On September 19, 2023, the PCAOB proposed amendments to Rule 3502, Responsibility Not to Knowingly or Recklessly Contribute to Violations, which governs the liability of associated persons of a registered public accounting firm who contribute to a primary violation of PCAOB rules by that firm. If adopted, the proposal would expand the scope of Rule 3502 in in two ways. First, the proposed rule lowers the standard of conduct required to bring a contributory liability charge against an associated person from recklessness to negligence. The proposal would eliminate what the PCAOB perceives as an incongruity between the Board’s ability to charge a firm, which only requires negligence, and the Board’s ability to charge an associated person for contributing to that firm’s violation, which currently requires recklessness. Second, in an effort to address complex audits involving multiple entities, the proposed rule provides that an associated person contributing to a violation need not be an associated person of the registered firm that committed the primary violation. The PCAOB has asked for comments on the proposal by November 3, 2023.

The proposed rule is available here.