DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
RULE NO.:RULE TITLE:
61H1-21.001Independence
NOTICE OF CHANGE
Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 46 No. 141, July 21, 2020 issue of the Florida Administrative Register.
A Notice of Change was published in Vol. 46, No. 214, of the November 2, 2020, issue of the Florida Administrative Register. The changes are in response to written comments submitted by the staff of the Joint Administrative Procedures Committee and discussion and subsequent vote by the board at a public meeting held September 24, 2021. The changes are as follows:
Substantial rewording of Rule 61H1-21.001 follows. See Florida Administrative Code for present text.
61H1-21.001 Independence.
(1) Pursuant to 473.315(3), standards of practice are established for independence. A Florida Certified Public Certified Public Accountant (CPA) in public practice is required to be independent in fact and appearance when providing services under 473.302(8)(a), referred to herein as attest services.
(2) Independence consists of two elements, defined as follows:
(a) Independence in fact is the state of mind that permits a CPA to perform an attest service without being affected by influences that compromise professional judgment or materially impair the CPA’s ability to act with integrity and exercise objectivity and professional skepticism. The CPA shall determine whether those influences, when present, create such a threat that would cause the CPA not to act with integrity and exercise objectivity and professional skepticism in the conduct of an engagement or would be perceived as not being able to do so by a reasonable and informed third party with knowledge of all relevant information. The CPA shall not perform an attest service where independence is impaired as described herein.
(b) Independence in appearance is the avoidance of circumstances that would cause a reasonable and informed third party who has knowledge of all relevant information, including the safeguards applied, to reasonably conclude that the integrity, objectivity, or professional skepticism of a licensee is compromised, or conclude the CPA’s independence is impaired.
(3)Threats to Independence include:
(a) Adverse Interest Threat – the CPA’s interest is opposed to the client’s interests.
(b)Advocacy Threat – The CPA engages in activities to promote the client’s interests.
(c) Familiarity Threat – The CPA’s relationship with the client has become too sympathetic to the client’s interests or too accepting of the information provided by the client.
(d) Management Participation Threat – The CPA undertakes the role of client management or similar responsibilities in connection with providing non-attest services.
(e) Self-Interest Threat – The CPA could benefit in some way from an interest in or relationship with the client or some entity associated with the client.
(f) Self-Review Threat – The CPA does not evaluate properly prior judgments, services and/or work performed by the Certified Public Accountant and/or their firm.
(g) Undue Influence Threat – The CPA will subordinate their judgement to someone.
Rulemaking Authority 473.304, 473.315 FS. Law Implemented 473.315 FS. History–New 12-4-79, Amended 2-3-81, 10-28-85, Formerly 21A-21.01, Amended 10-20-86, Formerly 21A-21.001, Amended 5-21-03, 1-31-05, 12-10-09,_______________.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Roger Scarborough, Division Director, Board of Accountancy, 240 NW 76th Dr., Suite A, Gainesville, Florida 32607, Roger.Scarborough@myfloridalicense.com.
