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Published 1 (2020-02-28)

handle is hein.gao/gaobaeasr0001 and id is 1 raw text is: G A O U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 February 28, 2020 Mr. Brian S. Lynch Ms. Toni Lee-Andrews American Institute of Certified Public Accountants 1345 Avenue of the Americas New York, NY 10019 GAO's Response to the American Institute of Certified Public Accountants Professional Ethics Division November 15, 2019 Consultation Paper, Strategy and Work Plan This letter provides GAO's response to the American Institute of Certified Public Accountants (AICPA) Professional Ethics Division's consultation paper, Strategy and Work Plan. GAO promulgates generally accepted government auditing standards (commonly referred to as GAGAS), which provide professional standards for auditors of government entities in the United States. These standards include ethical principles for auditors in the government environment. As the supreme audit institution for the United States as well as an auditing standard-setting organization, GAO is committed to supporting the public interest and the interest of the public sector auditing community. Response to Request for Comments We identified certain proposed new standard-setting projects and new member enrichment projects as matters of particular interest to GAO and provide the following responses to AICPA's Professional Ethics Executive Committee's (PEEC) request for input: 1. Business relationships a) What business relationships do firms have with either nonattest or attest clients? We are aware that many audit organizations provide professional services, such as bookkeeping; financial statement preparation; internal audit assistance; internal control evaluation; information technology services; appraisal, valuation, and actuarial services; and various management consulting services to their nonattest and attest clients. b) What additional guidance related to business relationships, if any, would be helpful to address in the code? The existing code in section 1.265 focuses on business relationships between audit organizations and clients that pertain to cooperative arrangements and joint closely held investments. We believe that expanding the code to identify common nonattest services that audit organizations provide would enhance and clarify the concept of business relationships to reflect current practice in the audit industry, which now includes an extensive array of vendor- type or outsourced management services that audit organizations provide to their clients. In addition, we believe that more guidance would be helpful to address business relationships in which auditors are engaged to both provide a nonattest service, such as preparing an entity's Page 1

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