Interpretation 101-3 - Additional Resources

To help members understand the changes and what those changes mean when providing nonattest services to attest clients, additional resources have been provided which includes:

* The revised interpretation
* PEEC’s Background and Basis for Conclusions
* Bookkeeping and General Requirement Q&As
* Information Technology Services Q&As

These resources are located at http://www.aicpa.org/members/div/ethics/intr_101-3.htm.

The revised interpretation is effective for any new nonattest services engagements performed for an attest client after December 31, 2003; however, the documentation requirement included in the revised interpretation has been deferred and is effective for any new engagements performed after December 31, 2004.

Another ethics issue that is important for members to understand and comment on are the AICPA's Professional Ethics Executive Committee’s proposed revisions to the AICPA Code of Professional Conduct regarding the responsibility of members who outsource services to third-party service providers.

The exposure draft contains proposals for two new ethics rulings and revisions to an existing ethics ruling which include the following provisions:

• A requirement to inform the client that the member may be using a third-party service provider when providing professional services to the client, prior to sharing confidential client information with the service provider. This would include outsourcing to either domestic or foreign entities that the member or firm does not control and to individuals who are not employees of the member or firm;



• A specific reference to a member's responsibility for all work performed by the service provider;



• Broadening the application of the exiting ethics ruling beyond that of an outside tax service bureau and making it applicable to any service provider used by the member; and



• A requirement that a member who uses a service provider should enter into a contractual agreement with that provider to ensure the confidentiality of client records.

The exposure draft is available at www.aicpa.org/members/div/ethics/ed_outsourcing.htm. Comments may be submitted until October 8, 2004.