question archive Which statement best describes the SEC rules relating to bookkeeping services? Bookkeeping services are permitted, as long as the individuals performing these services are not the same individuals performing the audit
Which statement best describes the SEC rules relating to bookkeeping services? Bookkeeping services are permitted, as long as the individuals performing these services are not the same individuals performing the audit
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Which statement best describes the SEC rules relating to bookkeeping services?
Bookkeeping services are permitted, as long as the individuals performing these services are not the same individuals performing the audit.
Bookkeeping services are permitted if the fees from these services are insignificant relative to the audit fees.
Bookkeeping services are permitted if the client agrees in writing to accept responsibility for the adequacy of these services.
An accountant generally cannot provide bookkeeping services to an SEC audit client
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Answer:
The correct response is that An accountant generally cannot provide bookkeeping services to an SEC audit client
Step-by-step explanation
The SEC has ruled that performing bookkeeping for an audit client is considered to impair the firm's independence unless there is a high probability that the bookkeeping work is not audited. However, the SEC makes a presumption that the bookkeeping work will be used in an audit, so there are very few exceptions to the prohibition against bookkeeping for an audit client. (See section II.B.1 of RIN 3235-AI73, "Strengthening the Commission's Requirements Regarding Auditor Independence" at https://www.sec.gov/rules/final/33-8183.htm.)
