SEC Clarifies Item 407 of Regulation S-K
 
October 6, 2008
 

Effective September 30, 2008, the SEC adopted a technical amendment to Item 407 of Regulation S-K clarifying that an audit committee is only required to receive from its independent auditor those independence communications required by the PCAOB. Under the old Item 407, an issuer’s audit committee in its audit committee report was required to state that it had received from the independent accountants the written disclosures and letter required by “Independence Standards Board Standard No. 1, as adopted by the Public Company Accounting Oversight Board on Rule 3600T.” However, on August 22, 2008, the PCAOB adopted Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, which became effective on September 30, 2008, and superseded Independence Standards Board Standard No. 1. Under the revised Item 407, an issuer’s audit committee in its audit committee report is required to state that it has received from the independent accountants the written disclosures and letter required by the “applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence.”

http://www.sec.gov/rules/final/2008/33-8961.pdf

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