Defining Issues - SEC Proposes Amendments to Auditor Independence Rules

KPMG reports on the SEC’s proposed changes to auditor independence rules related to certain loans or debtor-creditor relationships. The SEC’s proposal includes four amendments to the loan provision that it believes would effectively identify relationships that could impair an auditor’s objectivity and impartiality.

Applicability

Public companies, registered investment companies, registered investment advisors, registered broker-dealers and private funds complying with the SEC’s custody rule.

Relevant dates

  • May 2, 2018 – Proposal issued
  • July 9, 2018 – Comments due on proposal

Key impacts

  • The proposed amendments would revise auditor independence rules related to loans or debtor-creditor relationships
  • The proposal excludes loans with record owners that are not beneficial owners, and only includes beneficial owners (known through reasonable inquiry) of the audit client’s equity securities where the beneficial owner has significant influence over the audit client

Report contents

  • Why did the SEC propose the amendments?
  • Proposed amendments
  • Next steps

 

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