Just in time for Independence Day!
From "The Pwc Scandal Changes Everything," which appeared in Businessweek back in February of 2000:
Regulators are putting pressure on the entire profession. The SEC has directed the accounting industry's watchdog, the Public Oversight Board, to investigate seven other major accounting firms. The Big Five are being required to invest in computer systems that will allow them for the first time to track employees' investments in order to guard against conflicts of interest. And other major firms are likely to separate their consulting and auditing businesses in coming months. The reason the SEC wants these changes is simple: Auditors may hesitate to issue tough opinions on companies' financial statements when they are courting consulting business.
You will recall the Public Oversight Board enjoyed a good run from 1977-2002 as "the cornerstone of the self-regulatory system that oversees the accounting profession in the United States." In 2002, the five-member board resigned as a group when then SEC chairman Harvey Pitt suggested the formation of what would later become the PCAOB in the wake of Enron's collapse.
Former POB head Charles Bowsher called the proposals "a sham intended to give the industry more power to discipline itself rather than submit to outside scrutiny. He said the effect would be to put the oversight board more under the control of the industry's main trade association, the American Institute of Certified Public Accountants."
From a January 2002 piece in the New York Times:
Critics have said that the oversight board and the American Institute of Certified Public Accountants have been too lax in their supervision of unethical accountants.
The oversight board, for instance, is responsible for supervising industry peer reviews that have yielded questionable findings. Late last year, for example, Deloitte & Touche gave Arthur Andersen, the Enron auditor, a healthy review for its auditing process.
''I've been disappointed in the P.O.B.'s inability to put teeth in its programs,'' said Arthur Levitt, the former chairman of the Securities and Exchange Commission, who tried with only limited success to have tougher restrictions imposed on the accounting industry. ''I attribute that to their funding and staffing by the industry's cheerleader, the American Institute of Certified Public Accountants. The oversight board has been well meaning but largely ineffective.''
Good thing shilling isn't a problem nowadays, huh guys? HUH?