"SEC Backs Down" Is Closer To The Truth
-- January 23, 2003
Throughout the week, the SEC has been enacting new rules that are supposed to implement the spirit of the Sarbanes-Oxley Act of 2002. But the SEC has watered down its proposals in the interest of big business. In fact, the commission is making it EASIER for companies to pull the wool over investors eyes.
For instance, the SEC used to require accounting firms to report to the public the ratio of auditing fees to consulting fees. That is, how much time the accounting firm spends auditing the books of the company versus how much time it spends giving the company advice on how to shelter itself from taxes, etc. Now, the SEC is getting rid of that requirement. They are taking away the KEY measure that investors use to determine whether they think an auditor is rubberstamping their clients' financial reports in order to get lucrative consulting deals.
We have been skeptical from the beginning that any REAL change would come to help investors. Despite the drumbeating, the chest thumping, and the bared teeth, Washington has once again let down investors.
related article: SEC Backs Rules for Auditors, Revised From Original Plan