PracticeConsultingLevitt under fire from US Senate

Levitt under fire from US Senate

Chairman of the US Securities & Exchange Commission, Arthur Levitt, has come under fire from the US Senate for his proposals on auditor independence, FT.com has reported.

Levitt’s assertions that an audit firm’s independence is compromised by offering other services to audit clients was questioned by a subcommittee of the Senate Banking Committee.

‘You’ve got to do more than argue there might be a conflict,’ said committee chairman Phil Gramm, ‘You’ve got to have hard evidence.’

But in an impassioned appeal, Levitt said: ‘I care deeply about this issue, about its implications for America’s marketplace and for sustained public confidence.’

The period of public consultation on the SEC’s plans ended at the beginning of last week, with KPMG, Deloitte & Touche and Arthur Andersen continuing to resist the plans and PricewaterhouseCoopers and Ernst & Young willing to compromise.

A number of senators challenged Levitt’s plans and stating that there was no evidence of conflicts of interest.

In order to bolster his arguments, Levitt even requested a private meeting with the committee members to disclose instances where he believed auditors had compromised their independence.

The SEC plans to meet representatives of KPMG, Deloittes and Andersens this week to work on compromise solutions.

Links

Why the SEC has got it wrong

Where Levitt’s plan falls short

SEC gives Big Five more time

KPMG chief pulls out of SEC hearings

SEC website

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