In response to recent attacks by the SEC on perceived independence problems across the auditing profession, the AICPA today approved new objectivity requirements for auditors who audit public companies.
Some of the new requirements include:
- Auditing firms must set up an internal computer database of restricted investments in public clients;
- Independence policies must be established regarding financial relationships between the company and the firm, to include the firm's benefit plans, its staff and its staff's relatives.
The new rules are intended to clear up some of the confusion that currently exists regarding direct investments in a company versus investments in mutual funds.
For example, Fidelity Investments recently indicated that it wants to drop PricewaterhouseCoopers as its auditor of four of its biggest funds because a couple of the partners in PWC owned shares in one of the funds.
The new AICPA rules will take effect January 1, 2000.