ET Section 101: Independence Rules and Exceptions, Study notes of Accounting

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Codification Framework Updated 1/22/14 Codification Framework - Page 1 (Bracketed text identifies the extant citation where the content came from or new content if content did not previously exist) 0 Preface 100.000 Overview of the Code of Professional Conduct 100.010 Principles and Rules of Conduct (ET Introduction) 100.020 Interpretations and Other Guidance (ET Introduction) 200.000 Structure and Application of the AICPA Code 200.010- Structure of the AICPA Code (New Content) 200.020 Application of the AICPA Code (New Content and ET§91) 200.030 Citations (New Content) 200.040 Transition Provisions (New Content) 200.050 Drafting Provisions (New Content) 300.000 Principles of Professional Conduct 300.010 Preamble (ET§51) 300.020 Responsibilities (ET§52) 300.030 The Public Interest (ET§53) 300.040 Integrity (ET§54) 300.050 Objectivity and Independence (ET§55) 300.060 Due Care (ET§56) 300.070 Scope and Nature of Services (ET§57) 400.000 Definitions (ET§92 and multiple interpretations. New Content is a definition of attest client and employing organization) 500.000 Nonauthoritative Guidance (New Content) 600.000 New, Revised, and Pending Interpretations and Other Guidance 600.010 New and Revised Interpretations and Other Guidance (New Content) 600.020 Pending Interpretations and Other Guidance (New Content) 700.000 Deleted Interpretations and Other Guidance (New Content) Part 1: Members in Public Practice 000 INTRODUCTION (New Content) 000.010 Conceptual Framework for Members in Public Practice (New Content) 000.020 Ethical Conflicts (New Content) 100 INTEGRITY AND OBJECTIVITY 100.001 “Rule 102” Integrity and Objectivity (ET§102.01) 100.005 Application of the Conceptual Framework for Members in Public Practice and the Ethical Conflicts Interpretation (New Content) 110 Conflicts of Interest 110.010 Conflicts of Interest (ET§102.03, ER93, ET§191.186-.187, ER 99, ET§191.198-.199, ER110, ET§191.220-.221) 110.020 Director Positions (ER 85, ET§191.170-.171, Substantive Change Made) 120 Gifts and Entertainment 120.010 Offering or Accepting Gifts or Entertainment (ER113, ET§191.226-.227) Codification Framework Updated 1/22/14 Codification Framework - Page 2 130 Preparing and Reporting Information 130.010 Knowing Misrepresentations in the Preparation of Financial Statements or Records (ET§102.02) 130.020 Subordination of Judgment (ET§102.05) 140 Client Advocacy 140.010 Client Advocacy (ET§102.07) 150 Use of a Third-Party Service Provider 150.040 Use of a Third-Party Service Provider (ER 112, ET§191.224-.225) 200 INDEPENDENCE 200.001 “Rule 101” Independence (ET§101.01) 200.005 Application of the Conceptual Framework for Independence and the Ethical Conflicts Interpretation (ET§101.02 and New Content) 210 Conceptual Framework Approach 210.010 Conceptual Framework for Independence (ET§100-1) 220 Accounting Firms 220.010 Networks and Network Firms (ET§101.19) 220.020 Alternative Practice Structures (ET§101.16) 220.030 Use of Nonindependent CPA Firm on Engagement (ER 71, ET§191.142-.143) 224 Affiliates, Including Governmental Units 224.010 Client Affiliates (ET§101.20) 224.020 Entities Included In State and Local Government Financial Statements (ET§101.12) 226 Reissued Reports 226.010 Consenting to the Use of a Previously Issued Report (ER 100, ET§191.200-.201) 228 Engagement Contractual Terms 228.010 Indemnification of a Covered Member (ER94, ET§191.188-.189) 228.020 Indemnification of an Attest Client (ER 102, ET§191.204-.205) 228.030 Alternative Dispute Resolution (ER95, ET§191.190-.191 and ER 96, ET§ 191.192-.193) 230 Fees 230.010 Unpaid Fees (ER52, ET§191.103-.104) 230.020 Fees and Other Types of Remuneration (New Content, Not Substantive Change) 240 Financial Interests 240.010 Overview of Financial Interests (ET§101.02.A-1 and ET§101.02.B) 240.020 Unsolicited Financial Interests (ET§101.17) 240.030 Mutual Funds (ET§101.17) 240.040 Retirement, Savings, Compensation, or Similar Plans (ET§101.17) 240.050 Partnerships (ET§101.17) 240.060 Limited Liability Companies (ET§101.17) 240.070 Section 529 Plans (ET§101.17) 245 Trusts and Estates 245.010 Trustee or Executor (ET§101.02.A-2 and ER 11, ET§191.021-.022) 245.020 Trust Investments (ET§101.17) 250 Participation in Employee Benefit Plans 250.010 Plan is an Attest Client or is Sponsored by an Attest Client (ER 107, ET§191.214-.215 and ET§101.17) Codification Framework Updated 1/22/14 Codification Framework - Page 5 295.160 Tax services (Tax compliance services; Authorized representation (ET§101.05); New Content is addition of staff position on “Power of attorney”) 297 Independence Standards for Engagements Performed in Accordance with Statements on Standards for Attestation Engagements 297.010 Application of the Independence Rule to Engagements Performed in Accordance with Statements on Standards for Attestation Engagements (SSAEs) (ET§101.13) 297.020 Agreed-Upon Procedure (AUP) Engagements Performed in Accordance with SSAEs (ET§101.13) 297.030 Engagements, Other Than AUPs, Performed in Accordance with SSAEs (ET§101.13) 300 GENERAL STANDARDS 300.001 “Rule 201” General Standards (ET§201.01) 300.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) 300.010 Competence (ET§201.02) 300.020 Supervision of Specialist on Consulting Engagements (ER 9, ET§291.017-.018) 300.030 Submission of Financial Statements (ER 10, ET§291.019-.020) 300.040 Use of a Third-Party Service Provider (ER 8, ET§291.015-.016 and ER 12, ET§291.023- .024) 310 COMPLIANCE WITH STANDARDS 310.001 “Rule 202” Compliance with Standards (ET§202.01) 310.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) 320 ACCOUNTING PRINCIPLES 320.001 “Rule 203” Accounting Principles (ET§203.01) 320.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) 320.010 Responsibility for Affirming that Financial Statements Are in Conformity with the Applicable Financial Reporting Framework (ET§203.05) 320.020 Status of Financial Accounting Standards Board, Governmental Accounting Standards Board, Federal Accounting Standards Advisory Board, and International Accounting Standards Board Interpretations (ET§203.03) 320.030 Departures from Generally Accepted Accounting Principles (ET§203.02) 320.040 Financial Statements Prepared Pursuant to Financial Reporting Frameworks Other Than GAAP (ET§203.06) 400 ACTS DISCREDITABLE 400.001 “Rule 501” Acts Discreditable (ET§501.01) 400.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretations (New Content) 400.010 Discrimination and Harassment in Employment Practices (ET§501.03) 400.020 Solicitation or Disclosure of CPA Examination Questions and Answers (ET§501.07) 400.030 Failure to File a Tax Return or Pay a Tax Liability (ET§501.08) 400.040 Negligence in the Preparation of Financial Statements or Records (ET§501.05) 400.050 Governmental Bodies, Commissions or Other Regulatory Agencies (ET§501.06) Codification Framework Updated 1/22/14 Codification Framework - Page 6 400.055 Governmental Audits (ET§501.04) 400.060 Indemnification and Limitation of Liability Provisions (ET§501.09) 400.070 Confidential Information Obtained from Employment or Volunteer Activities (ET§501.10) 400.090 False, Misleading or Deceptive Acts in Promoting or Marketing Professional Services (New Content) 400.100 Use of CPA Credential (ET§501.12) 400.200 Records Requests (ET§501.02 and ER 189, ET§591.377-.378) 400.210 Removing Client Files or Proprietary Information From a Firm (ER 191 ET§591.381−.382; New content) 400.240 Use of Confidential Information From Nonclient Sources (ER 14, ET§391.027-.028; New Content is addition of staff position on “Prospective Clients”) 500 FEES AND OTHER TYPES OF REMUNERATION 500.008 Unpaid Fees (New Content) 510 Contingent Fees 510.001 “Rule 302” Contingent Fees Rule (ET§302.01) 510.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) 510.010 Tax Matters (ET§302.02) 510.020 Receipt of Contingent Fees (ER17, ET§391.033-.034) 510.030 Services Performed by a Member’s Spouse for a Contingent Fee (ER19, ET§391.037-.038) 510.040 Contingent Fee Arrangements With an Investment Advisory Services Nonattest Client That Is Related to a Client (ER 25, ET§391.049-.050) 510.050 Investment Advisory Services (ER 24, ET§391.047-.048) 520 Commissions and Referral Fees 520.001 “Rule 503” Commissions and Referral Fees Rule (ET§503.01) 520.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) 520.020 Receipt of Commissions (ER 184, ET§591.367-.368) 520.030 Services Performed by a Member’s Spouse for a Commission (ER 187, ET§591.373-.374) 520.040 Referral of Products of Others (ER 188, ET§591.375-.376) 520.050 Commission Arrangements with an Investment Advisory Services Nonattest Client That Is Related to a Client (ER 192, ET§591.383-.384) 520.060 Sale of Products to Clients (ER 185, ET§591.369-.370) 520.070 Billing for a Subcontractor’s Services (ER 186, ET§591.371-372, Substantive Change Made) 600 ADVERTISING AND OTHER FORMS OF SOLICITATION 600.001 “Rule 502” Advertising and Other Forms of Solicitation (ET§502.01) 600.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) 600.010 False, Misleading or Deceptive Acts in Advertising or Solicitations (ET§502.03 and ET§502.06) 600.030 Use of AICPA-Awarded Designation (ER 183, ET§591.365-.366, Substantive Change Made) 600.100 Use of CPA Credential (ET§502.07) 700 CONFIDENTIAL INFORMATION 700.001 “Rule 301” Confidential Client Information (ET§301.01) 700.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) Codification Framework Updated 1/22/14 Codification Framework - Page 7 700.010 Client Competitors (ER 6, ET§391.011-.012) 700.020 Disclosing Information From Previous Engagements (ER 15, ET§391.029-.030 and ER 3, ET§391.005-.006) 700.030 Disclosing Information to Persons or Entities Associated With Clients (ER 16, ET§391.031- .032 and ER 21, ET§391.041-.042) 700.040 Disclosing Information to a Third-Party Service Provider (ER 1, ET§391.001-.002) 700.050 Disclosing Client Information in Connection With a Review of the Member’s Practice (ET§301.04) 700.060 Disclosure of Client Information to Third Parties (ER 2, ET§391.003-.004) 700.070 Disclosing Client Information During Litigation (ER 20, ET§391.039-.040 and ER 23, ET§391.045-.046) 700.080 Disclosing Client Information in Director Positions (ER 18, ET§391.035-.036 – Substantive Change Made) 700.090 Disclosing Client Names (ER 7, ET§391.013-.014) 700.100 Disclosing Confidential Client Information as a Result of a Subpoena or Summons (New Content, Not Substantive Change) 800 FORM OF ORGANIZATION AND NAME 800.001 “Rule 505” Form of Organization and Name (ET§505.01) 800.005 Application of the Conceptual Framework for Members in Public Practice and Ethical Conflicts Interpretation (New Content) 810 Form of Organization and Related Practice Issues 810.010 Ownership of a Separate Business (ET§505.03 and ER 138, ET§591.275-.276) 810.020 Partner Designation (ER 137, ET§591.273-.274) 810.030 A Member’s Responsibility for Nonmember Practitioners (ER 3, ET§591.005-.006 and ER 141, ET§591.281-.282) 810.040 Attest Engagement Performed with a Former Partner (ER 136, ET§591.271-.272, Substantive Change Made) 810.050 Alternative Practice Structures (ET§505.04) 820 Firm Name 820.010 Use of Retired Partner’s Name (ER 145, ET§591.289-.290) 820.020 A Practice with Non-CPA Partners (ER 190, ET§591.379-.380) 820.030 Misleading Firm Names (ET§505.05) 820.040 Use of a Common Brand Name in Firm Name (ET§505.06) Part 2: Members in Business 000 INTRODUCTION (New Content) 000.010 Conceptual Framework for Members in Business (New Content) 000.020 Ethical Conflicts (New Content) 100 INTEGRITY AND OBJECTIVITY 100.001 “Rule 102” Integrity and Objectivity (ET§ 102.01) 100.005 Application of the Conceptual Framework for Members in Business and Ethical Conflicts Interpretation (New Content)