The AICPA has revised its definition of a
public interest entity, also referred to as a PIE in an
effort to better align with IESBA’s expanded definition of a
public interest entity. Being classified as a public
interest entity is significant because it subjects the
entity to heightened independence requirements, which may
exceed SEC independence rules in certain cases, such as
obtaining concurrence for non-audit services from those
charged with governance and certain fee-related
communications. A public interest entity can fall into
four categories, subject to size or other criteria: publicly
traded entities; FDIC insured depository institutions with
one billion dollars or more in total assets; insurers that
are subject to the NAIC Annual Financial Reporting Model
Regulation and have five-hundred million dollars or more in
direct written and assumed premiums; and investment
companies registered under the SEC Investment Company Act of
1940 and the Securities Act of 1933. The biggest impact for
our US engagements will be for non-issuer insurance
companies with premiums of $500 million or more. The other
categories are already considered public interest entities
under existing rules today.
For new public interest entities, the revised definition
will be adopted for periods beginning on or after December 15, 2024.
For more details, refer to Risk Management Alert 24-03.