Addressing an Independence Violation
Audit Conduct has helped firms evaluate the ramifications of a breach of AICPA, SEC, PCAOB, GAO, DOL or other auditor independence rules or regulations in an audit or other assurance engagement and determine what actions may be taken to resolve the matter.
Typically, we work with a firm to review the relevant facts and circumstances, help determine the impact of the breach on the firm's independence, and recommend next steps in accordance with professional and regulatory standards. If needed, we can assist the firm in communications with the appropriate regulatory body.
Interpreting Subjective Rules
AICPA, SEC, and PCAOB auditor independence rules can be quite subjective and some rules and regulations provide little to no guidance. In such cases, we often share consensus views about how firms and regulators are interpreting independence rules and regulations so the firm may consider them in applying the rules to their specific situation.
The appearance of independence is a key component of the independence rules of all standard-setters and regulators and we can provide an objective, third-party opinion of the factors you should consider in evaluating your firm's independence. In some cases, it may be helpful to arrange a meeting with staff of the relevant regulatory body (e.g., DOL, PCAOB, FDIC or SEC) and we can assist with that process as well.
Complying With Multi-layered Independence Requirements (DOL, AICPA, FDIC, SEC, PCAOB)
The maze of auditor independence requirements can be tricky to navigate; our job is to guide you through. For example, multiple independence rules can apply to audit services performed for an employee benefit plan or a benefit plan's sponsor, e.g. , DOL, AICPA, FDIC, SEC, and/or PCAOB. We have worked with firms to create tools (e.g., charts or matrices) that the firm's quality control personnel and/or its professionals can use to facilitate review of similar matters going forward.
Accountancy Board Regulations
We have advised firms on the impact of state accountancy board regulations and other relevant professional rules on their CPA firm's practice. For example, a firm may wish to acquire a financial advisory firm, provide certain types of nonaudit services or use certain types of fee arrangements. We can provide a synopsis of the relevant rules and regulations, and the options that are available.
Policies and Procedures Review
We have evaluated policies and procedures for independence regulatory compliance, both broadly, (e.g., with AICPA, SEC and PCAOB auditor independence rules), and more specifically, (e.g., for nonaudit services or business relationships under AICPA, SEC and PCAOB rules) to ensure these policies and procedures support compliance with the relevant auditor independence rules. We'have also advised firms on how to improve the efficiency and effectiveness of their quality controls over independence.