Auditors of financial institutions required to have a financial statement audit by the Federal Deposit Insurance Corporation Improvement Act (FDICIA) must be independent under the independence rules of the SEC. The Federal Deposit Insurance Corporation recently announced that, in all cases where financial statement audits are required by FDICIA, the SEC’s independence rules encompass the Public Company Accounting Oversight Board’s (PCAOB) ethics and independence rules approved by the SEC. This position means, among other things, that:
- Under PCAOB Rule 3522, which applies to tax services performed after June 18, 2006, McGladrey and Pullen, LLP and RSM McGladrey, Inc. cannot provide any tax services to such a client related to marketing, planning or opining in favor of a confidential transaction or an aggressive tax position.
- Under PCAOB Rule 3523, which applies to services that were not in process as of April 19, 2006, and not completed by October 31, 2006, McGladrey and Pullen, LLP, RSM McGladrey, Inc. and H&R Block, Inc. are prohibited from providing tax services to persons in a financial reporting oversight role at the audit client (except those persons who are in such a role only because they serve on the board of directors), or an immediate family member of such person.
- Under PCAOB Rule 3524, which applies to all services approved on an engagement-by engagement basis after June 18, 2006, in connection with obtaining audit committee pre-approval of all permitted tax services performed by McGladrey & Pullen, LLP or RSM McGladrey, Inc., we must describe, in writing, the scope of the service and the fee structure, discuss with the audit committee the potential effects of the services on independence, and document the substance of those discussions. Rule 3524 does not apply to engagements approved subject to pre-approval policies and procedures that are begun by April 20, 2007.
|
