The PCAOB has released a new Spotlight on auditor independence, which provides observations from PCAOB inspections regarding independence issues and identifies considerations for both auditors and audit committees. Auditor independence has, for years, been a major focus of the SEC’s Office of the Chief Accountant, and current Chief Accountant Paul Munter has addressed the issue in a number of statements, characterizing auditor independence as a concept that is “foundational to the credibility of the financial statements.” (See, for example, this PubCo post and this PubCo post.) But auditor independence is not just an issue for auditors. It’s important for companies to keep in mind that violations of the auditor independence rules can have serious consequences not only for the audit firm, but also for the company as the audit client.
Source: PCAOB spotlight on auditor independence outlines considerations for audit committees