Accounting Policy & Practice Series
Sarbanes-Oxley: Auditor Independence
Portfolio Description
This Portfolio 5502 Sarbanes-Oxley: Auditor Independence, presents a detailed study of the requirement that an accountant auditing the financial statements of a public company must be independent in fact and in appearance of that company. This Portfolio analyzes the historical auditor independence rules under the U.S. securities laws, the changes to these rules as a result of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), and the reasons for these changes. Because the Public Company Accounting Oversight Board (the "PCAOB") is responsible for implementing the Sarbanes-Oxley Act, the Portfolio also includes a general discussion of the establishment, purpose, and operation of the PCAOB.
Section I provides historical information regarding auditor independence. It discusses the Regulations issued by the Securities and Exchange Commission ("SEC") on auditor independence predating the Sarbanes-Oxley Act and the events leading to that legislation.
Section II describes the regulation of the public accounting profession, a subject inextricably intertwined with auditor independence. After summarizing the profession's long history of self-regulation, Section II describes the structure and operation of the PCAOB and related topics including oversight and funding.
Section III discusses the categories of services that an accounting firm cannot provide to an audit client without impairing independence and the categories of services that can be provided if pre-approval is obtained from the audit client's audit committee.
The remaining sections of the Portfolio discuss other topics pertinent to the overall subject of auditor independence. These topics include rotation of audit partners, communications between accounting firms and audit committees, and relationships between accounting firms and audit clients. Worksheet 1 provides a Glossary of significant terms used in the Portfolio, and other worksheets illuminate the Detailed Analysis.
This Portfolio may be cited as BNA Tax and Accounting Portfolio 5502, Henkel, Wheeler, and Lane, Sarbanes-Oxley: Auditor Independence (Accounting Policy and Practice Series).
Michelle M. Henkel; B.A., Rhodes College (1986); Senior Accountant, Arthur Andersen & Co. (1986-1989); Manager, National Mortgage Co. (1989-1990); J.D., Emory University School of Law (1993); Federal Tax Controversies, Mayer, Brown, Rowe & Maw (Associate, 1993-1994); Federal Income Tax, Alston & Bird LLP (Associate, 1994-1999; Partner, 2000-present); Member, American Bar Association (Section of Taxation, Banking and Savings Institution Committee, and Court Practice and Procedure Committee); Vice-Chair, Banking and Savings Institution Committee of the American Bar Association's Section of Taxation (2005-2007); Member, Tax Audits and Litigation Committee of the District of Columbia Bar (2005-present); Chair, Section of Taxation of the Atlanta Bar Association (2005-2006); Member, Atlanta Tax Forum (2001-present); Trustee, Thompson West Tax Advisory Board (2003-2005); Member, American Institute of Certified Public Accountants (1986-present); Member, Georgia Society of Certified Public Accountants (1996-present); Admitted to the bars of the District of Columbia, Georgia, and Illinois; Admitted to practice in the U.S. Supreme Court, the Eleventh and Federal Circuit Courts of Appeals, the U.S. Tax Court, the U.S. Court of Federal Claims, the Court of Appeals for the District of Columbia, the Supreme Court of Georgia and the Supreme Court of Illinois; Licensed as a certified public accountant (Tennessee; inactive status); Author and speaker on federal tax and tax controversies topics.
Charles W. Wheeler; B.A., University of Wisconsin (1967); J.D., University of Wisconsin (1970); LL.M., Georgetown University (1978); Senior Tax Counsel, U.S. Chamber of Commerce (1979-1981); Assistant to the Commissioner of Internal Revenue (1981-1983); Tax Counsel, American Bankers Association (1984-1986); Partner, Ernst & Young, LLP (1986-1994); Partner, KPMG, LLP (1994-1999); Partner, Federal Income Tax, Alston & Bird LLP (1999-Present); Member, American Bar Association (Section of Taxation); Chair, Banking and Savings Institutions Committee of the Tax Section of the American Bar Association (1991-1993); Primary author of the Bank Income Tax Return Manual (1987-1994); Co-author of Taxation of Financial Institutions; Author and speaker on financial industry and financial product tax issues; Admitted to the bars of Wisconsin and the District of Columbia; listed in The Best Lawyers in America.
Andrea M. Lane; B.S. Acc., University of Florida; J.D., The George Washington University Law School; LL.M., New York University School of Law; Associate, Alston & Bird LLP (2001-present); Member, American Bar Association (Section of Taxation); Co-author of articles appearing in the Journal of Taxation, the Journal of Financial Instruments and the International Tax Review; Admitted to the bars of Virginia and the District of Columbia; Licensed as a certified public accountant in Virginia.
