Two new ethics rulings adopted on gifts and entertainment.
The ethics ruling under Rule 101, Independence, incorporates the substance of the existing guidance contained in Ethics Ruling No. 1, "Acceptance of a Gift," (which will be deleted) and is applicable to members in public practice who are "covered members" with respect to an attest client of the member's firm. The ethics ruling provides that independence would be considered impaired if an individual on the attest engagement team or in a position to influence the attest engagement accepts a gift from an attest client unless the value is clearly insignificant to the member. And, since a member may also offer a gift to an attest client, the proposal also provides that as long as the gift offered was "reasonable in the circumstances," independence would not be considered impaired.
With respect to entertainment, the proposal provides that covered members should be able to offer or accept entertainment to or from an attest client provided the entertainment is "reasonable in the circumstances."
The ethics rulings can be found at www.aicpa.org/download/ethics/Gifts and Entertainment_Rulings.pdf and are published in the Jan. 2006 issue of the Journal of Accountancy, making them effective on Jan. 31, 2006.
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|Date:||Jan 1, 2006|
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