SEC Allows Auditors to Perform Services for Affiliate Companies in Same Fund
The SEC has revised the auditor independence rules to allow auditors to perform services for related companies owned by the same fund. Under current rules, an auditor was deemed not independent if affiliates provided services to other portfolio companies regardless of materiality, thereby necessitating SEC relief. The new rules allow the engagement so long as the relationships are not material. The revised auditor independence rules also address student loans to auditor personnel and first time filers.
We support these changes which foster increased competition and (hopefully) lower audit fees. It also brings a more practical and real-world regulatory approach to judging auditor independence in the fund industry.