OCA has taken this position based on the specific facts and circumstances represented in your letter. Of course, DTT otherwise remains fully subject to the Commission’s independence requirements, as well as the provisions of the Act, with respect to matters not expressly covered by your letter and this response. The representations set forth in your letter indicate that DTT has already taken the following steps to divest GMS: (1) D&T Spain has transferred all of its interest in GMS in a private transaction to the GMS Partners and no GMS Partners now have or will receive or retain any equity interest in DTT or D&T Spain (2) DTT has no corporate governance, or management role in GMS or direct or indirect financial ties with GMS (other than a transitional service arrangement) (3) GMS will not use any variant of the “Deloitte” name (4) DTT does not and will not receive from GMS any royalty, interest, dividend or other payments, and there is no revenue or profit sharing between DTT and GMS (5) DTT and GMS are under no obligation to refer clients to one another and there will be no referral fees or other forms of compensation to each other for referrals (6) DTT and D&T Spain will not compete against GMS for certain services under a three year Non-Compete Agreement (7) shared services between DTT and GMS are limited and transitional in nature and are for a period of no more than three years and (8) GMS has no obligation to DTT in connection with any retirement obligation and DTT has no obligation to GMS Partners in connection with retirement benefits of former partners.Īssuming that the representations set forth in your letter are and continue to be accurate, and further assuming that DTT continues to comply with each of the terms and conditions set forth in your letter, the Office of the Chief Accountant (“OCA” or the “staff”) will not recommend an enforcement action asserting that DTT lacks independence as a result of non-audit services provided to DTT’s audit clients by GMS or its employees.
Your letter concludes that, based on its compliance with those terms and conditions, DTT should not be considered to have a “mutual or conflicting interest” or a “direct or material indirect business relationship” with, or a “direct financial interest or material indirect financial interest” in, any of its audit clients that are also clients of or enter into business relationships with or invest in GMS, or that are invested in by GMS or any departing GMS Partners or employees.Īs you are aware, the Sarbanes-Oxley Act of 2002 (the “Act”) expressly prohibits any registered public accounting firm, or any associated person or entity of that firm, from providing certain non-audit services to its audit clients that are “issuers” as defined in the Act. In your letter, you detail key terms of the transaction and conditions that DTT, including entities that have been considered part of DTT under Rule 2-01(f)(2) of Regulation S-X, have complied or will comply with in connection with the completion of the transaction. since Decem(referred to as “GMS”), to the former consulting partners of GSM. The staff has reviewed your letter of Januconcerning Deloitte Touche Tohmatsu’s (“DTT”) sale by its member firm Deloitte & Touche Espana (“D&T Spain”), DTT’s member firm in Spain, of their consulting business which has operated under the name GMS Management Solutions, S.L.
Letter from the Deputy Chief Accountant to Deloitte Touche Tohmatsu on the disposition of its member firm's Spanish consulting practice, GMS Management Solutions, S.L.
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