SEC Calls Andersen Case 'Smoking Gun'
In a speech this week to the Center For Professional Education, Inc., acting SEC chairman, Laura Unger voiced renewed concern over auditor independence issues, citing the recent Andersen/Waste Management fracas as a prime example of abuse.
"This is one very significant case that we can point to," said Ms. Unger in her speech Monday, referring to recent allegations that auditor independence may indeed be compromised when accounting firms perform non-audit services for audit clients. "The problem may be larger than we originally thought," Ms. Unger said.
Concern had surfaced a few weeks ago when the results of an SEC analysis of consulting fees charged to audit clients showed higher-than-expected payments for non-audit services. The SEC learned that the typical company pays 73 percent of its fees to auditors for non-audit work.