Monday, January 4, 2010
"The legality of a federal board that oversees accounting firms was debated before the Supreme Court on Monday, with conservative justices suggesting that the board enjoys more independence from the president than the Constitution permits. ... During oral arguments, conservative justices including Antonin Scalia noted that the president's control over the accounting board is limited because the board answers to all five independent commissioners of the SEC, not just the chairman. ... Because of its power to initiate investigations into accounting firms, the board can take 'actions that have devastating consequences for the regulated bodies,' said Chief Justice John Roberts. ... Jeffrey Lamke, the attorney representing the [PCAOB] .... said the president has the same control over the board as he does over everything else that falls under the SEC's jurisdiction. 'Which is nothing,' said Justice Scalia. Several former SEC chairman and accounting-industry groups support the current setup of the accounting board", my emphasis, Fawn Johnson and Jess Bravin at the WSJ, 8 December 2009, link: http://online.wsj.com/article/SB126020055598680141.html.
If the AICPA and Big 87654 support the PCAOB, how much has it improved investor protection since 2003? Remember the AICPA, Big 87654 and SEC all supported CPA "peer review". I await the PCAOB barring a Big 87654 firm from further practice in front of the SEC.
I found a 21 July 1993 piece by Janice Shields, who was then an Associate Professor of Accounting at Bloomburg University titled, "Bad Audits ... Not Deep Pockets" about the Big 6's auditing failures. Nothing has improved since 1993. Here's a link: http://www.enronwatchdog.org/PDFs/bad_audits.pdf.