NASBA Submits Comments on Proposed APS Revisions

On Monday, April 27, 2026, NASBA submitted a comment letter in response to the AICPA Professional Ethics Executive Committee’s (PEEC) exposure draft on Alternative Practice Structures (APS). The letter reflects input from Boards of Accountancy and focuses on a central question: How will this work in practice?

The proposal addresses changes to independence standards based on how firm structures are evolving, including private equity investment. NASBA’s letter acknowledges that change but emphasizes that independence – both in fact and appearance – is fundamental to protecting the public and maintaining trust in the accounting profession.

A central concern raised in the letter is the complexity of the proposed guidance. The principles-based framework depends heavily on professional judgment and may lead to inconsistent application by firms and regulators, creating diversity in practice that is not in the public interest.

NASBA also highlights the need for clearer guidance in key areas, including how “control” is defined and how concepts like significant influence and cooperation should be applied. In practice, influence is not limited to ownership. NASBA remains concerned about the undue influence threat created when personnel, resources, strategic decision-making and compensation structures are controlled or heavily influenced by affiliated non-attest entities or APS investors.

The proposal would apply stricter independence rules to financial statement audits and reviews while relying on the conceptual framework for other assurance and attest services. NASBA believes this sends the wrong message by implying that some assurance services require less independence than others. A single, consistent standard for all assurance services is in the public interest.

Transparency is another important theme. NASBA supports disclosure requirements around APS ownership structures, affiliated entities and investor relationships. Better visibility into ownership, governance and financial arrangements will help member boards understand how these structures operate and where risks may exist.

Finally, the letter reinforces the role of state boards in overseeing the profession. Boards must have clear and practical independence standards to allow them to determine compliance within their statutory authority and take action when necessary. The framework should support that responsibility.

Overall, NASBA concludes that additional collaboration, clarification and stakeholder involvement are necessary before finalizing standards that could significantly affect both professional practice and regulatory oversight.