Regulatory Alerts2019-07-05 | 2019-13429Added
Auditor Independence With Respect to Certain Loans or Debtor-Creditor Relationships
The Securities and Exchange Commission adopted amendments to Rule 2-01 of Regulation S-X to refocus auditor independence analysis on lending relationships with beneficial owners of audit clients. The final rule replaces the existing 10 percent bright-line ownership test with a significant influence test and adds a known through reasonable inquiry standard for identifying beneficial owners. These changes aim to exclude attenuated debtor-creditor relationships that are unlikely to impair objectivity, thereby allowing auditors to focus on borrowing relationships that are important to investors.
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