Following the Securities and Exchange Commission's investigation last year of independence issues at PricewaterhouseCoopers, the SEC vowed to investigate other Big 5 firms to ensure independence is not sacrificed.
Now, however, lack of funding of the Public Oversight Board (POB) by the AICPA may jeopardize that investigation, and the SEC is not pleased. This issue came to light last week during a speech by SEC chair Arthur Levitt.
The AICPA is holding back funding of the POB until it knows and understands what is is receiving for its investment. The most disagreeable point thus far is the rift between how the Big 5 firms will cooperate with the investigation and the scope of the investigation itself.
Disagreements like this provide fuel for the SEC to force changes through by relying on the split in the profession, and hoping that some partners within firms will help the SEC with their efforts.