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According to the Independence Rule from AICPA, “A member in public practice shall be independent in the performance of professional services as required by standards promulgated by bodies designated by Council”.
In the case of PwC and Brandon Sprankle, even though they did not admit or deny the SEC’s findings, they agreed to pay penalties. Without saying they did what they did, they confirmed they violated the Independence Rule by paying a penalty.
In another case, EY and three partners violated the independence rules, they attempted to win the auditor position for Sealed Air from the incumbent audit partner, KPMG. Again, EY did not admit or deny the findings, but they agree to pay a penalty of $10 million.
In the case of Ernst & Young, a partner and two former employees agreed to pay more than $10 million for violating the auditor independence rule. Of course, they did not admit or deny the SEC’s findings, but they agreed to pay penalties.
Looks like accounting firms do not admit what they did but they pay the penalty of millions of dollars. And those who were involved in the case also paid penalties and were suspended from appearing or practicing before the commission, with a right to apply for reinstatement a few years.
Just like J. Edward Ketz mentioned in his article The Myth of Auditor Independence, the auditor might need to rotate every few years to reduce the coziness of the relationship between clients and auditors. I agree with that suggestion.
