1. (a) An accountant or a firm of which they are a partner, shareholder, or member shall not express an opinion on financial statements of an enterprise unless the accountant and the accountant’s firm are independent with respect to such enterprise.

2. (b) Instances where an accountant or their firm’s independence shall be considered impaired include, but are not limited to:

   1. (1) Periods of their professional engagement, or at the time of expressing their opinion, when the accountant or the accountant’s firm:

      1. a. Had or was committed to acquire any direct or material indirect financial interest in the enterprise;
      2. b. Was a trustee of any trust or executor or administrator of any estate if such trust or estate had or was committed to acquire any direct or material indirect financial interest in the enterprise;
      3. c. Had any joint closely-held business investment with the enterprise or any officer, director, or principal stockholder thereof which was material in relation to their or their firm’s net worth; or

      4. d. Had any loan to or from the enterprise or any officer, director, or principal stockholder thereof, except for the following loans from a financial institution when made under normal lending procedures, terms, and requirements:

         1. 1. Loans obtained by an accountant or the firm which are not material in relation to the net worth of such borrower;
         2. 2. Home mortgages; and
         3. 3. Other secured loans, except loans guaranteed by an accountant’s firm which are otherwise unsecured; and

   2. (2) Periods covered by the financial statements, the time period of the professional engagement, or at the time of expressing an opinion, when the accountant or firm:

      1. a. Was connected with the enterprise as a promoter, underwriter or voting trustee, a director or officer, or in any capacity equivalent to that of an accountant of management or of an employee; or
      2. b. Was a trustee for any pension or profit-sharing trust of the enterprise.

Source. #1663, eff 12-17-80; ss by #2475, eff 9-13-83; ss by #3061, eff 7-18-85, EXPIRED: 7-18-91 New. #5366, eff 3-27-92; ss by #6721, INTERIM, eff 3-27-98, EXPIRED: 7-25-98 New. #6905, eff 12-4-98, EXPIRED: 12-4-06 New. #8810, INTERIM, eff 1-25-07, EXPIRED: 7-25-07 New. #9051, eff 12-27-07; ss by #10746, eff 1-1-15; ss by #14188, eff 4-5-25