U.S. Chamber Calls SEC Proposal Unwarranted

WASHINGTON, D.C. - The United States Chamber of Commerce warned the Securities and Exchange Commission (SEC) in a letter today that there is not enough evidence of improper self-dealing by accounting firms to warrant a massive restructuring of the industry, by restricting the services that accounting firms can offer.

"Placing new restrictions on accounting firms, without clear evidence that a problem exists, could hurt businesses that rely on those firms for professional assistance and harm audit effectiveness as well," said Thomas Donohue, Chamber President and CEO. "A recent study of the accounting industry found no evidence that audit quality was being compromised by current practices."

The SEC has proposed new restrictions for accounting firms that would prohibit firms from offering clients both accounting and consulting services. Such a substantial reordering of the industry is likely to have unintended negative consequences, according to the Chamber. Businesses might be forced to dismiss auditors who have performed well, in order to retain consulting services, or forgo important consulting assistance in order to continue to work with their existing auditor.

"Inflexible rules that restrict business operations should not be the SEC's first option," said Donohue. "The effectiveness of disclosure laws adopted by the SEC last year should be considered before these more draconian measures are finalized."

Imposing government restrictions on business services, without evidence of widespread wrongdoing, runs counter to the free market system that supports our economy and should be a last resort, according to the Chamber.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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