ISB Takes Command of Alternative Practice Structures

Wants No Guidance from Committee

By Ann E. Spaulding

The Independence Standards Board recently told its affiliated Independence Issues Committee that the board does not want the committee's guidance on alternative practice structures.

At the IIC's February 2 meeting, ISB Chair William Allen commented via telephone that the board's resolution reached on alternative practice structures should come from a fully public process. He requested that the committee not give guidance but instead assist the ISB by providing a neutral, unbiased document on the issues.

Committee members expressed concern as to their future role since giving guidance to the ISB is their primary function. The IIC consists of nine CPAs from the AICPA's SEC Practice Section member firms that, according to ISB's operating policies, "assist the Independence Standards Board in establishing independence standards through the timely identification and discussion of emerging independence issues."

Allen said the recent direction on alternative practice firms is not intended to stop guidance from the IIC when there is a basis to give such input. He further stressed that this does not represent an attempt to change the IIC's structure and there is no agenda to reduce its role. Rather, the ISB feels its resolution on this issue should be accomplished through open public participation.

Allen suggested that the IIC take the matter up with the full board and the Securities and Exchange Commission to get assurance. The SEC created the ISB in 1997, in conjunction with the AICPA, as a private sector standards-setting body governing the independence of auditors from their public company clients. (See page 3 for a related article on the first standard issued by the ISB.)

Watch future issues of The Trusted Professional for updates on this and other ISB-related issues. *