PracticeConsultingE&Y confident of SEC solution

E&Y confident of SEC solution

US Securities and Exchange Commission officials and representatives of Big Five firms are nearing a compromise that could avoid further conflict over proposed auditor independence rules.

SEC plans to restrict the non-audit activities of accountancy firms to avoid conflicts of interest have angered the Big Five who believe their independence is not compromised by offering consulting services.

Ernst & Young chairman Philip Laskawy, issued a statement last week which said: ‘We are confident that we can develop a workable solution to this situation. We are working together with the SEC and the other firms toward that goal.’

And at the American Institute of Certified Public Accountants conference in Las Vegas this week, SEC chairman Arthur Levitt praised the co-operation of two of the Big Five.

‘Since proposing the commission’s independence rule-making initiative, two firms, PricewaterhouseCoopers, led by Jim Schiro, and Ernst & Young, headed by Phil Laskawy, have engaged in a meaningful dialogue with commission staff and came up with thoughtful and constructive comments which have been extremely useful to the commission in thinking through these issues,’ said Levitt.

‘In recent weeks, I’ve sensed a new willingness by those in the profession who have expressed serious concern about the rule-making to come to the table and share their concerns,’ he added

But in an interview prior to his address, Levitt did admit the conflict had taken its toll. He said the level of acrimony between the two sides had been almost unprecedented and had hampered a negotiated settlement.

Links

Levitt under fire from US Senate

Where Levitt’s plan falls short

SEC gives Big Five more time

Ward prepares to attack SEC proposals

KPMG chief pulls out of SEC hearings”

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