Accounting firm RSM US LLP has settled allegations with U.S. securities regulators, which charged the firm with violating auditor independence rules.
The U.S. Securities and Exchange Commission (SEC) alleged that RSM US violated its auditor independence requirements by claiming to be independent in audit reports for U.S. clients, while the firm and its international affiliates provided a variety of non-audit services (such as payroll, bookkeeping and corporate secretarial services) to affiliates of those audit clients.
As a result, the SEC’s order found that RSM US violated provisions of federal securities laws and caused its audit clients to violate their obligations to have their financials independently audited.
The alleged violations involved more than 100 audit reports and at least 15 audit clients.
“The SEC’s auditor independence rules specifically prohibit audit firms from providing certain non-audit services,” said Carolyn Welshhans, associate director of the SEC’s enforcement division.
“Audit firms must put in place procedures, training and systems that provide a reasonable assurance of independence, and they must monitor for independence on an ongoing basis,” she said.
The firm settled the allegations without admitting or denying the SEC’s findings, by agreeing to pay a US$950,000 penalty and to be censured. It also agreed to hire a consultant to evaluate its controls for complying with auditor independence requirements.