As I blogged a few weeks back, the SEC’s FAQs regarding auditor independence likely will cause many companies to revise their pre-approval of audit/non-audit services policies. As more fully laid out in our Pre-Approval Policy samples page, the FAQs make it clear that pre-approval policies can’t provide for broad, categorical approvals (e.g., tax compliance services); that the pre-approval policies must be detailed as to the particular services to be provided; that the audit committee must be informed about each service; that monetary limits cannot be the only basis for the pre-approval policies; and that if the audit committee is presented with a schedule or cover sheet describing services to be pre-approved, a schedule must be presented with detailed back-up documentation regarding the specific services to be provided.
Now, Procter & Gamble has become the first company to post/file a policy since the FAQs were issued – and provides an indication of how much more the audit committee (or a delegated member(s) of the committee) is going to be involved than previously thought in pre-approving services. We will continue to add these policies to our Pre-Approval Policy samples page as they are made public.
For TheCorporateCounsel.net subscribers, we have posted an interview with Betsy Atkins about Life as a Professional Director.