United States

Financial statement production for clients subject to SEC independence rules

Jan 30, 2015
From the KPMG Institutes

RC_Sarbanes-OxleySourcing_RelatedService

For companies that are subject to SEC independence rules, the firm will no longer bind audit reports to their financial statements. Companies that are subject to SEC independence rules include:-

  • SEC public registrants
  • Private investment funds where the SEC-registered investment advisor is subject to SEC Rule 206 (4)-2 ("custody rule")
  • Nonissuers that are registered with the SEC as a broker dealer

The regulators have continued to stress that the financial statement preparation process is the responsibility of management and that the responsibility as auditors is to express an opinion on the financial statements. The impact of this policy change will require additional controls by the companies we audit and their third-party administrators to ensure the accuracy of the financial statements being issues to their stakeholders.

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