In remarks made in December 2018, the Securities and Exchange Commission’s (SEC) Chief Accountant Wesley Bricker reaffirmed that auditor independence remains one of the SEC’s areas of focus. Consultations with the SEC about specific auditor independence questions influence the staff’s recommendations to the commission regarding updating or expanding the independence rules and existing staff guidance, Bricker said. Indeed, the SEC is currently considering amendments to those rules related to certain lending relationships as a result of these consultation trends.

Despite the SEC’s affirmation of the importance of these consultations in identifying emerging and recurring auditor independence issues, the SEC does not make its specific guidance on individual consultations publicly available. It is important for public company audit committees to understand these limitations in this complex area. There also is an opportunity for the SEC to improve its process by making its specific guidance public.

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