Ep. 18: Check out PEEC's 3Q activity

August 14, 2020

In this episode, you’ll hear our update on NOCLAR (noncompliance with laws and regulations), the inducements practice aid, IESBA (the International Ethics Standards Board for Accountants), the monitoring group recommendations, and a status report on the Statements on Standards for Tax Services. You'll hear about an Association update from Sue Coffey, executive vice president for public practice and also the PEEC strategy and work plan. In this meeting, PEEC voted to re-expose the staff augmentation proposal for comment.

Our next PEEC meeting is November 17. We'd love you to join us. Go to www.aicpa.org/PEECmeeting and register to attend.

If you have questions about the substantive content of this episode, please call the ethics hotline at 888.777.7077 (option 2, then option 3) or email ethics@aicpa.org.

If you’d like to suggest topics for future episodes, please email ethicallyspeaking@aicpa.org.

Transcript

Toni Lee-Andrews: I’m Toni Lee-Andrews director of the Professional Ethics Division at the AICPA. In this episode, you’ll hear our update on NOCLAR, noncompliance with laws and regulations, the inducements practice aid, IESBA — the International Ethics Standards Board for Accountants, the monitoring group recommendations and a status report on the Statements on Standards for Tax Services.

In our meeting we had an Association update from Sue Coffey, executive vice president for public practice. We discussed the PEEC strategy and work plan and the committee voted to re-expose the staff augmentation proposal for comment. We're going to start today with our NOCLAR update, which will be given by Michelle Craig the division’s lead manager of behavioral and independent standards. Michelle?

Michele Craig: Thanks, Toni. As Toni mentioned, I will be providing the NOCLAR update so during the PEEC meeting Bob Durham, the NOCLAR task force chair reported on the task force activities since the last meeting held in May. And if you recall at that meeting the task force report had several pending issues which the task force has now narrowed down to one pending issue.

The task force met four times since the last meeting and the first issue addressed was the use of the term engaging entity. The task force decided that the guidance provided in the introduction of the proposed interpretation sufficiently explained that the members responsibility applied to the engaging entity.

The task force also addressed issues related to the application of guidance for members providing attest services and concluded that the guidance and the proposed interpretation should apply to financial statement attest services. The task force then decided to use the term financial statement attest services throughout the proposed interpretation, except for the section related to group audits.

The task force decided also to include additional guidance for non-attest services such as members providing financial statement nonattest services will only be required to seek to obtain an understanding of the matter.

Addressing the matter would be limited to communicating the matter to the appropriate level of management and those charged with governance if the member has access to them, whereas members, providing financial statement attest services are also required to advise management to take certain appropriate and timely actions when addressing a NOCLAR or suspected NOCLAR. Additionally, members, providing Nonattest services will be encouraged to document, rather than required to document certain aspects of the NOCLAR or suspected NOCLAR. The remaining issue that the task force will need to address is the exclusion of certain nonattest services from the proposed interpretation. At this point, the task force identified forensic accounting services as the principal serves where the interpretation should probably not apply, but the task force is also considering the inclusion of certain other Nonattest services, particularly engagements relating to tax controversies. The task force made a few other revisions to the proposed interpretation, such as removing the language throughout the interpretation specifically relating to the member using his or her professional judgment to determine whether to withdraw from an engagement and documenting from a reasonable and informed third party perspective. This was viewed as a potential way to gain litigation advantage and claim that professional judgment was not appropriate. The task force decided to remove that language. And for members in business, the task force added factors members would consider when determining disclosure to an appropriate party.

Mr. Denham also provide an update on the ASB’s [Auditing Standards Board] NOCLAR task force and that task force expects for the ASB to vote an exposure of the revised standards in October 2020 that will include addressing communication with the successor auditor. There were questions raised by some committee members during the PEEC meeting on this NOCLAR update, such as the use of financial attest services, which may create confusion if this is new terminology that would be added to the proposed interpretation.

The less restrictive documentation requirements for members, providing nontest services and the removal of the professional judgment language from the interpretation.

Mr. Denham explained that the task force will consider these questions and comments at their next meeting. The task force plans on proposing exposure at the next meeting, which will be held in November.

Now I'll hand it over to John Wiley, a technical standards manager in the division.

John Wiley: Thanks, Michele. I'm here to discuss the continuing saga of staff augmentation. In the meeting held just recently, Lisa Snyder, chair of the staff orientation task force opened up the discussion with a recap of the May PEEC meeting in which the committee agreed on the final changes of the significant general provisions of the revised interpretation in preparation for upcoming exposure.

The changes that were requested at that meeting, including the removal of the affiliates exception from the proposed interpretation, that exception, the committee decided that they would develop questions and examples for the exposure draft, including should staff augmentation services being provided or permitted at all for attest clients and, if so, should an exception be made for certain affiliates.

Another item tackled was the development of the proposed language in the explanation section of the exposure draft for those who believe that there should be an exemption for certain affiliates, as well as examples of the application of the rules, with the goal of helping those practitioners who may not be familiar with the complexities of certain affiliate relationships.

The staff also added a question for exposure and example language regarding the proposed exception for staff augmentation arrangements when the only attest engagement a firm has with a client is an agreed upon procedure or in a key engagement under the SSAEs [Statement on Standards for Attestation Engagements].

Engagements do not have to comply with the general requirements for nonattest services such as not providing management functions as long as the underlying services do not apply to the subject matter of the engagement. It committed to not want to be too restrictive if a firm was providing staff augmentation services to an AUP only client.

So therefore, in the exposure draft, there is a proposed revision to the AUP interpretation in the independence section of the code that would allow staff augmentation services to AUP only clients provided the underlying Nonattest services provided by the augmented staff are not subject to AUP engagements.

After making the requested revisions, a draft of the exposure document was sent out to all the team members for their review and comment and most of the comments received were mostly editorial in nature. One substantive comment that was submitted was that they were asked for clarification regarding the staff who provided the services to the client and how they would not be permitted to participate on the attest engagement team for just the period in which the staff augmentation services will provided. This would be a consistent change that would make it consistent with the employment relationship rules that are already existing and the code.

The committee then discussed numerous items regarding the fine tuning of the language of the exposure draft. NASBA representatives on the committee, one of the small changes to clarify their position regarding staff augmentation in the exposure document as well as highlight their interactions with PEEC throughout the process.

NASBA representatives, when people said they would send over some of the requested changes after the meeting and the division would update the exposure document according to committee, also work through language and clarifying when augmented staff could not participate on the attest engagement and the committee reworked the language to be more clear and consistent with other areas of the code.

The committee essentially ended up with wording that staff cannot participate or be in a position to influence the ancestor engagement within the financial statement period for which the staff augmentation services were performed.

The intention again was to be consistent with the subsequent appointment provisions of the code, as if the staff was coming from the attest client to the firm and this presents a self-review threat.

The committee also discuss potential exposure on a question regarding what would be considered a recurring or non-recurring engagement. And the committee in the end concluded that no changes are needed. The proposed interpretation already included wording that a staff augmentation engagement, by definition, is not expected to reoccur and if that if it does happen, or in the same circumstances happened a few years later than it is would be expected of the team to evaluate if that is still a non-recurring type engagement.

The committee also discussed whether certain affiliates should be afforded an exception for staff augmentation services and if they did, should the phrase, quote, If safeguards could not be applied then the member should not enter into the staff augmentation arrangement unquote be added to the proposed affiliate language already in the exposure document.

The document is presenting this language in the draft so that the reader can see what it would look like if the affiliates exception was supported and give the reader to ability to comment on the additional language. Other areas of the code did not have it and the addition of this additional phrase, but certain committee members felt it would be beneficial others wanting more consistent with consistency with other areas of the code and thought it could be left out.

In the end, there was no strong opinions on either side of this. So, it was decided to go ahead and leave the phrase in the exposure draft how question we asked for commenters to leave their comments on it if it should be included or not, or even reward.

The committee also discuss a possible staff augmentation exemption for firms with clients, whose only attest engagements are under the SSAEs, but not AUP. Should be proposed an exception, similar to ASBs. Committee members wanted to ensure that staff augmentation will not be afforded an exception not available to other not attest services. It was noted later that key provisions of the proposed exception of the staff augmentation arrangements would not violate the general requirements for not attest services specifically performance of management functions and therefore, and not relate to the subject matter of the SSAE engagement, so therefore it would be consistent with the treatment of other services in SSAE engagements would not be getting any special treatment in the code.

The committee did agree that some examples of wording for potential SSEA exceptions in the exposure draft will be helpful and staff put that item on their to do list for after the meeting.

The committee concluded that the exposure draft wouldn't include proposed language for the independence guidance for SSAEs similar to what was proposed for affiliates. So it could be seen what it would look like, and then ask a question in the draft whether the SSAE exception should be included.

A question was asked by the committee if they expose their draft should it include a question or comment should staff augmentation be viewed as a simultaneous employment or not attest service. Someone had a question whether others were concerned. Some practitioners may have difficulty understanding the nuances of the two and that mentioning simultaneous employment could raise legal questions, others were concerned about PEEC’s continually work towards convergence with it as the code, which does not include loan staff within the attest services section.

NASBA has consistently raised concerns regarding staff augmentation arrangements and the appearance of co-employment and it was finally concluded by the committee that these discussions have been occurring over many meetings and then in the end it was decided not to ask this question as PEEC has essentially already concluded on the issue.

The committee then worked on the fine tuning of the language regarding defining the period that they all augmented staff would be prohibited from participating on attesting for a client when a staff augmentation arrangement occurs. And it really has been amazing to see these members work through the language word by word with the goal of making the code as clear as possible. The committee finally discussed the exposure period and agreed that 90 days would be an appropriate period with the hopes of getting comments back and have feedback ready for consideration at the February 2021 PEEC meeting.

And now we have the drum roll: a motion was made it was seconded, and the committee then voted unanimously to expose the text of interpretation 1.275.007, staff augmentation arrangements and also to expose the proposed revisions to interpretation 1.297.020, agreed upon procedure engagements performed in accordance with the SSAEs.

Staff will make a few final changes to the exposure draft, do a final recirculation among the team member for final approval, and once it's approved the division will work to get the exposure document out for public comment as soon as possible. So stay tuned.

And now, back to Michele for inducements.

Michele Craig: Thanks John for that great update. I’ll provide an update on the inducements task force. Anna Dourdourekas provided an update on the task force’s activities as they relate to the draft practice aid. The task force met several times since the May meeting to revise the practice aid to incorporate the feedback that was received. And when revising the practice aid the task force decided to clarify that the purpose of the practice aid is provide guidance on integrity and objectivity for all professional services and that the practice aid does not include guidance of independence and the task force also wants to make sure that members use the conceptual framework when addressing circumstances, other than accepting or offering gifts or entertainment. But the task force also revised the FAQs in the practice aid as it removes the specific answers provided and change these examples to potential scenarios with questions that members may considered using the threats and safeguards approach.

The task force also increased the use of the conceptual framework throughout the practice aid focusing on the first three steps at the conceptual framework approach which are identifying the threat evaluating the significance of the threat and identifying and applying safeguards.

This is so that members will be able to conclude on evaluating the effectiveness of the safeguards identified and documenting the safeguards the member applied.

If you recall some of the feedback received that the May PEEC meeting addressed reasonable in the circumstances and the conceptual framework and to address, including in the practice aid saying what a reasonable third party may conclude and the appearance of the matter, the task force, use the language that reasonable in the circumstances that phrase is the same as an acceptable level and they use this concept. This is because the member would need to evaluate the threat, apply reasonable third-party evaluation, and apply safeguards if necessary in order for integrity and objectivity to not be impaired.

Michele Craig: The task force also fine-tuned the factors for what's reasonable in circumstances and included the timing of the action as a factor. This is similar to what the IESBA has in their.

Another issue the task force addressed was the concept of intent. The task was concluded that it might be impossible to know the intent and initially decided on using the appearance of the action if not known, and included the phrase be intended or appear to be intended to influence the outcome.

However, based on some feedback received from KPMG that the privatization not introduce language that is not currently defined in the code, the task force eventually focused on the member’s integrity and objectivity throughout the practice aid, rather than the intent to influence and added the term unduly influence an outcome or behavior as a factor to consider what's reasonable in the circumstances.

This language is more in line with the AICPA code. Ms. Dourdourekas has requested feedback from PEEC on using the term unduly influence and the committee seemed to agree with the task force going in this direction.

The task force also revised the examples of practices that members may have in place to eliminate to reduce threats to independence and objectivity and add a general guidance as it relates to practices that might help members integrating objectivity.

PEEC was presented with a list of the examples, suggesting that the task force soften the language a bit and the examples such as changing the term adopt the policy.

The task force will continue to work on the practice aid and intends to share a draft version with the committee at the next PEEC meeting in November. Now I’ll hand it over to Toni.

Toni Lee-Andrews: Thanks Michele. Sue Coffey gave an update to PEEC talking about the organization's strategic plan and some of the initiatives that are important to the committee's work, especially as we go through our strategic planning process and discuss our strategy and work plan.

We all know that the world is in turmoil and that there's financial insecurity for businesses of all sizes across the globe, a lot of research has been done on trust in businesses ability to recover and do the right thing and trust is not very high right now in terms of that.

Businesses are looking for help from professionals, putting us at the center of business stabilization and transformation, it really puts us squarely on the front line when it comes to helping businesses and the economy recover.

The core services we provide as a profession are critical to promoting and enhancing trust but organizations’ priorities and investment over the last few months have been around supporting the profession with resources in order to support employers, businesses, and clients primarily in the small business area. A lot of work has gone into supporting practitioners with PPP applications, paycheck protection program, and forgiveness.

We've been talking and collaborating very closely with those in the financial and business ecosystem, such as the banking community and payroll processors providers. We've had a lot of connectivity with Congress, the SBA (Small Business Administration) and the IRS. We've also been working with other standard setters, such as the Auditing Standards Board and the Peer Review Board.

We've been focusing our resources around the activities that businesses need most. In addition, we've been looking at the organization's strategic plan and discussing whether it continues to be relevant, whether we add new ones which ones to expedite etc.

Every three years we re-evaluate what's going on in the marketplace and within the business environment. What's going on with firms of all sizes and now with the information that we have, what do we need to do at least in the short term.

Sue talked about promoting competency globally, leading the profession and competency development and lifelong learning, making sure the profession has the tools and resources needed, promoting both the US CPA and the CGMA designations globally transforming our organization reimagining our organization, making sure it's fit for purpose and making sure that the experience we offer our members is an excellent one.

And she also talked about future proofing management and public accounting where evolution of the CPA exists and involves occupational licensing activities.

A major activity under this is developing and evolving professional standards to support the use of new technologies and new ways of providing services looking again at strategic plans agendas, and priorities, understanding the market and understanding the future of these services and asking the question, how do we need to prioritize our agenda in a way that recognizes that the use of emerging technologies is changing what we do and how we do it?

Maybe we need to think about our standards, a little bit differently because our standards originated in a paper-based world, and now we're in an electronic world and that electronic world is rapidly changing almost on a daily basis.

We've also got to make sure that we've got the right principles of those standards in place to drive better behavior as well as to make sure that the profession has the right skills in order to be able to deliver on the services that the marketplace is demanding. The development and evolution of criteria and guidance to support new areas of non-financial statement assurance is a big growth area for our profession.

There are all sorts of non-financial statement topics and subject matter that are being reported on within businesses that are really important to the value proposition of a business and we've got several individuals and groups and teams internally, working with the assurance services executive committee on identifying those opportunities.

For example, cyber security, risk management, and assurance related to sustainability reporting would fall into that. There's a very active group of practitioners that are working with us to identify those issues. And again, we need standards that are fit for purpose.

One of the things that Sue encouraged the committee to think about, especially when considering PEEC strategy and work plan is the implications of emerging technologies because as I mentioned those technologies are changing and emerging every day.

We've had conversations on blockchain. And we've had conversations with experts on artificial intelligence. And we're thinking about what does that mean for standards, what does it mean for the code. What does it mean for enforcement and how does that relate to the committee's work?

Think about the concept of office, here we are all working remotely. So what does an office mean anymore? What about confidential? Confidentiality of client information while working remotely and in an AI environment. Do we need to look at the confidentiality rule a little bit differently? Maybe, maybe not.

Another area that Sue encouraged the committee to consider is that of new services and types of services that are being performed. We've been talking about third party assessments, SOC engagements and the evolution of those around data privacy and data integrity.

Again, is the code fit for purpose to be able to support the professionals performing the services around these topics in a manner that protects the public interest?

So I'm going to turn it now to Iryna Klepcha, a technical manager with our team to discuss PEEC strategy and work plan.

Iryna Klepcha: Thank you, Toni. Initially the planning task force was planning to seek PEEC’s approval to issue the strategy and work plan at the August meeting, but after Ms. Coffey had provided the committee with professional issues update the planning task force decided to just give an update on the development of the SWP so PEEC has additional time to digest the information. So Toni and I updated PEEC yesterday about the status of the strategy and work plan.

We received 14 comment letters and the task force analyzed the letters and developed the SWP. The SWP reflects the feedback received considering various factors such as benefit to the public interest, technological change, education and tools to assist members, of course, social and economic trends due to the pandemic issues in the profession and other factors.

The planning task force recommends initiating the following standard setting projects

  • 529 College Savings Plans
  • Business relationships
  • Client affiliates
  • Digital assets
  • Simultaneous employment or association with an attest client
  • Unpaid fees

Most of the commenters support all of these projects, except for the unpaid fees. The commenters were evenly split for this project.

Also originally, the unpaid fees project was included in the consultation paper as de minimis fees and the planning task force renamed it to unpaid fees. In addition to specific projects the consultation paper sought input regarding other matters and after the comment letters have been analyzed.

An additional standard setting project was added to the standard to the strategy and work plan and that project is assisting clients with implementing accounting standards.

Now I will talk about member enrichment projects. The planning task force recommends initiating for projects conflicts of interest, artificial Intelligence, definition of office, and operational enhancement to the code.

Artificial Intelligence and definition of office were included in the public consultation paper as proposed new standard setting projects. However, after the comment letters have been analyzed the planning task force recommends initiating member enrichment projects instead.

As it relates to conflict of interest project, most of the commenters indicate that they believe there is enough existing guidance, but they support the project due to the increased number of

One project is included in the SWP, but it is not listed on the standard setting or member enrichment projects and I'm talking about reporting of an independence breach to an affiliate that is also in an attest client. Most comments did not support this project, but they express different opinions regarding the reporting of independence breach and affiliate that is also in attest client is required and because of this inconsistency PEEC recommends in the planning task force recommends initiating this project and the end the form to task force will determine whether this project should be undertaken as a member enrichment or standard setting project.

The planning task force does not recommend initiating the data security and breaches project and that is mainly due to the rapid changes in related laws and regulations and most comments do not support this project.

It was also highlighted that when the planning task force developed the expected timeline for the projects they considered various factors. For example, staff availability, ongoing current project. And they also wanted to leave some flexibility for unplanned project that we may need to undertake.

PEEC was asked to let us know if they would like to add any additional project to the SWP and the planning task force is planning to seek PEEC’s approval to issue the SWP during the next PEEC meeting in November, and I'm going to turn it over to Ellen Goria the division’s associate director.

Ellen Goria: Thank you, Iryna. I'm going to start off giving you an update on what's going on in the international standards setting arena. There's a lot going on. And so let's go right into it. Andy Mintzer who is a board member of the IESBA joined myself in presenting the update. We started explaining to folks what’s going on with the fees and the non-assurance services exposure drafts. Both of those exposure dress received comments from diverse populations and overall respondents were supportive of the proposals. One major comment though that we heard loud and clear was concern related to the timing of these projects.

As well in comparison to the companion project, public interest entities or PIES, as I might slip up and say, and the listed entity project.

The PIE project slash listed entity project has only just begun. And so commenters really found it challenging to properly assess the proposal for fees and non-assurance services, since they didn't really understand the scope of what entities the provisions would be applicable to with respect to the PIEs to the entity project. Mr. Mintzer confirmed that it's in the early stages. So honestly, time will tell how these three projects come together with respect to the tax planning and related services project which Mr Mintzer is actually a member of.

He reported that there are key emerging themes that have been identified so far. One theme is that there really is no one set of ethical principles that are applicable to professional accountants across all the jurisdictions in the world.

Also he noted that the impacts on tax planning and ethical behaviors across all the fundamental principles were widespread. Also the concepts of fairness and transparency are really viewed as expected and necessary elements and so we probably will see some discussion of those terms in whatever is put out by the task force.

Another item he indicated that's really critical for professional accountants, at least in this particular area as well is the exercise of professional judgment. So in this space, in particular, they think professional development, it would be abundantly helpful and also threats to compliance with the fundamental principles do not seem to capture the complexity risk associated with a multi-faceted discipline of tax planning and this complexity risk is something that the technology task force is also wrestling with. So those two task forces will be, you know, coordinating. There's a couple of other items as well that they've seen as emerging issues, but for the most part, that's, that's kind of where we're headed. The next project that we reported was the role in mindset project this the role of mindset project has been out for exposure and the board has had the opportunity to discuss the feedback on a couple of occasions and so at this meeting the board approved the role and mindset project, it will be effective December 31 2021.

So delayed effective date, hopefully will be helpful to folks as we get through these challenging times. But they did allow for early implementation so that if we’re able to do so they could implement it early. Just by way of recap the main revisions that  this project put into the [IESBA] code was a renewed emphasis on accountants’ responsibility to act in the public interest. Enhancements were also made to the descriptions of certain fundamental principles, specifically integrity, objectivity, professional behavior, and the professional competence into care principle.

There was also an introduction of a new requirement for accountants to have an inquiring mind when they're applying the codes conceptual framework and some application material was also added to help highlight the impact that bias can have on exercising professional judgment, as well as when you're applying the conceptual framework.

On the technology front, it was reported that the technology task force is focusing first on just to have the seven recommendations that were outlined in the technology report are issued earlier this year.

The two recommendations that are being focused on initially are the complexity recommendation and the independence recommendation. With respect to complexity that work stream is specifically looking at revising the code to really deal more effectively with the threats created by the complexity of the professional environment that a Professional Accountant performs their activities. And so some of the things that task forces considering adding is possibly a new category of a threat for complexity, possibly revising existing three categories to kind of interject that complexity notion. Also looking at highlighting the complexity risk in the conceptual frame markets itself and maybe doing some examples and putting that into the various discussions in parts two and three of the code.

On the other side of the technology task force, they're looking at the independence work stream and they're looking at whether provisions, such as business relationship guidance, should be revised to address the threats to independence created when the professional accountant is actually selling or licensing technology applications to audit clients. Or, on the flip side, if they're using an audit client’s technology tool in the delivery of, say, a non-assurance service to another entity.

They're also looking to revise the IT systems services guidance with respect to the provision of technology related to non-assurance services and of course will take into account any kind of feedback that's received from the non-assurance service project that is you know just concluding hopefully within the next two meetings.

On the IESBA and IAASB coordination front we reported that there's a new project that has begun to harmonize the definition of engagement team that was added to ISA 220 and to harmonize that with the definition engagement team that's in the code.

Also we heard a report from the EQR [engagement quality reviewer] task force as far as what kind of feedback was received through the exposure draft process on the EQR front.

We were told that the cooling off period for an engagement quality reviewer the sense of the commenters was that it should remain principle based in the code and so work will continue to be done to liaison with the IAASB to see if there is something specific they believe should be put into the technical standards with respect to a specific cooling off period.

The final project that was reported on from IESBA perspective was also a new project. This is one dealing with benchmarking. So some concerns that the IESBA codes conceptual framework approach were expressed specifically that it could allow firms too much flexibility and too much judgment and that perhaps national laws and regulations are really more robust and enforceable. So to kind of, you know, really measure and determine whether or not there's any truth to that perception, the benchmarking projects will really be a strategic exercise to promote the awareness of the international independent standards, so that during the first phase, the International independent standards will be compared to the SEC and PCA to be independent standards and from there I guess it'll, it'll be a bit clear whether or not there really is a you know any merit to that concern.

Depending upon how things go there. Phase two might include expanding it to other major standard setters.

So that's really everything from IESBA perspective, but also on an international standard setting front, I reported about the monitoring group report that was just released in July of 2020. The report included a number of recommendations that are looking to strengthen the international audit and ethics standard setting system. So what that means that means the IESBA and IAASB, that’s what they're looking at. And how they could strengthen that actual standard setting process.

There were a number of perceptions outlined in the report that were the goal for you know why they believed there. There were some enhancements that were needed.

Those perceptions ranged from the fact that the current standard setting process does not give sufficient weight to the public interest also perception that stakeholder confidence in the standards might be lacking because of the influence of the accountancy profession and the extent involvement it has in now standard setting process itself, also because of the significant funding and resources donated to support the process by the profession.

Another concern was that perhaps the speed in which the spammers are being developed might not really be keeping pace with how fast the audit and business environment is changing. So, you know, to address those concerns, there were a number of recommendations in the report, um, but a couple of the key ones that were explained were that both the IESBA and IAASB board members would be compensated.

Also that additional technical staff would be added, funding for these boards would be diversified so that eventually the professions funding would be less than 50%. And as far as the timing of all this, the goal is that no later than April of 2021 a transition plan would be available to implement and then the actual implementation of that plan should take no more than three years from then on, so that's that's the sense of everything happening on the international standard setting aside so I'm going to turn it back to John to talk a little bit about the tax working group.

John Wiley: Thank you Ellen, we're going to talk about the SSTS revision project and this is the Statements on Standards for Tax Services.

And Stephanie Saunders updated the committee on activities of the revision task forces at its closed May 2020 meeting in which the draft standards at that point in time where shared with the PEEC for review. Now, the SSTS revision task force members met with a CPA or tax executive committee at their June meeting to take a detailed review of the draft standards with them and received additional feedback on the project. At the end of July, task force members met with new members of the AICPA’s tax practice responsibilities committee to share a copy of the draft standards as well as bring them up to speed on the project, the system, the meetings. In May and June the individual subgroups of the task force as well as the full task force itself have met multiple times to evaluate comments received from team members the Tax Executive Committee and other sources and these have resulted in proposed changes to the initial draft of the standards. These changes were completed last week, and they will be briefly discussed with the team at their meeting on August 12.

The task force above reminded PEEC that they are still actively seeking comments from members of PEEC on the project and the task forces, hoping that PEEC members who have firm colleagues on the team and the TPRC or the task force itself will be able to meet with those individuals and share their thoughts on the project.

It’s expected that the task force will share updated versions of the draft standard at PEEC’s November closed meeting. And now to bring us home is Toni

Toni Lee-Andrews: Thanks John. John, Michelle, Ellen, Iryna, thanks so much for joining me today and also thanks for all of your hard work on these task forces and PEECs activities. Our next PEEC meeting is scheduled for November 17 and we invite you to attend.

Note that you will need to register. Thanks for listening today. Everyone stay safe and well.