Reuters reports that the SEC’s chief accountant is pushing back against reports that the agency plans to weaken auditor independence requirements, emphasizing instead that regulators are reviewing existing rules to ensure they remain effective in a rapidly changing business environment. 

Speaking at the SEC and Financial Reporting Conference on June 4, SEC Chief Accountant Kurt Hohl said that “auditor independence kind of remains a cornerstone for investor protection” and rejected suggestions that the commission is seeking to loosen standards. “There’s some chatter out there that the SEC is trying to weaken the independent standards. Nothing could be further from the truth,” he said. 

Hohl said the SEC’s Office of the Chief Accountant is taking a broader look at auditor independence guidance. This review includes updating frequently asked questions that have stayed the same for years. He noted that companies and audit firms often need help with complicated independence issues, especially as business structures and technology evolve. 

This review comes at a time when private equity investments in accounting firms and new technology like artificial intelligence are raising fresh questions about how independence standards apply in practice. Hohl said the SEC is currently in “listening mode” as it considers these challenges and gathers feedback from stakeholders. 

The office also plans to work with the PCAOB to review independence standards that were first adopted from the AICPA on an interim basis over twenty years ago. 

“The question isn’t really whether independence matters; it clearly does,” Hohl said. “But we want to take a look at whether our independence framework is clear, coherent, and effective in the modern marketplace.”