AICPA Voices Concern Over GAO Exposure Draft on Auditor Independence.

Emphasizing that restrictions on non-audit services contained in a General Accounting Office exposure draft on auditor independence may be especially harmful to smaller entities, and by extension to the CPA firms on which they rely, the AICPA outlined its concerns in a comment letter to the GAO. The letter, sent in late July, was in response to the GAO's proposal to establish new auditor independence standards in Government Auditing Standards ("Yellow Book") (The CPA Letter, June).

The AICPA expressed concern about the cost/benefit of restricting certain non-audit services, including bookkeeping and human resources services--two areas where the proposed standards could hit smaller CPA firms particularly hard. Also, if adopted as drafted, the proposal would add yet another set of independence standards CPAs must follow--the AICPA and SEC independence roles being the others.

Representatives of the AICPA's Professional Ethics Executive Committee have met with GAO staff to discuss the Institute's concerns. The GAO has expressed interest in understanding the full range and extent of services...