The SECPS, which includes some 1,300 firms, is aimed at improving the quality of practice by CPA firms before the Securities and Exchange Commission. The AICPA requires membership in the SECPS by its member firms that audit SEC clients.

Under the new rule, effective Jan. 1, 2001, if an audit engagement partner is subject to an ethics investigation in connection with an alleged audit failure, the partner's firm must take one of the following actions: terminate or retire the partner; remove the partner from performing or supervising audits of public companies until the ethics enforcement process is completed; or subject the partner to additional oversight for at least a year on all public firm audit engagements in which that partner is involved. In addition, the oversight duties must be assigned to a senior technical partner appointed by the firm's chief executive or managing partner, the AICPA said.

The member firm is responsible for choosing one of the options, but the implementation of disciplinary procedures is subject to monitoring by the firm's peer review and the Public Oversight Board, the AICPA said.

"This additional requirement represents our continuing efforts to safeguard the public interest," said SECPS director David Brumbeloe.

-- SmartPros News Staff

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