SEC’s Nicolaisen Welcomes PCAOB Involvement in Independence Standards-Setting
In response to the Public Company Accounting Oversight Board (PCAOB) action earlier this week, proposing certain ethics and independence rules for public comment, the Commission’s Chief Accountant, Donald T. Nicolaisen, noted that he welcomed PCAOB involvement in this important area.
The PCAOB’s proposed rules grew out of its public roundtable on auditor independence held in July, and address issues relating to tax services and contingent fees.
Although the Commission historically has adopted its own rules and interpretations regarding auditor independence issues – and will continue to provide companies and audit committees with guidance on independence issues – Nicolaisen stated that he looks forward to the PCAOB fulfilling its role and becoming the primary standard-setter and source of guidance to auditors on these issues. “It’s appropriate that the PCAOB play a robust role in the area of auditor independence,” Nicolaisen stated. “Since the passage of the Sarbanes-Oxley Act in 2002, there have been many questions about the types of services auditors may provide without compromising their independence, especially with respect to tax services. PCAOB guidance in this area will be helpful to audit committees, in particular, as they consider these issues.”
There will be an opportunity for public comment on the PCAOB’s proposed rules before the PCAOB Board takes final action, and Nicolaisen stated that he hoped a broad range of commenters would take the opportunity to participate in that process. The final rules adopted by the Board will be submitted to the Commission for approval.