Independence Standards Board (ISB)
The Independence Standards Board (ISB) came into existence in the month of May in 1997 owing to discussions held between the AICPA and SEC. The numerous securities related laws that were enacted by the Congress and managed by the SEC state that the credibility and integrity of the finance related reporting procedure for public entities depends, largely, on the auditors that operate independently from their auditing customers.
The Independence Standards Board’s operating related policies are crafted for permitting thorough, open and timely study of matters pertaining to independence of auditor and for encouraging broad participation from public in the procedure of setting up and enhancing independence related standards. The Independence Standards Board’s mission is to set up independence related standards that can be applied to audits of public companies for serving the interest of public and for protecting and promoting the confidence of investors in the securities market.
Structure of ISB
The Independence Standards Board comprises of 8 members and enjoys the support of an executive director, an Independence Issues Committee and other supporting staff. Funded by SECPS, the ISB basically functions as an independent board. The Independence Standards Board has the right to issue statements on issues pertaining to independence of auditor in context of auditing of public companies without acquiring clearance from the AICPA or the SECPS board of directors. The members of the board of the ISB offer part-time services. While four of the members are considered to be public member, three others function as senior partners of the member entities of SECPS and one of the members is either the AICPA’s president or the designee of the president.
Role of ISB’s Chair
The chairman of the Independence Standards Board serves a term of three years. The chairman possesses the responsibilities and powers that pertain to the supervision and appointment of personnel at the Independence Standards Board. He/she is also responsible for distributing work among the appointed personnel. The chair also has the power to spend and use funds as per the budget related limits approved by the Independence Standards Board. The chair has the power of establishing and appointing people to the task forces after the ISB has approved them and once the executive director as well as others has been consulted.