KPMG Chairman and CEO Stephen G. Butler was scheduled to testify at the crucial SEC auditor independence hearings today, but was irritated at the skimpy amount of time that was allotted to him (30 minutes, to be shared with five other speakers), and distressed that he was not given a requested morning time slot.
Mr. Butler's testimony was delivered in printed form to the SEC, and KPMG provided AccountingWEB with a copy of that testimony.
As an auditor with KPMG for more than 30 years, and now as the Chairman and CEO of the company, Mr. Butler has had an opportunity to attend hundreds of meetings with corporate leaders, and his experiences inform him that, "investor confidence and market preceptions of auditor independence are positive and strong. There is no fundamental unease within the marketplace on this subject.
"In addition, there is no empirical evidence that an expanded scope of services has ever caused an audit failure, diminished audit effectiveness or weakened investor confidence.
Mr. Butler fears the Commission's proposal to limit the scope of services will create three major problems:
- "It will constitute a huge setback in our ability to attract and retain the best and brightest professionals.
- "It will severely inhibit our ability to create the next generation of products and solutions that our clients will need - and that the profession will require - to stay on top of dramatic changes in business.
- "It will gradually degrade the profession's ability to produce high-quality, independent audits for the 21st Century, by choking off the profession's access to the best people, ideas, products, processes and technologies."
Much of Mr. Butler's testimony is devoted to elaborating on these three points. He makes the argument that, "if the audit profession loses its attractiveness, we will lose our best people; and we'll be back in this room within two years talking about a brain drain and its harmful impact on audit quality."
AccountingWEB is providing continuing coverage of the SEC hearings.
If you're not yet a member of AccountingWEB and would like to register for additional news and resources, subscribe now!