PracticeConsultingEx-KPMG chief slams SEC’s Levitt

Ex-KPMG chief slams SEC's Levitt

A leading Liberal Democrat peer and former chairman of KPMG International has launched an attack on the US Securities and Exchange Commission, warning the watchdog against hasty rulemaking.

Lord Sharman said: ‘Insistence that auditors of all companies regulated by the SEC abide by SEC rules is a straightforward extension of US hegemony. I say to chairman Levitt: get your tanks off our lawn.’

Speaking at an English Institute dinner, Lord Sharman criticised the SEC for its hostility to multidisciplinary firms. ‘SEC chairman Arthur Levitt threatens to reshape the accounting profession just because he believes that accounting firms should just do audit and nothing else.’

The attack comes on the back of Levitt’s scathing remarks against Big Five firms compromising auditor independence and their increased in-roads into non-audit work.

‘This flies in the face of the history of firms that have built up their services in response to customer and marketplace demand. It further ignores the changes that will be driven by the e-economy and will require auditors to have skills beyond audit,’ said Lord Sharman.

As the profession adapts to economic changes, firms of all sizes are moving further away from pure audit work by beginning to enhance the varied services they offer clients.

The SEC has heavily criticised this trend, causing UK accountants to question who runs the profession in the UK.

Hasty rulemaking without careful thought and debate is not likely to be good regulation. In the UK the OFT is already looking at the role of the professions and the UK government should make it clear any precipitate rulemaking by the SEC is unwelcome.’

SEC should look before it leaps

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