In December 2004, the Public Company Accounting Oversight Board (PCAOB) adopted and approved rules requiring that audit firms DO NOT prepare the tax returns or provide tax planning advice to corporate executives involved in the company financial oversight role. This could apply to the CEO, COO, vice presidents, most certainly the CFO, and other executives for whom the company auditor provides tax planning and compliance services. These rules are awaiting SEC approval and, if approved, are expected to take effect on or about October 20, 2005. The rules represent the continued efforts of government to restore public confidence in corporate governance.
Prior to these proposed rules, auditors frequently provided tax preparation and planning services both to public companies and to the executives of those companies. Audit committees and the registrants they serve now may be required to engage tax service professionals other than those who are with the same accounting firm as the corporate auditor of record.
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