AICPA Seeks Comment on Ethics Rules Update for Alternative Practice Structures

NEW YORK (Dec. 19, 2025) – The American Institute of CPAs’ Professional Ethics Executive Committee (PEEC) today voted to seek public comment on proposed revisions to the AICPA Code of Professional Conduct that bear on alternative practice structures, particularly those that involve private equity investment.

Interested parties will have until April 30 to respond to the exposure draft, Proposed Revisions Related to Alternative Practice Structures, which is expected to be posted online by Dec. 29. The exposure draft incorporates feedback from a discussion memo on the same topic that a PEEC task force circulated for comment earlier this year.

Although independence guidelines have addressed alternative practice structures (APS) for decades, the increased prevalence of private equity investment in the profession calls for updated interpretations. Among other changes, the exposure draft identifies relationships and circumstances that could impair independence and addresses factors for evaluating threats, where appropriate.

“These changes aim to uphold the integrity of the profession while offering practical guidance for firms operating in alternative practice structures,” the exposure draft states.

Among other items, PEEC seeks comment on:

• A new version of the independence interpretation related to alternative practice structures, which describe attest firms that are closely aligned with a nonattest entity at least partly owned by investors. The proposed Code of Professional Conduct revisions would distinguish between “significant influence” and “control” by investors over nonattest entities, with guidance on how these terms affect independence assessments.

• Revisions to the “Alternative Practice Structures” interpretation under the “Form of Organization and Name Rule.”

• Revisions to the “Conceptual Framework for Independence” interpretation, a key assessment tool for complex APS situations.

• Revisions to the “Conceptual Framework for Members in Public Practice” interpretation.

• Revisions 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 include “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.”

If approved next year, the proposed independence updates would be effective one year after adoption, although firms could implement them earlier.

Media contact:

Jeff May

jeffrey.may@aicpa-cima.com