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A94825 1 (2011-05-31)

handle is hein.gao/gaobadvxt0001 and id is 1 raw text is: i GA 0 A countabiity I Integrity * Reliability United States Government Accountability Office Washington, DC 20548 May 31, 2011 Ms. Lisa A. Snyder, Director Professional Ethics Division American Institute of Certified Public Accountants New York, New York 10036-8775 Subject: AICPA Professional Ethics Executive Committee (PEEC) February 2011 Exposure Draft entitled Omnibus Proposal - AICPA Professional Ethics Division Interpretations and Rulings. This letter provides the U.S. Government Accountability Office's (GAO) comments on the PEEC's Omnibus Proposal. We appreciate the PEEC's efforts to obtain a wide range of views on these pronouncements exposed for possible adoption. Overall, we support the Omnibus Proposal. We have specific comments related to the PEEC's proposed interpretations and rulings on (1) the clarification of Public Interest Entities, and (2) the revisions to Interpretation No. 101-3 and non-attest services. These specific comments are detailed below. Clarification of Public Interest Entities (PIEs) We support the proposed revision to the Conceptual Framework for AICPA Independence Standards as described on page 39 of the PEEC's Omnibus Proposal and support the PEEC's efforts to further clarify the entities that should be considered public interest entities (PIEs) for determining the nature and extent of safeguards to be applied and to make the definition of PIEs more consistent with the International Ethics Standards Board for Accountants (IESBA) definition. The PEEC's revision to the definition, removing employee benefit and health and welfare plans, governmental retirement plans, entities or other programs subject to Single Audit Act requirements, will clarify the entities that will be considered PIEs and will help auditors better understand their responsibilities regarding PIEs. Revisions to Interpretation No. 101-3 and Non-Attest Services We support the PEEC's proposed revisions to Interpretation No. 101-3, Performance of Non-Attest Services Under Rule 101, Independence as described on pages 41 - 47 of the of the PEEC's Omnibus Proposal. The proposed revisions, on pages 44 - 46 on activities that would be considered management responsibilities and their impact on auditor independence, is clearer and is consistent with the language used in other professional standards. However, we have the following specific concerns about the PEEC's proposed revisions to this interpretation.

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