US regulator to tighten audit rules
US regulators yesterday proposed tighter rules to increase auditor independence in compliance with the notorious Sarbanes-Oxley Act passed by Congress this summer.
Link: Sarbanes-Oxley in depth
The Securities and Exchange Commission plans to restrict non-audit services that could impede audit independence and demands that a company’s audit committee first approve the services that are offered.
It further plans to prohibit audit partners staying with a client for more than five consecutive years and intends to prohibit firms from performing audits with clients where directors were members of the audit team less than one year ago.
The public has 30 days to comment or request amendments. The new rules are set to come into force at the end of January 2003.