The Securities and Exchange Commission is planning to institute its own new comprehensive regulatory system for the accounting profession by the end of the year, should the US Congress fail to pass legislation itself.
Harvey Pitt, the SEC’s chairman, has stated that the agency will consider new rules to establish aboard of oversight for the accounting profession at the agency’s next meeting.
The rules would be designed to address the criticism of the area, in the light of recent revelations including Andersen’s involvement in the Enron debacle, by insuring that auditors would have to meet the highest legal, ethical and competence standards ever imposed on the accounting profession.
The US Congress is considering reform of accounting regulation, inspired by Enron. The SEC would implement any approved legislative changes. However, the likelihood of any legislation making it through Congress before the elections in November is diminishing. In light of this, the SEC has made it clear that if legislative reform fails, the agency will substitute its own proposed program.
