Ethics for Public Companies
Additional Independence Requirements
Audits of public companies are subject to additional independence requirements under the Sarbanes-Oxley Act and PCAOB rules. These requirements strengthen investor protection by limiting relationships and services that could impair auditor independence.
- Lead engagement partner rotation is required.
- Certain non-audit services are prohibited.
- The audit committee oversees auditor appointment and compensation.
- Auditors communicate significant findings directly to the audit committee.
Note
The CPA AUD Exam tests both AICPA ethics and the additional independence rules applicable to public company audits.
Summary
Public company audits require stricter independence standards to protect investors and capital markets.