The PCAOB, a panel set up under the post-Enron Sarbanes-Oxley corporate reform law, adopted the proposal unanimously , according to a Reuters report. The measure now goes to the US Securities and Exchange Commission for further review.
The rules, proposed last December, are expected to largely close down the tax shelter advisory business, which was once a big business for auditors. “This will keep auditors out of aggressive tax work that has so damaged investor confidence,” Chairman William McDonough said at the rulemaking meeting.
The new rules would not limit routine tax return preparation and tax compliance, general tax planning and some other tax work.
The PCAOB on Tuesday also unanimously approved a new standard for how an auditor should handle a request from a company for an opinion on whether a previously reported flaw in the company’s internal financial controls still exists.