New AICPA technical corrections clarify independence requirements

The AICPA has issued technical corrections to the definition of “covered member” in the AICPA Professional Standards and the independence rules for agreed-upon procedure engagements performed in accordance with the Statements on Standards for Attestation Engagements (SSAEs).

Neither of the technical corrections represents a change in position on the part of the AICPA; rather, both corrections fix typographical errors that occurred when previous updates were published.

One technical correction clarifies that 10 hours is the threshold for provision of nonattest services to an attest client within a fiscal year at which a partner, partner equivalent, or manager is considered a “covered member” (ET §0.400.12) in the AICPA Code of Professional Conduct.

The other technical correction clarifies that independence would be impaired in an agreed-upon procedure engagement under the SSAEs if a firm had a material financial relationship with the responsible party or parties that was covered by any of the following interpretations of the “Independence Rule” (ET §1.200.001):

• Paragraphs .01 and .02 of “Overview of Financial Interests” (ET §1.240.010).
• “Trustee or Executor” (ET §1.245.010).
• “Joint Closely Held Investments” (ET §1.265.020).
• “Loans” (ET §1.260.010, prior reference: Paragraph .13 of ET §101).

The technical corrections take effect immediately.

— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.