Free Site Registration

Disclosure of Outsourcing


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 ethics/ed_outsourcing.htm. Comments are welcome until Oct. 8.

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

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 cba/notices/reg04-1.pdf.


Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Accounting Today, please use the form below to login. When completed you will immeditely be directed to post a comment.


Follow Accounting Today


Lessons in M&A: Client and Staff Retention

April 14, 2014

Transition Advisors president Joel Sinkin talks about what firms should do after a merger to retain their clients and staff members.

Are You Missing These Growth Opportunities?

April 2, 2014

Gale Crosley of Crosley + Company discusses the practice areas and international opportunities that firms often overlook in trying to grow.



Dumbest Employee Excuses for Being Late

March 31, 2014

Running a little late could have big repercussions, especially at a firm in the midst of busy season. From escaped zebras to must-see TV, employers told CareerBuilder some of the most memorable excuses they've heard from tardy employees.

Common Taxpayer Misconceptions

March 19, 2014

The NAEA’s collection of ridiculous things tax clients believe.

The 10 Fastest-Growing Firms in the U.S.

March 10, 2014

The firms with the highest 2013 revenue growth in our Top 100 Firms/Regional Leaders list.

Top 10 Tech Trends for 2014

March 3, 2014

As companies gain more affordable access to new technology and platforms, they also seek to make smarter investments.

Strangest Tax Deductions

January 31, 2014

The Minnesota Society of CPAs recently conducted its annual survey about the most strange and unusual tax deductions proposed by clients.