The Commission will not recognize any person as a public accountant who is not in good standing and entitled to practice as such under the laws of the place of his residence or principal office. (a) The Commission will not recognize any person as a certified public accountant who is not duly registered and in good standing as such under the laws of the place of his residence or principal office.

For the same reason, registrants and accountants are encouraged to consult with the Commission's Office of the Chief Accountant before entering into relationships, including relationships involving the provision of services that are not explicitly described in the rule. For that reason, § 210.2-01(b) provides that, in determining whether an accountant is independent, the Commission will consider all relevant facts and circumstances. These factors are general guidance only, and their application may depend on particular facts and circumstances. In considering this standard, the Commission looks in the first instance to whether a relationship or the provision of a service: Creates a mutual or conflicting interest between the accountant and the audit client places the accountant in the position of auditing his or her own work results in the accountant acting as management or an employee of the audit client or places the accountant in a position of being an advocate for the audit client.

The rule does not purport to, and the Commission could not, consider all circumstances that raise independence concerns, and these are subject to the general standard in § 210.2-01(b). Paragraphs (c)(1) through (c)(5) of this section reflect the application of the general standard to particular circumstances. Section 210.2-01(b) sets forth the general standard of auditor independence. Accordingly, the rule sets forth restrictions on financial, employment, and business relationships between an accountant and an audit client and restrictions on an accountant providing certain non-audit services to an audit client. Section 210.2-01 is designed to ensure that auditors are qualified and independent of their audit clients both in fact and in appearance. § 210.2-01 Qualifications of accountants.

F x 2 x 1 2 3