AICPA Proposes Tighter Rules for Alternative Practices
The American Institute of CPAs will open public consultation on ethics changes governing alternative practice structures that include outside investors.
Updated on Nov. 4, 2026 in Professional Services
The AICPA's Professional Ethics Executive Committee will launch a public consultation on proposed changes to ethics rules for alternative practice structures. The revised draft limits that designation to arrangements that include an investor.
Why it matters
Private equity deals across the accounting profession have accelerated, prompting the committee to clarify independence and conflict-of-interest requirements. The changes would affect how CPA firms with outside capital are structured and overseen nationwide.
The revised draft draws on 81 stakeholder comment letters and opens a 120-day public consultation, with rules taking effect 12 months after any adoption. The final text has not yet been approved, and feedback during consultation could change its scope.
The players
American Institute of Certified Public Accountants (AICPA)
The AICPA is the national professional organization for certified public accountants in the United States, which sets the ethics code governing CPA conduct.
Professional Ethics Executive Committee (PEEC)
PEEC is the AICPA body responsible for developing and revising the ethics rules that govern CPA independence and professional conduct.
The details
The draft limits the 'alternative practice structures' designation to arrangements that include an investor and requires formal separation between the attest entity and non-attest entity where significant outside investment is involved. It also classifies controlling investors and closely aligned entities as network firms subject to independence rules, while complex structures without an investor remain under existing provisions.
Timeline
2000: Alternative practice structure provisions were added to the AICPA Code of Professional Conduct.
December of the prior year: The committee released its initial proposal.
Earlier this year: 81 stakeholder comment letters were submitted.
Once the exposure draft is published: A 120-day public consultation period opens.
Next year: Potential approval of the revised rules.
Industry Shift
The proposal updates AICPA Code of Professional Conduct provisions first added in 2000 that govern alternative practice structures. It narrows the designation to investor-backed arrangements and extends independence rules to controlling investors and closely aligned entities as private equity activity in the profession grows.
CPA firms considering outside investment will face clearer separation requirements between attest and non-attest entities if the rules are adopted. Firms without investors will continue under existing code provisions, so their operations are unaffected by this draft.
The takeaway
Firms weighing private equity arrangements should track the consultation period closely, since the final rules may define which structures require formal separation and network-firm treatment.
What happens next
The AICPA will publish the exposure draft on its website and open a 120-day public consultation period, after which PEEC will consider feedback before any final vote next year.
Further reading
Explore more coverage of Professional Services developments shaping the accounting profession.
Source note: This article includes information reported by The Accountant.
