SEC and Senate Banking Committee put forth proposals for new regulation of public company auditors

CPA Letter, The, July, 2002 by Anonymous

"This model sends a loud and clear message that the era of self-regulation of the accounting profession is over," said Securities and Exchange Commission Chairman Harvey Pitt in describing the commission's far-reaching plan to regulate auditors of public company financial statements. The proposal, which the SEC approved for public comment on June 20, would create a Public Accountability Board - a private sector board that would be "wholly independent" of the accounting profession and designed to address "accountants' ethical lapses or competence deficiencies."

Funding for the PAB would come from all public companies and their audit firms. The proposal calls for a board consisting of nine members, at least six of whom must be public members (i.e., not accountants). Practicing...

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