Statement on Amendments to PCAOB Independence Standards and Rules
I support the amendments to our independence standards and rules that we are considering today.
Auditor independence is essential to investor confidence and protection. Indeed, the value of the audit is in large part dependent on the public's perception that the audit is performed by skilled professionals capable of exercising objective and impartial judgment. To serve the public interest, auditors must be independent—both in fact and in appearance—of the companies they audit.
Congress has granted both the SEC and the PCAOB jurisdiction to establish auditor independence requirements. Historically, the SEC's and PCAOB's independence requirements have worked together to establish the independence compliance framework for auditors.
When one of us makes amendments to our independence rules, as the SEC did in this case, it is important for the other organization to consider potential implications of the revisions on their own requirements, and to make conforming changes, when appropriate, to avoid unnecessary differences.
The amendments we are adopting today will help better align our requirements with the SEC's recently revised rules. This should help provide greater clarity and certainty to investors, auditors and other market participants, and should better ensure effective and consistent application of the requirements. In addition, by adopting these changes, the policy objectives of the SEC's revisions, which I believe are appropriate, can be more fully realized.
In closing, I would like to recognize and thank all those who have contributed to this effort—in particular our staff in our Offices of the Chief Auditor, Economic and Risk Analysis, and General Counsel, as well as our colleagues at the SEC.