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Treasury Committee Updates Auditing Proposal

Tammy Whitehouse | September 30, 2008

A Treasury committee has updated its draft report on how to prop up the auditing profession but with no further consensus on what could or should be done to minimize the threat of liability wiping out an audit firm.

Given the inability of the committee to reach an agreement on the extent to which audit firms should be protected from liability, Donald Nicolaisen and Arthur Levitt, co-chairs for the Advisory Committee on the Auditing Profession, added their own thoughts on the matter. They suggest Congress consider creating a federally chartered audit structure for firms that would choose to operate as such—including incorporation, requirements for capitalization, federal licensing, further clarity of regulatory oversight, new governance structures with independent directors, mandatory public reporting with audited financial statements, and improvements to auditors’ reports to...

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