With the ink barely dry on the last iteration, here come IFAC with some revised independence guidelines - effective 1/1/11.
The full rules are a bit of a grind at 132 pages, but there are some interesting highlights:
The revised codeextends the independence requirements for audits of listed entities to all "public-interest entities." You will hit page 126 before the definition of a "public interest entity" becomes clear. In addition to the obvious - quoted companies, the standard will also apply to any entity required to have a similar audit. So, private companies, government departments, charities, etc. might all now be covered by this extension.
The revised code also now precludes audit partners from being evaluated on (or compensated for) selling non-assurance services to their audit clients.
The material that addresses the definition of a network and a network firm for independence purposes appears untouched at this stage.
National institutes (AICPA, CICA, et al) will now have to go through their own consultation and notification process in order to get these revised rules adopted.
Comments