The Professional Ethics Executive Committee (PEEC) of the AICPA is proposing a rule that would require Institute members to disclose to their clients the outsourcing of professional services. The exposure draft, "Omnibus Proposal of Ethics Division Interpretations and Rulings," is available at www.aicpa.org/members/div/ ethics/ed_outsourcing.htm. Comments are welcome until Oct. 8.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
The PEEC convened a task force earlier this year to examine the issues surrounding the outsourcing of services.
The exposure draft proposes three new rulings in the Institute's Code of Professional Conduct: Under Rule 102, Integrity and Objectivity, a member would have to inform the client of the use of a third-party service provider prior to sharing confidential client information with that provider; under Rules 201, General Standards, and 202, Compliance With Standards, a member using a third-party provider is responsible for all work performed by the provider; and under Rule 301, Confidential Client Information, a member who uses a third-party provider should enter into a contractual agreement with that provider to ensure the confidentiality of client records.
The draft is at www.aicpa.org/members/div/ethics/ed_outsourcing.htm.
The California Board of Accountancy has also issued a regulation notice informing licensees of amendments to its Code of Regulations related to outsourcing disclosures.
The proposal would revise Section 54.1 of the Code to provide that, in the event confidential client information may be disclosed to persons or entities outside the U.S., the licensee inform the client in writing and obtain the client's written permission.
The board said that the objective of the proposal is "to help ensure that the clients of licensees have the information they need to make informed choices regarding the disclosure of their financial information." The Regulation Notice is available online at www.dca.ca.gov/ cba/notices/reg04-1.pdf.