Audit board resigns amid rules shakeup
The main audit watchdog in the US has announced its intention to wind itself up after the chairman of the SEC proposed a new audit regulator with stronger powers.
The future of the five-member Public Oversight Board, was thrown into confusion last week when Securities & Exchange Commission chairman Harvey Pitt announced far-reaching changes to the regulation of the audit profession in the wake of the Enron collapse.
The board is said to be angry that it was not consulted on future changes to regulation.
In a letter to Pitt, POB chairman Charles Bowsher, wrote: ‘It is significant that there was no consultation with the POB before these proposed changes were announced.’p>Pitt urged the board to reconsider its decision, saying it was not in the public interest.
‘Nothing I said on Thursday, or since, was in any way intended to suggest that the POB had no role to play, ‘Pitt wrote in a letter to the members of the board. ‘Indeed, my proposals were intended to strengthen the body that will be our “new POB”, ensure its independence from the AICPA and expand its mandate.’
The POB which played a pivotal role in the consultation process on auditor independence under Arthur Levitt, was created in 1977 to oversee quality control and peer reviews of accounting firms. It also oversees the US Auditing Standards Board.