AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

PROFESSIONAL ETHICS DIVISION

Frequently Asked Quest!ns
Per"!r#$n%e !" N!n$ttest&N!n$ssur$n%e Ser'%es
Answers to frequently asked questions (FAQs) regarding performance of nonattest
services follow. The answers to these FAQs are based on guidance the A!"A
"rofessional #thics $ivision staff provided in response to members% inquires concerning
nterpretation &o. '(')*+ ,"erformance of &onattest -ervices+, under .ule '('+
Independence (A!"A+ Professional Standards+ vol. /+ #T sec.'(' par. .(0)+ and have
been updated through the date of this practice aid. 1nless specifically noted otherwise+
the "rofessional #thics $ivision published these FAQs through various documents
between 2ay /((3 and 2ay /((0. n an effort to make the guidance more user)friendly+
the FAQs were reformatted into this document in 2arch /((4. The FAQs are not rules+
regulations+ or statements of the "rofessional #thics #5ecutive !ommittee and+ therefore+
are not authoritative guidance. Further+ the answers do not address the requirements of
other regulatory bodies+ such as the state boards of accountancy+ the -ecurities and
#5change !ommission (-#!)+ and the 1.-. 6overnment Accountability 7ffice whose
positions may differ from those of the A!"A.
IMPORTANT NOTE(
In $))lyn* t+e "!ll!,n* FAQs- t+e #e#.er s+!uld %!#)ly ,t+ $ll $))l%$.le
)r!'s!ns !" Inter)ret$t!n N!/ 01023- n%ludn*- .ut n!t l#ted t!- t+e 45ener$l
Requre#ents6
0
unless s)e%"%$lly dent"ed !t+er,se $nd t+$t t+e %lent n
quest!n s $n $ttest %lent t+$t s n!t requred t! "le ,t+ t+e SEC/
The FAQs in this document cover the following topics8
2anagement Functions (' FAQ)
.outine Activities (/ FAQs)
-uitable -kill+ 9nowledge+ and:or #5perience ('( FAQs)
$ocumentation .equirement (4 FAQs)
"eriod of the "rofessional #ngagement (' FAQ)
;ookkeeping -ervices ('( FAQs)
!ontrollership -ervices (' FAQ)
Ta5 -ervices (* FAQs)
nformation Technology -ervices (4 FAQs)
Appraisal+ <aluation+ and Actuarial -ervices (' FAQ)
Training (' FAQ)
"ro=ect 2anagement -ervices (/ FAQs)
M$n$*e#ent Fun%t!ns
0/ T+e "rst *ener$l requre#ent under Inter)ret$t!n N!/ 01023 st$tes t+$t t+e
#e#.er s+!uld n!t )er"!r# #$n$*e#ent "un%t!ns !r #$ke #$n$*e#ent
de%s!ns "!r t+e $ttest %lent/ 7+$t $re s!#e e8$#)les !" #$n$*e#ent "un%t!ns
"!r )ur)!ses !" Inter)ret$t!n N!/ 010239
A management function generally would include doing or having the authority to do
the following8
2ake decisions on behalf of the client
Authori>e+ e5ecute+ or consummate client transactions
-upervise+ hire+ or terminate client employees
7versee or manage any aspect of the client%s business
-et policy for the client
?ave access to or custody of client assets
-ign or cosign client checks
Taking responsibility for the management of a client%s pro=ect
#stablish or maintain internal controls for the client
Note: The preceding list is not intended to be all)inclusive.
"roviding advice+ research materials+ and recommendations to assist the client%s
management in performing its functions and making decisions would not constitute
the performance of a management function.
R!utne A%t'tes
0/ T+e se%!nd $nd t+rd *ener$l requre#ents under Inter)ret$t!n N!/ 01023 d!
n!t $))ly t! %ert$n r!utne $%t'tes )er"!r#ed .y t+e #e#.er/ 7+$t $re
%!nsdered t! .e r!utne $%t'tes "!r )ur)!ses !" t+e nter)ret$t!n9
@hether an activity is routine should be determined by considering all of the facts
and circumstances surrounding the activity. .outine activities generally involve
providing advice or assistance to the client on an informal basis as part of the normal
client)member relationship. .outine activities typically are insignificant in terms of
time incurred or resources e5pended and generally do not result in a specific pro=ect
or engagement or in the member producing a formal report or other formal work
product. #5amples of routine activities may include the following8
"roviding advice to the client on an accounting matter as an ancillary part of
the overall attest engagement
.esearching and responding to the client%s technical questions on relevant ta5
laws as an ancillary part of providing ta5 services
"roviding advice to the client on routine business matters
Page 2
#ducating the client on matters within the technical e5pertise of the member
"roviding information to the client that is readily available to the member+
such as best practices and benchmarking studies
:/ Is $ #e#.er )er#tted t! $ssst t+e %lent n underst$ndn* t+e n$ture !"
$d;ustn* entres $nd t+er #)$%t !n t+e "n$n%$l st$te#ents9
Aes. f a client needs assistance in understanding the nature of the entries and their
impact on the financial statements+ the member may e5plain the accounting principles
giving rise to the ad=ustments+ as well as the impact of the ad=ustments on the
financial statements.
Sut$.le Skll- <n!,led*e- $nd&!r E8)eren%e
0/ 7+$t d!es sut$.le skll- kn!,led*e- $nd&!r e8)eren%e #e$n n t+e %!nte8t !"
Inter)ret$t!n N!/ 010239
Suitable skill, knowledge, and/or experience means that the individual designated to
oversee the nonattest service has the ability to understand the nature+ ob=ective+ and
scope of the nonattest service. 7verseeing the service does not require the designated
individual to supervise the member in the day)to)day rendering of the services.
.ather+ the individual should agree on the nature+ ob=ective+ and scope of the servicesB
receive periodic progress reports when appropriateB make all significant =udgmentsB
evaluate the adequacy and results of the serviceB accept responsibility for the service
resultsB and ensure that the resulting work product meets the agreed)upon
specifications. The skill+ knowledge+ and:or e5perience needed will vary depending
on the nature of the nonattest service. For e5ample+ the skill+ knowledge+ and:or
e5perience needed to oversee a payroll service can be e5pected to be different than
the skill+ knowledge+ and:or e5perience needed to oversee a comple5 ta5 service. The
requirement for the designated individual to possess suitable skill+ knowledge+ and:or
e5perience does not+ however+ require that the individual possess the technical
e5pertise and e5perience and:or e5tensive familiarity that the member possesses or
the ability to perform or reperform the services. For e5ample+ at various times the rule
has called for the individual to Cbe sufficiently knowledgeable+D Csufficiently
informed+D
:/ Is t+e requre#ent t+$t t+e )r$%tt!ner )!ssess sut$.le skll- kn!,led*e- $nd&!r
e8)eren%e t! !'ersee t+e n!n$ttest ser'%es )r!'ded .y t+e #e#.er $
#$nd$t!ry )r!'s!n9
&o. -ince the mid)'EF(s+ nterpretation &o. '(')* has called for the attest client to
undertake certain responsibilities in connection with the delivery of various nonattest
services. These requirements necessitate oversight by an individual with suitable skill+
knowledge+ and:or e5perience.
Page 3
3/ 7+y d!es t+e rule requre $n nd'du$l ,+! )!ssesses sut$.le skll- kn!,led*e-
$nd&!r e8)eren%e t! !'ersee t+e n!n$ttest ser'%es )r!'ded .y t+e #e#.er9
f the individual designated by the client does not possess suitable skill+ knowledge+
and:or e5perience to oversee the nonattest service+ there would be no one (other than
the member) to make the significant =udgments that become necessary during the
delivery of the service or discharge the other client responsibilities under
nterpretation &o. '(')*.
=/ 7+$t $re t+e underlyn* %!n%e)ts t+$t su))!rt t+e %!n%lus!n t+$t $ #e#.er>s
nde)enden%e ,!uld .e #)$red " $n nd'du$l des*n$ted .y t+e %lent ,t+
sut$.le skll- kn!,led*e- $nd&!r e8)eren%e d!es n!t )er"!r# t+e $%t'tes
des%r.ed n t+e nter)ret$t!n9
Two threats to a member%s independence arise if the member assumes the client%s
responsibilities under nterpretation &o. '(')*. First a Cself)review threatD arises
when the member reviews+ as part of an attest engagement+ evidence that results from
his or her (or his or her firm%s) own nonattest work. That could happen+ for e5ample+
when the member makes significant =udgments on behalf of the client during the
performance of the nonattest service+ or the designated client individual lacks suitable
skill+ knowledge+ and:or e5perience to evaluate the adequacy and results of the
service and accept responsibility for those results. n that situation+ the member has a
disincentive to challenge the related financial statement amounts because doing so
could call into question his or her (or his or her firm%s) own work. That disincentive is
inconsistent with the need for the member to be independent and ob=ective with
respect to the client. The second threat that arises is a Cmanagement participation
threat.D 2aking significant =udgments on behalf of the attest client during the
performance of the nonattest service causes the member to function as management in
connection with the service. That also is inconsistent with the need for the member to
be independent and ob=ective with respect to the client. ;y ensuring that an individual
designated by the client with suitable skill+ knowledge+ and:or e5perience oversees
the member%s nonattest services and makes all management decisions+ both threats
are eliminated.
?/ H!, s+!uld $ #e#.er $ssess ,+et+er t+e nd'du$l des*n$ted .y t+e %lent t!
!'ersee t+e n!n$ttest ser'%e )!ssesses sut$.le skll- kn!,led*e- $nd&!r
e8)eren%e9
n assessing whether the designated individual has suitable skills+ knowledge+ and:or
e5perience to oversee a nonattest service+ the member might consider the following
factors that pertain to the individual8
9nowledge of the client%s business
9nowledge of the client%s industry
6eneral business knowledge
#ducation
Page 4
"osition at the client
-ome factors may be given more weight than others+ depending on the nature of the
service. For e5ample+ although the level of education attained by the individual can
be one indicator of his or her skills and:or knowledge+ it is not necessarily true that
the more formal education the individual possesses+ the more able he or she would be
to oversee the nonattest service. f the individual understands the nature of the
service+ he or she may have the skills+ knowledge+ and:or e5perience to oversee the
service+ regardless of the level of education he or she possesses. Accordingly+
members might conclude that those individuals would possess the necessary skills+
knowledge+ and:or e5perience to understand the services being performedB make any
management decisionsB and determine whether the results of the services meet the
agreed)upon specifications.
@/ Inter)ret$t!n N!/ 01023 requres t+$t t+e %lent des*n$te $n nd'du$l ,+!
)!ssesses sut$.le skll- kn!,led*e- $nd&!r e8)eren%e- )re"er$.ly ,t+n sen!r
#$n$*e#ent- t! !'ersee t+e n!n$ttest ser'%es/ 7+%+ nd'du$lAsB $t t+e %lent
%$n ser'e n t+s %$)$%ty A"!r e8$#)le- t+e !,nerCsD- %!ntr!ller- !r .!!kkee)erB9
The individual(s) designated by the client will likely depend on the nature of the
client%s organi>ation and the nature of the nonattest engagement. n an owner)
managed business+ it will often be the owner+ but depending on the nature of the
nonattest services and the qualifications (that is+ skill+ knowledge+ or e5perience) of
other client employees or individuals+ it also could be the controller+ bookkeeper+ or
another employee with or without knowledge:e5perience provided there is a basic
training on the nature of the engagement. n larger organi>ations or for more comple5
services+ the client is more likely to designate a senior officer to oversee the services.
The employee or individual responsible for overseeing the nonattest services needs to
understand the services sufficiently to oversee them but does not need to possess the
technical qualifications to perform or reperform the services.
For e5ample+ consider a nonattest engagement in which the member has been asked
to provide investment advisory services that include recommendations on the
allocation of funds that the client should invest in various asset classes based on the
client%s desired rate of return and risk tolerance. The owner of the company has
knowledge of the company%s investment ob=ectives and therefore serves as the client
designee. The owner makes all investment decisions concerning the allocation of
funds and investment selections and accepts responsibility for the resulting
investment plan. For purposes of this nonattest engagement+ the member may
conclude that the owner of the company possesses the skill+ knowledge+ and:or
e5perience to oversee the service. 7n the other hand+ consider an engagement when
the member is asked to install an off)the)shelf accounting package and set up the
chart of accounts and financial statement format for a small business client. The
owner of the company is traveling on business and designates the office manager or
bookeeper to oversee the installation. Those individual primarily performs routine
Page 5
clerical and receptionist functions for the business and has limited understanding of
the company%s operations. ?e or she has never used accounting or financial software+
such as the application being installed by the practitioner. For purposes of this
nonattest engagement+ it appears unlikely that the office manager or bookkeeper
would be in a position to sufficiently understand the services being performed to
oversee them and accept responsibility for the resulting accounting system.
E/ M$y t+e %lent %!ntr$%t ,t+ $ t+rd )$rty ,+! s n!t $n e#)l!yee !" t+e %lent t!
!'ersee !r $d'se !n t+e #e#.er>s )er"!r#$n%e !" t+e n!n$ttest ser'%e9
The client may contract with a third party to advise management regarding the nature
of the services and the evaluation of the adequacy and results of the services in order
to enable management to effectively oversee the services+ perform all management
functions+ make all management decisions+ accept responsibility for the services+ and
maintain internal controls over the services.
@hen the client outsources the nonattest services oversight functions to a third party+
such third party may serve as the individual designated by the client to oversee the
nonattest services provided he or she possesses the necessary skill+ knowledge+ or
e5perienceB functions in a capacity equivalent to that of a client employeeB and has the
authority to make decisions on behalf of the client.
F/ H!, %$n $ #e#.er .e s$ts"ed t+$t t+e %lent des*nee underst$nds t+e
n!n$ttest ser'%es )er"!r#ed $nd t+e resultn* ,!rk )r!du%t9
2embers are e5pected to utili>e their professional =udgment and e5perience to
recogni>e which individuals are able and willing to fulfill the client responsibilities
that are set forth in the interpretation. Through interaction with the client owner(s) or
client employees+ e5perienced practitioners should be able to assess whether the
designated client individual possesses the skill+ knowledge+ and:or e5perience to
effectively oversee the nonattest service.
G/ A %lent +$s d""%ulty underst$ndn* de"erred t$8 $ssets $nd de"erred t$8
l$.ltes/ 7+$t #ust $ %lent kn!, $.!ut t+ese %!n%e)ts n !rder t! .e
%!nsdered t! )!ssess t+e skll- kn!,led*e- $nd&!r e8)eren%e ne%ess$ry t! "ul"ll
t+e requre#entAsB under Inter)ret$t!n N! 010239
The intent of nterpretation &o. '(')* is not for the client to possess a level of
technical e5pertise commensurate with that of the member. n the case of deferred
ta5es+ the client should understand the basis for the deferred ta5 assets or liabilities
and the impact of the deferred ta5es on the financial statements.
01/ 7+$t $re s!#e e8$#)les !" n!n$ttest ser'%es $nd t+e le'el !" underst$ndn*
t+$t t+e %lent des*nee s+!uld )!ssess n !rder t! %!#)ly ,t+ Inter)ret$t!n N!/
010239
Page 6
BookkeepingG@hen the member performs routine bookkeeping services for an audit+
review+ or compilation client+ the member should be satisfied that the designated
individual understands the reason why the =ournal entries are being proposed and the
effect they have on the financial statements. For recurring or standard =ournal entries
(for e5ample+ depreciation)+ the designated individual may require no e5planation
regarding the reason for the entry (for e5ample+ when the member has previously
discussed these entries with the client)+ whereas for more comple5 =ournal entries (for
e5ample+ deferred ta5es)+ the member may need to e5plain to the client the reason and
basis for the entry and its impact on the financial statements. n any case+ the
individual should be in a position to approve the proposed =ournal entries and accept
responsibility for the company%s financial statements.
Tax ServicesGFor ta5 return preparation engagements+ the individual designated by
the client need not have an understanding of the applicable ta5 lawsB however+ the
member should have the designated individual review the ta5 return with an emphasis
on the key ta5 positions taken. The member also should be satisfied that the
individual understands the company%s ta5 situation+ has a general understanding of
how the amounts on the ta5 return were determined+ and make all decisions regarding
significant ta5 positions taken in the return.
Valuation ServicesGFor more comple5 engagements+ such as permitted valuation
services+ the member may need to e5plain to the individual designated by the client
the valuation methodologies used as well as all significant assumptions. The
individual then should be in a position to approve all significant assumptions and
accept responsibility for the resulting valuation.
D!%u#ent$t!n Requre#ent
0/ T+e t+rd *ener$l requre#ent !" Inter)ret$t!n N!/ 01023 requres t+$t t+e
#e#.er s+!uld est$.ls+ $nd d!%u#ent n ,rtn*

+s !r +er underst$ndn* ,t+
t+e %lent re*$rdn* t+e AaB !.;e%t'es !" t+e en*$*e#ent- AbB ser'%es t! .e
)er"!r#ed- AcB %lent>s $%%e)t$n%e !" ts res)!ns.ltes- AdB #e#.er>s
res)!ns.ltes- $nd AeB l#t$t!ns !" t+e en*$*e#ent/ 7!uld $ #e#.er .e n
%!#)l$n%e ,t+ t+s requre#ent " t+e )re%edn* )!nts ,ere d!%u#ented n $n
en*$*e#ent letter- t+e $udt )l$nnn* #e#!- !r n $ #e#! !" underst$ndn*
#$nt$ned n t+e #e#.er>s .lln* "les9
Aes. The general requirements of nterpretation &o. '(')* only require a member to
document his or her understanding with the client and do not indicate any specific
method of documentation. The methods indicated are not all)inclusive+ and other
methods may be appropriate as well. FAQ &o. / that follows provides further details+
including illustrative sample language.
:/ 7+$t "!r# !" d!%u#ent$t!n s requred9
Page 7
Although the rule requires that the understanding with the client must be in writing+
the form of documentation is left to the member%s discretion. The method of
documentation is not as important as the content of the documentation. For e5ample+
if the member performs a consulting engagement for an audit client+ the member may
decide to document the required elements with respect to the consulting engagement
in the audit engagement letter. The understanding also could be documented+ for
e5ample+ in a separate engagement letter specific to the consulting service
engagement+ a memo to the audit files+ or a checklist that the member completes as
part of the audit. f a client engages the member to perform ta5 services+ the
understanding could be documented in a ta5 organi>er or a memo contained in the ta5
working papers. 7ther methods of documentation+ such as a memo of understanding
maintained in the member%s billing or correspondence files (that is+ separate from the
client working paper files)+ also would satisfy this requirement. The following is
illustrative sample language that can be incorporated into an audit+ review+ or
compilation engagement letterB a Cstand)aloneD nonattest services engagement letterB
a ta5 organi>er letterB or other documentation method preferred by the member8
Page 8
3/ 7+$t %lents $re $""e%ted .y t+e d!%u#ent$t!n requre#ent9
Page 9
-ample Hanguage to $ocument 1nderstanding @ith the !lient for the "rovision of
;ookkeeping and Ta5 -ervices
O.;e%t'es !" t+e En*$*e#ent $nd Ser'%es t! .e Per"!r#ed
'. @e provide the bookkeeping and ta5 services outlined as follows8
At the end of each month+ !"A Firm agrees to perform the following functions8
G "ost coded transactions to A;! !ompany%s general ledger.
G "ropose ad=usting or correcting =ournal entries to be reviewed and approved by
A;! !ompany.
G "repare a trial balance based on the ad=usted general ledger.
G "repare monthly sales and payroll ta5 returns Iinsert applicable tax
jurisdictionsJ.
At the end of the year+ !"A Firm agrees to perform the following functions8
G "ropose ad=usting or correcting =ournal entries to be reviewed and approved by
A;! !ompany.
G "repare federal and state income ta5 returns Iinsert applicable tax
jurisdictionsJ.
G "repare year)end sales and payroll ta5 returns Iinsert applicable tax
jurisdictionsJ.
G Answer inquiries on specific ta5 matters.
!"A Firm will not perform management functions or make management decisions
on behalf of A;! !ompany. ?owever+ we will provide advice and
recommendations to assist management of A;! !ompany in performing its
functions and making decisions.
/. A;! !ompany%s responsibilities are as follows8
A;! !ompany agrees to perform the following functions in connection with !"A
Firm%s provision of the bookkeeping and ta5 services8
G 2ake all management decisions and perform all management functions+
including determining account codings and approving all proposed =ournal
entries.
G Assign Iname of competent client emploeeJ to oversee the bookkeeping and
ta5 services and evaluate the adequacy and results of the services.
G Accept responsibility for the results of the bookkeeping and ta5 services+
including the =ournal entries+ general ledger+ trial balance+ and ta5 returns.
G #stablish and maintain internal controls over the bookkeeping and ta5 return
preparation processes.
*. !"A Firm%s responsibilities and limitations of the engagement are as follows8
!"A Firm will perform the services in accordance with applicable professional
standards+ including the -tatements on -tandards for Ta5 -ervices issued by the
A!"A.
This engagement is limited to the bookkeeping and ta5 services previously
outlined. !"A Firm+ in its sole professional =udgment+ reserves the right to refuse to
do any procedure or take any action that could be construed as making
management decisions or performing management functions+ including
determining account codings and approving =ournal entries. !"A Firm will advise
A;! !ompany with regard to ta5 positions taken in the preparation of the ta5
return+ but A;! !ompany must make all decisions with regard to those matters.
The documentation requirement applies to any nonattest services (for e5ample+
bookkeeping+ ta5+ or consulting services) performed by the member for an attest
client. For purposes of this rule+ an attest client is any client for which the member
performs any service for which independence is required. Accordingly+ for purposes
of this rule+ a client for which a member performs a compilation would only be
considered an attest client if the member%s compilation report does not disclose a lack
of independence.
7ther regulators may have more restrictive rules regarding independence when
performing nonattest services for an attest client. Accordingly+ the member should be
aware of and comply with all rules and regulations applicable to specific clients.
=/ Are $ny $%t'tes e8%luded "r!# t+e d!%u#ent$t!n requre#ent9
The documentation requirement does not apply to routine activities performed by the
member+ such as providing advice and responding to the client%s technical questions
as part of the normal client)member relationship. -ee FAQ &o. ' under the heading
C.outine Activities.D
?/ 7!uld nde)enden%e .e #)$red ,+en $ #e#.er "$ls t! d!%u#ent t+e
underst$ndn* ,t+ t+e %lent9
&o. A failure to prepare the required documentation would not impair the member%s
independence provided the understanding with the client had been established.
?owever+ the failure to document the understanding with the client would be
considered a violation of .ule /(/+ !ompliance "it# Standards (A!"A+
Professional Standards+ vol. /+ #T sec. /(/ par. .(').
@/ A #e#.er )r!'des !nly n!n$ttest ser'%es t! $ %lent "!r t+e ye$r endn*
De%e#.er 30- :11=/ In :11?- t+e #e#.er s $sked t! )er"!r# $n $udt !" t+e
%lent>s ye$r2end :11= "n$n%$l st$te#ents/ 7!uld t+e #e#.er .e n '!l$t!n !"
t+e t+rd *ener$l requre#ent under Inter)ret$t!n N!/ 01023 .e%$use t+e "r#
dd n!t %!#)ly ,t+ t+e d!%u#ent$t!n requre#ent ,t+ res)e%t t! t+e
n!n$ttest ser'%es )er"!r#ed n :11=9
&o. The documentation requirement does not apply to nonattest services performed
prior to the client becoming an attest client. ?owever+ upon the acceptance of an attest
engagement+ the member should prepare written documentation demonstrating his or
her compliance with the other general requirements of nterpretation &o. '(')*
during the period covered by the financial statements+ including the requirement to
establish an understanding with the client.
Page 10
E/ Must $ #e#.er d!%u#ent t+e %lent>s re'e, $nd $))r!'$l !" ;!urn$l entres
)r!)!sed .y t+e #e#.er9
nterpretation &o. '(')* does not require that the member document the client%s
review and approval of the =ournal entries. ?owever+ the member may wish to
document the name of the client representative who reviewed and approved the
=ournal entries and the date of his or her review to provide evidence that such review
and approval took place.
F/ A #e#.er>s "r# d!es n!t requre ts %lents t! s*n en*$*e#ent letters "!r t$8
return )re)$r$t!n ser'%es/ H!, d!es t+e d!%u#ent$t!n requre#ent under
Inter)ret$t!n N!/ 01023 $))ly ,t+ res)e%t t! t+ese %lents9
Ta5 services are nonattest services sub=ect to the requirements of nterpretation &o.
'(')*. Therefore+ the documentation requirement applies when the member provides
ta5 services to a client for which the member also provides attest services. ?owever+
the method of documentation is left to the member%s discretion+ and+ provided it
contains all of the required elements+ it could be documented in a ta5 organi>er or
disclosure statement provided to the client+ a memo in the ta5 or attest service
working papers+ or through other means.
Per!d !" t+e Pr!"ess!n$l En*$*e#ent
0/ 7!uld $ #e#.er>s nde)enden%e .e %!nsdered #)$red " $ #e#.er
)er"!r#ed ser'%es t+$t ,!uld #)$r nde)enden%e under Inter)ret$t!n N!/
01023 durn* t+e )er!d %!'ered .y t+e "n$n%$l st$te#ents .ut )r!r t! t+e
)er!d !" t+e )r!"ess!n$l en*$*e#ent9
nterpretation &o. '(')* states that in cases when the requirements of the
interpretation have not been met during the period of the professional engagement or
the period covered by the financial statements+ the member%s independence would be
impaired. ?owever+ independence would not be considered impaired provided the
services (a) do not constitute management functions+ (b) were performed prior to the
period of the professional engagement+ (c) relate solely to financial statements of the
prior period+ and (d) those financial statements were audited by another firm (or in the
case of a review engagement+ reviewed or audited by another firm). -ee FAQ &o. '
under the previous heading C2anagement FunctionsD and #T section '((.('+
!onceptual $ramework for %I!P% Independence Standards (A!"A+ Professional
Standards+ vol. /)+ for further guidance on what would constitute a management
function (issued &ovember /((F).
B!!kkee)n* Ser'%es
Page 11
0/ A #e#.er re%!rds ;!urn$l entres ,+le )er"!r#n* #!nt+ly .!!kkee)n*
ser'%es ,t+!ut !.t$nn* %lent $))r!'$l/ 7!uld nde)enden%e .e #)$red9
Aes. n order for the member to maintain his or her independence+ the client must
review and approve the =ournal entries+ and the member should be satisfied that
management understands the nature of the proposed entries and the impact the entries
have on the financial statements.
:/ Durn* t+e %!urse !" )r!'dn* #!nt+ly .!!kkee)n* ser'%es- t+e #e#.er
re%e'es n'!%es "r!# t+e %lent nd%$tn* $))r!'$l "!r )$y#ent $nd dent"yn*
t+e $))r!)r$te *ener$l led*er $%%!unts t! re%!rd t+e tr$ns$%t!n/ T+e #e#.er
)re)$res t+e %lent>s %+e%ks "!r )$y#ent !" t+!se n'!%es- re%!rds t+e
tr$ns$%t!ns n t+e %lent>s *ener$l led*er syste#- $nd returns t+e %+e%ks t! t+e
%lent "!r $))r!'$l $nd s*n$ture/ T+e #e#.er d!es n!t +$'e s*n$ture $ut+!rty
!'er t+e %lent>s %+e%kn* $%%!unt/ 7!uld nde)enden%e .e #)$red9
&o. 2anagement determined and approved the appropriate account classifications+
approved the invoices for payment+ and reviewed and signed the prepared checks.
3/ Durn* t+e %!urse !" )r!'dn* #!nt+ly .!!kkee)n* ser'%es- t+e #e#.er
ds%usses ,t+ %lent #$n$*e#ent t+e need t! re%!rd re%urrn* ;!urn$l entres
A"!r e8$#)le- de)re%$t!n e8)enseB e$%+ #!nt+ n t+e *ener$l led*er/ T+e %lent
$))r!'es t+e re%urrn* ;!urn$l entres $nd #$kes $ny ne%ess$ry de%s!ns A"!r
e8$#)le- use"ul l'es !" t+e $ssetsB/ T+e #e#.er t+en re%!rds t+ese entres n t+e
%lent>s *ener$l led*er e$%+ #!nt+/ 7!uld nde)enden%e .e #)$red9
&o. The client understands the general nature of the =ournal entries and the impact
they have on its financial statements.
=/ A %lent re%!rds $ll ds.urse#ents n ts %+e%k.!!k $nd dent"es t+e ty)e !"
e8)ense A"!r e8$#)le- tele)+!ne- rent- $nd s! !nB !n t+e %+e%k.!!k stu.s/ Durn*
t+e %!urse !" )r!'dn* #!nt+ly .!!kkee)n* ser'%es- t+e #e#.er $ss*ns t+e
*ener$l led*er $%%!unt nu#.er .$sed !n t+e ty)e !" e8)ense nd%$ted .y t+e
%lent $nd re%!rds t+ese )$y#ents n t+e %lent>s $%%!untn* syste#/ 7!uld
nde)enden%e .e #)$red9
&o. The member would not be considered coding transactions.
?/ A #e#.er s en*$*ed t! )er"!r# $n $udt- re'e,- !r %!#)l$t!n !" $ %lent>s
"n$n%$l st$te#ents/ Durn* t+e %!urse !" t+e $udt- re'e,- !r %!#)l$t!n- t+e
#e#.er )r!)!ses $udt $d;ust#ents t! t+e "n$n%$l st$te#ents/ E8$#)les !"
t+ese entres n%lude t+e %urrent t$8 $%%ru$l $nd de"erred t$8 $ssets !r l$.ltes
$nd t+e $#!unt !" de)re%$t!n $nd $#!rtH$t!n ne%ess$ry "!r t+e %urrent ye$r/
T+e %lent re'e,s t+ese entres- underst$nds t+e #)$%t !n ts "n$n%$l
st$te#ents- $nd re%!rds t+e $d;ust#ents dent"ed .y t+e #e#.er/ 7!uld t+e
)r!)!s$l !" su%+ entres %!nsttute $ n!n$ttest .!!kkee)n* ser'%e su.;e%t t!
Inter)ret$t!n N!/ 010239
Page 12
&o. "roposing entries as a result of the member%s audit+ review+ or compilation
services is a normal part of those engagements and would not constitute performing a
nonattest bookkeeping service sub=ect to nterpretation &o. '(')*.
@/ A #e#.er s en*$*ed t! )er"!r# $n $udt "!r $ %lent ,+! re%!rds $ll
tr$ns$%t!ns !n $ %$s+ .$ss n ts *ener$l led*er/ Durn* t+e $udt )r!%ess- t+e
#e#.er dent"es $ll $))r!)r$te ;!urn$l entres requred t! %!n'ert t+e %lent>s
*ener$l led*er t! $n $%%ru$l .$ss $nd )re)$res t+e "n$n%$l st$te#ents-
n%ludn* "!!tn!tes- !n t+e $%%ru$l .$ss n !rder t! %!n"!r# ,t+ U/S/ *ener$lly
$%%e)ted $%%!untn* )rn%)les A5APPB/ T+e %lent re'e,s t+e entres $nd
"n$n%$l st$te#ents- n%ludn* $ll "!!tn!te ds%l!sures- $nd underst$nds t+e
#)$%t t+ese entres +$'e !n t+e "n$n%$l st$te#ents/ As )$rt !" t+e #$n$*e#ent
re)resent$t!n letter- t+e %lent $%kn!,led*es res)!ns.lty "!r t+e "n$n%$l
st$te#ents $nd "!!tn!tes/ 7!uld t+ese ser'%es .e %!nsdered n!n$ttest
.!!kkee)n* ser'%es su.;e%t t! Inter)ret$t!n N!/ 010239
&o. "roviding these services as part of the member%s audit of the client%s financial
statements would not be considered bookkeeping services sub=ect to the requirements
of nterpretation &o. '(')*. n addition+ a member should use =udgment concerning
what would be considered part of the normal audit process and what would be a
separate nonattest service. A client%s books and records have to be substantially
complete and current in order to conduct an audit of those books and records. The
client%s books and records would include all subsidiary ledgers or information
required by the auditor (such as accounts receivable or payable) for the necessary
conversion. f a member performs a service to bring those books and records current
or complete (such as compiling the subsidiary information)+ the service should be
considered outside the scope of the normal audit process and+ therefore+ a nonattest
service sub=ect to nterpretation &o. '(')*. ?owever+ nterpretation &o. '(')* would
be applicable when the member is engaged to perform a stand)alone bookkeeping
engagement for the client. An e5ample would be when a member is engaged to
perform monthly bookkeeping services+ including the preparation of monthly
compiled financial statements.
E/ T+e #e#.er )re)$res $ .$nk re%!n%l$t!n !" $ %lent>s .$nk $%%!unt n
%!nne%t!n ,t+ #!nt+ly .!!kkee)n* ser'%es/ T+e %lent re'e,s $nd $))r!'es
t+e .$nk re%!n%l$t!n/ 7!uld nde)enden%e .e #)$red9
&o. The client reviews and approves the bank reconciliation and sufficiently
understands the services performed to oversee them.
F/ A #e#.er )er"!r#n* .!!kkee)n* ser'%es re%!rds $d;ustn* $nd
re%l$ss"%$t!n ;!urn$l entres $nd %!#)les )rel#n$ry "n$n%$l st$te#ents/
T+e #e#.er del'ers t+e "n$n%$l st$te#ents $nd %!#)l$t!n re)!rt t! t+e
%lent $nd )r!'des t+e %lent %!)es !" t+e *ener$l led*er- ;!urn$ls- $nd ;!urn$l
entres- ,+%+ %!nt$n $ des%r)t!n !" t+e n$ture !" e$%+ entry/ T+e #e#.er
Page 13
$sks t+e %lent t! re'e, t+e ;!urn$l entres $nd t+en $sks ,+et+er t+e %lent +$s
$ny quest!ns $.!ut $ny !" t+e entres/ 7!uld t+e requre#ents !" Inter)ret$t!n
N!/ 01023 .e #et9
Aes. "rovided the member is satisfied that the client understands the nature and
impact of the =ournal entries+ the requirements of nterpretation &o. '(')* would be
met.
G/ Must t+e #e#.er re'e, t+e )r!)!sed ;!urn$l entres $nd e8)l$n t+er #)$%t
!n t+e "n$n%$l st$te#ents t! t+e %lent n )ers!n !r %$n t+s re'e, t$ke )l$%e
.y )+!ne- "$8- #$l- !r e2#$l9
The review process can take place in personB by phone+ fa5+ mail+ or e)mailB or a
combination thereof. .egardless of the method used+ the member must be satisfied
that the client understands the nature and impact of the =ournal entries.
01/ As )$rt !" )er"!r#n* .!!kkee)n* ser'%es- $ #e#.er re%!rds $d;ustn*
;!urn$l $nd re%l$ss"%$t!n entres $nd )re)$res t+e %lent>s )rel#n$ry
"n$n%$l st$te#ents/ T+e #e#.er d!es n!t re'e, e$%+ $nd e'ery ;!urn$l entry
,t+ t+e %lent- .ut- r$t+er- t+e #e#.er des%r.es t+e n$ture !" t+e ;!urn$l
entres $nd t+er #)$%t !n t+e )rel#n$ry "n$n%$l st$te#ents/ T+e %lent
$))r!'es t+e )rel#n$ry "n$n%$l st$te#ents $nd ssues t+e# t! ts
.$nk/ 7!uld t+e requre#ents !" Inter)ret$t!n N!/ 01023 .e #et9
Aes. "rovided all of the other requirements of nterpretation &o. '(')* are met.
C!ntr!llers+) Ser'%es
0/ A #e#.er )r!'des te#)!r$ry %!ntr!llers+) ser'%es $nd '$r!us ty)es !" !t+er
te#)!r$ry $%%!untn* ser'%es "!r %lents durn* %lent #$ternty le$'es-
llnesses- $nd sudden de)$rtures/ D! t+ese $%t'tes #)$r nde)enden%e under
Inter)ret$t!n N!/ 010239
These services would be sub=ect to nterpretation &o. '(')*. f a member performs
controller)type activities+ independence would be impaired because such activities
typically involve the performance of management functions or the supervision of
client employees. ?owever+ if the member performs temporary accounting and other
services in compliance with the requirements of nterpretation &o. '(')*+
independence would not be impaired. The member also should consider whether the
duration or regularity of the services might appear to impair independence/ ?aving
the title of controller would impair independence regardless of the actual services
performed.
T$8 Ser'%es
Page 14
0/ T+e #e#.er )er"!r#s ye$r2end t$8 )l$nnn* $nd )re)$res t+e t$8 returns "!r $n
$ttest %lent/ 7!uld t+ese ser'%es .e %!nsdered n!n$ttest ser'%es $nd t+ere"!re
su.;e%t t! t+e requre#ents !" Inter)ret$t!n N!/ 010239
Aes. Ta5 services are considered nonattest services and are therefore sub=ect to the
general requirements of nterpretation &o. '(')*+ including the member%s
understanding with the client with respect to the ta5 services that must be documented
in writing.
:/ D!es Inter)ret$t!n N!/ 01023 $))ly ,+en t+e #e#.er )re)$res t+e )ers!n$l t$8
returns !" t+e !,ners $nd !""%ers !" $n $udt- re'e,- !r %!#)l$t!n %lent9
D!es t #$tter ,+et+er t+e !,ners !r !""%ers )$y "!r t+e ser'%es t+e#sel'es !r
,+et+er t+e %lent )$ys "!r t+e ser'%es $s $n e8e%ut'e )erk9
f the personal ta5 returns are prepared without having to rely on representations of
the client+ then nterpretation &o. '(')* would not apply. The mere fact that the client
pays for the services also would not cause nterpretation &o. '(')* to apply.
3/ 7!uld $ssstn* $ %lent n $))lyn* Fn$n%$l A%%!untn* St$nd$rds B!$rd
AFASBB Accounting Standards Codification
TM
AASCB E=12012?1 #)$r
nde)enden%e A"!r e8$#)le- dent"yn* )!tent$l un%ert$n t$8 )!st!ns-
$d'sn* t+e %lent ,+et+er t+!se t$8 )!st!ns #eet t+e #!re2lkely2t+$n2n!t
CMLTND t+res+!ld- $nd %$l%ul$tn* t+e rel$ted unre%!*nHed t$8 .ene"tsB9
The provision of such services would not impair independence provided the client can
make an informed =udgment on the results of the member%s services and the other
requirements of nterpretation &o. '(')* are met. n meeting the requirements of
nterpretation &o. '(')*+ the member may assist the client in understanding why the
ta5 positions do or do not meet the 2HT& threshold and the basis for any
unrecogni>ed ta5 benefit so that the client can accept responsibility for the amounts
reported and disclosed in the financial statements (issued Kuly /((F and reference to
FA-; A-! updated -eptember /((E).
In"!r#$t!n Te%+n!l!*y Ser'%es
0/ 7+y d!es Inter)ret$t!n N!/ 01023 nd%$te t+$t nde)enden%e ,!uld .e
#)$red " $ #e#.er s !)er$tn* $ %lent>s l!%$l $re$ net,!rk ALANB syste#9
7perating a client%s HA& is considered to be a management function that would
violate the general requirements of nterpretation &o. '(')*.
:/ 7!uld !uts!ur%n* t+e %lent>s entre net,!rk !)er$t!n $nd nde)endently
!)er$tn* t+e %lent>s LAN syste# #)$r nde)enden%e9
Aes.
Page 15
3/ 7!uld )er"!r#n* net,!rk #$nten$n%e A"!r e8$#)le- u)d$tn* 'rus
)r!te%t!n- $))lyn* u)d$tes $nd )$t%+es- !r %!n"*urn* user settn*s %!nsstent
,t+ #$n$*e#ent>s requestB #)$r nde)enden%e9
&o. "erforming network maintenance is not considered to be operating the client%s
network and+ therefore+ would not impair independence provided a client employee
with the necessary skill+ knowledge+ and:or e5perience is making all decisions and
approving all activities.
=/ 7!uld $ssstn* $ %lent ,t+ $ ser'er )r!;e%t A"!r e8$#)le- nst$ll- #*r$te- !r
u)d$te ts net,!rk !)er$tn* syste#I $dd equ)#ent $nd usersI !r %!)y d$t$ t!
$n!t+er %!#)uterB #)$r nde)enden%e9
&o. "rovided the member does not make other than insignificant modifications to the
source code underlying the client%s financial information system.
?/ 7!uld su)er'sn* %lent )ers!nnel n t+e d$ly !)er$t!n !" t+e %lent>s
n"!r#$t!n syste# #)$r nde)enden%e9
Aes. n this case+ the member would be performing management duties (supervising
client employees in the performance of their normal recurring activities)+ which
would impair independence.
@/ 7!uld $ssstn* $ %lent ,t+ )r!%urn* $nd se%urn* Internet $%%ess #)$r
nde)enden%e9
&o+ provided a client employee with the necessary skill+ knowledge+ and:or
e5perience makes all decisions concerning the nternet provider and services to be
provided.
E/ 7+$t %rter$ s+!uld $ #e#.er use t! deter#ne ,+et+er $ %lent>s n"!r#$t!n
syste# s unrel$ted t! ts "n$n%$l st$te#ents !r $%%!untn* re%!rds9
nformation systems that produce information that is reflected in the amounts and
disclosures in the client%s financial statements+ used in determining such amounts and
disclosures+ or used in effecting internal control over financial reporting are
considered to be related to the financial statements and accounting records. ?owever+
information systems that are used only in connection with controlling the efficiency
and effectiveness of operations are considered to be unrelated to the financial
statements and accounting records.
F/ 7+$t "$%t!rs s+!uld $ #e#.er %!nsder n deter#nn* ,+et+er t+e
#!d"%$t!ns #$de t! s!ur%e %!de underlyn* $ %lent>s "n$n%$l n"!r#$t!n
syste# $re !t+er t+$n ns*n"%$nt9
Page 16
f the modifications have more than an insignificant effect on the functionality of the
software+ they should be considered to be other than insignificant.
A))r$s$l- V$lu$t!n- $nd A%tu$r$l Ser'%es
0/ 7!uld $ssstn* $ %lent n $))lyn* FASB ASC F1?- usiness Co!binations- !r
FASB ASC 3?1- "ntangib#es$%ood&i## and 't(er- #)$r nde)enden%e A"!r
e8$#)le- )r!'dn* $d'%e !n t+e '$r!us '$lu$t!n #et+!d!l!*es $'$l$.le $nd
$ssu#)t!ns needed $nd )r!'dn* '$lu$t!n te#)l$tes- s!"t,$re- !r !t+er t!!ls
s! t+$t t+e %lent %$n deter#ne $n $))r!)r$te '$lue "!r $%qured $ssets-
*!!d,ll- %!ntn*ent %!nsder$t!n- $nd s! !nB9
@hen the client requests that the member perform valuation services or when the
member is in essence performing the valuation for the client (such as when the
member provides the client with a firm)developed template or software product or
inserts amounts into a template or software product)+ the member should refer to the
guidance in nterpretation &o. '(')*. The guidance states that independence would be
impaired if a member performs an appraisal or valuation service for an attest client
when the results of the service would be material to the financial statements and the
appraisal or valuation involves a significant degree of sub=ectivity. <aluations
performed in connection with business combinations or appraisals of assets or
liabilities normally have a material effect on financial statements and involve a
significant degree of sub=ectivity.
"roviding advice on the various valuation methodologies available and assumptions
to be made in performing the valuation would not impair independence provided the
requirements of nterpretation &o. '(')* are met. These requirements include the
client determining or approving all significant assumptions and matters of =udgment
and making an informed =udgment on+ and accepting responsibility for+ the results of
the service. n meeting the requirements of nterpretation &o. '(')*+ the member also
may assist the client in understanding the accounting standards and the nature of the
necessary accounting ad=ustments.
n addition+ the member may provide the client with generic or standardi>ed
templates or software products not developed by the firm to assist the client with
performing the valuation. &eneric or standardi'ed products are those in which
formulas are well established and sub=ect to only minor =udgments or interpretations.
Accordingly+ it is reasonable to e5pect that the result produced by such products will
be similar to the result that would be produced by other vendors% products (issued
August /((4 and references to FA-; A-! updated -eptember /((E).
Tr$nn*
0/ An $ttest %lent s #)le#entn* %+$n*es t! ts "n$n%$l re)!rtn* syste# !r
)r!%ess A"!r e8$#)le- #)le#entn* Intern$t!n$l Fn$n%$l Re)!rtn*
St$nd$rds CIFRSsD !r eJtens.le Busness Re)!rtn* L$n*u$*e CJBRLDB/ 7!uld
Page 17
$ #e#.er>s nde)enden%e .e #)$red " +e !r s+e )r!'ded tr$nn* t! t+e %lent
rel$ted t! su%+ syste# !r )r!%ess9
A member%s independence would not be impaired if he or she provides client
personnel with a general understanding of the financial reporting system or process
(F."). f client personnel already have a general understanding of the F."+ the
member may provide more specific training to client personnel on how the system or
process applies to the client%s specific circumstances. n providing training services+
however+ the member should ensure that such nonattest services do not involve
supervising client personnel in either the implementation or daily operation of the
F."+ or performing other management responsibilities+ such as making F."
operational decisions or implementing the internal controls necessary for the F." to
run effectively (issued February /('().
Pr!;e%t M$n$*e#ent Ser'%es
0/ 7!uld $ #e#.er>s nde)enden%e .e #)$red " +e !r s+e #$n$*ed $ )r!;e%t "!r
$n $ttest %lent Asu%+ $s %!n'ertn* t+e %lent>s FRP "r!# US 5AAP t! IFRSs !r
#)le#entn* JBRLB9
Aes+ taking responsibility for the management of a client%s pro=ect would impair a
member%s independence. This would be true even if the pro=ect did not impact the
financial statements.
ndependence+ however+ would not be impaired if management makes all decisions
related to the pro=ect and the member%s involvement was limited to providing
assistance+ advice+ suggestions and:or recommendations regarding matters that are
within their areas of knowledge or e5perience. -uch activities might include (a)
providing advice about either the tagging of L;.H)formatted or preparation of
F.-s)based financial statements+ (b) providing feedback on management%s plans+
including how management will prioriti>e its activities+ and (c) assisting the client
with its understanding of the general considerations for the pro=ect (issued February
/('(.)
:/ 7!uld $ #e#.er>s nde)enden%e .e #)$red " +e !r s+e $sssted %lent
#$n$*e#ent ,t+ ts deter#n$t!n !" ,+et+er !r n!t t! )r!%eed ,t+ $ )r!;e%t
A"!r e8$#)le- %!n'ert ts FRP "r!# US 5AAP t! IFRSs !r s #)le#entn*
JBRL "!r ts "n$n%$l st$te#entsB9
"rovided the member only assists the client by providing guidance on the conversion
or implementation issues and does not make the decision of whether or not to proceed
with the pro=ect+ the member%s independence would not be impaired. For e5ample+
such assistance may include (a) helping gather information that management will use
to conduct its analysis or (b) providing advice and making recommendations on the
assumptions management plans to use in its analysis (issued February /('(.)
Page 18
Endn!tes
Page 19
'
. The general requirements for performing nonattest services are the following8
a( The member should not perform management functions or make management decisions for the attest client. ?owever+ the
member may provide advice+ research materials+ and recommendations to assist the client%s management in performing its
functions and making decisions.
b( The client must agree to perform the following functions in connection with the engagement to perform nonattest services8
i. 2ake all management decisions and perform all management functions.
ii. $esignate an individual who possesses suitable skill+ knowledge+ and:or e5perience+ preferably within senior
management+ to oversee the services.
iii. #valuate the adequacy and results of the services performed.
iv. Accept responsibility for the results of the services.
The member should be satisfied that the client will be able to meet all of these criteria and make an informed
=udgment on the results of the member%s nonattest services. n assessing whether the designated individual possesses
suitable skill+ knowledge+ and:or e5perience+ the member should be satisfied that such individual sufficiently
understands the services to be performed to oversee them. ?owever+ the individual is not required to possess the
e5pertise and e5perience to perform or reperform the services.
n cases when the client is unable or unwilling to assume these responsibilities (for e5ample+ the client does not have
an individual with suitable skill+ knowledge+ and:or e5perience to oversee the nonattest services provided or is
unwilling to perform such functions due to lack of time or desire)+ the member%s provision of these services would
impair independence.
c( ;efore performing nonattest services+ the member should establish and document in writingK his or her understanding with
the client (board of directors+ audit committee+ or management+ as appropriate in the circumstances) regarding the
following8 (') ob=ectives of the engagementB (/) services to be performedB (*) clientMs acceptance of its responsibilitiesB (3)
memberMs responsibilitiesB and (0) any limitations of the engagement.
The documentation requirement does not apply to the following8
i. &onattest services performed prior to Kanuary '+ /((0.
ii. &onattest services performed prior to the client becoming an attest client.
L
6eneral requirements (a) and (b) do not apply to certain routine activities performed by the member+ such as providing
advice and responding to the clientMs questions as part of the normal client)member relationship.
K A failure to prepare the required documentation would not impair independence+ but would be considered a violation of .ule /(/+
!ompliance wit# Standards (A!"A+ Professional Standards+ vol. /+ #T sec. /(/)- provided that the member did establish the
understanding with the client. IFootnote added+ effective $ecember *'+ /((*+ by the "rofessional #thics #5ecutive !ommittee.
Footnote subsequently revised Kanuary /F+ /((0.J
L ?owever+ upon the acceptance of an attest engagement+ the member should prepare written documentation demonstrating his or her
compliance with the other general requirements during the period covered by the financial statements+ including the requirement to
establish an understanding with the client. IFootnote added+ effective 7ctober *'+ /((3+ by the "rofessional #thics #5ecutive
!ommittee.J