Department of Labor

Question 1

The rules provide that an accountant will not be considered independent with respect to a plan, due to the following:

Answer 1

Financial ties—Independence will be considered to be impaired if during the period of the engagement, at the date of the opinion, or during the period covered by the financial statements, “the accountant or his or her firm or a member thereof had, or was committed to acquire, any direct financial interest or any material indirect financial interest in such plan, or the plan sponsor . . .”

1) Because this provision covers any member of an accountant’s firm, its coverage is much broader than that of current AICPA guidelines.
2) The term member means all partners or shareholder employees in the firm and all professional employees participating in the audit or located in an office of the firm participating in a significant portion of the audit.

Question 2

Employment ties—During the same period, the same entities may not be connected to a plan or plan sponsor as a:

Answer 2

Promoter;
Underwriter;
Investment advisor;
Voting trustee;
Director;
Officer; or
Employee of the plan or plan sponsor.