The US Treasury’s Advisory Committee on the Auditing Profession has just released a discussion paper on the first meeting of an inquiry intended to produce recommendations to restore credibility in the auditing profession following a raft of auditing scandals earlier this decade.

On the release of the white paper, committee chairman Arthur Leavitt, former chairman of the Securities and Exchange Commission, said the auditor's responsibility to search for fraud would be a major issue examined by the committee. He said the demise of Arthur Andersen earlier in the decade showed the vulnerability of auditors if they did not do this job better.

The committee will also examine market concentration and its impact on audit quality as well as the possible need for public policy change dealing with a lack of competition. The white paper noted the biggest auditing firms audited more than 78% of public companies, and 99% of public company revenue.

In addition, the committee is also expected to devote considerable time to find ways of helping the auditing profession attract and retain qualified people.

Further reading:
US committee will examine choice in audit market
Audit choice: handle with care