SEC May Have Leaked News of Audit Irregularities
The ongoing probe by the SEC of Andersen’s accounting practices was made public last week when a story appeared in the Wall Street Journal that included confidential details of the investigation into the accounting services provided by Andersen to Waste Management Inc. The accounting problems that were uncovered last year resulted in billions of dollars of write-offs for Waste Management.
“We're extremely concerned that this kind of leak occurred, that it was inaccurate information that seemed clearly designed to influence the debate on auditor independence rules,” said David Barrett, a lawyer representing Arthur Andersen in an interview with Reuters news service.
“This information… doesn't appear to us that it can come from anywhere other than the SEC (Securities and Exchange Commission," Barrett continued. The SEC has refused to comment on the matter.
The timing is significant as the SEC is striving to separate auditing and consulting services with its proposed auditor independence rules. Public hearings on the separation of services matter will continue in September.