SEC Considers Amending Auditor Independence Rules
Rick Morris was quoted in Compliance Week, discussing the SEC considering amending its current auditor independence rules (subscription required). Due to complications caused by complexity and consolidation, SEC Chief Accountant Wes Bricker is debating recommending an amendment to the detailed independence rules that prohibit auditors from having loans tied to audit clients. Morris stated that one of the challenges with the current rules is the lack of provided degrees of severity. He said, “The way the rules are written, it’s an absolute. It’s a cliff-type of foul. There’s no mitigation, no accommodation.” He added that the evolution and globalization of both the auditing profession and the financial services sector have forced regulators to rethink the rigidity of the rules.