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PCAOB Adds Independence Rule to its Research Agenda

Noting the appointment of a whole new Board, Tammy Whitehouse of Compliance Week blogged yesterday about the addition of a new item to the Public Company Accounting Oversight Board's (PCAOB's) research agenda, Rule 3526, Communication with Audit Committees Concerning Independence. I too noticed this addition and listened to the archive of the Standing Advisory Group's last meeting in November 2017, but did not find any discussion about the addition. That said, the PCAOB has cited Rule 3526 compliance as a problem area for firms, in both inspections and enforcement actions. (I discuss Board commentary on this rule and four other problem areas cited by the PCAOB in my Winter 2018 Newsletter and an accompanying video.) An excerpt from the Board's most recent Standard-Setting Agenda appears below: 

EXCERPT: STANDARD-SETTING UPDATE OFFICE OF THE CHIEF AUDITOR MARCH 31, 2018

According to the document: Inspection observations have identified situations that raise questions about how firms are executing against the provisions of PCAOB Rule 3526 in circumstances in which there has been a relationship that caused a firm not to be independent under PCAOB Rule 3520. The staff is exploring, through outreach and other research activities, whether guidance should be issued or whether there is a need for amendments to Rule 3526.

So, more to come on this topic - stay tuned.