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The AICPA has revised its definition of a

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public interest entity, also referred to as a PIE in an

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effort to better align with IESBA’s expanded definition of a

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public interest entity. Being classified as a public

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interest entity is significant because it subjects the

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entity to heightened independence requirements, which may

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exceed SEC independence rules in certain cases, such as

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obtaining concurrence for non-audit services from those

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charged with governance and certain fee-related

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communications. A public interest entity can fall into

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four categories, subject to size or other criteria: publicly

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traded entities; FDIC insured depository institutions with

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one billion dollars or more in total assets; insurers that

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are subject to the NAIC Annual Financial Reporting Model

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Regulation and have five-hundred million dollars or more in

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direct written and assumed premiums; and investment

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companies registered under the SEC Investment Company Act of

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1940 and the Securities Act of 1933. The biggest impact for

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our US engagements will be for non-issuer insurance

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companies with premiums of $500 million or more. The other

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categories are already considered public interest entities

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under existing rules today.

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For new public interest entities, the revised definition

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will be adopted for periods beginning on or after December 15, 2024.

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For more details, refer to Risk Management Alert 24-03.