PEEC issues recruiting guidance, exposure draft on simultaneous employment

On Monday, the AICPA Professional Ethics Executive Committee (PEEC) released new ethics guidance related to recruiting services for attest clients. The committee also released an exposure draft related to simultaneous employment with an attest client.

New guidance: Employee or executive recruiting

The revised interpretation “Executive or Employee Recruiting” (ET §1.295.135) will affect independence for members in public practice. To ensure independence, protect the public, and align with international standards, the revised AICPA guidance includes these new prohibitions when a member is performing recruiting services for a key position for an attest client:

• Advising on the specific terms of employment, remuneration, or related benefits of a particular candidate;
• Searching for candidates;
• Undertaking reference checks of candidates; and
• Recommending to the attest client only one candidate for consideration (as opposed to recommending a slate of candidates).

The guidance will be effective Jan. 1, 2026, and early implementation is allowed. Readers can find more on the history of this project and PEEC’s rationale for changes in the exposure draft.

New exposure draft: Simultaneous employment or association

The extant interpretation “Simultaneous Employment or Association With an Attest Client” (ET §1.275.005) became part of the AICPA Code of Professional Conduct more than 20 years ago, before the advent of the gig economy. To keep pace with current work practices, PEEC revisited the guidance as part of its most recent strategy and work plan.

The proposed changes aim to balance the prohibition of simultaneous employment and association by covered members and restrictions for other partners and professional employees, while allowing firms to evaluate threats to independence using the conceptual framework in other instances.

• New definition and interpretation: PEEC is proposing a new definition of “simultaneously employed or associated” and a new version of the “Simultaneous Employment or Association With an Attest Client” interpretation. The new interpretation will replace the current one in its entirety.
• Prohibitions and exceptions: The proposed interpretation prohibits covered members from any simultaneous employment or association with an attest client and prevents any partner or professional employee from holding a key position at an attest client. There are exceptions for independent contractors and specific situations. In other instances, application of the “Conceptual Framework for Independence” interpretation is appropriate.
• Reporting requirement: The proposed interpretation includes a reporting requirement triggered by a professional’s intention to accept an attest client’s offer of employment.

If the guidance is adopted as final, practitioners will need to adhere to the new prohibitions and exceptions outlined in the proposal. They will also need to comply with the reporting requirement when considering employment with an attest client. Independent contractors will be subject to the new guidelines and factors for evaluating threats to independence.

The comment period ends March 16, 2025, and PEEC welcomes feedback at ethics-exposuredraft@aicpa.org.

— Kelly D. Mullins is the communications manager for the AICPA Professional Ethics Division. To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.