The AICPA has issued a new interpretation related to the ethics code for state and local governments. This interpretation helps identify the entities related to a state or local government, which are considered affiliates and thus are subject to independence provisions in the Code of Professional Conduct. Given the unique structure and relationship of SLGs, the approach for understanding affiliates is different from that which is applied to entities such as corporations, partnerships and trusts. This interpretation, effective for years beginning after Dec. 15, 2020, will drive significant changes in how we think about independence for state and local government financial statement attest clients.
Make sure to read the eight-page official release from the AICPA Professional Ethics Division here.
“Going through and reading it, it’s not that long, it’s just so meaty that I wanted to spend some time with some of the language you’re going to see there,” Galasso says. “But definitely I want you to take a look at this and think abut what processes or changes to your quality control system you might have if you work with these governmental entities that use GASB as part of your overall planning for the upcoming year.”
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Upcoming Broadcast Note: Join Melisa Galasso at 2 p.m. on Thursday, July 25, for a one-hour credit A&A Broadcast Course on “The New AICPA Auditor’s Report,” a must-see for auditors.
SCACPA is excited to partner with Galasso Learning Solutions and the Genuine Learning Blog for real-time A&A updates and answers for SCACPA members. With over 15 years of experience in the accounting profession, Melisa Galasso designs and facilitates courses in advanced technical accounting and auditing topics, including not-for-profit and governmental accounting. She closely monitors regulatory bodies for changes in auditing and accounting guidance and serves as a subject matter expert in implementing the updated guidance.
Melisa was a speaker on audit topics at SCACPA’s 2019 Spring Splash. Look for her to return this November for Fall Fest as well as many seminars and rebroadcasts.
You can read SCACPA’s Q&A with Melisa conducted during some break time at Spring Splash here.