Dating management representation letter

Posted by / 14-Mar-2020 10:37

Dating management representation letter

Auditor reports on financial statements that refer to PCAOB standards must comply with the independence rules of both the SEC and the PCAOB.

The SEC’s independence rules are promulgated in S-X 2-01.

The rule does not purport to, and the SEC could not, consider all the circumstances that raise independence concerns, and these are subject to the general standard in paragraph 2-01(b).

[S-X 2-01(a)] However, S-X 2-01(a) does not affect the applicability of any other registration, licensing or qualification requirements that may apply in any State or competent jurisdiction.

The staff may question the location from which the audit report was rendered if there does not appear to be a logical relationship between that location and the location of the registrant’s corporate offices, its principal operations, its principal assets, or where the audit work was principally conducted.

In considering this standard, the SEC looks in the first instance to whether a relationship or the provision of a service: (a) creates a mutual or conflicting interest between the accountant and the audit client; (b) places the accountant in the position of auditing his or her own work; (c) results in the accountant acting as management or an employee of the audit client; or (d) places the accountant in a position of being an advocate for the audit client.

When an independent auditor uses the work and reports of other independent auditors to audit the financial statements of one or more subsidiaries, divisions, branches, components, or investments included in the financial statements presented, such independent auditor must decide whether it may serve as the principal auditor.

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