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News and Press Releases |
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HEADLINE:
PCAOB Ponders Tax Service, Auditor Independence
By: Staff Writer
AccountingWeb.com. July 15, 2004
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EXCERPT: Do the auditor independence rules outlined in the Sarbanes-Oxley Act of 2002 go far enough or should they be tweaked to include language governing tax advice? This is a growing concern of the Public Company Accounting Oversight Board, which was created by the act. Investors, consumer advocates, regulators and some accounting industry representatives are in rare agreement that something needs to be done to address the practice of audit firms marketing aggressive off-the-shelf tax shelters to their audit clients, Dow Jones Newswires reported. There's a fine line for the PCAOB to draw between acceptable tax services and pushing products that clearly muddy the auditor independence waters. "I don't relish the job ahead of the board, to try to figure out where to draw the line," James L. Brown, an executive at Indianapolis-based accounting and consulting firm Crowe Chizek & Co. LLC, told Dow Jones. "We've been talking about tax planning and strategies, and it all blends together." If an auditor's firm stands to gain on the tax side, will the auditor look the other way when encountering irregularities during a financial statement audit? That is the crux of the issue. AFL-CIO associate general counsel Damon Silvers urged the board to draft clear guidance to audit firms and audit committees "where the lines are," indicating that audit firms should have nothing to do with engineering tax-saving transactions that ultimately have to be approved by the partner auditing the books. "This sort of stuff needs to be banned," he said. "It is not acceptable to have an audit firm creating the structures they audit."
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