On Friday, the SEC approved the PCAOB's rules on auditor independence. The rules deal with auditor ethics and independence and they restrict auditors from engaging in contingent fee arrangements and certain tax services for audit clients.
Under the Sarbanes-Oxley Act, which created the PCAOB, the Board was given rulemaking authority in these areas. Section 103(a) of SOX requires the PCAOB to establish auditing, attestation, quality control and ethics standards for public accouting firms that engage in audits of public companies.
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