The AICPA's Professional Ethics Executive Committee (PEEC) on Dec. 19 voted to ask for public comment on proposed changes to the AICPA Code of Professional Conduct that affect alternative practice structures (APS), specifically those that involve private equity investments.
“These changes aim to uphold the integrity of the profession while offering practical guidance for firms operating in APS,” the exposure draft states.
The AICPA exposure draft will be clarifying the independence considerations for private equity-backed accounting firms, and those with other business models that are non-traditional, according to AICPA
release.
Interested parties who want to comment have until Apr. 30 to respond to the exposure draft titled "Proposed Revisions Related to APS." which is set to be posted online by Dec. 29.
The exposure draft has feedback from a discussion memo about the same topic that a PEEC task force brought out for comment earlier in 2025.
If approved in 2026, the proposed independence updates will be effective a year after adoption, although firms can adopt them earlier than that date.
Even though independence guidelines have addressed APS for decades, the rising prevalence of private equity investment in the profession calls for updated interpretations.
Aside from other changes, the exposure draft lists relationships and circumstances that can diminish independence while addressing factors for evaluating threats.
Among the other items, PEEC is looking for comment on:
• A fresh version of the independence interpretation regarding APS, which characterized attest firms that are closely aligned with a non-attest entity at least partly owned by investors. The proposed Code of Professional Conduct changes will examine the difference between “significant influence” and “control” by investors over non-attest entities, with guidance on how these terms affect independence assessments.
• Changes to the “APS” interpretation under the “Form of Organization and Name Rule.”
• Changes to the “Conceptual Framework for Independence” interpretation, which is a crucial assessment tool for complicated APS situations.
• Modifications to the “Conceptual Framework for Members in Public Practice” interpretation.
• Modifications to the definition of “network firm,” a term in the Code of Professional Conduct that refers to entities subject to independence requirements for financial statement audit and review clients. The new definition would cover “an entity that, by itself or through one or more of its owners a. the network firm controls, or b. controls the network firm and cooperates with the network firm for the purpose of enhancing that network firm’s capabilities to provide professional services,” the release said.
