The AICPA Professional Ethics Executive Committee (PEEC) has further delayed the effective date of the Information Systems Services interpretation and has adopted a temporary policy statement related to employment statutes that may be in conflict with certain independence interpretations.
During its Nov. 16 meeting, PEEC delayed the effective date of the "Information Systems Services" interpretation (ET §1.295.145) until Jan. 1, 2023, to allow for additional educational efforts. As part of these educational efforts, the division plans to issue a practice aid that will be available in the "Spotlight" section of the AICPA ethics page; additional education will follow during 2022.
At the meeting PEEC also adopted the temporary policy statement. PEEC will evaluate whether the AICPA Code of Professional Conduct (the Code) should be revised as a result of the conflict between employment statutes and independence interpretations.
The Uniformed Services Employment and Reemployment Rights Act (USERRA), P.L. 103-353, and parallel state statutes expressly prohibit employers from taking adverse employment actions against an employee because the employee is or was a member of the armed services. Such statutes create a conflict when a firm is providing attest services to a branch of the armed services, as independence would be impaired if a partner or professional employee is simultaneously employed or associated with an attest client.
While PEEC's evaluation is underway, according to the policy statement, it will consider a member or member's firm to be in compliance with the Code as long as the individual:
- Is not in a key position with the attest client,
- Is not in a position to influence the attest engagement, and
- Is not on the attest engagement team.
This temporary enforcement policy will remain in effect until PEEC rescinds it.
— Ellen Goria, CPA, CGMA, is associate director–Global Professional Ethics for the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Ken Tysiac at Kenneth.Tysiac@aicpa-cima.com.
