The American Institute of CPAs has adopted ethics rules that place new requirements on members who outsource clients' work to third-party providers and broaden the definition of those providers.
The definition of third-party service providers has been broadened beyond an outside tax service bureau to any third-party service provider used by AICPA members, including independent contractors used by a CPA firm.
Under the new requirements, AICPA members must inform their clients -- preferably in writing and before providing confidential client information to the third-party service provider -- that the firm will use a third-party service provider when providing professional services to the client. The new rules also clarify that AICPA members are responsible for all work performed by the service provider.
In addition, members using third-party service providers are required to enter into a contractual agreement with the provider to maintain the confidentiality of the client's information, and "to be reasonably assured" that the service provider has appropriate procedures in place to prevent the unauthorized release of confidential client information.
The new rules are effective for professional services performed on or after July 1, 2005, except for services performed pursuant to agreements in existence on June 30, 2005, that are completed by Dec. 31, 2005. Early application is encouraged.
The new standards are available at
