Voices: The ABCs of better independence compliance

February 5, 2018

Published: Accounting Today

By: Cathy Allen


I hear it all the time – firms struggle with independence compliance. Understanding, applying, and getting it right is not so easy, but there are three key things firms can do to enhance compliance. These can be categorized as:

  • Promote awareness.
  • Communicate well.
  • Create good documentation.


Promote awareness

Firms should enthusiastically promote awareness of independence requirements to counter this situation by observing the following best practices:

–        The firm gives independence the proper priority and importance in firm discussions, communications and decision-making.

–        The firm has clear, well-organized independence policies and procedures that are easy to find, tailored to the firm, and spell out the responsibilities of various parties.

–        Staff and partners, regardless of practice area and level in the firm, receive periodic training in independence.


Your staff knows independence is important and is aware of red flags and where to find guidance, which is the critical first step towards good independence compliance. Good communication between firm members will be the next key step.


Lastly, documenting independence evaluations is important for many reasons – first, firms must evidence their independence to prove that they complied with professional and regulatory requirements. This is important not only from a peer review or inspection perspective but also to protect the firm from legal liability if a claimant alleges the firm lacked independence.

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