Get the latest on the Professional Ethics Executive Committee’s proposal to update the definition of the attest engagement team. Discover how these changes aim to ensure consistency between audit, attest, and ethics standards.
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Overview of the proposed revised definition of the attest engagement team
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Key exclusions and clarifications for external specialists
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Alignment with recent updates in quality management standards
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Explanation regarding component auditors and referred-to auditors
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Effective date, early implementation option, and comment period details
Ethics Proposal: Clarifying the Attest Engagement Team Definition
Welcome to another edition of the Genuine Learning Blog! Today, we’re diving into an important ethics proposal from the AICPA’s Professional Ethics Executive Committee (PEEC) that aims to clarify the definition of the attest engagement team. This update is particularly timely, given recent evolutions in quality management and newly issued standards in both auditing and attestation.
Why Is This Change Needed?
Consistency is crucial across quality management, ethics, and auditing standards. Historically, there’s been a lack of uniformity in how external specialists are factored into engagement teams across various standards, leading to potential confusion for practitioners navigating AUC section 620 (specialists), ATC 105, and the AICPA Code of Professional Conduct.
Currently, both AUC section 620 (audit) and ATC 105 (attestation) exclude external specialists from the engagement team. However, this essential distinction isn’t clearly reflected within the ethics standard, which can create inconsistencies in practice and potentially impact independence evaluations.
Key Elements of the Proposal
Melisa Galasso outlined several important clarifications in this proposed revision:
Wording Update: The proposal recommends replacing the word “specialists” in the definition with the phrases “auditors external specialist” and “practitioners external specialists” to clearly indicate that it’s only the external specialists who are excluded from the attest engagement team.
Reference Removal: The updated definition will no longer specifically reference AUC section 620. Instead, it aims for a more general and consistently applied exclusion of external specialists used in any attest engagement.
Group Audits & Inclusion/Exclusion: The revised definition intentionally does not exclude “component auditors” (as addressed in SSAS149 and group audit standards) since a component auditor is, by definition, included in the engagement team. However, it explicitly excludes “referred to auditors,” clarifying a point made during the quality management (QM) update.
Other Roles: Internal auditors, external specialists (both “auditors” and “practitioners”), referred-to auditors, and referred-to practitioners are all clearly defined regarding their inclusion or exclusion from the engagement team.
Practical Impact
This may seem like a small revision, but Melisa emphasized that “words matter,” and such precision eliminates ambiguity for firms implementing quality management systems and practitioners assessing independence. Consistent definitions across the audit, attest, and ethics spectrum help streamline compliance and decision-making.
Implementation Timeline
If adopted, these changes would apply to engagements beginning on or after December 15, 2026. However, early implementation is permitted, which could be particularly beneficial for firms eager to bring their policies in line with recent quality management updates.
Your Feedback Is Needed
PEEC requests public comments on this proposal until June 1. Simply send feedback to Ethics Exposure (drafticpa.org).
Is there another group you believe should be explicitly included or excluded in the definition? Your input can help shape this important ethical standard!
