PCAOB Sets Rules For Its Employees

The Public Company Accounting Oversight Board set new rules on Monday that limit the types of investments its members can own. The rules are designed to protect the board members from any possible accusations of conflicts of interest.

Board members and staff of the PCAOB as well as spouses and dependents of PCAOB members and staff are restricted from having any financial interest in any public accounting firm that performs audits of publicly-held companies and is thus under the jurisdiction of the PCAOB.

Under the new strict guidelines, board members and staff are prohibited from owning a financial interest in any company that might give the appearance of affecting their independence or objectivity. Board members and staff will make an annual, public report of all stock holdings.

Board members may not "owe or be owed any financial or other obligation to or by any former employer, business partner, publisher or client." An exception to the new rule is that board members are allowed to receive retirement benefits from public accounting firms.

In addition, board members are prohibited from working for any other organization for pay, and cannot perform unpaid services for any organization that might be perceived to be in conflict with the mission of the PCAOB.

The complete PCAOB ethics guidelines are available on the PCAOB Web site.

The Securities and Exchange Commission, which oversees the PCAOB, is expected to approve the new rules.

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