NASBA Responds to SEC and PEEC

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On NASBA’s behalf, Chair Laurie J. Tish and President and CEO Ken L. Bishop submitted responses to exposure drafts from the Securities and Exchange Commission (SEC) and the AICPA Professional Ethics Executive Committee (PEEC) on February 25. The complete responses can be found on www.nasba.org in the Publications section.

The letter to the SEC commenting on Amendments to Rule 2-01, Qualifications of Accountants, basically voiced agreement with several sections that would impact the work of regulators. One item pointed out in the letter concerned adding a transition framework to address inadvertent violations of independence rules that occur in connection with a client’s merger or acquisition: “NASBA has some concerns that the maximum six-month transition period will become the acceptable standard in practice. Further, NASBA believes under no circumstances should the auditor be permitted to audit its own work if such work materially affects the consolidated financial statements at the acquisition effective date and in any post acquisition period.”

In response to PEEC’s Strategy and Work Plan Consultation Paper, NASBA suggests PEEC when defining “office” consider how meaningful physical location is in the current environment. A project suggested to the PEEC by NASBA is evaluation of the final revisions of the SEC’s independence rules against PEEC’s rules, so they align.

NASBA’s responses were developed for Chair Tish and President Bishop by the NASBA Regulatory Response Committee and Ethics Committee: Regulatory Response Committee – W. Michael Fritz – Chair (OH), Alan R. Augenstein (AZ), Richard L. Bell (AR), Kevin Collins (CO), David D. Duree (TX), Gaylen R. Hansen (CO), Tracy W. Harding (ME), Matthew J. Howell (MI), Richard Isserman (NY), Frederick R. Kostecki (MO), Laurie A. Warwick (VA), Carleton L. Williams (HI) and L. Samuel Williams, Jr. (NC); Ethics Committee – Catherine R. Allen – Chair (NY), Paul Balas (MI), David I. Bridgers, Jr., (MS), Donald H. Burkett (SC), Wm. Hunter Cook (NC), Robert F. Fay (OH), Susan Quaintance Ferguson (VA), Robert L. Goldfarb (NY), Larry Hunter (ID), James G. Kelley (IL), Thomas G. Neill (WA), Michael L. Nickerson (ME), Steven M. Platau (FL), and Lawrence A. Wojcik (IL). NASBA’s Regional Directors participated in the Regulatory Response Committee’s preparation calls.