I have a concern that we continue to establish one set of rules of independence for SEC audits and another for private non-SEC audits. This, I believe, creates confusion and should be avoided. The audit of Cargill, a large private company, should not have a set of Independence rules that is different from the smallest of audits performed for a public company under SEC rules of Independence. Auditors should be independent irrespective of other considerations and the same rules should apply across the board. I applaud the SEC for stepping forward and dealing with this difficult issue.
Independence is a crucial contribution to the credibility of audits.
Non-audit services diminish independence both in fact and appearance. The Panel on Audit Effectiveness found that audits are fundamentally sound, but we should strive to continuously improve. Over the years the profession has seen different proposals set forth to address the issue of non-audit services. The issue has never been fully resolved or settled. To make reference of not being aware of situations in which auditors' independence has been impaired as a result of providing consulting services may be begging the question as to the exact research and cases that were exhaustively examined.