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LEARNING RESOURCES

AICPA Code of Professional Conduct
DON’T FORGET ABOUT THE CONCEPTUAL
FRAMEWORK Gain an understanding of professional ethics in
the accounting profession, the AICPA Code of
There will be scenarios where entities don’t meet
Professional Conduct, and how to maintain integrity
any of the definitions of affiliates as outlined and objectivity.
in the interpretation. However, the interpreta-
tion does highlight that you still might have CPE SELF-STUDY
relationships or circumstances where you should
apply the AICPA’s “Conceptual Framework
for Independence” (ET §1.210.010). Certain
relationships might create threats to indepen-
dence, requiring the application of safeguards
Independence
to mitigate or reduce the threat to an acceptable
level. For example, say your immediate family Gain an understanding of the AICPA Code of
member is in a key position with a nonaffiliate Professional Conduct and independence rules
affecting accounting professionals.
that includes your client in its financial state-
ments. The nonaffiliate provides accounting staff, CPE SELF-STUDY
shares financial information systems, or estab-
lishes internal controls over financial reporting
for your client. This situation would need to be
evaluated to determine if a significant threat to
independence is created. If so, can appropriate
safeguards be applied to eliminate the threat For more information or to make a purchase, go to aicpa.org/cpe-learning
[Data for chart, numbers are in millions]
or reduce it to an acceptable level? Additional or call the Institute at 888-777-7077.
examples could include entities that are not
required to be included in the reporting entity
and upstream entities.
AICPA RESOURCES
WHAT SHOULD AUDITORS KEEP AN EYE OUT
FOR? Article
Here are a few key takeaways and important next “Effective Dates Extended for 3 AICPA Ethics Interpretations,” JofA, May 6,
steps for auditors to follow: 2020
■ Firms will need to perform more evaluation
Exposure draft
of material entities when referring to another
PEEC exposure draft — Compliance audits
auditor’s report. This coincides with the need
to evaluate material excluded entities. Online
■ Firms should revisit existing documentation
Tips for Organizations Subject to Single Audit Requirements
of all entities within the financial reporting
Single Audit Tips for Auditors
entity that are not in scope of the FSAC.
The revised interpretation is a good reason to Hotline
ensure there is a complete and accurate list
AICPA Ethics Hotline, 888-777-7077 (select option 2, then 3)
and that the understanding of the relationship
between the FSAC and each entity is clear.
■ Firms should take an “inventory” of their
relationships, including asking the following
questions of, or about, potential affiliates: of affiliates, you may have questions. The
y Whom are you doing business with? AICPA ethics hotline is one resource that can
y Which entity is related to which entity? provide real-time answers. You can contact
■ Firm policies will need to be updated for the it at 888-777-7077 (select option 2, then 3).
revised interpretation. Another resource is a dedicated webcast on this
topic sponsored by the AICPA Governmental
PRACTICAL APPLICATION Audit Quality Center. Many have found the
As you evaluate relationships and circum- implementation guide, SLG affiliate evaluator:
stances that could result in the identification Entities, SLG affiliate evaluator: Investments,

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