Oppose Gramm Let's-Have-Some-"Not-So-Independent-Auditors" Amendment To The Sarbanes Accounting Reform Bill

Allowing the SEC to create two-classes of auditor independence —independent and not-so-independent—is a bad idea for the markets and investor confidence. Investors need to know that all auditors, big and small, of all public companies, big and small, are independent and serving as "public watchdogs" (Supreme Court, United States vs. Arthur Young, 1984), not management lapdogs. Fifty-one percent (51%) of the financial statements required to be restated from 1997-2001 were on companies, including dot-coms, with under $100 million in revenues. Small company audits need be improved, not weakened, to restore investor confidence. Even existing accounting profession practices are stronger than the Gramm amendment would allow.

Support These And Other Strengthening Amendments

Support Boxer Amendments To Guarantee That The Auditor Oversight Board Will Really Be Independent: Do you want the accounting industry's lobbyists and lawyers taking "public" seats on the oversight board? Unless the Boxer amendment to require that public members also be independent passes, they could. Also support the Boxer amendment to allow only one (1) accountant on the oversight board.

Support Dorgan Amendment To Guarantee Transparency Of Disciplinary Proceedings: The public is fed up with closed-door disciplinary procedures that produce weak settlements and do nothing to resolve lax or abusive practices. Under the bill, investors might not even find out about closed-door disciplinary actions until after the statute of limitations has run.

Support Dorgan and McCain Amendments To Strengthen Auditor Independence Rules: The bill needs stronger guarantees against consulting services conflicts for auditors. Don't leave all-important decisions on the scope of the services ban to the SEC. Restore real teeth to the auditor independence rules. The Dorgan amendment restores important definitions to the independence rules. The McCain amendment bans all non-audit services to audit clients.

Support Shelby Amendment To Restore Aiding And Abetting Liability: If you drive the car for a bank robber, you go to jail as an accomplice. Yet Enron's accountants (Arthur Andersen!) and lawyers (Vinson and Elkins!) are telling defrauded pension funds and consumers in court right now that they are immune from liability under the Supreme Court's 1994 Central Bank decision. Enacting the Shelby amendment to restore aiding and abetting liability is good public policy that will force accountants and lawyers to blow the whistle on fraud, not aid it.