Proposed New Interpretation
Interpretation 501-8 under Rule 501: “Failure to follow requirements of governmental bodies, commissions, or other regulatory agencies on indemnification and limitation of liability agreements with a client”
The Professional Ethics Executive Committee (PEEC, or the committee) believes it would be prudent to issue guidance reminding members that certain regulators prohibit the use of various indemnification and limitation of liability provisions and, therefore, entering into such an agreement with a client who is subject to such regulators’ requirements would be considered an act discreditable to the profession. Accordingly, the committee is proposing an interpretation under Rule 501, Acts Discreditable (AICPA, Professional Standards, vol. 2, ET sec. 501), that would require members to comply with the requirements of such regulators on the use of these provisions when providing audit or other attest services that are required by such regulators.
Members and other interested parties are encouraged to comment on this proposal. Comments on this exposure draft will be accepted through February 3, 2008, and should be sent to Lisa A. Snyder, Director, Professional Ethics Division, at firstname.lastname@example.org.
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