandable as to why the rulings contained the

conclusions about not accepting a bank director

position, since such a position puts individuals is

questionable situations dealing with the public, which

is not necessarily true with dealing in any directors

position. I think the concept is lost with a change to

"director".

1.110.020.01 Terminology Reference is made to "fiduciary duties" but it is not a

defined term in the Code. Have you considered

incorporating a definition? I am very much aware

that it is a legal concept, but it may provide the

member some awareness by making it a defined term

in the Code.


Suggestion

Suggest the phrase "the term" be added after the

phrase "For purposes of this interpretation,"


Suggestion

Do not have link to Integrity and Objectivity rule

1.130.010 Name of

Interpretation

Title - Can we remove the word "knowing"?


suggestion

Can we add a colon after "knowingly"?


Suggestion

A member would have knowingly misrepresented

facts be in violation of the Integrity and Objectivity

rule if the member knowingly

1.130.020.01 Drafting

Convention

a - c - Do not seem like safeguards as the first

paragraph indicate'

1.130.020.01 Drafting

Convention

a. Change reference to generic reference and add

reference to QC standards (which cover more than

just audits).


Suggestion

I think the last paragraph should be labeled d.


Suggestion

Consistent with the comment above about the

categories of threats, the safeguards identified in the

conceptual framework seem to align better with

independence than in this context. If the conceptual

framework is intended to be used throughout the

entire Code of Conduct, threats and safeguards that

are context-specific may need to be developed in

order for members to apply the framework

consistently. This seems to be the only

interpretation that is analyzed in this document that

attempts to apply the threats and safeguards

approach. Why is that, as only having it in one place

might be confusing as to which safeguards apply - if

no specific safeguards are identified in other

interpretations, and the general safeguards are more

independence-oriented, then are members to

conclude there no safeguards attached to these other

interpretations?


Suggestion

Step 4 of the extant (Interpretation 102-4) requires

that "The member should at all times be cognizant of

his or her obligations under interpretation 102-3 [ET

section 102.04]." Interpretation 102-3 addresses

"Obligations of a member to his or her employer's

external accountant" and, accordingly, its omission

from the proposed interpretation, which applies to

members in public practice, is appropriate.


Suggestion

The major difference between the proposed

interpretation and the extant (interpretation 102-4) is

the characterization of certain "steps" in the extant as

"safeguards" in the proposed; however, referring to

these matters as "steps" seems clearer than (and

therefore preferable to) referring to them as

"safeguards." Furthermore, the meaning of the

reference in par. 01 to "self-interest, familiarity and

undue influence threats" is not clear.

1.130.020.01 Other Should this be broadened to include a member not

subordinating his/her judgment to the client? This

would make sense and can be easily incorporated

(e.g. When a member and his or her supervisor or

client have a disagreement...

1.130.020.01 a Editorial

Suggestion

The member should refer to the consider guidance in

AU

1.130.020.01a Cross

References

A comment is hung on the phrase "what the auditor

should do" that says "Interpretation 1.130.010.01

suggests that a member is preparing, or assisting in

the preparation of a financial statement. This

language introduces the notion of the member also

being the auditor. That being the case, shouldn't there

be a cross reference somewhere to Subtopic 1.295

(i.e., Interpretation 101-3)?"


Suggestion



Suggestion

Suggest that "tax and consulting" be replaced by

"nonattest".

1.140.010.02 Drafting

Convention

The paragraphs throughout the draft that include

references to the Code of Professional Conduct are a

bit circular and it is not clear what value they add.


Suggestion

Suggest the phrase "Code of Professional Conduct" be

replaced by the defined phrase "AICPA Code."

1.200.000 Other The independence interpretations are not logically

consistent with the conceptual framework for

evaluating independence. The independence

interpretations are essentially political "rules"

whereas the logical and consistent application of the

conceptual framework in some cases would lead to an

interpretation different from an "official" AICPA

independence interpretation. This is the same

problem as the "legal standards" issue vs. the

"professional standards." In effect, this section says

to act rationally (apply the conceptual framework)

unless there is an AICPA interpretation covering the

situation, and if so just follow the rule regardless of its

applicability to the particular situation between the

firm and the client. I would reverse the priority of the

conceptual framework and interpretations and note

that AICPA interpretations provide guidance in certain

situations unless a better, more rational result is

obtained by using the conceptual framework. I

respect a rational, objectively supported explanation

for a particular situation (i.e., "professional

judgment") more than the fact that at some time in

the past a majority of committee members voted in

favor of a particular rule.

1.200.001 Editorial

Suggestion

Suggest that instead of saying "standards

promulgated by bodies" that we cite those standards.


Suggestion"in violation of the Independence Rule Vs.

"independence would be impaired" elsewhere in

Topic 200. This is not consistent with the

standard language, although it is much clearer

(the more commonly used verbiage in the

codified Code sounds, unfortunately, too much

like techno-speak that is not helpful to the

uninitiated). In any case, whatever standard

language is ultimately landed upon, it should be

used consistently throughout the Code,

especially in Topic 200. Currently, we find there

to be a lack of consistency in the verbiage that

the Code uses to express the notion that

independence is impaired (or, conversely, that it

is not impaired).


Suggestion

Is "significant threat" a defined term? Should it be?

What does it mean vs. a threat at an acceptable level?

It is not a term used in the Conceptual Framework of

the current Code. Perhaps the codified Code should

use the standard "acceptable level" language to

discuss threats - i.e., a threat that is not at an

acceptable level.

1.210.010 Other Agree with placement for definitions, terms for conceptual framework application for independence

1.210.010.01 Drafting

Convention

The last sentence is confusing as it appears to

reference to itself. Maybe it just needs to be

reworded.


Suggestion

"When making that evaluation, a member should

apply this interpretation that describes a the threats

and safeguards approach as outlined in this

interpretation to analyzing independence matters."


Suggestion

Add prior reference: "Other Considerations" section

of paragraph .02 of ET section 101


Suggestion

delete the words, "In addition" and just start the

sentence with "A". Changed the last word from

"developed" to "based".


Suggestion

In certain circumstances,There are circumstances in

which the AICPA Code specifies that no safeguards

can reduce an independence threat to an acceptable

level, and as such, this interpretation should may not

be used to overcome a prohibition or requirement

specifically contained in an independence

interpretation. For example, a covered member may

not own even an immaterial direct financial interest in

an attest client because there is no safeguard to

reduce the self-interest threat to an acceptable level.


Suggestion

add to the last sentence of the paragraph "under the

applicable interpretation".

1.210.010.02 Drafting

Convention

1st sentence - remove reference to the AICPA Code.


Suggestion

For purposes of clarity, it might be helpful to the

reader to state "the obvious" here; that is, that the

member cannot therefore perform an attest service

(i.e., audit, review, attestation).

1.210.010.05 Drafting

Convention

Threats - Can we move the last 2 sentences to the end

of 1.210.010.05? "Threats might not involve violations

of existing interpretations or rulings. For example, the

circumstance described in paragraph .15(b) of this

framework is permissible in limited instances under

current independence interpretations."


Suggestion

"and the effectiveness of those safeguards as

described in paragraph .20". - Note Paragraph .20

does not describe the safeguards, it describes

determining the effectiveness of them.


Suggestion

Suggest changing the wording to "of the safeguards

applied (as described in paragraph .20 of this

interpretation)


Suggestion

The use of these terms (acceptable level, impair &

threats) is not limited to the Conceptual Framework,

but appear throughout the Code. Therefore, because

of the broader applicability, they should be included

in 0.400 (Definitions).

1.210.010.05 Other Threats- I believe this paragraph needs to be

simplified, especially since it involves general

concepts. Also, because of the extensive content of

the document, I don't think it is advisable to refer to

other paragraphs for additional understanding of the

content. It is frustrating to the reader/user. "Threats

might not involve violations of existing interpretations

or rulings" is confusing. Are you trying to say, "not all

threats result in a impairment to independence"?


Suggestion

I think you should prior reference: "Other

Considerations" section of paragraph .02 of ET

section 101


Suggestion

should read …considered a violation of the

Compliance with Standards rule (ET reference) not the

Independence rule (no ET reference needed)


Suggestion

Suggest changing the wording to ".08 When the

member applies safeguards to eliminates or reduces

significant threats to an acceptable level through the

application of safeguards, as described in paragraph

.06(c) of the Conceptual Framework for Members in

the Practice of Public Accounting, the member should

document the identified threats and the safeguards

that are applied. A fFailure to prepare the required

documentation would be considered a violation of the

Compliance With Standards rule (AICPA, Professional

Standards, ET 1.310.001), not the Independence rule

(AICPA, Professional Standards, ET 1.200.001),

provided that the member can demonstrate that

safeguards were applied that eliminated or reduced

significant threats to an acceptable level.


suggestion

Perhaps add: "not a threat to independence" to

emphasize that failure to document does not result in

a violation of the independene standard.


Code

The reference to .06c of the Conceptual Framework

for Members in the Practice of Public Accounting is

confusing as there is separate guidance for threats

and safeguards in the independence sections

(1.210.010.09-.21). Having the threats and safeguards

for members in public accounting is confusing.


Suggestion

Do not have link to Conceptual Framework for

Independence interpretation


Suggestion

Add ":" after For example

1.210.010.12 c Editorial

Suggestion

Suggest adding the word "other" before public forum

and delete the a


Suggestion

Add ":" after For example


Suggestion

Comment related to the phrase "nonattest services

performed, or services previously performed or

supervised by the member" - How are "nonattest

service performed" and "service previously

performed…by the member" different? What

different services are these two clauses intended to

address?


suggestion

Suggest adding words "objectively" after? Not",and

before "evaluate "instead of appropriately.

1.210.010.16 Other Self-review threat - member's immediate family or

close relative? I think that this belongs under

familiarity.

1.210.010.18 ediorial

comment

suggest removing " counteract" replace with

"ameliorate" or "diminish", or "neutralize"


Suggestion No punctuation in these bullets, and in many

similar paragraphs throughout the Code. Others,

however, like paragraph .19 above, include

punctuation. Appropriate punctuation should be

added here and throughout the Code.


Suggestion

If the safeguards identified apply with respect to

independence, then what safeguards are applicable

for threats to compliance with the non-independence

rules of the Code? For example, what safeguards are

there for threats to compliance with the guidance in

Topic 1.300? As noted before, it will only confuse

matters for the Code to comingle the discussion of

ethics and independence threats. Given the existence

of this Conceptual Framework devoted exclusively to

independence matters, shouldn't the broad

framework focus on the threats to compliance with

the other ethics rules of the Code and the appropriate

safeguards to apply?


Suggestion

Related to the Prior Reference ET Section 100-1: The

remainder of the discussion from paragraph 20 of the

Conceptual Framework in the current Code around

safeguards implemented by the attest client and the

firm has been omitted here.


Suggestion

change the ";" to a "."

1.220.010.03 Drafting

Convention

Sentence wording is off - "Members of the association

should consistently apply.." This doesn't mean the

same thing as the "members of the association should

apply the interpretation in the same manner." They

could be consistently different.


Suggestion

may be created by another network firm's interests in

and relationships with the attest client.


Suggestion

related to the start of the 2nd sentence: Odd

transition from what a network firm has to do in the

first sentence to what a covered member has to do in

the second sentence. Why the difference? All of a

sudden, the guidance moves from requirements of

the network firm to requirements of the covered

member.


Suggestion

Add , after the word members (occurs twice)


Suggestion

Same comment as above. No appropriate punctuation

in these bullets.


Suggestion

Same comment as above. No appropriate punctuation

in these bullets.

1.220.020 Other This interpretation/subtopic is complex and difficult

to follow and might benefit from a "Plain English"

revision as a long term project.


Suggestion

All such structures must be organized in a form that

complies with applicable laws, regulations, and the

Form of Organization and Name rule


Suggestion

The following terms are defined subsequently solely

for the purpose of applyinguse with this

interpretation


Suggestion

Related to the term "professional services": Is this

the correct term here? Is this intended to mean

nonattest services?


Suggestion

Related to the word "subsequently" - Can the specific

citation be provided?


Suggestion

I think the word related is missing…in this

interpretation are related to the example, ….


Suggestion

I think that the defining of (the professional services

subsidiary [PSS] should be moved to after subsidiaries

or divisions earlier in the sentences. It is too

confusing after the examples of nonattest

professional services


Suggestion

Move the word "to clients" after nonattest

professional services instead of before it. Also related

to "professional services" - Is this term

necessary/correct here?


Suggestion

Here and throughout Topic 200: This language is

cumbersome, too wordy, and redundant.

Independence is impaired because, by definition,

threats are not at an acceptable level. Does this need

to be so wordy? Also, as noted before, it sounds too

much like techno-speak that is not helpful to the

uninitiated reader.


Suggestion

In addition, independence would be impaired because

threats cannot be eliminatedare not at an acceptable

level and could not be or reduced to an acceptable

level


suggestion

is there a definition for "materiality"?


Suggestion

Suggest that 1st sentence is long, run-on sentence.

Also question whether the phase "comtemplated by"

should be prohibited by


Suggestion

Independence would be impaired because threats

are not at an acceptable level and could not be

reduced to an acceptable level by the application of

safeguards when Newfirm and its partners and

professional employees may not perform attest

engagements for PublicCo or any of its subsidiaries or

divisions.


Suggestion

Related to PwC's rewrite in 1.220.020.12 - Isn't this

the new standard language being used to denote an

outright prohibition? Again, there should be

consistency throughout the Code.


Suggestion

Related to the phase "would be considered to be

impaired" - Hasn't the Code moved away from this

language (although it is much clearer and direct than

the standard language being proposed to replace it)?


Suggestion

Related to the phase "would be impaired" - Hasn't the

Code moved away from this language (although it is

much clearer and direct than the standard language

being proposed to replace it)?


Suggestion

Add the words "with respect" after the word

applicable

1.224.010.02a Editorial

Suggestion

Add the word "covered" before member's

independence


Suggestion



1.224.010.02c Editorial

Suggestion

Extend the hyperlink to include the word

"interpretation"


Suggestion

under (c)-(j) of the definition of affiliate, would put

the employeeis in a key position

1.224.010.02d Editorial

Suggestion

A covered member’s immediate family members and

close relatives may be employed in a key position at

an entity described under (c)–(j) of the definition of

affiliate if provided they are not in a key position with

respect to the financial statement attest client.


Suggestion

Comment related to the phrase "apply to

engagements performed for a financial statement

attest client" - The more precise wording would be to

refer to "engagements," as the Code is not binding on

the client itself.

1.224.020 Editorial

Suggestion

Add to the title "Entities Included in"

1.224.020 Name of

Section

It seems like the title here ought to refer to

independence matters when we are performing attest

engagements for state and local government entities

in that the financial statements themselves would not

be the issue in the Code.


Suggestion

Change reference from Paragraph .04 to Paragraph

.05


SuggestionAgain, no punctuation in these bullets.


Suggestion

Entities that should be disclosed or actually are

disclosed in the financial statement notes? How

would the covered member know what entities

should be disclosed, but aren't?


Suggestion

Delete , and add .


Suggestion

When a covered member isdoes not auditing the

primary government but is auditsing the financial

statements of the following entities, the covered

member is not required to be independent of

entities that the covered member does not audit:


Suggestion

Add ";" between entity and or

1.226.000 Editorial

Suggestion

We're not sure how this title relates to the content of

the subtopic. Is there a need for this title? It makes

this very difficult guidance to locate because the

interpretation/subtopic does not truly address the

concept of "engagement period," in its purest form,

but rather "post-engagement" period and residual

auditor responsibilities. Simply use the title of

1.226.010, as with 1.150.

1.226.000 Question 1 TIC suggests changing the title “Engagement Period”

(Page 68 of Draft Codification) to “Reissued Reports.”

TIC believes “Reissued Reports” is more descriptive of

the section content and would be more intuitive for

members. When questions arise concerning

previously issued reports, TIC members would not

readily or intuitively think to look for guidance under

a section entitled “engagement period.”

1.226.010 Editorial

Suggestion

Resigning or Consenting to the Use of athe Previously

Issued Report


Suggestion

Related to phrase "was in compliance with the

Independence rule" - Vs. "was independent." It is

difficult to see how this wording improves on clarity,

understanding, etc, particularly with regard to other

rule sets (e.g., SEC), and how this will be read by the

uninitiated reader.


Suggestion

the member or member's firm may perform

procedures required by applicable professional

standards when the member's or member's firm's

independence is impaired., sSuch procedures include

as making inquiries of successor auditors, reading the

subsequent financial statements, or other procedures

that the member believes are necessary, to assess the

effect of subsequently discovered facts on the

financial statements covered by the previously issued

report when the member's or member's firm's

independence is impaired.

1.228.000 Editorial

Suggestion

Change title from "Engagement Contractual Terms" to

"Indemnification and ADR Arrangements


Suggestion

Need to add to the prior reference at the end 191


Suggestion

Add the word "a" before provision


Suggestion

Related to "compliance with the Independence rule

would not be at an acceptable level and could not be

reduced by the application of safeguards - In some

places, this language is inserted before the statement

that independence would be impaired, in other places

it isn't - e.g., APS interpretation.


Suggestion

Do not need the ET reference since it was included in

1.230.010.04


Suggestion

Recommend deleting the word "and" before

commissions


Suggestion

Might readers incorrectly conclude from this

heading/placement that Topic 1.500 has

independence implications? Also, how does the Code

address the requirements in IESBA 290.226?


Suggestion

Is it necessary to say this twice…here and in

paragraph .04? - refer to 1.230.010.04

1.240.010 Editorial

Suggestion

I think we should also prior reference paragraph .17

of ET section 101

1.240.010 Editorial

Suggestion

Overview of Direct and Indirect Financial Interests


Suggestion

General comment - The current Code says in relatively

few words what members can and cannot do; a very

user-friendly approach. Contrasting that with the

approach used in the codified Code (here and in other

topics and subtopics, but especially in Topic 1.200),

it's difficult to conclude that the new approach better

serves the end user.

1.240.010.01;

1.240.010.02;

1.240.010.03;

1.245.010.01 etc.

Cross

References

The capitilization of the cross reference

"Independence rule" is inconsistent with the subtopic

"Independence Rule". Recommend the indpendence

rule cross reference be revised to read

"Independence Rule".

1.240.030.04 Numeric

Citations

The seperation of examples into a separate subtopic

is inconsistent between 1.240.040.03/04 and

1.240.030.03. Recommend subtopic 1.240.040.03 be

combined with the examples listed in subtopic

1.240.040.04.


Suggestion

Many complex, paragraph length sentences here.


Suggestion

A colon is ommitted after the clause "For example"

which introduces a list of examples. Recommend

inserting a colon after the clause "For example".


Suggestion

Recommend adding a ":" after For Example


Suggestion

change "indirect finanical interests" to "an indirect

financial interest"


Suggestion

The capitilization of the cross reference "Plan is an

Attest Client or Is Sponsored by an Attest Client" is

inconsistent with the subtopic "Plan Is an Attest Client

or Is Sponsored by an Attest Client". Recommend

revising the word "is" with a capital "I" in "Plan is an

Attest Client or Is Sponsored by an Attest Client".


Suggestion

See the Plan is an Attest Client or Is Sponsored by an

Attest Client interpretation, and the Former

Employment or Association With an Attest Client

interpretation, and the Family Relationships With

Attest Clients interpretation of the Independence

rule (AICPA, Professional Standards, ET 1.250.010, and

1.280.100, and 1.275 respectively) and the

interpretations of the Family Relationships With

Attest Clients subtopic under the Independence rule

(AICPA, Professional Standards, ET 1.275). [Prior

reference: paragraph .17 of ET section 101]

1.240.040.07;

1.240.050.05;

1.250.010.01, a iii;

1.250.010.01, b etc.

Cross

References

When referencing a subtopic or interpretation of the

independnece rule, the wording "Independence rule"

appears without a hyperlink. Recommend capitilizing

the "R" in "Independence rule".


Suggestion

See the Client Affiliates interpretation of the

Independence rule (AICPA, Professional Standards, ET

1.224.010) and the Joint Closely-Held Investments

interpretation of the Independence rule (AICPA,

Professional Standards, ET 1.224.010 and 1.270.020

respectively) for additional guidance on the

application of the Financial Interests interpretation

financial interests with respect (AICPA, Professional

Standards, ET 1.240) to affiliates of a financial

statement attest client. [Prior reference: paragraph

.17 of ET section 101]


Suggestion

Need to add the words after interpretation link "of

the Independence rule"


Suggestion

suggests italicizing the word designation


Suggestion

Suggests changing "however, if" to "however, when",

italicizing the word serves and adding a : "safeguards

if"


Suggestion

A semicolon is ommitted after point a and after point

b but before the word "or." Recommend inserting

semicolons after points a and b.


Suggestion

suggests changing "definition" to "interpretation"

1.245.020.02 Other The opening sentence does not appear to be accurate

- "including a blind trust" seems to conflict with

paragraph .04.

1.245.020.04 Numeric

Citations

The seperation of examples into a separate subtopic

is inconsistent between 1.245.020.03/04 and

1.240.030.03. Recommend subtopic 1.245.020.03 be

combined with the examples listed in subtopic

1.245.020.04.


Suggestion

In regard to the phrase "independence with respect

to the employee benefit plan and the sponsor would

be impaired" comments the following - Vs.

"compliance with the Independence rule" language


Suggestion

suggests changing "will" to "would"

1.250.010.01 a iv Editorial

Suggestion

I think prior reference should be moved to end of

section since all topics are covered by ethics ruling


Suggestion




Suggestion

suggests adding the following after "interpretation" -

of the Independence rule (AICPA, Professional

Standards, ET 1.280.100)

1.250.020 Editorial

Suggestion

suggests changing "participate" to "participation"


Suggestion

Extend the hyperlink to include the word

"interpretation"


Suggestion




Suggestion

to reduce the familiarity, self-interest, or

management participation threats to an acceptable

level, the requirements of paragraph .02(a) - (c) of the

Subsequent Employment or Association With an

Attest Client interpretation of the Independence rule

(AICPA, Professional Standards, ET 1.280.210) must

be met in order to reduce the familiarity, self-

interest, or management participation threats to an

acceptable level,


Suggestion

suggests changing "concluded" to "concludes" and

changing "was" to "is"


Suggestion

A comma seperates point a from point b. Recommend

replacing a comma with a semicolon after point a and

after point b but before the word "or."


Suggestion

Ellen added a cross reference to 1.260.020.06 based

upon feedback in 1.260.020.06 that it was missing.


Suggestion

The reference to "ET" is ommitted prior to 1.255.010.

Recommend the AICPA Professional satndards

reference be revised to read "(AICPA, Professional

Standards, ET 1.255.010)"


Suggestion

suggests adding a ":" to the end of the sentence


Suggestion

related to "if the policy provided the covered member

with an investment option" - Why raise this point

here given the section title (Policies with No

Investment Option)? We would suggest deleting this

paragraph

1.257.020 Editorial

Suggestion

We're not sure that separating the guidance (.010 vs.

.020) works here. The normal terms, procedures and

requirements guidance (1.257.010.01 above) is

omitted from this section, but would still apply.

1.257.020.01 Other Seems to conflict with the extant - which does not

conclude that these are direct financial interests.


Suggestion

I think we should add the words after subtopic link "of



Suggestion

See the Financial Interests subtopicinterpretation of

the Independence rule (AICPA, Professional

Standards, ET 1.240) to determine whether other

investments underlying the policy's underlying

investments products are direct financial interests or

indirect financial interests


Suggestion

related to "joint closely-held investments

interpretation" - Why is this in the insurance

interpretation?


Suggestion




Suggestion

See the Joint Closely-Held Investments interpretation


Standards, ET 1.270.020) for additional guidance on

joint closely-held investments


Suggestion

related to "refer to" - Vs. apply the guidance in?

1.260.010 Editorial

Suggestion

suggests deleting "Overview of"


Suggestion

related to "in the Loans and Leases With Financial

Institutions or Credit Unions interpretation of the

Independence rule (AICPA, Professional Standards, ET

1.260.020) were met. [Prior reference: paragraph

.02(A)(4) of ET section 101]" - We suggest deleting

this language and simply following with paragraph .02

below. See next comment.


Suggestion

related to "loan with an attest client" - With vs. "to or

from"?


Suggestion

related to "were met" - Why use the past tense?

Replace with "are" or "have been"?


Suggestion

I think 1.260.010.01 & 1.260.020.01 say the same

thing and I don't see why we need both paragraphs

one right after the other

1.260.020.01 Drafting

Convention

1st sentence change "with an attest client" to "to or

from an attest client" ?


Suggestion

It seems odd to repeat the content in this paragraph

when the same thing is said in 1.260.010.01. We

suggest merging the two interpretations, deleting the

last part of the last sentence in 1.260.010.01 alogn

with 1.260.020.01 and following 1.260.010.01 with

1.260.020.02 (Whew! What a numbering system!?!?)

without creating a new subtopic.


Suggestion



1.260.020.01 Other The last sentence in this paragrah indicates that

independence would be impaired unless the

exceptions provided for in this interpreation are met.

However, the paragraphs that follow don't use the

term "excpetions" so it's not clear which paragraphs

should be consisered the exceptions.

1.260.020.02 Cross

reference

related to "material to the covered member’s net

worth" - Include a cross-reference to how materiality

to net worth ought to be measured?


Suggestion

Concerned that without saying "provided that all of

the following safeguards are met:" or including the

term "and" after a, b and c that members might not

realize that they have to apply all of the safeguards.


Suggestion

I think d. should go before b.


Suggestion

related to "safeguards are met" - Should it be

"applied" instead of "met"? Do you "meet" a

safeguard or "apply" it?


Suggestion

comment relates to above 1.260.020.03 - A

subheading to separate the lengthy narrative would

be helpful here. Similar comment below.


Suggestion

related to "would be at an acceptable level, and

independence would not be impaired" - General

comment - As noted before, this language is

redundant. If threats are at an acceptable level, then

automatically independence is not impaired.


Suggestion

suggest deleting "that is, immaterial unsecured loan"


Suggestion

This subtopic is repetative. Recommend removing

"(that is, immaterial unsecured loan)".

An additional reccomendation is replacing the

semicolons within the subtopic with commas.


Suggestion

The word "or" is repetative in the last sentence.

Recommend revising it to end with "revised collateral,

and revised or waived covenants."


Suggestion

suggests changing "an" to "the"

1.260.020.03 d Editorial

Suggestion

monthly statement, or a payment made by the due

date or within any available grace period


Suggestion

suggests changing "enters into" to "obtains"


Suggestion

related to "normal lending procedures, terms, and

requirements, and the covered member complies

with the terms of the lending or lease agreement and

keeps the required payments current at all times" -

This is awkwardly worded. We suggest reverting back

to the original language of Interpretation 101-5.


Suggestion

related to "When the covered member is a partner in

a partnership, a loan " - The Code shifts gears here a

bit. Again, a subheading would be helpful so that this

guidance doesn't get lost.


Suggestion

This paragraph seems to need some kind of context.

For example, the extant paragraph includes a

statement that "For purposes of applying the

grandfathered loans provision when the covered

member is a partner I a partnership.."

1.260.020.04 Other This paragraph in the extant seems to relate to

paragraph .02. That relationship has been lost by the

reformatting.


Suggestion

A comma seperates point a from point b. Recommend

replacing a comma with a semicolon after point a and

after point b but before the word "or."


Suggestion

This is true in a number of situations, not just with

respect to loans. The statement could therefore be

misleading. As the Code already addresses this

concern, globally, in 0.200.03, we suggest that this

paragraph be deleted.


Suggestion

Does the Code cross-reference in both directions?


Suggestion




Suggestion



Standards, ET 1.255.010 and 1.265.040 respectively)


Suggestion

suggest adding the following after "covered member" -

that was obtained from another lender and also asked

instead of "lender" - To be consistent, shouldn't this

say "financial institution" instead?


Suggestion

related to "Loans and Leases With Financial

Institutions and Credit Unions interpretation," - The

citation should be provided so that readers can

quickly locate the guidance. This should be done

throughout the Code, in all such instances.


Suggestion

related to word "met" - Vs. applied?


Suggestion




Suggestion




Suggestion



Standards, ET 1.260.020),


Suggestion

suggests changing "had a lease" to "has a lease"


Suggestion

This is such a lengthy, run-on sentence.

1.260.050 Editorial

Suggestion

Will this subtopic be deleted when Interpretation 101-

18 becomes effective? Should the Code note that

fact?


Suggestion

related to "Threats would not be at an acceptable

level and could not be reduced by the application of

safeguards, and independence would be impaired" -

Again, this is cumbersome and awkward wording. Isn't

there a simpler way of saying this, here and

throughout Topic 1.200?


Suggestion




Suggestion

suggest adding between "unless" and "permitted" -

"the lending relationship is"?


Suggestion

suggests adding after "interpretation" - of the

Independence rule (AICPA, Professional Standards,

ET 1.260.020)


Suggestion

related to "a shareholder of an entity" - 10%

significant? We wouldn't say that a self-interest threat

exists where a covered member holds a de minimus

number of shares, correct? A threat may exist?

Wouldn't the threat only exist if the covered member

has control over the entity with the loan?


Suggestion


the Integrity and Objectivity rule"


Suggestion


Integrity and Objectivity rule AICPA, Professional

Standards, ET 1.110.010)


Suggestion

suggests changing "loan from an attest client" to

"loan with an attest client"


Suggestion

Is this guidance better placed within the Conflicts of

Interest topic? It's not an independence concern.


Suggestion

suggests adding after "firm" - ", who is not otherwise

a covered member,"

1.260.050.03 Cross

References

The capitilization of the cross reference "Confidential

Client Information rule" is inconsistent with the

subtopic "Confidential Client Information Rule".

Recommend the indpendence rule cross reference be

revised to read "Confidential Client Information Rule".


Suggestion

Is this the correct placement?


Suggestion

an attest client social club (for example, a country

club, tennis club, and so on) that is an attest client,

and


Suggestion




Suggestion

suggests adding after "not be reduced" - to an

acceptable level


Suggestion


Independence rule (AICPA, Professional Standards,ET

1.280.005) - Provide the relevant Code citation, here

and throughout.


Suggestion

an attest client trade association that is an attest

client,


Suggestion

This seems incomplete. "Acceptable level" guidance

should be provided in a manner similar to

1.265.010.01 above.


Suggestion




Suggestion


acceptable level - Add this language here and

throughout (where applicable) for consistency, since

the goal is to use standard language consistently.

There are other areas in Topic 200 where the wording

used is "…could not be reduced to an acceptable

level…" - see, for example, 1.220.020.09.


Suggestion


Independence rule (AICPA, Professional Standards,ET

1.280.005) - Provide the relevant Code citation, here

and throughout.


Suggestion




Suggestion

This is the third time Subtopic 265 says this. This

subtopic should just say it once, or preferably,

consider whether it needs to say this at all, given that

the employment prohibition relates to all attest

clients, not just membership organizations.


Suggestion




Suggestion

We recommend that Conflict of Interest matters be

confined to 1.110, not interspersed throughout the

independence topic. It can be a source of confusion -

e.g., a perceived conflict with respect to an attest

client addressed by disclosure/consent, rather than

the Independence Conceptual Framework.


Suggestion

IfWhen a covered member is a member of an attest

client credit union that is an attest client,


Suggestion


acceptable level


Suggestion




Suggestion

related to "Partners and professional employees" -

Covered members are subject to additional

restrictions.

1.270.010 Editorial

Suggestion

suggests deleting "With Attest Clients"


Suggestion


acceptable level


Suggestion

Related to "familiarity" - This is a new threat not

identified in the IESBA Code with respect to business

relationships. The IESBA Code only speaks to self-

interest and intimidation threats.


Suggestion

Related to "If a member of his or her firm has a

cooperative arrangement" - Shouldn't this subtopic

begin by first defining what is meant by a cooperative

arrangement?


Suggestion

Are these really safeguards, or attributes which

indicate that a cooperative arrangement does not

exist? The existing language is much more clear.


Suggestion

Shouldn't this subtopic talk about what a cooperative

arrangement is, before saying what it isn't? We

suggest reversing the order of 1.275.010.02 and

1.275.010.03.


Suggestion

Separate agreements, correct? As in current

Interpretation 101-12?


Suggestion

related to "rights or obligations between them" -

Rights and obligations between whom? The firm and

the attest client? This language does not appear in the

original interpretation in the current Code, and

appears to conflict with 1.275.010.02(b).


Suggestion

suggests adding "that do not create rights" - Shouldn't

this guidance say

agreements/arrangements/understandings that do

not create rights or obligations between the member

and the attest client? As written, this would be a

significant change that is the reverse of the position in

the current Code. See proposed change. Or,

alternatively, delete the reference to "that create

rights or obligations between them".

1.270.010.02 a Substantive

Change -

Attest Client

I recommend the following language which retains

the original meaning of the Interpretation .02 a.

The participation of the firm and attest client are

governed by separate agreements, arrangements, or

understandings that do not create any rights or

obligations between the firm and the attest client.


Suggestion

for the other's activities or results of the other party


Suggestion

other's representative or agent of the other party.


Suggestion

of the firm's services or products of the firm with one

or more of the attest client's services or products of

the attest client and market the package with

references to both parties


Suggestion

Distribution or marketing aArrangements under which

the firm acts as a distributor or marketer of the attest

client's products or services, or the attest client acts

as the distributor or marketer of the firm's products

or services of the firm


Suggestion

Why the addition? These fee arrangements are not

unique to cooperatives, nor is this the only significant

issue -e.g., providing prohibited nonattest services

through a cooperative arrangement to another attest

client also raises independence concerns.


Code

Joint Closely-Held Investments - Move to section on

Financial Interests?


Suggestion

related to "compliance with the Independence rule" -

Similar guidance in prior interpretations, for instance,

1.270.010, does not contain this language. Whatever

standard language has been chosen, the Code should

use it throughout.


Suggestion


acceptable level


Suggestion

, and independence would be impaired, if the covered

member held a material joint closely-held

investment is material to the covered member and

held during the period of the professional

engagement. Accordingly, independence would be

impaired.


Suggestion

related to "joint closely-held investment" - There is no

need to define this term in 0.400 (Definitions) as this

is the only occurrence of the term. Therefore, define

it in this subtopic/interpretation.

1.275.000 Editorial

Suggestion

suggests deleting "With Attest Clients"


Suggestion

related to "except to the extent permitted" - This

language is imprecise. It is the covered member that

is subject to independence requirements, not the

immediate family member. Perhaps reword as "the

covered member must be satisfied…"?


Suggestion

Need to reference at end (AICPA, Professional

Standards, 1.275.030)


Suggestion

Provide relevant Code citation.


Suggestion

Vs. "Immediate Family Member"?


Suggestion




Suggestion

related to "the immediate family of a covered

member may not own more than 5 percent of an

attest client’s outstanding" - This guidance is

misleading/incorrect. It needs to be re-worded. The

prohibition in 1.240.010.03 relates to collective

ownership not exceeding 5%. Therefore, a violation

may occur even if the immediate family member

owns less than 5%.


Suggestion

related to "Financial Interests interpretation" -

Provide citation, here and throughout.


Suggestion

interests of the immediate family member's and the

covered member's interests should


Suggestion

Is this the best placement, as this guidance has

broader relevance?

1.275.020 Editorial

Suggestion

Immediate Family Member Is Employed byat the

Attest Client - Present this guidance as a subtopic of

1.275.010 to shorten the titles.


Suggestion

related to "compliance with the Independence rule" -

Same comment as above. The Code should use

standard wording throughout


Suggestion

In most other sections, when referring to 'an

immediate family member,' the passing begins by

saying so. This passage should be re-written as: "If an

immediate family member of a covered member is

employed by an attest client, but is not in a key

position, threats would be at an acceptable level and

independence would not be impaired."

Written this way, the reader can move or continue

reading whether or not the immediate family

member is in a key position.

1.275.020.02-.03 Editorial

Suggestion

The codified Code uses three times as many words as

does the current Code to say this - "An individual in

a covered member's immediate family may be

employed by an attest client in a position other than a

key position." Which wording is more clear and

user-friendly? This is the case in a number of places in

the Codification. Staff and PEEC should rethink their

approach, and opt for what is best for the reader.


Suggestion

In most other sections, when referring to 'an

immediate family member,' the passing begins by

saying so. This passage should be re-written as: "If an

immediate family member of a covered member is in

a key position with an attest client, threats would not

be at an acceptable level and could not be reduced by

the application of safeguards. Accordingly,

independence would be impaired."

Written this way, the reader can move or continue

reading whether or not the immediate family

member is in a key position.


Suggestion

Under these preexisting requirementlationships


Suggestion

existing attest client that impairs independence under

this interpretation and that


Suggestion

Should not link close relative to definition in 0.400

since redefine in paragraph .05


Suggestion

This interpretation deals only with employment, not

association.


Suggestion

related to "spouse or a dependent" - Vs. immediate

family member? Here and in 1.275.020.04(a), (b).

1.275.020.04 a i Editorial

Suggestion

suggests adding "attest" before engagement

1.275.020.04 a I 1-3 Editorial

Suggestion

suggests adding "attest" before each instance of

engagement


Suggestion

attest engagement has a position with the attest

client involving audit-sensitive activities that is an

audit-sensitive position.

1.275.020.04

paragraph a.

Drafting

Convention

This restructuring is a bit confusing.

1.275.020.04-.05 Editorial

Suggestion

I think it would make more sense to put the

definitions first so switch .04 & .05

1.275.020.04-.05 Editorial

Suggestion

I think it would make more sense to put the

definitions first so switch .04 & .05


Suggestion

suggests changing the word "relationships" to

"requirements"

1.275.020.05 a ii Editorial

Suggestion

Examples are not all inclusive, as in the original

guidance?


Suggestion

related to term "office" - This term was not defined in

the pre-2001 Code.


Suggestion

related to term "responsibility for reporting" - Not all

inclusive as in the original guidance?


Suggestion

An audit-sensitive activitiesposition is any activity or

job function are those that areis normally an element

of, or subject to, significant internal accounting

controls, such as those encompassed by, but not

limited to, positions as a cashier

1.275.030 Editorial

Suggestion

Immediate Family Member Participation in an

Employee Benefit Plan That Is an Attest Client or Is

Sponsored by an Attest Client, Other Than Certain

Share-Based Arrangements or Nonqualified Deferred

Compensation Plans


Suggestion

Lengthy, complex, run on sentence. The extensive

cross-references make the flow of reading this

paragraph difficult


Suggestion




Suggestion

[discussed in subtopics 1.275.030-.080 below the

Immediate Family Member Participation in an

Employee Benefit Plan With Financial Interests in an

Attest Client interpretation, the Immediate Family

Member Participation in Share-Based Compensation

Arrangements Resulting in Beneficial Financial

Interests in Attest Clients interpretation, and the

Immediate Family Member Participation in Share-

Based Compensation Arrangements Based Upon

Stock Appreciation interpretation]


Suggestion



1.275.040 Editorial

Suggestion

suggests deleting "Immediate Family Member

Participation in an" - If the following

subtopics/interpretations were "sub-topics" of

1.275.030, there would be no need to repeat,

continually, "IFM Participation in…." here or in the

table of contents.

1.275.040.01 Drafting

Convention

Formating related to immediate family member not

serving in a key position… not consistent with section

.050, .060, .070, .080, and .100 where it is included

under "a."


Suggestion

As above (1.275.030.01), it might be more efficient to

simply cite the subtopic/interpretation numbers


Suggestion

Same comment as above (1.275.030.01). Lengthy,

complex, run on sentence. The extensive cross-

references make the flow of reading this paragraph

difficult.


Suggestion



1.275.050 Editorial

Suggestion


Participation in an"

1.275.050 (01) Editorial

Suggestion

When first mentioning the ESOP in this section, it

would be best to clearly define what the acronym

ESOP stands for since it is the first mention in this

section. The proposed change is to add in "employee

stock option plan" prior to ESOP and put ESOP in

parentheses. For consistency purposes, this was

already done in most other sections where ESOP's are

mentioned for the first time.


Suggestion



1.275.060 Editorial

Suggestion




Suggestion



1.275.070 Editorial

Suggestion



1.275.070 (d) Editorial

Suggestion

To provide consistency with 1.275.060, this passage

should be re-written as:

d. The immediate family member exercises or forfeits

these rights once he or she is vested if the underlying

price of the employer’s shares equals or exceeds the

exercise price for 10 consecutive days (market

period). The exercise or forfeiture should occur as

soon as practicable but no later than 30 days after the

end of the market period.


Suggestion



1.275.080 Editorial

Suggestion




Suggestion



1.275.100.02-.03 Editorial

Suggestion

Is there any way to highlight something…I had to read

the current code before realizing .02(b) said or and

.03(b) said and


Suggestion

an existing attest client that impair independence

under this interpretation and that existed as of

November 2001 will not be deemed to impair

independence, provided that such relationships were

permitted under the preexisting requirements of the

Independence rule and its interpretations. [Prior

reference: paragraph .02 of ET section 101] Under

these preexisting requirementlationships,


Suggestion

suggests changing "Grandfathered Close Relative

Relationships" to "Grandfathered Employment

Relationships" - See comments in 1.275.020.04/.05


Suggestion

Is this correct? This guidance comes from the pre-

2001 rules (Interpretation 101-9), but was not linked

to employment relationships.


Suggestion

suggests changing "relationships" to "requirements"


Suggestion

related to "during the period covered by the financial

statements" - Given that "attest," as defined by the

Code, includes non-financial statement assurance

engagements (e.g., SSAE 16), should PEEC consider

expanding references to f/s (here and throughout the

Code) to include other assertions upon which a

member may opine - e.g., during the period covered

by the subject matter of the attest engagement?

Perhaps a "global" statement to that effect can be

included somewhere in the Code? In the definition of

"financial statements" perhaps?


Suggestion

related to "member's firm" - Necessary? It is not in

the current Code. Employment wouldn't apply,

neither would most of the capacities cited above.


Suggestion




Suggestion

related to "Former Employment or Association With

an Attest Client interpretation" - Provide Code

citation


Suggestion

its activities to those of a charitable, religious, or civic

matters, (or those of a similar nature),


Suggestion

he or shethe member

1.280.015.03 Substantive

Change - Not

Identified

New content?

1.280.020 Substantive

Change - Not

Identified

Governmental Advisory Unit - now expanded from

audits to attest? Is this substantive? It is ok with me

but should it be highlighted?


Suggestion

This passage appears to be very long and reads better

as two distinct sentences. It should be re-written as

follows:

.01 A member’s service on a citizens’ advisory

committee that is studying possible changes in the

form of a county government that is an attest client

of the member’s firm would not impair the member’s

or member’s firm’s independence. Also, a member’s

service on an advisory committee appointed to study

the financial status of the state in which the county is

located would not impair the member’s or member’s

firm’s independence with respect to the county.

1.280.025 Editorial

Suggestion

Combine with the guidance in 1.280.020? It is a

similar subject matter.

1.280.025.01 Other Should this indicate that all of the conditions in a - c

should be met (provided that all)?

1.280.030.01 Other In this section I believe we can omit the words

'management participation.' This section is specifically

referring to the threat to the member's compliance

and mentioning the 'management participation' does

not seem necessary.


Suggestion



1.280.035 Editorial

Suggestion

Shouldn't this be part of the guidance in 1.280.015?

Similar subject matter.

1.280.035.02 Drafting

Convention

Wording is off - try this - "If the directorship is other

than honorary, the threat would not be at an

acceptable level and could not be reduced by the

application of safeguards.


Suggestion

The previous paragraph notwithstanding, this

sentence reads as an incomplete thought. We suggest

these edits, or otherwise combining paragraphs .01

and .02 - When a member becomes a partner or

professional employee ofwith a firm, that provides

attest services to an entity where the member was

formerly employed or otherwise associated,

familiarity, self-interest, self-review, or management

participation threats to the member’s compliance

with the Independence rule may exist.


Suggestion




Suggestion

related to term "member" - Don't define for this

purpose


Suggestion

This language only addresses attest engagement team

members.


Suggestion

related to "an individual" - Some readers may

interpret this too broadly … (as defined above)?


Suggestion



1.280.210.02 c ii Editorial

Suggestion

related to "such as secretarial and telephone services"

- This seems outdated. Perhaps change to

"administrative and technology services"?

1.285.010 (05 - f) Other The prior code includes customers and vendors also. I

was not sure if they were intentionally left out of the

new code.

1.285.010 (05 - g) Other The prior code includes customers, vendors, and the

member's firm or employer also. I was not sure if

they were intentionally left out of the new code.


Suggestion

The prior code refers to the equities as 'equity

securities.' Perhaps regarding these equities and

equity securities would be appropriate as it was done

this way in the past.


Suggestion

attest client or and individuals


Suggestion

suggests changing "a member on the attest

engagement team" to "a member of the attest

engagement team"


Suggestion

This section refers to gift's and their insignificance to

the recipient however, I believe that it make's sense

to refer to whether or not 'the value' of that gift is

insignificant to the recipient. The passage should be

re-written as follows: If a member’s firm, a member

on the attest engagement team, or an individual in a

position to influence the attest engagement accepts a

gift from an attest client and the value is not clearly

insignificant to the recipient, the threat to the

member’s compliance with the Independence rule

would not be at an acceptable level and could not be

reduced by the application of safeguards.


Suggestion

All clients, or nonattest clients?


Suggestion

.01 The relationship between an attest client’s

management and a covered member must be

characterized by complete candor and full disclosure

regarding all aspects of the attest client ’s business

operations. In addition, the covered member must

not be biased, so that the covered member can

exercise professional judgment and objectivity in

evaluating management’s financial reporting

decisions.

1.290.010.02 Other paragraph refers to the independence rule - the

extant also refers to objectivity.


Change -

Attest Client

I recommend the following language to clarify this

paragraph and link it to what follows .03

Litigation or the expressed intention to commence

litigation between a covered member and an attest

client or its management and, in some cases, other

parties requires the covered member to assess the

materiality of the litigation to the covered member ,

covered member ’s firm , or the attest client , which

should include an evaluation of the nature of the

matter(s) underlying the litigation and all other

relevant factors.


Suggestion

Related to "Litigation Between the Attest Client and

Member" - Subheadings such as these are helpful to

the reader. Consider using these more often

throughout the Code.


Suggestion



1.295.000 Other Like the reconfiguration of ET 101-3 on nonattest

services. It flows well.


Suggestion

related to "Activities Related to Attest Services" - The

placement of this guidance upfront seems odd given

that subtopic 295 focuses on nonattest services. The

IESBA Code incorporates this discussion in the section

on bookkeeping services (290.169).


Suggestion

more restrictive than the provisions of the

interpretations

1.295.010.05 Is this now saying that an independence impairment

arising out of SEC rules constitutes an impairment

under AICPA independence rules, as well as a

violation under Interpretation 501-5? Why? Will this

change be highlighted in the exposure draft?

1.295.020 Name of

Interpretation

The title of this interpretation is inconsistent between

the Preliminary Codificaiton Framework and the Draft

Content. Recommend the title in the Preliminary

Codification Framework be revised to read

"Cummulative Effect on Independence When

Providing Nonattest services".


Suggestion

If a member were to performs an activity that is a

management function, the management participation

threat would be so significant that no safeguards

could reduce the threat to an acceptable level.

Examples of some general activities that would be

considered management functions and therefore

impair independence areinclude:

1.295.030.01 e Editorial

Suggestion

determining which of the member's

recommendations of the memberattest client should

be implemented.

1.295.030.01 h Editorial

Suggestion

are built into the entity's normal recurring activities

of an entity;. tThese activities

1.295.040 .01 b Editorial

Suggestion

However, the individual is not required to possess the

expertise to perform or re-perform the services.


Suggestion

Independence rule may exists - Appropriate change?


Suggestion

Should this language be reworded in accordance with

the IESBA Code, paragraph 290.166? I.e., "To avoid

the risk of assuming a management responsibility, the

firm shall be satisfied…"

1.295.040.01 As a general comment, perhaps PEEC and staff may

want to consider modeling (here and throughout the

Code) its wording after the IESBA Code language,

which is clearer.


Suggestion

Include a cross-reference to 1.295.030, which covers

management functions?


Suggestion

Do not have link to Documentation Requirement or

Management Functions interpretations


Suggestion

The way in which this sentence has been structured

makes the guidance unclear. It is not evident at first

reading what the last clause applies to. See suggested

revisions. This guidance would be much clearer if

broken up into two sentences. - A fFailure to prepare

the required documentation does not impair

independence, provided that the member

established the understanding with the attest client.

butHowever, it would be considered a violation of the

Compliance With Standards rule, provided that the

member did establish the understanding with the

attest client.


Suggestion

related to "General Requirements for Performing

Nonattest Services interpretation" - Include a cross-

reference here to 295.040?


Suggestion




Suggestion




Suggestion



reference here to 295.040?


Suggestion

This paragraph would likely be clearer if it were

broken up into bullets addressing the various

requirements: the member complies with the General

Requirements interpretation, and the client accepts

responsibility for the service, etc, etc.


Suggestion

when using the same assumptions and information

are used in performing the valuation.


Suggestion

suggest adding the word "solely" after "valuation, or

actuarial services"


Suggestion

related to "such as appraisal, valuation, and actuarial

services performed for tax planning or tax

compliance, estate and gift taxation, and divorce

proceedings" - Is the list of examples of services for

non-financial statement purposes meant to be an all

inclusive list? (i.e., are the three examples provided

the only instances that PEEC has determined to be for

non-financial statement purposes?) Can this be

clarified in some way?

1.295.110 What is the difference between the advisory services

and business risk consulting services? Do they really

address two different types of non-attest services?

Perhaps these two subtopics can be combined.

1.295.110 If the different services are intended to be addressed

alphabetically, then subtopic 295.110 ought to come

before subtopic 295.105.


Suggestion

Related to "routine activities" - We were surprised to

see the comparison to routine activities, which are

not considered nonattest services. We would suggest

ending the sentence after "extensive advisory services

for an attest client".


Suggestion

Examples of routine activities performed by a

member, such asinclude providing advice and

responding


Suggestion




Suggestion

Applies the general requirements vs. "meeting" the

general requirements in 295.105.03. Which is the

appropriate term? The Code should be consistent


Suggestion



reference here to 1.295.040?


Suggestion

Isn't this already covered by the General

Requirements interpretation (295.040)? Why repeat

this notion here and not for other services?


Suggestion

related to "Management Functions interpretation" -

Include a cross-reference here to 295.030?


Suggestion




Suggestion

Notwithstanding the conclusions reached in

paragraph .03 of this interpretation, a member

should comply with the more restrictive

independence provisions required byof the Employee

Retirement Income Security Act (ERISA) of 1974 and

DOL regulations must be followed when performing a

member audits of an employee benefit plans that is

subject to those regulations


Suggestion

This is an odd way to phrase this clause of the

introduction. Independence would not be impaired if

the member performs the activities described in

bullets (a) through (e) - whether the attest client

engages the member is almost irrelevant. The focus

ought to be on what the member is doing, not the

attest client. See suggested revisions. - if, for example,

an attest client engages athe member to:


Suggestion




Suggestion

related to "independence would not be impaired" -

Again…vs. "compliance with the Independence rule"

language


Suggestion

suggests changing "communicate" to "communicates"


Suggestion

suggests changing "advise" to "advises"


Suggestion

suggests changing "process" to "processes"


Suggestion

suggest changing "prepare" to "prepares"


Suggestion

suggest changing "prepare" to "prepares"


Suggestion

related to the term "acceptable level" - This term

ought to be defined (consistent with the IESBA Code)

here and throughout the Code (or, alternatively, in

0.400).


Suggestion

related to phrase "independence would be impaired" -

Here and throughout the codified Code, consider

adding headings to break up long discussions of

services, similar to the table headings in current

Interpretation 101-3 - i.e., permitted services,

prohibited services. It would be helpful to the reader.


Suggestion

Suggests deleting the word "net" before assets - This

should only say "assets," as stated in current

Interpretation 101-3


Suggestion



1.295.120.02 g Editorial

Suggestion

processes an attest client's payroll using payroll time

records that the attest client has provided and

approved by the attest client.


Suggestion




Suggestion

provides assistsance to management in its assessment of


Suggestion

provides recommendsations to management for improvements


Suggestion




Suggestion

provides adviceadvises to an attest client during

1.295.135 .02 c Substantive

Change -

Attest Client

This appears to be a change in guidance as the Code

has prohibited recommending specific candidate(s)

for specific postions (s) due to a self-interest threat

c. recommends qualified candidates to the attest

client for their consideration based on client-

approved criteria.


Suggestion




Suggestion

solicits and performs screensing of candidates based

on client-approved criteria

1.295.140 Editorial

Suggestion

Consider revising this subtopic on forensic accounting

services to clarify whether it is permissible to

represent an attest client in arbitration.


Suggestion

For purposes of this interpretation, investigative

services include all forensic services that do not

involveing actual or threatened litigation


Suggestion



1.295.140.03 Terminology I recognize that the new code adopts the term

"investigative services" contained in the prior code,

but the definition really does not work in practice.

Many Investigative service engagements involve

actual or threatened litigation.

1.295.140.04 a i Editorial

Suggestion

if a member conditionally or unconditionally is

engaged conditionally or unconditionally to provide

expert witness

1.295.140.04 a iii Editorial

Suggestion

a fact witness, the trier of fact or counsel may

question a member may be questioned by the trier of

fact or counsel about the member's opinions

pertaining to the matters

1.295.140.04 a iii Editorial

Suggestion

related to "would not be considered a nonattest

service" - Is this an accurate statement? Serving as a

fact witness is not considered a service?

1.295.140.04 a i-ii Where is the guidance from footnote 27 of ET Section

101 that requires compliance with Rule 102, Integrity

and Objectivity, when a member provides expert

witness services? Shouldn't there be a cross-reference

here to Topic 1.100?

1.295.140.04 b i Editorial

Suggestion



1.295.140.04 b i Editorial

Suggestion




1.295.140.04 b ii Editorial

Suggestion

Based upon a comment made on 1.265.020.02 Ellen

revised the phrase "would not be at an acceptable

level and could not be reduced to an acceptable level

by the application of safeguards".


Suggestion

related to the prior reference - Litigation can continue

for years. The transition guidance for forensic

accounting services in current Interpretation 101-3

should be retained in the codified Code.


Suggestion

Need to add the words after Conflicts of Interest

interpretation link "of the Integrity and Objectivity

rule"


Suggestion

Need to add the words after General Requirements

for Performing Nonattest services interpretation link

"of the Independence rule"


Suggestion





Suggestion




Suggestion

attest client's financial information system that the

member did was not designed or developed by the

member

1.295.150 .03 a Editorial

Suggestion

Designates an individual or individuals who possess

suitable skill, knowledge, and/or experience,

preferably within senior management, to be

responsible for the internal audit function.

1.295.150 .07 a Cross

References

Performs ongoing monitoring evaluations (see the

paragraph .10) or control activities (for example,

reviewing loan originations as part of the attest

client ’s approval process or reviewing customer

credit information as part of the


Suggestion

The sSelf-review


Suggestion

the attest client outsources the internal audit function

to the member, wherebyand the member, in effect,

manages the attest client's internal audit activities of

the attest client.


Suggestion




Suggestion

those to be performed by the member will perform

in providing internal audit assistancethe services


Suggestion

those performed by the member will perform in

providing internal audit assistancethe services


Suggestion

For example, provided thatif the member applies the

safeguards in paragraph .03 have been met, athe

member may assess whether performance is in

compliance with management's policies and

procedures, identify opportunities for improvement,

and develop recommendations for improvement


Suggestion

SuchThe member information should provide the


Suggestion

The member is responsible forshould performing the

internal audit services in accordance with the terms of

the engagement and reporting thereon. The

performance of such services and should be directed,

reviewed, and supervised by the member the

performance of the services.


Suggestion




Suggestion

related to "Management Functions interpretation" -

Include a cross-reference here to 1.295.030?


Suggestion

The reference to paragraph .10 should be removed

until such time as the content on monitoring

procedures is added back in.


Suggestion

would not impair independencebe subject to this

interpretation


Suggestion




Suggestion





Suggestion




Suggestion



1.295.160.04 b ii Editorial

Suggestion

to the best of his or herthe individual's knowledge

1.295.160.04 b iii Editorial

Suggestion

file the tax return on the attest client's behalf of the

attest client


Suggestion




Suggestion



1.297.000 Editorial

Suggestion

Independence Standards for Engagements Performed

in Accordance With Statements on Standards for

Attestation Engagements (SSAE) - The Code doesn't

use the term "standards" in this manner elsewhere, is

the usage correct?

1.297.010 Editorial

Suggestion

Application of the Independence Rule to Engagements

Performed in Accordance With SSAEsStatements on

Standards for Attestation Engagements


Suggestion

in accordance with Statements on Standards for

Attestation Engagements ( the SSAEs),


Suggestion




Suggestion

In addition, application of the Independence rule is

furthera modified independence standard may be

applied, as set forth

1.297.020 Editorial

Suggestion

Agreed-Upon Procedure (AUP) Engagements

Performed in Accordance With SSAEs - last part

unnecessary


Suggestion

related to "may apply" - This reads almost as if a

member can choose otherwise. We suggest that the

language be modified in a manner similar to

suggestions in 1.297.010.03 above.


Suggestion

related to term "standard" -Vs. rule?


Suggestion

Do not have link to Engagements Performed Under

Statements on Standards for Attestation

Engagements interpretation


Suggestion

Do not have link to General Requirements for

Performing Nonattest Services interpretation


Suggestion




Suggestion

related to phrase "independence would not be

impaired" - Use the standard language - i.e., Threats

would be at an acceptable level…etc.


Suggestion

Need to add the words after each interpretation link


1.297.030 Editorial

Suggestion

Why is this subtopic/interpretation necessary? Why

hasn't this guidance been included in subtopic

1.297.010? It may be confusing for the reader to start

discussing SSAE engagements, then move to AUPs,

then move back to SSAE engagements again. It just

creates unnecessary duplication - for example,

paragraphs .01 and .02 are repeated in 1.297.010.

1.297.030 Other What is the difference between the types of

engagements addressed in1.297.010 and the

engagements addressed 1.297.030?


Suggestion


the Independence rule" & ET reference


Suggestion

related to "may apply" - This reads almost as if a

member can choose otherwise. We suggest that the

language be modified in a manner similar to

suggestions in 1.297.010.03 above.


Suggestion

Need to add the words after each subtopic link "of the

Independence rule"


Suggestion

Need to add the words after each interpretation link


1.300.000 Editorial

Suggestion

Is this is an odd placement for this topic? Should it be

included at the beginning of the Code?

1.300.001 General

Standards

Addition of new sections on the application of the

Conceptual Framework provides a better

understanding of how to navigate and apply the

applicable guidance. Moving the Ethical Rulings (ER)

into the respective subject sections and converting

them from Q&A format makes the AICPA Code more

helpful and clearer to readers. Agree with rewrites

and the headings of the ERs.

1.300.005 Issue that the threats and safeguards approach may

be not as relevant in this context - the threat and

safeguard categories identified in the conceptual

framework of the draft appear more closely aligned to

independence than to the general standards. Some

might apply but not all. It seems like for this model to

be workable the conceptual framework should be

revised to be broader. The conceptual framework also

just references independence rules, so it would seem

this would need updated as well.

1.300.010.01 Drafting

Convention

Add an s to supervise and evaluate?

1.300.010.03 Drafting

Convention

The 2nd sentence needs rephrasing - try this - "A

normal part of performing professional services

includs additional research and consultation with

others to gain sufficient competence."

1.300.010.04 Drafting

Convention

The sentence ends in an unclear dangling modifier -

"either independently or as an associate" ?


Suggestion

Combining this Q&A into a single paragraph does not

introduce any substantive change, however, the

"must" in the extant as been changed to "should" in

the proposed interpretation. Why has the

requirement been reduced from "must" (an

unconditional requirement) to "should" (a

presumptively mandatory requirement)? The nature

of the requirement suggests that "must" is more

appropriate than "should," but not sure if this change

was a result of a policy decision to replace all of the

"musts" with "shoulds."

1.300.030.01-.02 Editorial

Suggestion

The proposed interpretation relates to members in

public practice by virtue of its placement in part 1,

which applies to members in public practice;

however, par.02 also refers you to relevant

interpretations in part 2, which applies if you are a

member in business. As stated par. 02 of the Preface

(see p.15), "When a member has multiple roles, the

member should consult the applicable parts of the

AICPA Code." Apparently the 2nd paragraph of the

Answer in the extant (ET291 ER10) interpretation is

deemed to be the relevant "public practice" content

(agree that it has no relevance to a member in

business), whereas the 1st paragraph is deemed to be

the relevant "member in business" content (the

"member in business" equivalent of this

interpretation is reproduced in the line below, first

column). But the "member in business" content also

seems to apply to the member in public practice who

now has to go to two different places for an answer.

Overall the extant (ET291 ER10) seems both clearer

and simpler.


Suggestion

Do not have link to Submission of Financial

Statements interpretation

1.300.040 linkage appreciate the linkage to confidential client

information provided in para. 03


Suggestion

This is another instance in which "must" in the extant

(see paragraph .024 of ET291 ER12) has been changed

to "should" in the proposed. "Must" seems more

appropriate in this context. See commentary under

Supervision of a Specialist on Consulting Engagements

for further details.


Suggestion

The proposed interpretation combines two extant

interpretations (ET 291 ER8 & ER12). Proposed

paragraph .01(a) is substantially the same as extant ET

291.016 in terms of evaluating the professional

qualifications, technical skills, and resources of a third-

party service provider. Proposed .01(b) is substantially

the same as extant ET 291.024 although it omits the

sentence that "the member remains responsible for

the adequate oversight of all services performed by

the third-party service provider." That statement

seems unnecessary, however, given the requirement

that the member must (assuming here that "must"

will be restored) adequately plan and supervise the

third-party service provider's professional services so

that the member ensures that the services are

performed with competence and due professional

care.


Suggestion

The interpretations cited in the proposed

interpretation have the same content as those cited

in the extant interpretation (ET 191 ER112 & ET 391

ER1), except as follows: ET 1.150.040 omits the

sentence "this disclosure does not relieve the

member from his or her obligations under ethics

ruling No. 1," which appears in extant ET 191.225.

Why delete this since it seems to be helpful guidance?

The interpretations that are cited in both the extant

and in the proposed also appear to overlap and might

be candidates for combination, or at least reviewed to

eliminate the apparent redundancy, or are such

changes beyond the scope of this project?


Suggestion

Do not need ET references since already given in

1.300.005 & 1.300.030


Suggestion

See previous discussion regarding the conceptual

framework


Suggestion

Do not need ET reference for Conceptual Framework

since in 1.300.005

1.320.010 Name of

Interpretation

This section is based on prior 203.05, which relates to

responsibility of employees for the preparation of

financial statements. Although it applies to all

members who state affirmatively that financial

statements are in conformity with GAAP, I believe the

title should be changed to: "Responsibility for

Affirming that Financial Statements are in Conformity

With Generally Accepted Accounting Principles

1.320.010.01 Other I believe this section below relates to a member in

their role as an employee of the company and should

be deleted from Part 1 of the Codification. If it

remains, it should provide an example of how it

relates to a member in public accounting. The

remaining language is consistent with the role of a

member in public accounting:

"A member’s representation in a letter or an other

communication that an entity’s financial statements

are in conformity with GAAP may be considered an

affirmative statement within the meaning of this rule

with respect to the member who signed the letter or

other communication (for example, the member

signed a report to a regulatory authority). "

1.320.020 Other Council has designed three bodies here to establish

accounting principles, however, in 1.320.030 below,

they also include the IASB. .01 and .02 should include

the IASB. At the end of .01 the following should be

added: "Council also

designated the International Accounting Standards

Board (IASB) as an accounting body for purposes of

establishing international financial accounting and

reporting principles." .02 should also add IASB after

FASAB.

1.320.030.01 Other I believe paragraph 1.320.030.01 should be added as

.03 to 1.320.020, as this does not relate to Departures

From Generally Accepted Accounting Principles


Suggestion

Add an "s" after departure, as more than one are

discussed.


Suggestion

an other comprehensive basis - another?


Suggestion

related to "reports thereon should not purport" -

Guidance lapses into sudden legalese out of the blue.


Code

The requirements and responsibility for the client’s

financial statements should not be with the member

in public practice, as those are the responsibility of

management. The remainder should be in Part 2 for

members in business. This should make reference to

the reports on those financial statements only:

"04. In such circumstances, however, the client’s

financial statements and member’s reports thereon

should not purport that the financial statements are

in accordance with GAAP, and the reports on those

financial statements, should clarify the financial

reporting framework(s) used. [Prior reference:

paragraph .06 of ET section 203]

1.400.010-.240 Structure of

Code

There are numerous examples listed that would meet

the standard. .010 says “presumed to have

committed”; .020 “shall be considered to have

committed”;.030 “may be considered to have

committed”; .040 “shall be considered in violation”;

.090 “would be in violation”; .210 “would be

considered in violation”; .240 “would be in violation.”

They are not in any order.

I believe that these paragraphs should be listed in

order of severity in terms of whether or not an act

discreditable has occurred.

1.400.050 structure believe should follow other sections,

1.400.050 and .055 Structure of

Code

050 and .055 refer to government bodies and audits

and should be organized after the paragraphs noted

above, which appear more egregious.


Suggestion

organizations, in addition to the applicable financial

reporting frameworkgenerally accepted accounting

principles


Suggestion

requirements, in addition to generally accepted

auditing standardsthe applicable financial reporting

framework.


Suggestion

"Is" in the extant (Interpretation 501-5) has been

changed to "would be considered" in the proposed

which is not deemed to be a substantive change


Suggestion

Since the proposed interpretation retains from the

extant the "undertakes an obligation" language at the

beginning of the sentence, why was the phrase at the

end of the sentence changed to "the member should

follow" instead of retaining "the member is obligated

to follow" from the extant (Interpretation 501-3)?


Suggestion

Is in the extant (Interpretation 501-3) has been

changed to "would be considered" in the proposed

which is not deemed to be a substantive change

1.400.060 linkage also link to independene rule 200.020


Suggestion

Do not have link to Acts Discreditable rule

1.400.070 Other A statement should be added that this section does

not apply to a CPAs resume where their job skills and

experience are required to be displayed for the

purposes of obtaining employment.

1.400.090 Editorial

Suggestion

Why did we skip 1.400.080 (I don't see if used in any

other part)

1.400.090 Other A statement should be added that CPAs employed by

staffing or non-CPA consulting firms are held to the

standard laid out in this section. The marketing and

sales function in staffing firms and non CPA staffing

firms can be false, misleading, or deceptive with

respect to how they sell human capital to their clients.

Sales people who are not CPAs and have never

worked in accounting are often the sales people in

these firms. In order not to lose a commission, the

sales person will say just about anything necessary to

place a candidate, going as far as modifying their

resume sent to that client. CPAs working for these

firms are not part of the sales process and have no

control over what occurs. When an industry

employer wants a CPA to staff their SEC reporting

function, the staffing firm will provide one, even if

that person as relatively little experience, this practice

is misleading. The definition of Professional Services

includes Consulting and client advocacy work, and

that is the type of work that staffing and non CPA

consulting firms do, and that is why they employ

CPAs. However, with the State Boards unconcerned

with these CPAs, there is no oversight. A complaint

cannot be lodged by a client at the Better Business

Bureau either since these firms do not sell products,

they sell people.


Suggestion

Says no prior reference but I think it should be

referenced to paragraph .11 of ET section 501

1.400.100 Other As you might be aware, I would like to see it stated

that CPAs working for staffing or non-CPA consulting

firms are not allowed to use their designation of CPA

if the State Board does not regulate these types of

firms. The CPA may retain their license under State

Law, but cannot use it if they are working for a

company that has no ethics oversight or governance

in the State where the CPA is working. I would also

like to see the State Board’s adopt a similar rule. Why

should the staffing industry and non CPA consulting

industry benefit from the CPA brand, and take work

away from CPA firms, while the CPAs inside those

firms are not governed under the jurisdiction of their

State Board? CPAs should not be allowed to state on a

resume or professional profile or website that they

are a CPA unless they are working for a company that

is governed by a State Board of Accountancy. Period.

1.400.200 Drafting

Convention

This is the only paragraph that has separate

“terminology” and “interpretation”. It should be

consistent with the other paragraphs. Records

Requests and retention is a very important area, and I

believe it should be moved up front in 1.400

1.400.200 Other Are there clear guidelines to review on providing

Records when requested between CPA firms when a

client leaves the firm? We deal with this issue

probably more than any other.


Suggestion

I think it might to easier to read if you put parenthesis

around "under paragraphs .03-.04

1.400.200.06 Other Can we add examples here? (e.g. general parnter,

majority shareholder, spouse)

1.400.240.070 structure should be links to confidential information ( 700)

1.500.001 editorial

suggestion

I would bold "any" in a ., and also in b.


suggestion

there is always confusion for this rule. Please

consider adding "if the fee is fixed by courts or other

public authorities, or in tax matters, if the fee is

determined based on the results of judicial

proceedings….. This emphasized the fee is decided by

a third party, not the results.


Suggestion

I think you should clarify services listed above like you

did in 1.500.001.02 so it might say "services listed in

1.500.002.01 above"

1.500.002/ .01 a. Other Typo in a. Should read - "an audit or review of a

financial statement; or"

1.500.005 Conceptual

Framework

This section is called Conceptual Framework for

Members in the Practice of Public Accounting. I would

think this discussion should be before the rules are

covered.

1.510.010 Editorial

Suggestion

On page 141, in paragraph 5, the heading to the

paragraph is: "Example of When A Contingent Fee Is

Not Permitted." However, the wording within the

paragraph is such that the fee is permitted. I don't

think the fee is permitted so that the issue appears to

be with the wording in the paragraph.

1.510.010.04f Contingent fee

rule

This is not an issue with the codification. It relates to

the current rule. The AICPA currently allows a

contingent fee when "represening a client in

connection with obtainin a private letter ruling or

influencing the drafting of a regulation or statute."

Contingent fees for private letter rulings do nto

appear to be allowed under Circular 230 Section

10.27(b) that indicates when contingent fees are

allowed. Further, contingent fees for lobbying may be

prohibited by state law (e.g., Hawaii).


Suggestion

The prior reference should be "of ET section 302" not

302.02


Suggestion

Should read as follows: A contingent fee is not

permitted……..filed return. (appears to be a typo at

the beginning of the sentence)


Suggestion

I think the first sentence should be "A Contingent fee

is not permitted if a …."

1.510.010/.03 Mapping At the end of .03 - reference paragraph .02 - consider

hyperlinking to paragraph .02.

1.510.010/.04 Editorial

Suggestion

In e. to emphasize the words protest and assessed

value - consider adding quotes ("protest" / "assessed

value")

1.510.010/.04 Other In paragraph .01 under 1.510.010 - there is a sentence

that says " When practicign before the IRS or

before….. also comply with other applicable or more

restrictive requirements." A similar sentence should

be added under (or cautionary language) paragraph

.04 (Examples of When a Contingent Fee is

Permitted). The sentence could read -"Although a

contingent fee or determined fee may be permitted

under the Contingent Fees Rule, the member should

exercise caution that the fee structure is permitted

under the independence rules of other independence

standard-setters, the applicable state boards of

accountancy, or the IRS Code or the taxing regulatory

agencies." < underlined the Contingent Fees Rule - so

it is also hyperlinked.

1.510.010/.05 Editorial

Suggestion

In the first sentence - consider removing the word

"valid". Then consider adding a second sentence:

"There is no question as to the propriety of the

deduction; rather the claim is filed to correct an

omission."

1.510.030 Editorial

Suggestion

There is a. and b. - shouldn't the word "and" be added

after a. Both of these need to present. or the lead in

in paragraph .01 can be changed - by adding the word

"both" after "if".

1.510.040.01 Cross

References

In a. and b. - hyperlink to Contingent Fees rule (since

it is cross-referenced)

1.510.040.01 a & b Editorial

Suggestion

Do not have links to Contingent Fees rule

1.510.050 Other should the reference to the "investment portfolio to a

client" refer to an "attest client"?


Suggestion

In a. change the word "on" to "as".


Suggestion

There is an a. and b. - shouldn't the word "and" be

added after a. Both of these need to present. or the

lead in in paragraph .01 can be changed - by adding

the word "both" after "if".


Suggestion



1.520.050 .01 Editorial

Suggestion

The ruling is written to cover all attest and nonattest

clients. Therefore, a. should read "Owners, officers,

or employees of an attest client." ( hyperlink to attest

client; don't need to hyperlink to paragraph .01 if

referencing to attest client)

1.520.050.01 a & b Editorial

Suggestion

Do not have links to Commissions and Referral Fees

rule


Suggestion



1.600.030 Other Use of PFP designation - is this needed? Or should it

be expanded to all the other credentials?

1.600.030.01 Question Should you consider a broader definition of the AICPA

specialties? We now have the ABV, CITP, CFF, CGFM

specialties. Further, the indication that all members

of the firm must be a PFS before the firm name and

letterhead can be used is, in all reality, not being

practiced.

1.700.010 Definitions I believe the term “all relevant parties” should be

defined.


Suggestion

I believe as written it is not clear whose confidential

information is being shared with whom. I suggest the

following changes bolded:

".02 When a member evaluates whether to accept a

new client engagement, the member should consider

whether knowledge and experience that the member

or member’s firm will share with a prospective client

while providing the professional services to the

prospective client would be confidential client

information of an original client. If such information

would be confidential client information, and the

circumstances are such that the prospective client

would be able to identify the client or clients that are

the source of the information, the engagement

should not be accepted, unless the member obtains

the original client’s specific consent to disclose the

information. "


suggestion

When a member evaluates whether to accept a new

client engagement, the member should consider

whether the prospective client would be obtaining

knowledge and experience provided by member or

member’s firm will share while providing the

professional services to the prospective client would

be considered to be another client's confidential

client information. If such information would be

confidential client information, and the circumstances

are such that the prospective client would be able to

identify the client or clients that are the source of the

information, the engagement should not be accepted,

unless the member obtains the original client’s

specific consent to disclose the information.


Change - Not

Identified

The connotation appears to have changed - "The

Confidential Client Information rule is not intended to

help an unscrupulous client cover up illegal acts" -

This seems to suggest that it is ok to release

confidential client information in situations of illegal

acts. I was not aware of this. Can you now report

information to the IRS? To the FBI? I know that the

IESBA is working on this but I didn't think that the

guidance had been finalized.

1.700.030 Name of

Interpretation

The title refers to “Persons” who are not defined.

Since .03 refers to disclosing information “to the

company”, I suggest the following title change: "

Disclosing Information to Persons or Entities

Associated With Clients"


Suggestion

Who retains us should be evident. I suggest the

following change bolded:

"When a member is engaged to prepare a married

couple’s joint tax return, both spouses are considered

to be the member’s client, even if the member was

engaged by one spouse and deals exclusively with

that spouse.

1.700.030.02 spelling both spouses are considered to be the member's

clients.


suggestion

the member should do one or the other of the

following either:


Suggestion

Need ET Reference for both Use of a Third-Party

Service Provider interpretations


Suggestion

Do not have link to Confidential Client Information

rule

1.700.080 Editorial

Suggestion

I believe the rules should be defined in reference to

para. 01 – Integrity and Objectivity Rule and the

Confidential Client Information rule to clarify what

rules are being referred to:

" Under such an arrangement, the member could limit

activities to those that do not threaten the member’s

compliance with the Integrity and Objectivity Rule

and the Confidential Client Information rule."


Suggestion

Need ET reference for Integrity and Objectivity rule

1.700.080.02 comment I think that expanding the member's restrictions for

joining boards of various organizations beyond a bank

or other obvious publicly served organization dealing

with individuals or organization private or financial

information, is going beyond the original intention. It

could result in harmful litigation to members, since

they may be considered not in compliance with the

Code. Who determines what type of position and

organization is problematic?

1.700.090.01 Other The extant paragraph conclusion states that

disclosure "would suggest that the client may be

experiencing financial difficulties." (ET 391.013) The

new section states that it "would indicate that the

client is experiencing financial difficulties." I believe

the language from the extant should be used as the

codification assumes that by using a firm limited to

bankruptcy matters assumes that the entity is

experiencing financial difficulties. There is no basis to

make that assumption unless examples are provided.


Change - Not

Identified

Disclosing client names - The connotation is different

from the extant which includes a positive affirmation

of the ability to disclose client names.

1.700.100.02 Observation This guidance is relatively weak. My personal

experience, for example, includes several instances

where the CPA has been served a Grand Jury

Subpoena with the notification that the client is not to

be notified of the request. The CPA, however, is in

the middle of an audit or completing an engagement.

The knowledge of the subpoena has put the CPA on

notice that some form of a governmental

investigation is underway and, I would suggest,

imposes a duty on the CPA to further investigate the

issue or disclose the existence of an investigation.

Your guidance is too weak for the member in this

section.

1.800.001 Form of

Organization

and Name

Addition of new sections on the application of the

Conceptual Framework provides a better

understanding of how to navigate and apply the

applicable guidance. Moving the Ethical Rulings (ER)

into the respective subject sections and converting

them from Q&A format makes the AICPA Code more

helpful and clearer to readers. Agree with rewrites

and the headings of the ERs.

1.800.001.03 Observation We have a non-CPA partner who is an associate

member of the AICPA; does this preclude this firm

from representing that we are "Members of the

AICPA"?


Suggestion

The prior reference should be "of ET section 505" not

505.01


Suggestion

I don't think you link member to definitions when

saying nonmember. We have member linked enough

times that I think that might be confusing.


Suggestion

Under prior reference - you have an incorrect prior

reference in .21-.22 of ET Section 101 - there is no

section .22

1.810.020 Cross

References

Agree with rewrite - Prior reference left off "591"

after ET Section


Suggestion

Do not have link to Form of Organization and Form

rule

1.810.030 comment Agree with emphasis, clarity on member's

responsibilities


Suggestion





Suggestion




1.810.040 Other Is this guidance needed? In Pennsylvania, a CPA and

Non-CPA cannot form a CPA firm and therefore could

not issue this report at all. I would think that this is

going to vary from state to state and I am not sure

that the guidance is particularly helpful - This may be

outside of the purpose of this task force, but it is

interesting how the Codification highlights things that

are currently buried in the Code.

1.810.050 comment Agree with drafting convention, showing member's

responsibility to make disclosures, recommend

linkage to resolutation


Suggestion

Recommend that the sentence "To protect the public

interest, the overriding focus of the resolution [Link

to Appendix B] is that CPAs remain responsible,

financially and otherwise, for a firm’s attest work. In

addition to the provisions of the resolution [Link to

Appendix B], other following requirements of the

AICPA Code and Bylaws the resolution’s

requirements ensure that responsibility" be edited as

noted.


Suggestion

Do not have link to Compliance with Standards rule


Suggestion

Do you want to include link to ET 0.200 since you

reference it?


Suggestion

Recommend that the sentence "Compliance with the

AICPA I independence rule [Link to the independence

rule] prescribed by the independence rule" be edited

as noted.

1.820.020.01 Other A Practice with Non-CPA Partners - Is this true in all

states? I am not sure that this is accurate for PA and I

am not sure why it is needed in the Code since it

seems to be a state statute issue.

2.000.000 Editorial

Suggestion

My concern (also shared by my colleagues at GAO) is

without specifically referring to members in

government, we do not recognize what part of the

restructured code we fall into. As you mention in the

cover letter for the pilot testers, there are three parts

divided by the member’s practice. Part 1 is applicable

to members in the practice of public accounting. I can

argue that GAO, Federal IGs, and many state and local

governments are very similar to public accounting in

what they do, but we are also employees of the

government. Part 2 is applicable to members in

business. Some may argue that CPAs that are in

internal audit functions or are in financial

management functions in the government may be in

Part 2. Part 3 is applicable to all other members such

as those who are retired or unemployed. A literal

reading of this criteria would place all CPAs in

government under part 3. This is not logical since I

think there should be government members that fall

under the other 2 parts. Without explanation of the

applicable part to the range of members in

government, the codification is difficult to apply to

these members. Since I also serve on GPAC, I need to

point out that about 12,000 members are employed

in government. Without a clear guidance on which

part of the codification applies to these members, it is

very difficult to use.

2.000.010 Editorial

Suggestion

I think we need to include the need to document this

process. I believe there is a documentation

requirement under the conceptual framework

2.000.010.02 Drafting

Convention

can we remove reference to the AICPA Code?


Suggestion



Suggestion

Self-review threat description hard to understand.

Need to rework - not sure if it is the punctuation or

what.

2.100.005 Editorial

Suggestion

Left out the word in - "Members in Business"

2.110.010.01 Other Can we provide examples?


Suggestion


2.310.005 .01 Editorial

Suggestion

Do not need ET reference for Conceptual Framework

since in 2.300.005

2.320.001 editorial

suggestion

The current Code provides a better explanation of

why the Rule was adopted ( 203-1). I believe this

should be incorporated in the "new" Code.


Suggestion

Do not need ET reference for Accounting Principles

rule since in 2.300.030.01


Suggestion

Do not have link to The Accounting Principles rule


Suggestion



Suggestion


2.320.033 ediorial

comment

I believe the placement of "not" before rendering, is

better grammar, and leads to better understanding

than the wording in int 203-1


Suggestion


2.400.010 editorial

suggestion

A comma is necessary after "jurisdiction"

2.400.070 editorial

suggestion

It would be helpful if there was a link to term

"confidential information" for clarity.

3.400.090 Editorial

Suggestion

Prior reference: paragraph .11 of ET Section 501 -

currently says new content

General Comment Name of Topic The use of the word "rule" to the rules makes for

cumbersome grammer. Couldn't we say Rule -

Independence then we can refer to the rule on

indpendence rather than the independence rule. I

can learn to live with it but it in many cases sounds

contrived.

General Comment Structure I appreciate the incorporation of the Conceptual

Framework into the "new code", clarification of the

terminology used in the Code, and the inclusion of the

interpretations as now constituting part of the Code.

General Comment Structure of

Code

I find having the conceptual framework in 3 places is

cumbersome. Is there no way to have it included

once? Also, its status within the Code is not clear. Is it

an interpretation?

Numbering Numeric

Citations

Use of “0” for the preface numbering system

somewhat odd

Numbering Numeric

Citations

Use of “0” for the preface numbering system

somewhat odd

Numbering Numeric

Citations

I continue to struggle with the two part structure - 0

Preface and Parts 1-3. I clearly understand that the

Preface represents the Principles of Professional

Conduct and the balance represent the "Rules", but

from a structure standpoint I would recommend you

incorporate then into one document with a consistent

referencing system.

Numbering Numeric

Citations

The structure (numbering and formatting) does not

clearly offset the Rules from the Interpretations - For

example the 1.100.0001 - Integrity and Objectivity

Rule - is at the same numbering level as the 1.110.010

Confilcts of Interest. I am wondering if either the

numbering could change or the formatting (e.g.

shading the rules). Given the current formatting, for

example, it is not clear that there are any

interpretations under the Integrity and Objectivity

rule.

Overall Conceptual

Framework

Overall, especially when compared to the guidance in

the IESBA Code of Ethics, we still have quite a bit of

"specifics" incorporated into the guidance so that I

think many folks are going to say something like: You

have provided us with the conceptual framework to

use in addressing independence matters, but then

you just gave specific answers to specific questions

related to many of the issues that might even appear

to be inconsistent with conclusions we would reach as

practitioners in applying the conceptual framework. I

know there is a delicate balance that needs to be

addressed here in that many folks are going to want

the conceptual guidance where they can use their

professional judgment, and others are going to want

the specific rules/interpretations so they don't have

to think. Personally, I would rather go to more use of

the conceptual framework [professional judgment]

than having to focus on things that are specifically

allowed or precluded. Essentially, if you have threats,

see if there are safeguards that can reduce or

eliminate the threats and document what you did in

this area.

Overall Definitions Finds the mulitiple hyperlinks to the definitions

excessive and would prefer if the hyperlink was done

on first mention topic/subtopic (or paragraph……

particularly if a topic/subtopic has many paragraphs in

it).

Overall Editorial

Suggestion

Because so much was added in some places, the

period that independence was impaired could

become unclear so might want to repeat it.

Specifically in the 1.297 topic.

Overall Editorial

Suggestion

Found the fact that the Application of the conceputal

framework interpreation came before the

independence concepual framework, inconsistent

with the fact that the broad concepual framework

comes before the other Application interpeations.

Overall Editorial

Suggestion

Recommends the term "Interpretation" be added to

the title of any interpretation so that it is clear what

items are interpretations.

Overall Numeric

Citations

On the subject of the numbering system, overall, and

as noted in several of our comments on the

codification, the proposed numbering system is

complex, unwieldy, and not user-friendly. Staff and

PEEC need to ask themselves if this new numbering

system is an improvement over that used in the

current Code.

Overall Numeric

Citations

They note that the citation for 1.120.010.01a is ten

characters long. They say that the numbering system

being proposed is too unwieldy, unnecessarily so, and

not as user-friendly (compare this citation to

Interpretation 101-11, for instance), or easy to

remember, etc. Staff and PEEC need to ask

themselves if this new numbering system is an

improvement over that used in the current Code

Overall Numeric

Citations

Overall, the numbering system might prove to be

challenging for folks using the guidance in that you

can go several pages within each section of many of

the captions before you even get to another

numbered captioned.

Overall Other Will it be clear to a member who holds InActive Status

with a State Board what their obligations are versus a

member with no status with a State Board? Does

State Board status really matter under the code?

Overall Other Would not part of the public interest include

remaining properly registered with a State Board for

those required to within public practice and to follow

state and federal requirements?

Overall Other When the Conceptual Framework is applied by the

member and the decision made is determined to be

“way off base”…..since the member applied the

framework..what kind of review can be applied? Can

they use the “excuse” they applied the required

framework….this would lend me to comment that

based on experience and feedback direct applications

of Independence should be applied when warranted

by PEEC.

Overall Other I do not think I will be submitting any formal

comments. I have used the codification to research a

few issues and haven’t notices any deficiencies in the

guidance and quite honestly I haven’t spent a lot of

time on the number conventions etc. I think as a

whole the codification is extremely well crafted and

developed and definitely the right answer for the

Code

Overall Other The content is so extensive that a reader might get

lost in it.

Overall Other I like the new format and think that embedding the threats

in each section is extremely helpful. I had mentioned on a

previous call that I was concerned about the ease of

printing various sections of the documents because of the

hyperlinks, as I often cut and past sections directly into

memos.

Overall Structure of

CodeThe flow of the codified Code was somewhat

disjointed with readers having to frequently stop and

look at another section for clarification. The intent

behind cross-references should always be clear; the

guidance should always explain why it is pointing

readers to another topic/subtopic/interpretation. The

complex numbering system also makes it a challenge

for readers to look up cross-referenced guidance.


Code

The AICPA code of conduct as written, applies only to

CPAs working in CPA firms, or as employees in

industry. As of 2012, and long before that over the

last decade, there are 10’s of thousands of CPAs

working for non-CPA consulting firms and staffing

firms that provide client advocacy services as defined

by the Code of Conduct to their clients where those

CPAs are using their expertise and credential as CPAs

in carrying out their work. My poll revealed that State

Boards, do not consider CPAs who work for Staffing

firms or Non-CPA firms to be CPAs that can be

investigated for ethics violations reported under a

contract engagement with a client of their firm

employer. I found this surprising. The State Boards

also do not track employer demographics for CPAs so

there is no way to know how many CPAs work for CPA

firms, Industry employers, or the 3rd category -

Staffing and non-CPA consulting firms. According to

the discussions I have had, staffing and non-CPA

consulting firms that employ CPAs are not treated as

industry employers for State Board purposes either,

meaning these firms fall under State contract law,

rather than State Board jurisdiction, ethics complaints

are not pursued against the CPAs working in these

firms. The State Boards are quite adamant about this.

Therefore there are thousands of CPAs who are not

covered by ethics statutes in their State, nor by the

AICPA Code of Professional Conduct. This is where

there is an extremely large gap in the law regarding Overall Structure of

Code

The placement of some of the guidance might be a

little confusing, where I will address this matter in

more detail in answering the overall question 3

related to fees. Essentially, in some cases, the topics

do not appear to be logically tied together so that the

concern would be, even with the cross-references,

some folks just might miss the guidance that is placed

elsewhere in the Code, especially if folks are using a

hard-copy of the guidance when compared to the e-

copy of the guidance.


Code

Regardless of State requirements, the AICPA

Professional Code of Conduct is the unifying standard

by which the public gauges CPAs. Making it applicable

to a membership subset of CPAs, those with an AICPA

membership is not consistent with how the Code is

applied nationally. Due to my concern that the AICPA

Code of Professional Conduct is being updated and

applicable to only the Members of the AICPA, a

subset of the CPAs in America, I polled the State

Boards via an email questionnaire to provide evidence

to the AICPA that more than several States have

either adopted the Code into State Law, State

Regulation, or CPA Board Rule and by doing so, those

States have legislated that all CPAs in those States are

bound to the AICPA Code of Professional Conduct,

regardless of AICPA membership. She provided

feedback on the poll in her letter. She recieved

feedback from only 58% as others were still to

respond. See letter for details.

Overall Table of

Contents

Check the numbering on the table of contents as it

seems to be off in a number of places.

Overall Gaylen suggested we change references to GAAP to

the Applicable Financial Reporting Framework.

Accordinlgy to Ahava, the staff person most familiar

to the changes to our other standards, she believes

changing to the generic term "the applicable financial

reporting framework" is a good move and would be

aligned with the ISAs. My concern is that our

Accounting Principles rule refers to GAAP still so I

would prefer to discuss with the Task Force before

making any changes.

Overall Gaylen suggested we change references to illegal acts

with compliance with laws and regulations. The term

"illegal acts" is used in 1.700.020 and 1.255.020. I

would like to discuss making the replacement as both

would need to be reworked to make sense.

Part 3 Other Is there a need for guidance on commissions and

referral fees?

Question 1 Question 1 Generally the titles seem okay.

Question 1 Question 1 Generally the titles seem okay. Does not believe the

term “engagement period” is not in the definitions

section and the content does not match the words.

Also, the term “Subsequent Events” has a generally

accepted meaning in the CPA profession and

describes heading 1.226 more closely.

Question 1 Question 1 The title for 1.226 isn't intuitive.

Question 1 Question 1 The titles appear appropriate to the NON CPA in

me….again; I really believe this system will assist the

public and regulators…..GREAT JOB!

Question 1 Question 1 Titles are sufficently accurate and informative

Question 1 Question 1 I have previously questioned the title "Members in

the Practice of Public Accounting" and I prefer

"Member in Public Practice." Otherwise I found the

topics and titles worked well.

Question 2 Question 2 Could this be made clear within the Introduction?

Question 2 Question 2 Does not like the way the rules and interpreations

are apart from each other. Recommends we place

1.500.001 as the first item in the 1.510 section and

place 1.500.002 as the first item in the 1.520 section.

Section 1.500 should only consist of the conceptual

framework for fees in general and not cover specific

fees.

Question 2 Question 2 Thinks it would be very helpful to folks in trying to

comply with the guidance if the guidance followed the

rule.

Question 2 Question 2 No concerns

Question 2 Question 2 I am just fine with the structure of the commisisn and

referral fee rule and the contingent fee rule.

Question 2 Question 2 This is consistent with prior code, although most

identify as an independence impairment, same with

gifts and entertainment

Question 2 Question 2 No, not really. Since the prohibited fees guidance on

Page 139 is followed by related interpretations on

Pages 140-144, all of the related content seems to be

easily accessible.

Question 2 Question 2 In reading this section (1.500) - it is confusing to the

reader to have the rules upfront and additional

related guidance after the rules. For example, it would

be better to group the contingent fee discussion

together. Then start a new section (1550.0001) for

Commissions and Referral Fees Rule.

Question 3 Question 3 Consider cross referencing to other sections where

fees are discussed - such as unbilled fees (ET

reference - ET 191.103-104)

Question 3 Question 3 Absolutely necessary to have this link. Especially so,

that the document is web based. Yes, I believe there

should be a cross reference to independence section,

as well. I would provide it directly after the title ( refer

to section on Independence for further appropriate

reference)

Question 3 Question 3 Believes the cross references would be useful.

Question 3 Question 3 I do think the way you have things here will serve to

be helpful reminders that other fee considerations

need to be addressed. Also, you asked whether a

similar cross-reference to fees subtopic under the

independence rule in the fees and other types of

renumeration would help, and I think it would be

helpful.

Question 3 Question 3 The Independence topic contains a subtopic on Fees.

Do you believe the interpretations 1.230.020 and

paragraph .04 of interpretation 1.230.010 are

necessary so that members do not overlook that

Contingent Fees and Commissions are addressed

under the Fees and Other Types of Remuneration

topic as opposed to the Independence topic? Yes.

Also, should there be a similar cross reference to the

Fees subtopic under the Independence rule in the

Fees and Other Types of Remuneration topic? Yes,

although it seems like it is already there (on Pages

139) and (85)? If so, please explain where you believe

such provision should appear.

Question 3 Question 3 I would keep the existing structure with Fees as a

subtopic of independence. Section 1.230 is

appropriate and consistent with the international

standards. Unpaid fees is appropriate here as is the

cross reference to guidance on comissions and

referral fees and contingent fees.

Question 3 Question 3 These sections are not necessary. Fees, as an abstract

concept meaning remuneration for services

performed, should not be tied to independence

because this creates the impression that fees can be

“too high” or that a CPA can earn “too much” in fees

from a particular client. The “Unpaid Fees” section,

dealing with “loans” resulting from unpaid fees being

carried on the CPA firm’s books too long, is a separate

issue unrelated to remuneration. Also, there should

not be a similar cross reference to the Fees subtopic

under the Independence rule in the Fees and Other

Types of Remuneration topic.

Question 3 Question 3 Again, this could be stressed within the Introduction

or a new subtopic discussing the areas where applied

Question 4 Question 4 Include an ethical conflicts interpretation for Part 3,

similar to Parts 1 and 2.

Question 4 Question 4 For consistency purposes, part 3 should contain an

Ethical Conflicts interpretation.

Question 4 Question 4 No thoughts

Question 4 Question 4 this cannot hurt

Question 4 Question 4 Yes, a member should adhere to all potential ethical

conflicts no matter their work status

Question 4 Question 4 Yes. It would seem that members who are not retired,

but unemployed or between jobs, should have the

same applicable structuring of the guidance for

consistency purposes as those members in public

practice and in business.

Question 4 Question 4 You asked whether Part 3 also contained this

interpretation and I am not sure that it is necessary in

that I really don't know what conflicts an unemployed

or retired member would encounter.

Question 5 Question 5 Yes, TIC believes the grandfathering provision should

be retained. Although it may be unlikely that

members will encounter this situation, TIC believes

those to whom it may be applicable should continue

to be grandfathered and should have ready access to

such guidance. Consistent with TIC’s point of view

that superseded guidance in old rulings and

interpretations should be updated rather than

deleted, TIC also believes that specific guidance

should not be deleted from the Code simply because

the occurrence of a fact pattern is unlikely. Retention

of the guidance would be convenient and practical for

members.

Question 5 Question 5 Grandfather provisions are problematic to State

Boards also within our regulations….It should be

properly noted since it could be applied….could a

“italicized link” be used or a footnote…(PEEC might

not be happy!)


Question 5 Question 5 since we are a litigious society, anything that clarifies

and defines legal limitation for members would be

helpful, even though it first appears to be

unwarranted, due to the aging of the original

grandfathering rules.

Question 5 Question 5 While some probably will disagree with my position

here, I think the answer is that we don't need the

grandfathering provisions any more in that, after all

these years, I just don't think the grandfathering

provisions would relate to anything encountered

often any more.

Question 5 Question 5 Believe that Grandfather clauses” are applicable only

to statutes, because in some sense all laws are the

result of compromise and contain one or more

arbitrary provisions not subject to rational

philosophical analysis. It thus makes sense if a new

law is passed to “grandfather” persons who were in

compliance with the old law and make the new

requirements applicable only to new persons not

previously subject to the law. For a private entity

such as the AICPA, grandfather clauses are not

rational because the AICPA ethics code should be

philosophically consistent and not contain arbitrary

exceptions to the general conceptual framework

underlying the Code. This is a reason why the

conceptual framework for independence should

supersede the interpretations, with the

interpretations used for guidance in certain situations.

Question 6 Question 6 These grandfathering provisions are still necessary

since firms do not know, and have no mechanism to

track, how many of these grandfathered loans are still

in existence.

Question 6 Question 6 Yes, TIC believes the grandfathering provision should

be retained. Although it may be unlikely that

members will encounter this situation, TIC believes

those to whom it may be applicable should continue

to be grandfathered and should have ready access to

such guidance. Consistent with TIC’s point of view

that superseded guidance in old rulings and

interpretations should be updated rather than

deleted, TIC also believes that specific guidance

should not be deleted from the Code simply because

the occurrence of a fact pattern is unlikely. Retention

of the guidance would be convenient and practical for

members.

Question 6 Question 6 Grandfather provisions are problematic to State

Boards also within our regulations….It should be

properly noted since it could be applied….could a

“italicized link” be used or a footnote…(PEEC might

not be happy!)


Question 6 Question 6 No, this is another example of why the conceptual

framework for independence should have precedence

over the Interpretations. The independence

interpretations are not logically consistent with the

conceptual framework for evaluating independence.

The independence interpretations are essentially

political "rules" whereas the logical and consistent

application of the conceptual framework in some

cases would lead to an interpretation different from

an "official" AICPA independence interpretation. The

current position is to apply the conceptual framework

unless there is an AICPA interpretation covering the

situation, and if so just follow the rule regardless of its

applicability to the particular situation between the

firm and the client. I would reverse the priority of the

conceptual framework and interpretations and note

that AICPA interpretations provide guidance in certain

situations but do not supersede the conceptual

framework unless a better, more rational result is

obtained by using the interpretations. I respect a

rational, objectively supported explanation for a

particular situation (i.e., "professional judgment")

more than the fact that at some time in the past a

majority of committee members voted in favor of a

particular rule.

Question 6 Question 6 Same anwer as question 5.

Question 6 Question 6 The issue relates to loans, but most of these loans will

have been refinanced or paid-off by now; if not,

members can refinance them, and it just, from an

appearance perspective, looks pretty bad for a

practitioner to have a loan from his/her client.

Essentially, while some will disagree, I would get rid of

the grandfathering provisions at this point.

Questions 5 & 6 Grandfatherin

g Provisions

IT is time to eliminate the grandfathering provisions

that go back to pre-2001. I think that practice has

changed sufficiently over the last decade that these

can go away.

Sugeest "sensitive professional judgments" be deleted since they don't know what it means.

Agree with placement for definitions, terms for conceptual framework application for independence