SEC Updates Rules On Auditor Independence

In an effort to modernize its auditor independence rules, the SEC recently adopted amendments to certain auditor independence requirements set forth in Regulation S-X (available here). Under the amendments, certain relationships and services that previously would have run afoul of the independence requirements, and that the SEC believes do not impair the objectivity or impartiality of auditors, will be permitted. By reducing some of the compliance-related challenges and burdens associated with the scrutiny of these relationships and services, the SEC expects that auditors, their clients and audit committees will be able to more meaningfully focus their attention on those relationships and services that may in fact pose threats to auditor independence. In addition, by increasing the scope of permitted services and relationships, these amendments should, as noted by SEC Chairman Clayton, "improve competition and audit quality by increasing the number of qualified audit