Accounting Industry Builds Case against Enron-Inspired Rules
WASHINGTON (AP) -- The accounting industry is building up a lobbying campaign against proposals in the wake of the Enron scandal that would put new restrictions on auditors.
Accounting firms are being urged to contact members of Congress, though the effort does not include Arthur Andersen, former auditor of collapsed Enron.
The industry, which showed its clout in 2000 in opposing an auditor independence proposal by the former head of the Securities and Exchange Commission, now is moving against legislation that would prohibit accounting firms from performing consulting and other services for companies whose books they audit.
In response to Enron's collapse -- which threw a spotlight on the role of the energy- trading company's longtime auditor, the Andersen accounting firm -- Congress also is considering requiring companies to switch auditors every few years.
The new lobbying push by the American Institute of Certified Public Accountants does not include Andersen, one of the Big Five accounting firms and a member of the accounting trade group.
"It's not our agenda," Andersen spokesman Charlie Leonard said Tuesday.
He said Andersen supports an accounting "reform agenda," through legislation or new SEC rules, designed to restore public confidence in accounting and company financial reports.
U.S. Comptroller General David Walker, who heads Congress' General Accounting Office, testified at a Senate hearing Tuesday that the current system in which the accounting industry largely polices itself is too "fragmented" and doesn't provide adequate sanctions for auditors who violate the trust placed in them.
New restrictions on auditors of publicly traded companies would spill over to affect auditing of all companies, big or small, and federal and state government agencies, the AICPA warned its members in an "action alert" memo Monday. …