Who is defined as a covered person in a business context?

In the context of business and corporate reporting, a covered person refers to an individual who has the potential to influence, or who actually does influence, the conduct or outcome of a specific engagement or decision-making process. This definition emphasizes the responsibility and ethical considerations of individuals who hold positions of authority or possess information that can significantly affect the direction of a business activity or the integrity of financial reporting.

Individuals identified as covered persons are often scrutinized under various regulatory frameworks, ensuring that they adhere to ethical standards and compliance requirements, particularly in scenarios involving conflicts of interest. Their role may include making decisions, offering advice, or participating in processes that could materially affect financial statements and overall company governance.

In contrast, while auditors and board members play critical roles in corporate governance and financial reporting, their functions do not encompass the broader definition of coverage that includes any person with the potential to sway decisions or outcomes. Stakeholders, while important to the context of a business, do not necessarily possess the authority or influence required to be classified as covered persons.