Audit Conduct

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Auditor Independence Consultation

Audit Conduct can supplement your firm's resources with a thorough knowledge of applicable laws, rules and regulations to address your specific circumstances. We will give you timely analysis, explanation and documentation of your best options. We can also advise your firm on ways to enhance audit quality and risk management through better ethics compliance.

Case Studies and Applications

Breach of Independence

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.

Interpreting Subjective  AICPA, SEC, and PCAOB Rules

AICPA, SEC, and PCAOB auditor independence rules can be quite subjective and open to interpretation and some of the rules and regulations provide little to no guidance, are ambiguous, conflicting, or otherwise complex. 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. When warranted, it may be appropriate to arrange a meeting with staff of the 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 can use to facilitate review of similar complex matters after the consultation.

I first met Cathy when she was Senior Manager at the AICPA and I was a member of the AICPA Professional Ethics Executive Committee. I had the opportunity to work with Cathy on some technical projects including the “modernization” of the AICPA independence rules back in 2001. Through those interactions I gained an immediate appreciation for her knowledge of the independence rules. Currently our firms uses Cathy as our outside independence consultant. Cathy has been very responsive to our inquiries which is greatly appreciated as often these are very time sensitive. She is a valuable resource for consulting on AICPA, DOL and SEC/PCAOB independence topics. We appreciate her perspective as someone who is outside of our firm.
Chris Piché , CPA
Managing Principal, Ethics; CliftonLarsonAllen, LLC

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 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 compliance to enhance audit quality.

Let's Talk

Let's talk about your consultation, training, CPE, or other needs. 

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