Alert focuses on independence rules for auditors of certain nonissuers
 

Alert focuses on independence rules for auditors of certain nonissuers

The Center for Audit Quality (CAQ) and the AICPA on Wednesday issued a joint alert to provide audit firms with an overview of SEC and PCAOB independence rules that apply to financial statement audit and attestation engagements for certain nonissuers.

The alert is intended for auditors of:

  • SEC-registered, nonissuer broker-dealers; and
  • Where the engagement is subject to the requirements of the SEC “custody rule”: Rule 206(4)-2 (17 C.F.R. 275.206(4)-2), SEC-registered and state-registered investment advisers, related-party custodians, and private funds such as pooled investment vehicles.

The alert is a follow-up to independence guidance provided in a CAQ/AICPA joint alert issued in May. Wednesday’s alert also provides relevant guidance as reflected in recent PCAOB staff guidance for auditors of SEC-registered brokers and dealers, in light of a recent PCAOB report on the progress of its interim inspection program for audits of brokers and dealers. The PCAOB expressed concern in that report over the continued high number of independence findings related to audits of broker-dealers. Read more on the Journal of Accountancy.