The American Institute of CPAs has issued a new standard that tightens ethics requirements for members on indemnification and limitation of liability.
Under the new standard, failure to comply with a regulator's requirements on the use of indemnification and limitation-of-liability provisions will be considered an act discreditable to the profession. Various regulators, including the Securities and Exchange Commission, state insurance commissions and federal banking agencies, currently prohibit organizations under their jurisdiction from entering into certain types of indemnification and limitation-of-liability provisions in agreements for the performance of audit or other attest services, according to the AICPA.
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