Big Five firms lock horns with SEC.
Three Big Five firms and the US Securities & Exchange Commission are locked on a collision course, following a joint letter written by the firms calling for ‘thorough examination and cross-examination’ of the regulator’s demands on audit independence.
The firms, Arthur Andersen, KPMG and Deloitte & Touche are understood to have written to the regulator demanding careful examination of SEC plans, as the SEC began its second public hearing into audit independence this week.
A spokesman for Arthur Andersen in the US said the SEC’s reaction to the firms’ recommendation ‘had not been positive’. This follows a similar response to a previous letter written solely by Arthur Andersen.
Lawyers acting on behalf of the firm had written to the general council of the SEC asking for proposals regarding separating consultancy and audit to be ‘seriously examined’.
AA also called for the SEC ‘to employ enhanced procedures in this rule-making, including limited cross-examination.’ It also wants the SEC to disclose all evidence on the costs and benefits of the proposed rules.
The head to head has developed as a leading US accounting academic has told SEC commissioner Jonathan Katz its plans will damage the standard of audit and the ability of the profession to recruit top graduates.
Ward in SEC fight, page 6.