EI 1000, Integrity and Objectivity (effective on 12/15/25)

The following new standard, EI 1000, Integrity and Objectivity, has been adopted by the PCAOB and approved by the U.S. Securities and Exchange Commission. The new standard will be effective on December 15, 2025. See PCAOB Release No. 2024-005, SEC Release No. 34-100968.

.01       In connection with their responsibilities under applicable professional and legal requirements¹ and the firm’s policies and procedures related thereto (for example, training activities and other professional development; engagement planning, performance, and supervision; and communication with company employees and boards of directors, other firm personnel, and regulators), a registered public accounting firm (“firm”) and its associated persons must maintain integrity and objectivity. 

.02       Integrity includes:

1. Being honest and candid.
2. Not knowingly or recklessly misrepresenting facts. Misrepresenting facts includes knowingly or recklessly making, or permitting or directing another to make, materially false or misleading statements, including knowingly or recklessly (1) signing, or permitting or directing another to sign, a document containing materially false or misleading information and (2) when having the authority to do so, failing to correct a document that is materially false or misleading when made (including when filed with or submitted to a regulatory authority), or when otherwise subject to a duty to correct the document.
3. Not subordinating professional judgment. If a person associated with a registered firm and such person’s supervisor have a disagreement or dispute over applicable professional and legal requirements or how to apply or comply with them, the associated person should take the following steps to ensure that the situation does not constitute a subordination of judgment:
1. Consider whether the supervisor’s approach results in a violation of applicable professional and legal requirements.
2. If, after appropriate research or consultation, the associated person concludes that the supervisor’s approach has sufficient support under applicable professional and legal requirements or does not constitute such a violation, the person need do nothing further. 
3. If, after appropriate research or consultation, the associated person concludes that there is insufficient support under applicable professional and legal requirements and the supervisor’s approach could constitute a violation of applicable professional and legal requirements, the associated person should make their concerns known to the appropriate higher level(s) of management (for example, the supervisor’s immediate superior or senior management). The associated person should also consider documenting their understanding of the facts, the applicable professional and legal requirements involved, the application of those requirements to the facts, and the parties involved in any relevant consultation or discussion.
4. If appropriate action is not taken, the associated person should consider:
1. Potential responsibilities to notify third parties (e.g., regulatory authorities, audit committees); and
2. The appropriateness of maintaining a continuing relationship with the firm.

.03       Objectivity includes: 

1. Being impartial.
2. Being intellectually honest.
3. Being free of conflicts of interest. A conflict of interest arises if a firm or any of its associated persons has a relationship with another person, entity, or service that may reasonably be thought to bear on the ability of the firm or the associated person to exercise objective and impartial judgment in connection with their responsibilities under applicable professional and legal requirements with respect to an engagement not involving such other person, entity, or service.
1. In general, if the firm believes that the firm and its associated persons can perform their respective responsibilities under applicable professional and legal requirements with objectivity, and the relationship is disclosed to and approval is obtained from the audit committee,² this standard does not prohibit the performance of the engagement.
2. Independence violations, as determined under applicable professional and legal requirements, cannot be eliminated by such disclosure and approval.