ASC 842 is the Financial Accounting Standards Board (FASB) accounting standard for leases. It requires companies to recognize lease assets and liabilities on their balance sheet for leases with terms longer than 12 months. The standard also requires disclosures about leases in the notes to the financial statements, including information about the nature of the leases, the lease terms, and the cash flows associated with the leases. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and for all other entities for fiscal years beginning after December 15, 2020. Early adoption is permitted All of the lease standards
Consulting on the implementation of ASC 842 can impair independence if the auditor is providing consulting services to the same entity that it is auditing. Independence is an important principle in auditing, as it ensures that the auditor’s judgement is not influenced by any other interests. The American Institute of Certified Public Accountants (AICPA) has specific rules and guidance on independence related to consulting services. According to the AICPA, providing consulting services to an audit client, such as assistance with the implementation of ASC 842, could impair independence if the services are “prohibited non-audit services” as defined by the rules. Prohibited non-audit services include services that involve providing advice on accounting or financial matters, such as the implementation of new accounting standards, and services that involve management responsibilities. Therefore, if an auditor is providing consulting services to an audit client on the implementation of ASC 842, the auditor must ensure that the services do not impair independence. This could involve implementing procedures to safeguard the integrity of the audit work and taking steps to minimize the risk of conflicts of interest. Additionally, the auditor must also disclose the nature and scope of the consulting services provided to the audit client in the auditor’s report.
If you do provide these services you are going to have to document how your independence was not impaired is you are being asked as part of a peer review.