AICPA proposes guidance on CPA indemnification

California CPA, Jan-Feb, 2008

The AICPA's Professional Ethics Executive Committee has issued an exposure draft of a proposed new interpretation that warns CPAs they should follow the requirements of governmental bodies, commissions or other regulatory agencies on indemnification and limitation of liability agreements with clients.

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The guidance states that certain regulators prohibit the use of various indemnification and limitation-of-liability provisions, and that entering into such an agreement with a client who is subject to regulators' requirements would be considered an act discreditable to the profession and may impact the practitioner's independence.

The comment deadline is Feb. 3.

Download the proposal at www.aicpa.org/download/ethics/December_3_2007_Exposure_Draft.pdf.