In the most recent year for which data are available, approximately seventy-five percent of the public company clients of the Big Five accounting firms received no non-audit services from their auditor.183 This would mean that the financial statements of thousands of public companies were audited by firms who provided no non-audit services to them in that year. Five yards from the previous spot (with the kick retaken); or the spot where the subsequent dead ball belongs to the receiving team; or the receiving team may put the ball in play 35 yards from the spot of kickoff. We requested comment on the IRFA, and we received several comments in response. . A current partner, principal, shareholder, or professional employee of the accounting firm is employed by the audit client or serves as a member of the board of directors or similar management or governing body of the audit client. While all registrants will have to disclose audit fees under the new rule, and, where applicable, registrants must make disclosures concerning the use of leased personnel on the audit, we believe that the time and expense required to make such disclosures will be minimal. 352 See, e.g., Deloitte & Touche Letter. They further state that at that time, "[t]he prohibition of non-accounting, non-audit services would not appear to have a substantial impact on firms because these services do not represent a large percentage of total revenues. Several protestors occasionally stopped to spray-paint walls and knock over potted plants, although Johnson himself took no part in it. 6694, penalties apply to the tax preparer with primary responsibility for each position on the return. We are keenly aware of the changes in traditional family structures, the increased mobility of professional employees, the recent globalization of accounting firms, and similar changes in society at large. He wrote of the flag: It is a symbol of freedom, of equal opportunity, of religious tolerance, and of goodwill for other peoples who share our aspirations. 611 See, e.g., Testimony of Joseph F. Berardino, Managing Partner, Assurance and Business Advisory Services, Arthur Andersen (July 26, 2000); Written Testimony of Stephen G. Butler, Chairman and Chief Executive Officer, KPMG (Sept. 13, 2000). With the increasing globalization of the markets, regulators worldwide have been re-examining current regulatory requirements applicable to cross-border offerings. Many commenters believed that the definition was overbroad and expressed concern over the application of the proposed definition to their business arrangements. (emphasis in original). The firm also should have appropriate procedures to remove immediately such a professional from an audit client's engagement and review the professional's work related to that audit client. As one analyst stated during our public hearings, If we're asking hard questions about independence and the appearance of independence now, won't our concerns be magnified during times of economic distress? 6694 and Sec. 1.6694-2(a)(2) and Regs. We recognize that situations may arise where an accountant's independence becomes impaired inadvertently, such as where a family member makes an investment of which the covered person is not aware. SECPS membership requirements and GAAS already require firms to have quality controls over their audit practices, so there should be little additional burden on accounting firms that want to take advantage of the exception. Some commenters suggested that safeguards, such as firewalls, could prevent or cure any independence problem that might arise by virtue of an accountant providing legal services to an audit client.430 Recently, the Commission on Multidisciplinary Practice of the ABA considered whether firewalls would address sufficiently issues that might arise if a law firm were to provide both legal and other services.431 That Commission rejected the firewall approach, stating "[We] explicitly recognize[] the[] incompatibility [of legal and audit services]. Bose Corp. v. Consumers Union of United States, Inc. Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc. Harte-Hanks Communications, Inc. v. Connaughton, Turner Broadcasting System, Inc. v. FCC I, Turner Broadcasting System, Inc. v. FCC II. Members of the "audit engagement team" are included within the category of "covered persons in the firm," which is the term used to indicate the persons in the firm subject to a number of the specific provisions of paragraph (c) of Rule 2-01. See Letter from Jonathan G. Katz, Secretary, SEC, to Duane R. Kullberg, Arthur Andersen & Co. (Feb. 14, 1989) (denying the petition). Lowe and K. Pany, "An Examination of the Effects of Type of Engagement Materiality, and Structure on CPA Consulting Engagements with Audit Clients," 10 Acct. 1205 (Nov. 10, 1999); In the Matter of Pinnacle Micro, Inc., Scott A. Blum, and Lilia Craig, AAER No. Reasons for and Objectives of the Rule Amendments. In those cases, the IRS must prove that willful conduct occurred. Except where an auditor accepts a payment to look the other way,141 is found to have participated in a fraudulent scheme,142 or admits to being biased, we cannot know with absolute certainty whether an auditor's mind is, or at the time of the audit was, "objective." (Recorded The following pronouncement of the void for vagueness doctrine was made by Justice Sutherland in Connally v. General Construction Co., 269 U.S. 385, 391 (1926): [T]he terms of a penal statute [] must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties and a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law. [55] Public opinion polls by Gallup show a downward trend in respondents supporting the amendment, from 71% in favor in 1989, to 68% in 1990,[56] to 55% in 2005. Most of the rule's limitations, however, are drawn from existing limitations, including the proscription on operating or supervising an audit client's information technology function. Under NCAA rules, it is a foul to grasp and twist the face mask. If they exist, spillovers may provide issuers with a more efficient audit or provide the auditor with additional knowledge that will enhance not only the concurrent audit, but other audits as well. 344 See Testimony of Joseph F. Berardino, Managing Partner, Assurance and Business Advisory Services, Arthur Andersen LLP (Sept. 20, 2000) and Testimony of James E. Copeland, Chief Executive Officer, Deloitte & Touche LLP (Sept. 20, 2000) (responding to questions from Chairman Arthur Levitt, SEC, about whether they would be comfortable if our final rules on non-audit services paralleled the profession's own rules); see also Testimony of K. Michael Conaway, Presiding Officer, Texas State Board of Accountancy (Sept. 20, 2000). Because the adviser plays an integral role in managing and overseeing the investment company, we believe the fees billed for non-audit services provided to a fund's adviser are relevant and should be disclosed. First, under paragraph (4)(i), which is based on the control definition currently in Rule 1-02 of Regulation S-X, an entity is an affiliate of the audit client when the entity controls, is controlled by, or is under common control with the audit client. 604 We agree with Professor Antle's assessment of the difficulties inherent in measuring these effects. The addition of these four words is intended to make clear that joint business ventures or prime/subcontractor arrangements in which audit clients and auditors jointly provide "professional services" would continue to impair the auditor's independence.337. A 1999 Joint Committee on Taxation Staff Report describes substantial authority as at least a 40% likelihood of success if challenged, which it described as "a general consensus of scholars and practitioners based on a survey of the literature. In 1964, however, the court issued an opinion in New York Times Co. v. Sullivan, 376 U.S. 254 (1964) dramatically changing the nature of libel law in the United States. 603. That duty requires auditors to remain independent of audit clients,260 and includes an obligation to "avoid situations that may lead outsiders to doubt [the auditor's] independence."261. As discussed above, audit committees play an important role in overseeing the financial reporting process and the auditor's independence. .' The term "affiliate of the accounting firm" was separately defined to include a broad group of entities that are either financially tied to or otherwise associated with the accounting firm enough to warrant being treated like the accounting firm for purposes of our independence requirements. The rules as proposed required, among other things, a description of each professional service provided by the principal accountant, disclosure of the fee for each, and disclosure of whether the audit committee approved the service. . Further, SECPS guidelines indicate that its members are required to assist their foreign associated firms to conform to "U.S. independence requirements of the SEC and ISB, and SEC rules and regulations in areas where such rules and regulations are pertinent. Under former requirements, an auditor's independence was impaired if any partner in the firm, any manager in an office participating in a significant portion of the audit, or certain of their relatives, had a financial interest in, or certain employment relationships with, an audit client. As a representative of one of the largest pension funds commented, "While we do not believe that disclosure in and of itself is adequate to deal with the independence problems involved here, shareholders have a right to know about relationships that may compromise the independence of audits on which they rely. Nat'l Socialist Party v. Village of Skokie, United States v. Thirty-seven Photographs, United States v. 12 200-ft. Reels of Film, American Booksellers Ass'n, Inc. v. Hudnut. If intentional, the personal foul of. In those cases, the IRS must prove that willful conduct occurred. These changes are consistent with our approach to adopt only those regulations that we believe are necessary to preserve investor confidence in the independence of auditors and the financial statements they audit. On the other hand, penalties called on the offense in its own end zone can result in the defense scoring a two-point safety. We do not believe that this requirement imposes a significant burden. If a lawyer comes to know or reasonably should know that a client expects assistance not permitted by the Rules of Professional Conduct or other law or if the lawyer intends to act contrary to the client's instructions, the lawyer must consult with the client regarding the limitations on the lawyer's conduct. Sometimes incorrectly referred to as a "chop block". 15 yards (if it is in the end zone the play will be ruled a safety); automatic first down if committed by defense (penalty also counts regardless of how many yards the offense gained). The rule does not purport to, and the Commission could not, consider all circumstances that raise independence concerns, and these are subject to the general standard in paragraph 2-01(b). With respect to the scope of services provisions, some commenters suggested that there is no evidence that auditors' provision to audit clients of non-audit services affects auditor independence or investors' perceptions of auditor independence, and they therefore argued that the rule will not increase investor confidence.673 Academic studies and other surveys, however, suggest that certain users of financial statements have long believed that an auditor's provision to an audit client of non-audit services could affect both the auditor's objectivity and investor confidence in the financial statements.674 Furthermore, even a relatively modest increase in investor confidence could have a significant, positive effect on the economy,675 while a relatively modest decrease in investor confidence could have significant consequences for the capital formation process. (NCAA) Same as Personal foul, it is a subset of that penalty. Robert E. I think these are warning shots to investors that this is a problem that has to be addressed."). Therefore, teams have the option of declining to have penalties assessed - when this occurs, the initial result of the play will stand. By amending 240.14a-101 to add paragraph (e) to Item 9 to read as follows: 240.14a-101 Schedule 14A Information required in proxy statement. Officials initially signal fouls by tossing a bright yellow flag onto the field toward or at the spot of the foul. 274 Cf. Updates and announcements Upcoming dates and deadlines Substantive change policy and related policies Webinars Documents and templates Related pages Updates and announcements New on-demand webinar available: Good Practices for Substantive Change Submissions Part 2 [Zoom] and handout [PDF]. One commenter asserted that to the extent an issuer perceived that buying non-audit services from its auditor increased its cost of capital to such an extent that it outweighed the benefits of purchasing non-audit services, it could protect itself by limiting the amount and types of non-audit services it purchased from its auditor.563 This argument may not fully capture the incentives of management or the issuer, however. With frequent tax law changes, the preparation date provides an important detail when applying penalties. We believe that the goal of this paragraph (F) can be served equally well by a provision that largely averts that potential hardship. 169 Blue Ribbon Report, supra note 101, at 40. If we have qualms about that independence now, it will be worse in an economic downturn, and that's when investor confidence may be tested on issues other than auditor independence.154, 5. In addition, Professor Antle estimates the aggregate social benefit of non-audit services purchased from any provider. The likelihood of audit failure, in turn, is attributable to many factors, only one of which is auditor independence. VI. Accounting professionals have become more mobile, and geographic location of firm personnel has become less important due to advances in telecommunications. It established 2 more, one in Hamirpur in 1986, and another in Jalandhar in 1987. . We received many letters from small accounting firms expressing strong support for our proposal,215 and the National Conference of CPA Practitioners, a national organization comprised of 1,200 member firms that represent 5,000 CPAs and service between 400,000 and 500,000 small and medium sized business clients, similarly wrote to express support for the proposal.216 Indeed, some commenters pointed out that rather than harming the interests of the small practitioners, the rules could provide smaller firms with new business opportunities to provide non-audit services to companies that previously used their auditors to provide those services.217. 217 Testimony of Larry Gelfond, CPA, CVA, CFE, former President of the Colorado State Board of Accountancy (Sept. 13, 2000); see also Letter of John Mitchell, CPA (Aug. 14, 2000). Moreover, there is a possibility that some requested professional services involving client advocacy may appear to stretch the bounds of performance standards, may go beyond sound and reasonable professional practice, or may compromise credibility, and thereby pose an unacceptable risk of impairing the reputation of the member and his or her firm with respect to independence, integrity, and objectivity. WebPickering v. Board of Education, 391 U.S. 563 (1968), was a case in which the Supreme Court of the United States held that in the absence of proof of the teacher knowingly or recklessly making false statements the teacher had a right to speak on issues of public importance without being dismissed from their position. Commenters were generally supportive of the proposals regarding employment relationships between and investments by auditors or their family members and audit clients. Other public accounting firms that audit SEC registrants employ an estimated 5,000 to 25,000 professional staff. Commenters pointed out how this provision could work a hardship where, for example, an accountant obtains a life insurance policy from an audit client of the firm, but obtains the policy when he or she is not a covered person with respect to the client. In a survey of its members, the Alliance found that just less than 96% of respondents outsourced less than 35% of the internal audit. Compustat specifically identified 116 (19.6%) as audited by other accounting firms. "193 This is a trend that we and the accounting profession alike must guard against because, as one commenter remarked, "the value of [a CPA] license and the public's perception of that license is going to be diminished when it becomes another one of the alphabet soup titles that people in the various professions now use. 6694 for understatements due to unreasonable positions and due to willful, reckless, or intentional conduct and Sec. If investors do not believe that an auditor is independent of a company, they will derive little confidence from the auditor's opinion and will be far less likely to invest in that public company's securities.9, One of our missions is to protect the reliability and integrity of the financial statements of public companies. can potentially be nullified if there is a perception that auditors lack independence and objectivity in their enforcement role * * * I think if the perception didn't have any basis in reality, it would not necessarily last very long, so there has to be some interconnection between them, but the perception is an important one. They receive compensation from the financial services firm and, in some situations, from the accounting firm, as well.478 We believe that investors should be informed of arrangements whereby most of the auditors who work on an audit are employed elsewhere.479. Specifically, the rule provides that audit clients who have less than $200 million in total assets may receive more than forty percent of their internal audit functions from their auditor without giving rise to an impairment of independence. In fact, we have found the opposite to be true: without a large consulting practice to manage, we are now more targeted and more focused on our core audit and tax business. Webthe Texas Disciplinary Rules of Professional Conduct or other law. First, the Compustat Database does not include all companies filing with the SEC. We estimate that approximately eighty-five percent of the clients of non-Big Five firms have assets of less than $200 million.644 Thus, as long as certain conditions are met, the rule amendments regarding internal audit services would not apply to eighty-five percent of audit clients of all but the Big Five firms. We believe that the two-pronged approach we are taking in the final rules -- requiring disclosure of the fees billed by the auditor for the audit, financial information systems design and implementation services, and other non-audit services, and identifying particular services that are incompatible with independence -- best protects the audit process. We have decided to codify in our rule the substance of the existing AICPA restrictions applicable to those situations.283 We have codified those restrictions in paragraph (c)(1)(i)(E). Virtually all of the surveys that have been submitted to the public record (Public Opinion Strategies, Brand Finance PLC, Earnscliffe, AIMR, Penn Schoen Survey, and Pace University) indicate some concern for auditor independence. By using the site, you consent to the placement of these cookies. Only two of the companies responding to the Manufacturers Alliance survey used accounting firms other than a Big Five firm as the primary external auditor. At the hearings, we heard from almost 100 witnesses, representing investors, investment professionals, large and small public companies, the Big Five accounting firms, smaller accounting firms, the AICPA, banking regulators, consumer advocates, state accounting board officials, members of the Independence Standards Board ("ISB"), academics, and others.27 In addition, the Subcommittee on Securities of the Senate Committee on Banking, Housing, and Urban Affairs held a hearing about our proposal.28. 15 yard penalty; automatic first down if committed by defense (penalty also counts regardless of how many yards the offense gained). 3227 (codified in scattered sections of the U.S.C.) Expert witness services have been removed from the list of services that are per se incompatible with an auditor's independence. Accordingly, we have eliminated the proposed definition of "affiliate of the accounting firm" from the rule we adopt and replaced the phrase "and affiliates of the accounting firm" in the proposed definition of "accounting firm" with "and associated entities, including those located outside of the United States. Many of the interpretations are reprinted in Section 600 of the Codification. 1 (April 15, 1982) is amended as follows: 2. After considering the comments received, we have determined not to adopt any of the alternatives proposed. Research commissioned by the Institute of Internal Auditors indicates that the internal auditors surveyed perceive an independence problem where internal audit work is outsourced to the external auditor.387 In particular, in auditing the company's financial statements, the accountant will consider the extent to which he or she may rely on the internal control system in designing its audit procedures.388 When the auditor has performed the internal audit work, the auditor will need to consider or examine its own work. By restricting broker-dealer services to those provided "on behalf of the audit client," we do not mean to suggest that an auditor can recommend an audit client's securities to either another audit client or a non-audit client.419 The language "on behalf of" the audit client encompasses all situations in which the auditor is directly or indirectly compensated for the recommendation. The conditions that the rule imposes are intended to reduce the likelihood that the auditor will be placed in a position of making, and then auditing, managerial decisions. [citation needed]. 139 Richard C. Breeden, Roderick M. Hills, David S. Ruder and Harold M. Williams, Editorial, supra note 33. Recently adopted SECPS provisions require quality controls substantially similar to those described in paragraph (d)(4).459 Because these SECPS requirements are effective December 31, 2000, which precedes the effective date for the Commission's final rule, no transition date for paragraph (d)(4) is necessary for domestic accounting firms. (An ERP system is designed to integrate all functions and departments in a company into one computer system that can serve the needs of each department.) At the same time, individual accounting professionals have become more mobile, while the geographic location of personnel has become less important due to advances in telecommunications and the Internet. It is difficult for the company to credibly pre-commit to restricting the purchase of non-audit services from the auditor. 23 See, e.g., Letter of the AICPA (Sept. 25, 2000) ("AICPA Letter"); Letter of KPMG (Sept. 25, 2000) ("KPMG Letter"); Letters of Robert Roy Ward, Chairman and Chief Executive Officer, Horne CPA Group (Sept. 20, 2000), Douglas R. Ream, CPA (undated), Jack W. Palmer (Sept. 9, 2000), Sherry Wilson, CPA (Aug. 28, 2000), and Nathaniel Boyle, CPA (Aug. 16, 2000) (each reiterating concerns expressed in the AICPA's Form Letter). "122 In Phase II, Earnscliffe reports that with respect to the investing public surveyed, "Most had a high degree of confidence in the quality and reliability of the information that was available for them to use in making investment decisions. Every consulting firm, including non-accounting firms, will have to compete for consulting business on the same footing. There is a $510 penalty for each failure, with no maximum dollar limitation. others argued that if the computer system had anything to do with the financial reporting systems. We are skeptical about this claim. Another exception allows accountants to continue to value an audit client's pension, other post-employment benefit, or similar liabilities, so long as the audit client has determined and taken responsibility for all significant assumptions and data underlying the valuation.369 Accountants historically have provided pension assistance to their audit clients, and if appropriate persons at the audit client determine the underlying assumptions and data, we believe that independence is not impaired. Further, we have modified the rule from that proposed to make the disclosed information more understandable to investors.658 For example, under the rule as adopted, registrants will not disclose a line-by-line description of each non-audit service, but rather will disclose relevant amounts in the aggregate. tit. Lebron v. National Railroad Passenger Corp. Los Angeles Police Department v. United Reporting Publishing Co. Thompson v. Western States Medical Center, Colorado Republican Federal Campaign Committee v. FEC, FEC v. Colorado Republican Federal Campaign Committee, Barr v. American Association of Political Consultants, City of Austin v. Reagan National Advertising of Austin, LLC, National Institute of Family and Life Advocates v. Becerra, Ysursa v. Pocatello Education Association, Friedrichs v. California Teachers Association, Walker v. Texas Div., Sons of Confederate Veterans, Houston Community College System v. Wilson, Tennessee Secondary School Athletic Assn. See Earnscliffe I, supra note 65, at 24, which states, "Some felt that installing computer systems was not a problem. Firth hypothesized that companies with potentially high agency costs (i.e., companies in which directors do not control management or which have a large amount of debt) would limit the non-audit services provided by their auditors because the appearance of a lack of auditor independence would increase their cost of capital. "); Public Oversight Board ("POB"), Scope of Services by CPA Firms, at 27 (Mar. We recognize that there is an irreducible degree of imprecision in the notion of independence. 469 See Earnscliffe I, supra note 65, at 26, which describes responses to a scenario when the annual audit fee was $1 million and the auditor performed computer system work for $10 million, which was 1% of the auditor's annual revenues, and states, "First off, the sheer size of the contract was seen as a potential perception challenge. Even though non-audit services did not constitute a large percentage of audit firms' revenues at that time, and Congress ultimately determined not to take legislative action, the deliberations highlighted significant concerns bearing on the independence issue.70. Paragraphs (c)(1) through (5) require the accountant to be independent during the "audit and professional engagement period. 28 A Proposal by the Securities and Exchange Commission to Modernize Its Rules That Govern the Independence of Accountants that Audit Public Companies, Before the Subcomm. 685 See, e.g., Testimony of Larry Gelfond, CPA, CVA, CFE, Colorado Accountancy Board, September 13, 2000 ("I do not believe that [the rule] will in any way hinder our [small] firm. In the IRFA, we estimated that approximately 227 investment companies are small businesses. As urged by commenters, however, the addition of the materiality threshold to the significant influence test should avoid undue hardships to accounting firms in situations where their audit clients have numerous affiliates that are immaterial to them. 517 ISB Standard No. 221 See, e.g., Testimony of K. Michael Conaway, Presiding Officer, Texas State Board of Public Accountancy (Sept. 20, 2000); Letter of William D. Baker, President, Arizona Board of Accountancy (Sept. 20, 2000). 576 See Lexecon Letter for a discussion and bibliography on this point. Information about Legal Services. We have declined to make the list of positions exhaustive because titles alone do not always accurately describe a person's duties and functions. That concern has been compounded in recent years by significant increases in the amounts of non-audit services provided by audit firms."20. | Football Zebras", "NFL supports official's call based on Rule 12", "Additional Rules Approved in High School Football Regarding Helmets Coming Off Players", https://en.wikipedia.org/w/index.php?title=Penalty_(gridiron_football)&oldid=1125956243, Creative Commons Attribution-ShareAlike License 3.0. The Court of Appeals is also responsible for determining admission to the state bar and is in charge of disciplinary proceedings for ethical and legal violations by lawyers and the judiciary. Nixon v. Shrink Missouri Government, 528 U.S. 377 (2000) (relying on the seminal case of Buckley v. Valeo, 424 U.S. 1 (1976)). We are adopting the definition of "rabbi trust" as proposed. Are you having problems with citing sources? Tennessee Secondary School Athletic Assn. Print Nov. 1977). In this instance, we believe that the indications of unease are reasonably based and thus likely to endure and increase, absent preventive action by the Commission. [64] President George H. W. Bush was also strongly opposed to the ruling, calling flag burning "dead wrong". 32 In the late 1980s, for example, several of the large public accounting firms filed a petition with us seeking to enter into joint ventures, limited partnership agreements, and other similar arrangements with audit clients. The nature of the non-audit services that accounting firms provide to their audit clients has changed, and the revenues from these services have dramatically increased. NIT Rourkela and NIT Agartala have such systems.. WebConan the Barbarian (also known as Conan the Cimmerian) is a fictional sword and sorcery hero who originated in pulp magazines and has since been adapted to books, comics, films (including Conan the Barbarian and Conan the Destroyer), television programs (animated and live-action), video games, and role-playing games. of Disciplinary Counsel of Supreme Court of Ohio, Posadas de Puerto Rico Assoc. ), Chairman, Consumer Federation of America (Sept. 20, 2000); Written Testimony of Bill Patterson, Director, Office of Investments, AFL-CIO (Sept. 20, 2000); Written Testimony of Frank Torres, Consumers Union (Sept. 20, 2000); Testimony of Nimish Patel, Attorney, Pollet & Richardson (July 26, 2000). Mr. Orren concluded that the findings do not support our proposals, and that the studies were methodologically flawed. 305 See Letter from POB to ISB (Jan. 12, 2000) ("Public ownership in an audit firm or in its parent or in an entity that effectively has control of the audit firm would add another form of allegiance and accountability to those identified by the Supreme Court - a form of allegiance that in our opinion will be viewed as detracting from, if not conflicting with, the auditor's `public responsibility'"). 191 See, e.g., Letter of John L. Marty, CPA (Sept. 9, 2000) ("If the practice of `cross-selling' of services were constrained, it may cause a renewed emphasis on effective auditing and thereby, enhance the reliability of audited financial statements and protect the investing public. Preparers of fiduciary returns or refund claims when the preparer is either a fiduciary or an officer, general partner, or employee of the fiduciary. United States v. Playboy Entertainment Group, Inc. Board of Airport Commissioners v. Jews for Jesus, Simon & Schuster, Inc. v. Crime Victims Board, Schenck v. Pro-Choice Network of Western New York, Arkansas Educational Television Commission v. Forbes, Hurley v. Irish-American Gay, Lesbian, and Bisexual Group of Boston, Communications Workers of America v. Beck. The following year the New York State Legislature changed the law to allow truth as a defense against a libel charge, breaking with English precedent under which the truthfulness of the statements alone is not a defense. Dramatic changes in the accounting profession and the types of services that auditors are providing to their audit clients, as well as increases in the absolute and relative size of the fees charged for non-audit services, have exacerbated these concerns. Deloitte & Touche provided an estimate of 3-6 hours per filing for a small firm and 50-100 hours for a large firm, but provided no data to support this estimate. If either of these criteria is satisfied, the investment is treated as a direct investment in the audit client and, therefore, impairs independence. While the categories are generally not the same as those used in the IIA GAIN reports, the operational audit component in both surveys is similar. Advocate. While we do not necessarily expect a firm making use of the limited exception to demonstrate that it has implemented appropriate quality control systems in each of its offices worldwide, the rule requires that, to avail itself of the limited exception, the firm must have quality control systems that cover each employee and associated entity participating in the engagement for which independence was impaired. Our analysis indicates that approximately fifty-four percent of registrants have assets of less than $200 million, which, of course, would exclude all companies defined as "small businesses" for purposes of the RFA. 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