PracticeConsultingTop names unite to slam SEC plans

Top names unite to slam SEC plans

UK accountancy and business leaders this morning accused the US Securities andExchange Commission of 'planning to undermine the skills base' of accountancyfirms with its shake-up of audit independence rules.

The previous president of the English ICA Baroness Noakes and LordSharman, former chairman of KPMG, were among five prominent business leaderswho sent the open letter to the Financial Times.

Director general of the Confederation of British Industry Digby Jones andchairperson of policy and resources at the Corporation of London Judith Mayhewalso signed the letter along with leading industrialists John Maersk, directorof Maersk, and the chairman of National Power Sir John Collins.

SEC plans to ban auditors from offering clients consultancy and legal services to prevent conflicts of interest were slammed as ‘hasty’ and damaging to firms operating in Europe.

‘This rulemaking would directly impact on SEC-registrants operating in Europeand on the European arms of the global accounting firms,’ the letter states.

The publication comes as big five firms Andersens, KPMG and Deloitte & Touchetoday gathered at a public hearing in Washington to represent their oppositionto the SEC audit rule amendments.

The six business leaders said that they shared the SEC’s aim to maintainhigh-quality financial reporting, but said that the debate on auditorindependence ‘should be a full and thorough international debate based on thefacts’.

The letter argued: ‘We have yet to see any evidence that the growth of globalmultidisciplinary business advisory firms has led to a decline in auditingstandards.

‘Before planning to undermine the skills base of firms that have served businessand public well for many years, the SEC needs a clearer idea of whatcompetencies the digital economy and new forms of corporate reporting willdemand of auditors.’

The UK six also called on the SEC to show more attention to the ‘global impactof their rule changes and said that the 75-day comment period was inadequate.’There may be much to learn from similar initiatives of the InternationalFederation of Accountants and the European Union and much to lose from hastyunilateral action,’ they said.

Arthur Andersen this week hired a top US lawyer to take on the SEC, while KPMGlast week said it would lobby the UK government and the European Commission tooppose the review.

Washington hearing schedule

SEC website

KPMG squares up to the SEC

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