The survival of CPA firms could depend on it.
That’s the heretical advice of Jim Peterson (pictured), once an in-house lawyer for Arthur Andersen, now a practicing multinational attorney and columnist for the International Herald Tribune.
He writes:
I say it is time to stop making nice and to discard a 150-year-old piece of conventional wisdom. The concept of auditor independence does not serve the interests of investors.
Audit performance – and more immediately, the survival of the large firms to serve their global clients and the capital markets – would be better achieved if the current independence requirements and constraints were scrapped altogether.
Auditors should be free to provide their clients with any services within their skills. The only thing that should be required is comprehensive disclosure of all relationships, to be evaluated and decided by the voting power of the marketplace.
One Response to “Scrap Independence?”
Superheater
Should we really be listening to a refugee from Arthur’s LEGAL department on accounting ethics? Arthur is a footnote because of advice received from its LEGAL DEPARTMENT.