Chief Accountant Kurt Hohl Says SEC Weighs Changes To Auditor Independence Rules In U.S.

The U.S. Securities and Exchange Commission (SEC) is considering changes to auditor independence rules, including the possible removal of separate standards set by the Public Company Accounting Oversight Board.

SEC Chief Accountant Kurt Hohl said the regulator plans to review existing rules over the next year, beginning with nonbinding guidance based on recurring questions raised by companies. The review may later expand to issues linked to artificial intelligence (AI) use in financial reporting and its impact on auditor independence. Hohl said the PCAOB’s independence rules were no longer necessary and could be replaced by SEC standards. The SEC is responsible for setting independence rules and revised some of them in 2020.

The PCAOB adopted its standards in 2003 using older accounting industry guidelines. Some regulators and investors have argued that parts of those rules conflict with current SEC regulations and create compliance issues for companies and audit firms.