Current through Register Vol. 48, No. 38, September 20, 2024
A qualified practitioner or a firm with which the qualified
practitioner is associated shall not express an opinion on the books and
records of a participating taxpayer unless the qualified practitioner and the
firm are independent with respect to the participating taxpayer. Independence
will be considered to be impaired if, for example:
a) During the period of the qualified
practitioner's professional engagement, or at the time of expressing an
opinion, the qualified practitioner or the associated firm:
1) had or was committed to acquire any direct
or material indirect financial interest in the participating
taxpayer;
2) had any closely held
business investment with the participating taxpayer or any officer, director or
principal stockholder thereof which was material in relation to the qualified
practitioner's or firm's net worth, or
3) had any loan to or from the participating
taxpayer or any officer, director or principal stockholder thereof. This latter
proscription does not apply to the following loans from a participating
taxpayer that is a financial institution when made under normal lending
procedures, terms and requirements:
A) loans
obtained by a qualified practitioner or the firm which are not material in
relation to the net worth of such borrower, or
B) home mortgages, or
C) other secured loans, except loans
guaranteed by a qualified practitioner's firm which are otherwise
unsecured.
b)
During the period covered by the books and records, during the period of the
professional engagement or at the time of expressing an opinion, the qualified
practitioner or the associated firm:
1) was
connected with the participating taxpayer as a promoter, underwriter or voting
trustee, a director or officer or in any capacity equivalent to that of a
member of management or of an employee, or
2) was a trustee of any trust or executor or
administrator of any estate if such trust or estate had a direct or material
indirect financial interest in the participating taxpayer or was a trustee for
any pension or profit-sharing trust of the participating taxpayer.
c) The above examples are intended
to be illustrative and are not intended to be all-inclusive.
