After the Andersen verdict was announced, lawmakers and regulators redoubled their efforts to establish a rigorous oversight process for independent auditors, and other reformists joined together in a parallel track for management under the auspices of the Conference Board.
Officially known as the "Blue Ribbon Commission on Public Trust and Private Enterprise," the group consists of well-known and influential accounting thought-leaders, including Arthur Levitt, former chairman of the Securities and Exchange Commission, Charles Bowsher, former chairman of the accounting profession's recently-disbanded Public Oversight Board, and Paul Volcker, former chairman of the Independent Oversight Board for Arthur Andersen LLP and current chairman of the foundation of the International Accounting Standards Board.
The Commission's charter is to examine the ethical and corporate governance issues facing Corporate America today, then recommend best-practices guidelines in a number of areas. According to the Conference Board's announcement, these areas specifically include auditing and accounting standards, disclosures, and the relationships between auditing firms, corporate boards and management. The Conference Board says it considers these issues to be "some of the toughest issues facing management."
A recent survey by Tillinghast-Towers Perrin confirms that directors and officers (D&O) of corporations have good reason to be concerned about accounting and auditing issues. The survey showed a 29% increase in D&O liability insurance premiums in 2001 due to alarming increases in the costs of litigation, particularly shareholder litigation, against directors and officers, as well as widespread concerns about high-profile bankruptcies and the quality of corporate accounting and financial reporting.
The Tillinghast-Towers Perrin study found that issues related to financial disclosure were the most common among shareholder claimants, representing 38.8% of shareholder claims and 9.2% of claims overall.