Understanding Rule 3526
Overview:The PCAOB has adopted Rule 3526. This new regulation will govern the relationship between audit committees and their independence. Specifically, registered firms will have to describe in detail the nature of their relationship with the company and any potential conflicts which would affect the firm's independence. Companies that provide auditing services should have a thorough and comprehensive knowledge of this new guidance.
The Knowledge Congress is assembling a panel of distinguished professionals and key regulators to help understand the impact of the new guidelines on the auditing/accounting firms and companies that are most affected by them. The speakers will present their expert opinions in a two-hour LIVE Webinar.
<strong id="ep-name-of-speaker">Bella Rivshin, CPA, Associate Chief Auditor</strong>
» Overview of Rule
<strong id="ep-name-of-speaker">Scott Bayless, Partner, National Office Independence Group</strong>
<em id="ep-speaker-firm">Deloitte & Touche LLP</em>
** Speaker Talking Points to be added soon.. **
<strong id="ep-name-of-speaker">Lewis Ferguson, Partner</strong>
<em id="ep-speaker-firm">Dunn & Crutcher LLP</em>
1. This part of the presentation will focus on the audit committee’s role and responsibilities
in connection with auditor independence.
2. AUDIT COMMITTEE ROLE UNDER SOX
Audit committee oversees the auditor and is responsible under SOX for engaging the
auditor and specifically approving non-audit functions performed by the auditor.
3. BACKGROUND OF AUDITOR INDEPENDENCE REQUIREMENT
(a) Requirement that an auditor be independent of audit client has been around for many years.
(b) Old rule was Independence Standard Board Rule No. 1 – required a periodic
independence determination by the auditor but its rules were much less detailed than
PCAOB Rule 3526.
(c) In practice, ISB No. 1 was often applied rather casually and it was not uncommon
for auditors to accept engagements and begin work before providing the new client
with an ISB No. 1 letter.
4. PCAOB Rule 3526 is much more specific and prescriptive than ISB No. 1.
(a) Relationships that might affect independence now be described in writing before work begins
(b) Letter must be repeated annually.
(c) Specific focus on relationships with client personnel working in financial reporting roles –
CEO, CFO, Chief Accounting Officer
5. AUDIT COMMITTEES ROLE IN INDEPENDENCE DETERMINATION
When the Rule 3526 letter is received, audit committee should:
(a) discuss with auditor
(b) ask for description of auditor’s survey process to determine independence
(c) Independently examine and evaluate auditor’s rationales for independence judgments
Who Should Attend:
- Public Accountants
- Tax Preparers
- Tax Attorneys
Bella Rivshin, CPA, is currently an Associate Chief Auditor for the Public Company Accounting Oversight Board (PCAOB) in Washington, DC. Her principal responsibility is assisting in the development of auditing and related professional practice standards applicable to audits of public companies in the United States.
Prior to joining the PCAOB in November 2003, Ms. Rivshin was with PricewaterhouseCoopers where she specialized in auditing and consulting. From 1999 to 2003, Ms. Rivshin was a resident in the firm's Independence Policy and Consulting Group at the national office in New York where she developed and implemented firm independence policies and provided technical policy assistance to engagement teams.
Ms. Rivshin holds a B.A. degree from Indiana University and a Masters of Accountancy degree from George Washington University. She is a certified public accountant in California.
Bella Rivshin, CPA, is currently an Associate Chief Auditor for the Public Company Accounting Oversight Board (PCAOB) in Washington, DC. …
Lewis H. Ferguson is a partner in the Washington, D.C. office of Gibson Dunn & Crutcher and a member of the firm's Securities Regulation and Corporate Transactions practice groups. Mr. Ferguson's practice focuses on the representation of accounting and auditing firms and their employees, securities regulation and disclosure issues and corporate governance matters.
Mr. Ferguson joined the firm in 2007 after serving for more than three years as the first General Counsel of the Public Company Accounting Oversight Board. At the PCAOB, Mr. Ferguson was in charge of all legal affairs and was involved in drafting the PCAOB's rules and regulations and auditing standards, including auditing standards for the audit of internal controls. He also oversaw the successful defense of litigation against the PCAOB challenging the constitutionality of the organization and of the Sarbanes Oxley Act itself.
Prior to joining the PCAOB in 2004, Mr. Ferguson was a partner in another Washington, D.C. firm where he specialized in corporate transactions, securities enforcement matters and representation of audit committees and boards of directors. From 1994 to 1998, he was Senior Vice President, General Counsel and Director of Wright Medical Technology, a medical device company. He has also been a director of a number of public and private companies, mainly in the medical device and technology areas.
For a number of years, Mr. Ferguson was an Adjunct Professor of Law at the Georgetown University Law School. He received his B.A. degree cum laude with High Honors in Politics and Economics from Yale College in 1966 and a B.A. and M.A. degree from Cambridge University (King's College) which he attended on a fellowship. In 1971, he received his J.D. degree from Harvard Law School where he was a member of the Harvard Law Review. Mr. Ferguson clerked for the Hon. Frank J. Murray, U.S. District Judge for the District of Massachusetts. He is a frequent speaker on accounting and auditing matters and the relationship between corporations, regulators and auditors at industry, legal and media-sponsored conferences.
Lewis H. Ferguson is a partner in the Washington, D.C. office of Gibson Dunn & Crutcher and a member of …
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