AICPA Provides Help With Troublesome GAO Rules
Fact Sheet and Comparison
To help minimize any confusion, the AICPA has prepared a fact sheet  explaining the types of entities affected and nonaudit services restricted under the GAO’s new rules.
- Affected entities. The affected entities range from federal, state and local governments to recipients of governmental grant and loan assistance, including colleges, universities, charitable organizations, and small businesses with SBA loans.
- Types of nonaudit services. The prohibited nonaudit services include basic bookkeeping, human resource services, information technology services, and indirect cost proposal or cost allocation plans. Other nonaudit services, (e.g., payroll services, tax services, and appraisal or valuation services), are allowed subject to certain “overarching principles.” A separate document provides a side-by-side comparison  of GAO’s rules with AICPA’s for each type of service.
The AICPA is also compiling a list of issues and questions to be addressed in implementation guidance. In its member notice, AICPA said it feels strongly that implementation guidance is needed to help overcome: (1) A lack of clarity that might otherwise confuse preparers, auditors, and the public, and (2) Uncertainties involving interpretations that could impede uniform implementation of the rules and create compliance problems for both auditors and preparers of financial statements.
The notice, which was signed by AICPA Chairman James G. Castellano and President Barry C. Melancon, said the Institute had voiced its concerns to GAO. “We were relentless in our efforts and these efforts were significant and continuous, even up until the day before the rule’s release.”
GAO’s independence rules  are effective for periods beginning on or after October 1, 2002. To submit an issue or question to AICPA for inclusion in the implementation guidance, send it to GAOIndependence@aicpa.org .