Professional Ethics

PICPA Adopts Revisions to ET 101-3 for Tax Compliance Services and Forensic Accounting Services

On June 29, 2007, PICPA Council approved revisions to the PICPA Code of Professional Conduct, Ethics Interpretation 101-3 for Tax Compliance Services and Forensic Accounting Services. The changes are effective June 30, 2007.

An updated copy of ET 101-3 , which highlights the revisions, is available through the AICPA Professional Ethics Division. PICPA Council also approved transitional rules to guide implementation of these changes. A summary of the changes, in addition to the transitional rules, is listed below.

Revisions to the PICPA Code of Professional Conduct

Tax Compliance Services - The revisions clarify the independence requirements related to the preparation of a tax return, transmittal of a tax return and transmittal of any related tax payment to the taxing authority, signing and filing a tax return, and authorized representation of clients in administrative proceedings before a taxing authority.

Transition period – Independence would not be impaired as a result of the more restrictive requirements of the tax compliance services provisions, provided such services are pursuant to engagements commenced prior to June 30, 2007, and completed prior to January 1, 2008, and the member complied with all applicable independence interpretations and rulings in effect on June 30, 2007.

Forensic Accounting Services –  The revisions outline the independence requirements related to forensic accounting services, which it defines as nonattest services that “involve the application of special skills in accounting, auditing, finance, quantitative methods and certain areas of the law, and research, and investigative skills, to collect, analyze, and evaluate evidential matter and to interpret and communicate findings.”  The revisions further divide forensic accounting services between litigation services, which include expert witness services, litigation services, and other services, and investigative services.

Transition period – Independence would not be impaired as a result of the more restrictive requirements of the forensic accounting services provisions, provided such services are pursuant to engagements commenced prior to June 30, 2007, and the member complied with all applicable independence interpretations and rulings in effect on June 30, 2007.

Related Links:

• PICPA Code of Professional Conduct
  
• AICPA Professional Ethics Division
  
• AICPA ET 101-3 Resources