On October 6, the U.S. Treasury Department’s Advisory Committee on the Auditing Profession issued its Final Report. The report was the product of 12 months of work by the Committee, which was headed up by former SEC chairman Arthur Levitt and former SEC Chief Accountant Donald Nicolaisen, and consisted of no fewer than 21 members.
Among many other things, the 200+ page report examined in great detail the “possible impact of the current U.S. liability system on audit effectiveness and the continued sustainability of the public company auditing profession.” The Committee, however, was “unable to reach a consensus as to whether limits on auditor liability would be beneficial or harmful to the capital markets and to investors or, for that matter, whether such limits are necessary to sustain the auditing profession,” and therefore presented no recommendation on this issue.
