New York (Dec. 8, 2002) – A new Securities and Exchange Commission proposal to forbid accounting firms from selling tax strategies to their audit clients highlights the governments’ continued incursions into and attempts to redefine the profession, an industry consultant noted.
The proposal, released Tuesday, would ban firms from advising public company clients on strategies such as tax shelters, claiming it might lead to a conflict of interest when performing the company’s audit.
“The accounting profession has an obligation to be an advocate for their clients, but at this point in time, the SEC is trying to change the role and mission of accounting firms,” said consultant Jay Nisberg. “Who in fact does a firm represent – the public, the SEC or the client? I think there’s some confusion over that.”
Nisberg said over the next six months or so, Washington leaders will be wrestling with these issues as they relate to the accounting profession. And he noted that the short-term prospects for the profession may not be so rosy. After a period of laissez-faire oversight during the deregulatory era of the 1990s, businesses post-Enron are now going through a period of much tougher scrutiny and stronger regulation. “Firms are going to have to bend with the winds and see how it all shakes out,” he said.
“I truly believe that the moral and ethical fiber of the general accounting profession rises far above the level where doomsayers are placing it,” Nisberg added. “The SEC is using a very large stick to keep a very few wayward players in line.”