By Allison M. Henry, CPA, CGMA, vice president – professional and technical standards
In August 2017, the AICPA Professional Ethics Executive Committee (PEEC) finalized a new Hosting Services Interpretation. It concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. Therefore, compliance with this new interpretation is critical to maintaining independence.
Generally, PEEC defines hosting services as nonattest services in which a member accepts responsibility for acting as the sole host of a client’s information system, taking custody or storing client data or records, or providing electronic security or back-up services to the client. Most practitioners will not have issues complying with the prohibition against providing electronic security or back-up services. But what does it mean to be the sole host of a client’s information system? Does that include bookkeeping software? And what does storing client data or records entail?
There are several practical issues that practitioners may face as a result of the new interpretation.
This new hosting interpretation is effective beginning Sept. 1, 2018. You have some time to ensure that your firm’s current practices comply with the new requirements. While you are planning for upcoming engagements, it may be helpful to look through your files to determine whether your firm is the sole source for certain client information. If so, take the opportunity to clean out the files and transfer those records back to the client. See the Sept. 27, 2017 AICPA Journal of Accountancy column, “How Data-Hosting Services Affect Independence,” by Catherine R. Allen, CPA, for more information about the new interpretation. The article includes examples of scenarios that may create hosting services and impair independence.
As this interpretation will likely change some firms’ current practices, feel free to reach out to me with any implementation questions. I can be reached at ahenry@picpa.org or (215) 972-6187.
Hear more from Allison Henry when she discusses professional ethics and audit quality at the PICPA Government Accounting Conference on July 9-10, 2018.
By Allison M. Henry, CPA, CGMA, vice president – professional and technical standards
In August 2017, the AICPA Professional Ethics Executive Committee (PEEC) finalized a new Hosting Services Interpretation. It concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. Therefore, compliance with this new interpretation is critical to maintaining independence.
Generally, PEEC defines hosting services as nonattest services in which a member accepts responsibility for acting as the sole host of a client’s information system, taking custody or storing client data or records, or providing electronic security or back-up services to the client. Most practitioners will not have issues complying with the prohibition against providing electronic security or back-up services. But what does it mean to be the sole host of a client’s information system? Does that include bookkeeping software? And what does storing client data or records entail?
There are several practical issues that practitioners may face as a result of the new interpretation.
This new hosting interpretation is effective beginning Sept. 1, 2018. You have some time to ensure that your firm’s current practices comply with the new requirements. While you are planning for upcoming engagements, it may be helpful to look through your files to determine whether your firm is the sole source for certain client information. If so, take the opportunity to clean out the files and transfer those records back to the client. See the Sept. 27, 2017 AICPA Journal of Accountancy column, “How Data-Hosting Services Affect Independence,” by Catherine R. Allen, CPA, for more information about the new interpretation. The article includes examples of scenarios that may create hosting services and impair independence.
As this interpretation will likely change some firms’ current practices, feel free to reach out to me with any implementation questions. I can be reached at ahenry@picpa.org or (215) 972-6187.
Hear more from Allison Henry when she discusses professional ethics and audit quality at the PICPA Government Accounting Conference on July 9-10, 2018.
By Allison M. Henry, CPA, CGMA, vice president – professional and technical standards
In August 2017, the AICPA Professional Ethics Executive Committee (PEEC) finalized a new Hosting Services Interpretation. It concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. Therefore, compliance with this new interpretation is critical to maintaining independence.
Generally, PEEC defines hosting services as nonattest services in which a member accepts responsibility for acting as the sole host of a client’s information system, taking custody or storing client data or records, or providing electronic security or back-up services to the client. Most practitioners will not have issues complying with the prohibition against providing electronic security or back-up services. But what does it mean to be the sole host of a client’s information system? Does that include bookkeeping software? And what does storing client data or records entail?
There are several practical issues that practitioners may face as a result of the new interpretation.
This new hosting interpretation is effective beginning Sept. 1, 2018. You have some time to ensure that your firm’s current practices comply with the new requirements. While you are planning for upcoming engagements, it may be helpful to look through your files to determine whether your firm is the sole source for certain client information. If so, take the opportunity to clean out the files and transfer those records back to the client. See the Sept. 27, 2017 AICPA Journal of Accountancy column, “How Data-Hosting Services Affect Independence,” by Catherine R. Allen, CPA, for more information about the new interpretation. The article includes examples of scenarios that may create hosting services and impair independence.
As this interpretation will likely change some firms’ current practices, feel free to reach out to me with any implementation questions. I can be reached at ahenry@picpa.org or (215) 972-6187.
Hear more from Allison Henry when she discusses professional ethics and audit quality at the PICPA Government Accounting Conference on July 9-10, 2018.
By Allison M. Henry, CPA, CGMA, vice president – professional and technical standards
In August 2017, the AICPA Professional Ethics Executive Committee (PEEC) finalized a new Hosting Services Interpretation. It concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. Therefore, compliance with this new interpretation is critical to maintaining independence.
Generally, PEEC defines hosting services as nonattest services in which a member accepts responsibility for acting as the sole host of a client’s information system, taking custody or storing client data or records, or providing electronic security or back-up services to the client. Most practitioners will not have issues complying with the prohibition against providing electronic security or back-up services. But what does it mean to be the sole host of a client’s information system? Does that include bookkeeping software? And what does storing client data or records entail?
There are several practical issues that practitioners may face as a result of the new interpretation.
This new hosting interpretation is effective beginning Sept. 1, 2018. You have some time to ensure that your firm’s current practices comply with the new requirements. While you are planning for upcoming engagements, it may be helpful to look through your files to determine whether your firm is the sole source for certain client information. If so, take the opportunity to clean out the files and transfer those records back to the client. See the Sept. 27, 2017 AICPA Journal of Accountancy column, “How Data-Hosting Services Affect Independence,” by Catherine R. Allen, CPA, for more information about the new interpretation. The article includes examples of scenarios that may create hosting services and impair independence.
As this interpretation will likely change some firms’ current practices, feel free to reach out to me with any implementation questions. I can be reached at ahenry@picpa.org or (215) 972-6187.
Hear more from Allison Henry when she discusses professional ethics and audit quality at the PICPA Government Accounting Conference on July 9-10, 2018.
By Allison M. Henry, CPA, CGMA, vice president – professional and technical standards
In August 2017, the AICPA Professional Ethics Executive Committee (PEEC) finalized a new Hosting Services Interpretation. It concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. Therefore, compliance with this new interpretation is critical to maintaining independence.
Generally, PEEC defines hosting services as nonattest services in which a member accepts responsibility for acting as the sole host of a client’s information system, taking custody or storing client data or records, or providing electronic security or back-up services to the client. Most practitioners will not have issues complying with the prohibition against providing electronic security or back-up services. But what does it mean to be the sole host of a client’s information system? Does that include bookkeeping software? And what does storing client data or records entail?
There are several practical issues that practitioners may face as a result of the new interpretation.
This new hosting interpretation is effective beginning Sept. 1, 2018. You have some time to ensure that your firm’s current practices comply with the new requirements. While you are planning for upcoming engagements, it may be helpful to look through your files to determine whether your firm is the sole source for certain client information. If so, take the opportunity to clean out the files and transfer those records back to the client. See the Sept. 27, 2017 AICPA Journal of Accountancy column, “How Data-Hosting Services Affect Independence,” by Catherine R. Allen, CPA, for more information about the new interpretation. The article includes examples of scenarios that may create hosting services and impair independence.
As this interpretation will likely change some firms’ current practices, feel free to reach out to me with any implementation questions. I can be reached at ahenry@picpa.org or (215) 972-6187.
Hear more from Allison Henry when she discusses professional ethics and audit quality at the PICPA Government Accounting Conference on July 9-10, 2018.
By Allison M. Henry, CPA, CGMA, vice president – professional and technical standards
In August 2017, the AICPA Professional Ethics Executive Committee (PEEC) finalized a new Hosting Services Interpretation. It concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. Therefore, compliance with this new interpretation is critical to maintaining independence.
Generally, PEEC defines hosting services as nonattest services in which a member accepts responsibility for acting as the sole host of a client’s information system, taking custody or storing client data or records, or providing electronic security or back-up services to the client. Most practitioners will not have issues complying with the prohibition against providing electronic security or back-up services. But what does it mean to be the sole host of a client’s information system? Does that include bookkeeping software? And what does storing client data or records entail?
There are several practical issues that practitioners may face as a result of the new interpretation.
This new hosting interpretation is effective beginning Sept. 1, 2018. You have some time to ensure that your firm’s current practices comply with the new requirements. While you are planning for upcoming engagements, it may be helpful to look through your files to determine whether your firm is the sole source for certain client information. If so, take the opportunity to clean out the files and transfer those records back to the client. See the Sept. 27, 2017 AICPA Journal of Accountancy column, “How Data-Hosting Services Affect Independence,” by Catherine R. Allen, CPA, for more information about the new interpretation. The article includes examples of scenarios that may create hosting services and impair independence.
As this interpretation will likely change some firms’ current practices, feel free to reach out to me with any implementation questions. I can be reached at ahenry@picpa.org or (215) 972-6187.
Hear more from Allison Henry when she discusses professional ethics and audit quality at the PICPA Government Accounting Conference on July 9-10, 2018.
By Allison M. Henry, CPA, CGMA, vice president – professional and technical standards
In August 2017, the AICPA Professional Ethics Executive Committee (PEEC) finalized a new Hosting Services Interpretation. It concludes that when members provide hosting services, they are maintaining internal control over a client’s data or records, which presents a threat to independence. Therefore, compliance with this new interpretation is critical to maintaining independence.
Generally, PEEC defines hosting services as nonattest services in which a member accepts responsibility for acting as the sole host of a client’s information system, taking custody or storing client data or records, or providing electronic security or back-up services to the client. Most practitioners will not have issues complying with the prohibition against providing electronic security or back-up services. But what does it mean to be the sole host of a client’s information system? Does that include bookkeeping software? And what does storing client data or records entail?
There are several practical issues that practitioners may face as a result of the new interpretation.
This new hosting interpretation is effective beginning Sept. 1, 2018. You have some time to ensure that your firm’s current practices comply with the new requirements. While you are planning for upcoming engagements, it may be helpful to look through your files to determine whether your firm is the sole source for certain client information. If so, take the opportunity to clean out the files and transfer those records back to the client. See the Sept. 27, 2017 AICPA Journal of Accountancy column, “How Data-Hosting Services Affect Independence,” by Catherine R. Allen, CPA, for more information about the new interpretation. The article includes examples of scenarios that may create hosting services and impair independence.
As this interpretation will likely change some firms’ current practices, feel free to reach out to me with any implementation questions. I can be reached at ahenry@picpa.org or (215) 972-6187.
Hear more from Allison Henry when she discusses professional ethics and audit quality at the PICPA Government Accounting Conference on July 9-10, 2018.
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