Content area
Full text
WASHINGTON - The Public Company Accounting Oversight Board adopted new ethics and independence rules for auditors that place clear limits on the ability of accounting firms to offer tax services to their audit clients.
Although the new restrictions stop well short of an all-out ban on the provision of tax services by auditors - a course advocated by some critics of the profession -they do make it clear that offering aggressive tax shelter schemes to audit clients will not be tolerated.
Under the recent rules approved by the board, an audit firm will not be considered independent if it offers its audit clients tax services "related to marketing, planning or opining in favor of a tax treatment on a transaction that is based on an aggressive interpretation of applicable tax laws and regulations."
The restrictions are aimed at curbing auditor involvement in "egregious tax dodges that impair independence and undermine public confidence in auditor integrity," PCAOB board member Daniel L. Goelzer said in voting to establish the new rules.
The standards adopted by the board further prohibit auditors from offering tax services to clients on a contingent-fee basis, and from providing tax services to certain members of management who serve in financial reporting oversight roles at an audit client.
PCAOB Chairman William J. McDonough described the new ethical guideline on auditor tax...