14 February 2005 — Consultation Response
February 2005
FEE comment letter on the PCAOB Rulemaking Docket Matter No. 017 – “Proposed Ethics and Independence Rules concerning Independence, Tax Services, and Contingent Fees”
In general terms, FEE agrees with the principle that a registered public accounting firm must be independent of its audit client throughout the audit and professional engagement period. FEE also welcomes the reconfirmation that the provision by a registered public accounting firm of the majority of tax services to its audit client is acceptable throughout the audit and professional engagement period. FEE is appreciative of the clarification provided on the provision of routine tax return preparation and tax compliance, general tax planning and advice on business transactions, international assignment tax services and employee personal tax services. FEE is also supportive of the proposal that the provision of any service or product to the audit client for a contingent fee or a commission impairs the independence of a registered public accounting firms of its audit client throughout the engagement period. However, FEE has some concerns regarding other proposals in the standard related to worldwide repercussions of the proposed standard, the lack of the use of the conceptual framework approach, the prohibitions on listed transactions, the prohibitions on aggressive tax positions, the prohibitions on tax services for senior officers in a financial reporting oversight role and the additional requirements related to the auditor’s involvement with the audit committee.
