While ensuring auditor independence may make good business sense in the mutual fund industry, actually achieving it may be very difficult. But, difficult as it may be, it is a problem that mutual fund companies and accounting firms will no doubt have to tackle in the near future.
The Independence Standards Board, the standard-setting group jointly established in May 1997 by the SEC and the American Institute of Certified Public Accountants, has turned its attention to the issue as a top priority. At its June 25th meeting, the board, based in New York, authorized the development of recommended guidelines for how distanced a fund auditor must be from its client, said Rick Towers, staff technical director for the board. These recommendations will be circulated for industry comments later this summer.