Levitt is tough, bluntly spoken, and was never going to pull his punches. Now
it seems we have a clear sign that his approach to regulating the firms may be
very different from our own homegrown efforts.
In an interview, Levitt has suggested that firms produce ‘fully documented’
audits of their own businesses; that the US government could take over a failing
firm, as in an administration; that the world is in need of audit-only firms;
and that he’s clearly concerned about the ‘aggressive’ return to consulting by
those firms that did give it up originally.
If all those measures were to come to fruition, that might add up to a
substantial, if not entirely radical, upheaval of the audit market in the
And what does that make for? It makes Levitt and politicians attached to the
US Treasury the targets for some pretty ferocious lobbying. There is a draft
report out under consultation, but Levitt’s recent mention of an audit-only firm
is the first time he has floated that idea. It will no doubt have the firms
And the lobbying, brutal, sometimes no-holds-barred, will be intensified.
But, Levitt is not the sort of man to give way. And there is a mood abroad in
the US, post-credit crunch, that the markets don’t necessarily know best and
therefore tighter regulation is a good thing.
With a tough opposition and public sentiment running against unfettered
markets, it’s going to be hard for US firms to persuade the Treasury to go easy.
Gavin Hinks is editor of AccountancyAge