FAQ on independence impact of providing FIN 48 services to attest clients.

• Position: Tax info

Periodically, the staff of the Professional Ethics Division issues non-authoritative guidance in the form of "Frequently Asked Questions and Answers" on ethics and independence questions raised by AICPA members. Recently, the division's staff was asked whether under Interpretation 101-3--Performance of Nonattest Services members could assist an attest client in applying FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, without impairing independence, given the potential complexity of the judgments that the client must make or approve in connection with such services.

Although the degree of complexity involved in the subject matter of any service would be a factor to consider in determining whether a client can meet the requirements of Interpretation 101-3, the Professional Ethics Executive Committee did not believe the complexities involved in applying FIN 48 would automatically preclude members from assisting clients with its implementation. The PEEC agreed with the staff that a member could assist an attest client with its application of FIN 48 provided the member is satisfied that the client understands the reasons why a specific tax position does or does not meet the more likely than not (MLTN) threshold and the basis for the determination of the amount of related unrecognized tax benefits.

In reaching this conclusion, the PEEC noted that the requirement for the client's designated individual to possess suitable skill, knowledge and/or experience to oversee the services does...