Chapter 9 — Breach of an independence interpretation What do I do if I’m not in compliance with an independence interpretation? Before resigning from an attest engagement, you may want to assess the breach under the “Breach of an Independence Interpretation” interpretation (ET sec. 1.298.010). However, if you choose to evaluate the breach using this interpretation and conclude that the consequences of the breach were satisfactorily addressed and do not resign, you should be prepared to justify such conclusion because use of the interpretation will not preclude you from an investigation or enforcement action by the AICPA. In order to use the interpretation, your firm must be compliant with QC section 10, A Firm’s System of Quality Control (AICPA, Professional Standards), which requires the member’s firm to have established policies and procedures designed to provide it with reasonable assurance that the firm, its personnel, and, when applicable, others subject to independence requirements maintain independence when required. If your firm is not compliant with QC section 10, you would not be able to address the consequences of the breach under this interpretation. If your firm is compliant with QC section 10, but still a breach occurs that results in the attest engagement team’s integrity, objectivity, and professional skepticism being compromised, the threat to independence would be so significant that you could not take any actions to satisfactorily address the consequences of the breach. In addition, there is a rebuttable presumption that the attest engagement team’s integrity, objectivity, and professional skepticism are compromised and that you cannot take any actions to satisfactorily address the consequence of the breach when the lead attest engagement partner or an individual in a position to influence the attest engagement either (1) committed the breach or (2) knows of a breach and fails to ensure the breach is promptly communicated to or known by an appropriate individual within the firm. If your firm is compliant with QC section 10 and the attest engagement team’s integrity, objectivity, and professional skepticism are not compromised, then you could evaluate the breach using the interpretation to determine if you can address the breach and perform the attest engagement. If you determine that you can satisfactorily address the breach, the interpretation calls for certain steps to be taken, including communicating with those charged with governance and documenting the breach, the action taken, key decisions made and all the matters discussed with those charged with governance, and any discussions with a professional body, relevant regulator, or oversight authority. 41