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Accountability * Integrity * Reliability
United States Government Accountability Office
Washington, DC 20548
November 20, 2012
Lisa A. Snyder
Director, Professional Ethics Division
American Institute of Certified Public Accountants
1211 Avenue of the Americas
New York, NY 10036-8775
Subject: AICPA Professional Ethics Executive Committee's September 2012
Exposure Draft entitled Omnibus Proposal - AICPA Professional Ethics Division
Interpretations and Definitions.
This letter provides the U.S. Government Accountability Office's (GAO) comments
on the AICPA Professional Ethics Executive Committee's (the PEEC) proposed
revisions to the definitions of practice of public accounting (paragraph .29 of ET
section 92, Definitions [AICPA, Professional Standards]) and professional services
(paragraph .30 of ET section 92) and the related conforming changes in the AICPA
Code of Professional Conduct (the Code). As noted below, while GAO generally
agrees with the proposed revisions to definitions, we believe that the revision
process provides an opportunity for the PEEC to consider additional changes that
would enhance the ability of auditors in government to apply the Code's rules and
standards. We are suggesting that the PEEC take this opportunity to revise the
definition of client (ET 92.03); add explanatory language to the definition offirm
(ET 92.10); and revise the list of safeguards implemented by the firm (ET 100-01.26).
Proposed Revisions to Paragraphs .29-.30 of ET Section 92
We agree that replacement of the term practice of public accounting with the term
public practice would improve consistency with both the majority of AICPA's rules
and with the International Ethics Standards Board for Accountants' Code of Ethics.
We also agree with the PEEC's position that eliminating the word accounting from
the term more clearly communicates the breadth of the term's meaning by not
appearing to limit its application strictly to accounting services. However, we
question the value of the parenthetical comment also referred to as the practice of
public accounting. If, after making the proposed revisions, the phrase the practice
of public accounting remains elsewhere in the Code, we suggest that the PEEC
make conforming changes similar to those proposed for the sections of the Code
selected for inclusion in the exposure draft.](ViewImageLocal?handle=hein.gao/gaobadprv0001&div=1&collection=&method=preview&ext=.png&size=3)