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SEC provides limited relief from certain independence requirements due to Hurricane Florence

On September 19, 2018, the Securities and Exchange Commission (SEC) issued an order granting, in part, limited relief from independence rules that normally prohibit auditors from assisting clients in assembling their financial statements and accounting records. The order allows auditors to help their clients reconstruct records destroyed in Hurricane Florence to facilitate the reconstruction process, which is in the public interest, an approach the SEC has taken after other natural disasters and extraordinary events.

Conditions of applying the order appear below: 

First, services are limited to reconstruction of previously existing accounting records that were lost or destroyed as a result of Hurricane Florence and cease as soon as the audit client’s lost or destroyed records are reconstructed, its financial systems are fully operational and the client can effect an orderly and efficient transition to management or other service provider; and

Second, services are subject to pre-approval by the audit client’s audit committee as required by Rule 2-01(c)(7) of Regulation S-X.