SEC Proposed Rule:
Revision of the Commission's Auditor Independence Requirements
[Release Nos. 33-7870; 34-42994; 35-27193; IC-24549; IA-1884; File No. S7-13-00]
The following information was submitted by 7 individuals.
Subject: Auditor Independence
Comments:I am writing to you about the proposed federal regulation being initiated by the SEC that threatens my profession. Specifically, File No S7-13-00.
If this proposal is approved, I fully expect it to find its way to state regulators across the country, significantly changing the way accounting firms do business.
The impact of such a change would be widely felt by forcing accounting firms to limit their clients to either audit or non-audit services. This limitation would prove to be a disservice to our clients and have a negative financial impact on our firm. Twenty percent of our current services are audit or audit related services.
The Panel on Audit Effectiveness of the Public Oversight Board, which was formed at the request of your organization, recently concluded that there was no evidence that the provision of non-audit services has hurt audit quality. In fact, it concluded that both the profession and the quality of audits are fundamentally sound and that in numerous instances non-audit services contributed to a more effective audit.
This proposal restricts freedom of choice by limiting the services an accounting firm can provide. This type of oversight is unwarranted and intrusive.