Auditor Independence - Andersens stands firm on SEC audit split.
Arthur Andersen this week revealed its lawyers have written to the SEC to demand ‘thorough examination and cross-examination’ over the regulator’s demands for auditor independence.
The firm stated its stance over auditor independence had not changed following its divorce with Andersen Consulting last week. However the firm described the issues raised by the SEC as ‘very important’.
A spokesman for the firm, said: ‘The effect of the arbitration has not changed our situation at all. We believe it would be beneficial for audit to remain independent, but we do not believe consulting is incompatible with audit independence.
‘Proposals regarding separating consultancy from audit need serious examination.
AA has written to the general council at the SEC asking for this’.
AA said it would like to find out from the SEC the reasons why it believes firms cannot provide consultancy services and independent audit services.
The letter said Andersen wants the SEC ‘to employ enhanced procedures in this rulemaking, including limited cross examination’.
Andersen also wants the SEC to disclose all its evidence on the ‘costs and benefits’ of the proposed rules. The SEC plans to resume hearings in September.
Andersens denies merger rumours, page 2; What future for AA and AC, page 12