The AICPA’s Professional Ethics Executive Committee (PEEC) recently issued a revised exposure draft (Sept. 15, 2025) that reconsiders how tax advisory and planning services affect CPA independence for attest clients.
For nonprofits, independence is more than a technical rule — it’s a cornerstone of trust. Donors, regulators, and communities depend on confidence that financial reporting and tax guidance are free from conflicts of interest.
🔹 The Concern
When CPAs provide both attest services (like audits) and tax advisory services to the same client, tax advice that advocates on behalf of the client may compromises auditor independence.
🔹 The Revised Approach
Instead of rigid thresholds, the AICPA is moving toward a principles-based model. CPAs will use professional judgment to assess whether taking a tax position creates a threat to independence. Factors include:
- Strength of legal support for the tax position,
- Whether the position is an accepted professional practice,
- Whether the transaction has true economic substance,
- Likelihood of review by tax authorities, and
- How significant the tax advice is to the client’s financial statements.
🔹 The Advantages
- Protects credibility and trust. Independence reassures stakeholders that attest services are objective and reliable.
- Opens new opportunities. Rather than being a minor feature of large attest engagements, the tax services would become a separate and distinct.
- Levels the playing field. Tax providers can bid directly for engagements that were previously bundled by audit firms.
- Encourages specialization. Deep expertise becomes more valuable than the convenience of generalization.
- Aligns with global ethics standards. Strengthens the profession worldwide and signals that CPAs hold themselves to the highest ethical bar.
⚠️ The Disadvantages (Fair to Acknowledge)
- Elimination of ‘more-likely-than-not’ standard may create uncertainties.
- More reliance on the subjective determinations of attest providers.
- Inconsistent application among service providers.
But even these challenges create opportunities, potentially strengthening governance, transparency, internal training, and client service.
🔹 Bottom Line
For nonprofits and the professionals who serve them, separating attest and tax service providers ensures greater independence. It’s an evolution that protects trust, expands opportunities, and builds stronger, more specialized practices.
At TrimnerBeckham PLLC, we see the separation of attest and tax services as a path to greater clarity, confidence, and integrity.
Do you see independently provided tax services as a challenge or an opportunity for growth?
