United States Government Publishing Office publisher pbl distributor dst United States National Archives and Records Administration Office of the Federal Register author aut Government Organization text government publication eng FR Regulatory Information 2002_register executive 2010-09-23 article Part II Proposed Rules D09002ee1c8188ad5 D09002ee1c8188bbe United States Securities and Exchange Commission originator org United States Government Agency or Subagency The Securities and Exchange Commission ("SEC" or "Commission") is proposing amendments to its existing requirements regarding auditor independence to enhance the independence of accountants that audit and review financial statements and prepare attestation reports filed with the Commission. The proposed rules recognize the critical role played by audit committees in the financial reporting process and the unique position of audit committees in assuring auditor independence. As directed by section 208(a) of the Sarbanes-Oxley Act of 2002, we are proposing rules to: Revise the Commission's regulations related to the non-audit services that, if provided to an audit client, would impair an accounting firm's independence; define the circumstances whereby an issuer's audit committee can and should pre-approve all audit and allowable non-audit services provided to the issuer by the auditor of an issuer's financial statements; prohibit partners on the audit engagement team from providing audit services to the issuer for more than five consecutive years; prohibit an accounting firm from auditing an issuer's financial statements if certain members of management of that issuer had been members of the accounting firm's audit engagement team within the one- year period preceding the commencement of audit procedures; and require that the auditor of an issuer's financial statements report certain matters to the issuer's audit committee, including "critical" accounting policies used by the issuer. In addition to the provisions required by the Act, we also are proposing rules defining an accountant as not being independent from an audit client if any partner, principal or shareholder of the accounting firm who is a member of the engagement team received compensation based on any service provided or sold to that client other than audit, review and attest services. Further, we proposed to amend and require additional disclosures to investors of information related to the audit and non-audit services provided by, and fees paid by the issuer to, the auditor of the issuer's financial statements. 67 FR 76780 https://www.govinfo.gov/app/details/FR-2002-12-13/02-30884 02-30884 fr13de02-21 RIN 3235-AI73 8010-01-P Release No. 33-8154 34-46934 35-27610 IC-25838 IA-2088, FR-64, File No. S7-49-02 https://www.govinfo.gov/app/details/FR-2002-12-13/02-30884 https://www.govinfo.gov/content/pkg/FR-2002-12-13/html/02-30884.htm https://www.govinfo.gov/content/pkg/FR-2002-12-13/pdf/02-30884.pdf Accountants Accounting Broker-Dealers Issuers Securities Reporting and Recordkeeping Requirements Investment Companies 38 p. 76780 76817 67 FR 76780 Title 17 Part 210 17 CFR Part 210 Title 17 Part 240 17 CFR Part 240 Title 17 Part 249 17 CFR Part 249 Title 17 Part 274 17 CFR Part 274 RIN 3235-AI73 Strengthening the Commission's Requirements Regarding Auditor Independence; Federal Register Vol. 67, Issue PRORULE 02-30884 II SECURITIES AND EXCHANGE COMMISSION 2003-01-13 Release No. 33-8154 34-46934 35-27610 IC-25838 IA-2088, FR-64, File No. S7-49-02 8010-01-P 02-30884 Proposed rule.

The Securities and Exchange Commission ("SEC" or "Commission") is proposing amendments to its existing requirements regarding auditor independence to enhance the independence of accountants that audit and review financial statements and prepare attestation reports filed with the Commission. The proposed rules recognize the critical role played by audit committees in the financial reporting process and the unique position of audit committees in assuring auditor independence. As directed by section 208(a) of the Sarbanes-Oxley Act of 2002, we are proposing rules to: Revise the Commission's regulations related to the non-audit services that, if provided to an audit client, would impair an accounting firm's independence; define the circumstances whereby an issuer's audit committee can and should pre-approve all audit and allowable non-audit services provided to the issuer by the auditor of an issuer's financial statements; prohibit partners on the audit engagement team from providing audit services to the issuer for more than five consecutive years; prohibit an accounting firm from auditing an issuer's financial statements if certain members of management of that issuer had been members of the accounting firm's audit engagement team within the one- year period preceding the commencement of audit procedures; and require that the auditor of an issuer's financial statements report certain matters to the issuer's audit committee, including "critical" accounting policies used by the issuer. In addition to the provisions required by the Act, we also are proposing rules defining an accountant as not being independent from an audit client if any partner, principal or shareholder of the accounting firm who is a member of the engagement team received compensation based on any service provided or sold to that client other than audit, review and attest services. Further, we proposed to amend and require additional disclosures to investors of information related to the audit and non-audit services provided by, and fees paid by the issuer to, the auditor of the issuer's financial statements.

Comments should be received on or before January 13, 2003. Samuel L. Burke, Associate Chief Accountant, or Robert E. Burns, Chief Counsel, at (202) 942-4400, Office of the Chief Accountant, or, with respect to questions about investment companies, Brian D. Bullard, Chief Accountant, at (202) 942- 0590, Division of Investment Management, U.S. Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. Accountants Accounting Broker-Dealers Issuers Securities Reporting and Recordkeeping Requirements Investment Companies Securities, etc.: Sarbarnes-Oxley Act of 2002; implementation Auditor independence, requirements, rule-comments@sec.gov http://www.aicpa.org/members/div/secps/require.htm http://www.sec.gov Vol. 67, no. 240 Office of the Federal Register, National Archives and Records Administration 2002-12-13 continuing daily deposited born digital 316 p. Table of Contents: AE 2.7: GS 4.107: AE 2.106: KF70.A2 https://www.govinfo.gov/app/details/FR-2002-12-13 P0b002ee1809c1a18 0097-6326 0042-1219 0364-1406 769-004-00000-9 000582072 f:fr13de02 https://www.govinfo.gov/app/details/FR-2002-12-13 https://www.govinfo.gov/content/pkg/FR-2002-12-13/pdf/FR-2002-12-13.pdf https://www.govinfo.gov/content/pkg/FR-2002-12-13/xml/FR-2002-12-13.xml fdlp 76671 76979 DGPO 2010-09-23 2024-06-07 FR-2002-12-13 machine generated eng FR FR-2002-12-13 67 240