|Man Without Qualities|
Sunday, July 20, 2003
The Securities and Exchange Commission, fresh, tanned and rested from its unbelievably stupid and counterproductive destruction of Arthur Andersen, is now seeking to suspend Ernst & Young from accepting new public-company audit clients for six months.
The Wall Street Journal reports: The SEC matter, now pending before an administrative-law judge in Washington, accuses Ernst of violating auditor-independence rules during the late 1990s by entering a marketing agreement with PeopleSoft Inc. to sell the Pleasanton, Calif., company's software at the same time that Ernst was PeopleSoft's auditor.
The SEC seems to be approaching a point where instead of the "Big 4" or "Big 3," public companies will have recourse to the "Big Zero" for their audits - and investors will have nobody on whom to rely. That way, there will be no risk of a headline appearing such as "National Accounting Firm Accused of Wrongdoing" that might embarrass the SEC.
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