May an auditor provide a fairness opinion on a transaction that is not material to the financial statements and still be considered independent?
As the Commission stated in the adopting release, “Fairness opinions are opinions that an accounting firm provides on the adequacy of consideration in a transaction. [I]f an audit firm provides these services to an audit client, when it is time to audit the financial statements the accountant could well end up reviewing his or her own work, including key assumptions or variables suggested by his or her firm that underlie an entry in the financial statements. [W]e are limiting application of the rule to the provision of appraisals, valuations or services involving a fairness opinion where it is reasonably likely that the results individually or in the aggregate, would be material to the audit client’s financial statements or where the results would be audited by the auditor. As a general matter, auditors would be auditing the results when they perform a GAAS audit.” Under this rule, the “results” of a fairness opinion refers to the financial effects of the transaction that is the subjec
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- May an auditor provide a fairness opinion on a transaction that is not material to the financial statements and still be considered independent?