PracticeConsultingMum’s the word in Whitehall

Mum's the word in Whitehall

The hearings themselves may have been clouded by rumour, lobbying and broken ranks, but by this morning the views of the US Securities and Exchange Commission on auditor independence should be clear.

SEC chairman Arthur Levitt was due to announce his ruling yesterday.

And legal appeals aside – and the paralysis caused by the farcical presidential election perhaps makes that more of a probability than a possibility – the Big Five can now be more sure of their destiny than at any time over the past 12 months.

But while the impact of the ruling will be just as shuddering this side of the Atlantic, one party has been curiously quiet.

Nowadays it is accepted practice that when one state attempts to affect business in another, the matter usually ends up the subject of much posturing, name calling and, if you are the US Trade Department, with the imposition of all manner of embargoes. Don’t forget the Banana Wars.

Throughout this debate, however, the British government has stayed mute, even though the futures of British firms are at stake at home and abroad.

Levitt has raised an important question of independence. In today’s climate perception matters as much as reality. There may be no proven example of an audit being prejudiced by consulting work but the question has to be asked whether they need to be ‘seen’ as independent.

This is a crucial debate and hopefully one with a sensible, balanced outcome. But it is in no one’s interests that one of the key players has been missing.

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