KPMG, one of the big four global accounting firms, is leading protests against proposals to create a new US regulatory body with powers to monitor audit work conducted outside of the US.
Mike Rake, international chairman of KPMG, has spoken out against attempts to give any new US regulator powers with a global reach.
Mr Rake has also indicated that the relationship between the big four and the US Securities and Exchange Commission (SEC), which is the current US financial regulator, had broken down.
Following the recent accounting scandals, it seems inevitable that reform of the financial regulating bodies in the US will occur. It only remains to be seen what form the new regulator will take and what extend its powers will reach.
The chairman of the US Senate banking committee, Paul Sarbanes, has proposed a bill that would lead to the creation of a new accounting regulatory body that would have the power both to create, monitor and enforce professional standards and disciplinary measures.
This would affect auditors of any foreign companies that maintained secondary listings on US stock exchanges and were, therefore, obliged to submit accounts to the SEC.
In an obvious reference to the recent accounting scandals in the US, Mr Rake was quoted by FT.com as saying, I think it has been demonstrated that the US does not have the right answers to all these problems. Forcing the US solution on the rest of the world is not acceptable.
Mr Rake claimed that US rules were not compatible to the rules imposed on auditors outside the US. As a result he predicted that auditors would find themselves facing a mountain of obstructive regulation.
This view was reflected by the European Commission, which is currently devising its own measures to prevent similar accounting scandals from affecting Europe. Commission officials claimed that they would be forced to intervene if US regulators attempted to interfere with companies within the European Union.