Regulators May Drop Plan to Limit Auditors' Work
Wall Street Journal Online (10/25/00) Vol. 104, No. 42 p.C20; Schroeder, Michael

The accounting industry could be on the verge of a victory in its hard fought battle against the Securities and Exchange Commission (SEC), because the commission may possibly back off of a main component of its proposal to reduce conflicts of interest when accountants provide consulting services. During its negotiations with three big accounting firms, the SEC indicated that it might allow auditors to continue to offer computer-systems consulting services to audit clients, which would be banned according to the original proposal. While the final wording of many complicated provisions in the new standard could result in a breakdown in negotiations, the current discussions have given the accounting industry high hopes for a resolution. In a speech to the AICPA, Arthur Levitt, chairman of the SEC, noted, "We are making important progress toward a more-enduring professional-wide approach to working through our differences and confronting the issues at hand." He added that through further discussions, he hopes the SEC and the AICPA can mend their strained relationship.


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