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U.S. Securities and Exchange Commission chairman Arthur Levitt said Monday the federal regulator will vote on its proposed auditor independence rules on Nov. 15, over the objections of many in the accounting profession and lawmakers who would prefer a six-month delay. Levitt had sought to ban accounting firms from providing both auditing and consulting services to the same client. He has said the integrity of an accounting firm’s auditing work for a company is questioned when the firm provides consulting services to the same company. In recent weeks, however, Levitt and the SEC have indicated a willingness to compromise on total separation between auditing and accounting. Ongoing discussions among the SEC, the Big Five accounting firms — Arthur Andersen LLP, Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP — as well as the professions’ trade group, the American Institute of Certified Public Accountants, will most likely yield a drastically scaled back rule. Levitt said in a statement Monday that he believes the final rule will largely reflect those concerns expressed by the profession. “While I respect the views of those in Congress and in the profession who believe the SEC should defer its rulemaking, I believe delay … will not add to the areas of agreement or resolve areas of difference,” he said. The compromise under discussion is expected to drop the most controversial aspect of the proposed rules — the ban on accounting firms offering consulting services to audit clients. In return, the accounting firms would agree to disclose the fees from such consulting services in their SEC filings. Stepping away from banning consulting services would be a major concession by the SEC. Even a proposal put forward by PricewaterhouseCoopers and Ernst & Young LLP called for restrictions on providing consulting services to audit clients. As proposed, the SEC rule does not ban most services auditors perform for their audit clients. Rather, it identifies 10 services that impair independence, most of which are banned under current SEC rules. The open meeting and vote will be held at the SEC’s headquarters in Washington at 10 a.m. Copyright (c)2000 TDD, LLC. All rights reserved.

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