PCAOB adopts new independence rules
Before they can audit a company, firms will be required to discuss the potential effects of relationships they may have with the company or staff engaged in financial reporting roles
The US audit oversight board has adopted new rules which compel a firm to
declare all relationships it or its affiliates may have with a company that it
may audit.
According to the Public Company Accounting Oversight Board, the declaration
must be made in writing to the audit committee and must include any details
relating to relationships the firm may have with any company personnel in a
financial reporting oversight role, that could impact on the firm’s
independence.
The firm will also be required to hold discussions with the audit committee
about what the potential effects of any such relationships could have on the
firm’s independence.
Further reading:
Board
Adopts New Ethics and Independence Rule Concerning Communications with Audit
Committees