Overview
- What is personal independence?
- Why do we maintain personal independence?
- Who has to maintain personal independence?
- Who is an immediate family member?
What is personal independence?
- As a public accounting firm, PwC and its partners, employees, third-party contractors and their immediate family members must be independent of PwC’s audit clients, including their affiliates, to comply with applicable independence regulations. This includes being personally financially independent of PwC’s audit clients, including their affiliates.
To be financially independent means the financial arrangements of PwC partners, employees, third-party contractors and their immediate family members need to be permissible according to independence regulations and PwC policy.
Why do we maintain personal independence?
At PwC, we’re guided by our purpose to build trust in society and solve important problems. As a public accounting firm, PwC is expected by our clients and required by our regulators to maintain our independence and objectivity, in fact and appearance. It’s a critical characteristic of our profession and how PwC builds trust with our clients, society and in the capital markets.
Who has to maintain personal independence?
PwC partners, certain employees and third-party contractors — along with their immediate family members.
Who is an immediate family member?
A spouse/spouse equivalent - a spouse (either by marriage or under common law), or someone a PwC partner, employee or third-party contractor lives with and shares an ongoing intimate relationship, regardless if their finances are handled separately.
- A dependent - anyone, whether related or not, who receives more than half of their financial support from a PwC partner, employee or third-party contractor.
What is a financial arrangement and when is it permissible?
A financial arrangement is any of the arrangements described below. Permissible financial arrangements are those that are permitted by independence regulations and PwC policy.
Click on the financial arrangements below to learn more:
Investments
Examples of investments are stocks, bonds, mutual funds, money market funds, investment contracts, options such as puts and calls, other investments in a company and certain crypto tokens.
In certain circumstances, there are restrictions on owning investments in a company that is an audit client of PwC.
Checkpoint or the Compliance Resource Center can assess whether a particular investment is permissible (see more below). Once permissibility is determined, investments must be recorded in Checkpoint within five business days of any transaction.
Credit cards
Definition:
A credit card is a card issued by a bank which enables people to buy items without cash.
Caution statement:
It’s important to know the bank issuing the credit card. In certain circumstances for credit cards issued by a PwC audit client, there may be a requirement to maintain a balance below a certain threshold.
Checkpoint or the Compliance Resource Center can assess whether any independence-related requirements apply (see more below).
Insurance policies
Examples are automobile, boat, motorcycle, homeowner, second home, vacation home, title, renter, umbrella, accident, disability and life insurance policies.
In certain circumstances, there are restrictions on entering into a new or making changes to an existing insurance policy with a PwC audit client.
Checkpoint or the Compliance Resource Center can assess which insurance policies are permissible (see more below).
Bank accounts
Examples are checking, savings and money market accounts.
In certain circumstances, there are restrictions on using certain bank account features offered by a PwC audit client, such as overdraft protection or having a balance which exceeds Federal Deposit Insurance Corporation (FDIC) limits.
Checkpoint or the Compliance Resource Center can assess whether any independence-related restrictions apply (see more below).
Online payment tools
Examples are PayPal, Venmo, Twinspires.com, Poshmark seller and Etsy seller online payment tools.
In certain circumstances, there are restrictions on holding an overnight balance with certain online payment tools offered by a PwC audit client.
Checkpoint or the Compliance Resource Center can assess whether independence-related requirements apply (see more below).
Loans and mortgages
Examples are home, vacation and investment property mortgages and unsecured lines of credit.
In certain circumstances, there are restrictions on entering into new or making changes to an existing loan or mortgage with a PwC audit client. In addition, timely payments may be required.
Checkpoint or the Compliance Resource Center can assess which lenders are permissible and whether any other independence-related requirements apply (see more below).
Material leases
Any lease (other than automobile leases and leases from individuals) where the sum of the annual lease payments comprise 5% or more of the household’s gross annual income. The most common example is an apartment lease.
In certain circumstances, there are restrictions on entering into or making changes to an existing material lease with a PwC audit client.
Checkpoint or the Compliance Resource Center can assess which lessors are permissible (see more below).
Brokerage accounts
A brokerage account is an investment account that enables buying and selling of investments and a variety of other investments. Examples are Fidelity, Charles Schwab, Vanguard, Merrill Lynch, JPMorgan and Robinhood.
PwC has restrictions on which brokerage firms PwC partners, employees, third-party contractors and their immediate family members may maintain an account with.
Even if the brokerage firm is permissible, there may be restrictions on account features offered by the brokerage firm. Examples of such features are automatic investing, money market sweep and margin options.
Checkpoint or the Compliance Resource Center can assess which brokerage firms are permissible and whether any other independence-related restrictions apply (see more below).
Employee benefit plan
An Employee Benefit Plan is a plan established by a company to provide retirement and savings benefits to its employees.
Any former employee benefit plan of a PwC partner, employee, third-party contractor or their immediate family members must be rolled over to an account with a permissible brokerage firm or into a current employee benefit plan. In addition, all investments held in a current employee benefit plan must be permissible.
Checkpoint or the Compliance Resource Center can assess which brokerage firms and investments are permissible (see more below). Once permissibility is determined, the investments held through the EBP must be recorded in Checkpoint within five business days of any transaction.
529 plans
A 529 plan is an investment account used to pay for education-related expenses.
Not all 529 plans are permissible.
Checkpoint or the Compliance Resource Center can assess which 529 plans are permissible. Once permissibility is determined, the 529 plan must be recorded in Checkpoint within five business days of investing in the plan.
Trusts, estates and powers of attorney
Trusts, estates and powers of attorney are types of legal agreements where an individual may exercise control over another individual’s financial assets.
If you or your immediate family members have been granted powers of attorney, are a trustee, co-trustee or grantor of any trust, or are an executor or administrator of any estate, any financial relationships held by the person over whom you or your immediate family members have the power of attorney, trust or estate must be treated as your financial relationships.
Checkpoint or the Compliance Resource Center can assess whether a particular financial relationship is permissible (see more below).
Other businesses under your control
Control of a business generally exists when an individual or entity owns more than 50% of another entity.
Personal independence requirements apply to any financial relationships related to any business over which you or your immediate family members have control.
Checkpoint or the Compliance Resource Center can assess whether any independence-related restrictions apply (see more below).
What’s the best way to determine the permissibility of a financial arrangement?
It’s critical to confirm financial arrangements are permitted by independence regulations and PwC policy. Permissibility must be determined before entering into a new financial arrangement or making changes to an existing financial arrangement.
There are three options to determine the permissibility of a financial arrangement:
The Compliance Resource Center is a dedicated resource to help PwC partners, employees, third-party contractors and their immediate family members maintain personal independence, including assessing the permissibility of a financial arrangement.
The Compliance Resource Center can be contacted by calling 1-877-PwC-HELP, option 6 (in the US), 1-813-351-6491 (outside the US) or 800-444-0103 (in Mexico).
PwC partners and their immediate family members, have a dedicated partner outreach liaison who they can contact directly to get assistance with any personal independence questions.
This proprietary tool informs PwC partners and employees (and their immediate family members and financial advisors) which financial arrangements are permissible and alerts them if a financial arrangement becomes impermissible.
PwC partners and employees can also grant Checkpoint access to immediate family members and financial advisors, enabling them to pre-clear financial arrangements themselves.
PwC partners and employees can pre-clear financial arrangements using Checkpoint.
- PwC partners and employees can also grant Checkpoint access to immediate family members and financial advisors, enabling them to pre-clear financial arrangements themselves.
