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    This document discusses several interpretations of Rule 101 regarding professional responsibilities and independence. It addresses when independence is required for certain attest engagements with restricted reports under SSAEs. It also discusses when independence would be impaired, such as if the firm had a financial relationship with the responsible party or a cooperative arrangement with a client. Additionally, it states that the independence provisions must be adhered to by all staff and management for attest engagements in alternative practice structures.

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    This document discusses several interpretations of Rule 101 regarding professional responsibilities and independence. It addresses when independence is required for certain attest engagements with restricted reports under SSAEs. It also discusses when independence would be impaired, such as if the firm had a financial relationship with the responsible party or a cooperative arrangement with a client. Additionally, it states that the independence provisions must be adhered to by all staff and management for attest engagements in alternative practice structures.

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    This document discusses several interpretations of Rule 101 regarding professional responsibilities and independence. It addresses when independence is required for certain attest engagements with restricted reports under SSAEs. It also discusses when independence would be impaired, such as if the firm had a financial relationship with the responsible party or a cooperative arrangement with a client. Additionally, it states that the independence provisions must be adhered to by all staff and management for attest engagements in alternative practice structures.

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    © All Rights Reserved
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    14 views2 pages

    Scan 0008

    Uploaded by

    Zeyad El-sayed
    This document discusses several interpretations of Rule 101 regarding professional responsibilities and independence. It addresses when independence is required for certain attest engagements with restricted reports under SSAEs. It also discusses when independence would be impaired, such as if the firm had a financial relationship with the responsible party or a cooperative arrangement with a client. Additionally, it states that the independence provisions must be adhered to by all staff and management for attest engagements in alternative practice structures.

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    48 MODULE 21 PROFESSIONAL RESPONSIBILITIES

    (2) Also should be independent if, although funds and accounts are separately immaterial, they
    are material in the aggregate
    Interpretation 101-11. Modified application of Rule 101 for certain engagements to issue
    restricted-use reports under the Statements on Standards for Attestation Engagements
    (1) Rule 101: Independence and its interpretations and rulings apply to all attest engagements.
    However, for purposes of performing engagements to issue reports under the Statements on
    Standards for Attestation Engagements (SSAE) that" are restricted to identified parties, only
    the following covered members, and their immediate families, are required to be independent
    with respect to the responsible party' in accordance with Rule 10 1:
    (a) Individuals participating on the attest engagement team;
    (b) Individuals who directly supervise or manage the attest engagement partner; and
    (c) Individuals who consult with the attest engagement team regarding technical or industry-
    related issues specific to the attest engagement.
    (2) In addition, independence would be considered to be impaired if the firm had a financial rela-
    tionship covered by interpretation 10 1-I.A with the responsible party that was material to the
    firm.
    (3) In cases where the firm provides nonattest services to the responsible party that are proscribed
    under interpretation 101-3 and that do not directly relate to the subject matter of the attest
    engagement, independence would not be considered to be impaired.
    (4) In circumstances where the individual or entity that engages the firm is not the responsible
    party or associated with the responsible party, individuals on the attest engagement team need
    not be independent of the individual or entity, but should consider their responsibilities under
    interpretation 102-2 with regard to any relationships that may exist with the individual or en-
    tity that engages them to perform these services.
    (5) This interpretation does not apply to an engagement performed under the Statement on Audit-
    ing Standards or Statement on Standards for Accounting and Review Services, or to an ex-
    amination or review engagement performed under the Statements on Standards for Attestation
    Engagements. '
    Interpretation 101-12. Independence is impaired if during professional engagement or while ex-
    pressing an opinion, member's firm had any material cooperative arrangement with client.
    (1) Cooperative arrangement exists when member's firm and client participate jointly in business
    activity such as
    (a) Joint ventures to develop or market a product or service
    (b) Arrangements to provide services or products to a third party
    (c) Arrangements to combine services or products of the member's firm with those of client
    to market them with references to both parties
    (d) Arrangements under which member firm or client act as distributor of other's products or
    services
    (2) Joint participation with client is not a cooperative arrangement and is thus allowed if all of the
    . following three conditions are present.
    (a) Participation of the firm and client are governed by separate agreements
    (b) Neither firm nor client assumes any responsibility for the other
    (c) Neither party is an agent of the other
    Interpretation 101-13. (Deleted)
    Interpretation 101-14. If a firm is organized in an alternative practice structure, in which the at-
    test function is part of a larger organization that leases the staff to the attest function, the inde-
    pendence provisions of the AICPA Code of Professional Conduct must be adhered to by all staff
    and management on attest engagement and every individual that is a direct superior of attest part-
    ners or managers. Indirect superiors of attest partners and managers cannot have any relationships
    prohibited by Interpretation 10 I-lA.

    As defined in the SSAE.

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