Audit firm CEOs speak at FEI Summit.

• Author: Heffes, Ellen M.
• Position: Chief executive officer - Financial Executives International

At FEI's Summit in Chicago, in May, two CEOs of the largest audit firms spoke--Big Four CEO James H. Quigley, of Deloitte USA LLP, and number five-firm CEO and Executive Partner for Grant Thornton, Edward E. Nusbaum. Following the theme of the Summit, each spoke about leadership. The following captures excerpts from each of their presentations.

James Quigley

Quigley opened by acknowledging that he and the audience come from very different places. "We have all suffered the pain associated with the scandals. And we continue to witness the collective image of corporate America suffer with the trials of those most directly involved." He labels the time as an "Age of Greed and Entitlement Thinking," noting that continued headlines "are disturbing to those of us who are committed to rebuilding trust and confidence." He then went on to discuss his perspectives on where we are, how we got here and where are we going.

"One year of implementation has passed. It is no exaggeration to say that every stakeholder hopes the first year will be the hardest. No one enjoys the prospect of a similar year in the future." (While it may be assumed the quote above refers to year-one Sarbanes-Oxley compliance, Quigley revealed that it was from a 1930s newspaper article, as the U.S. responded to the challenges and controversy over major reform that was instituted following scandals that triggered dramatic stock market declines.)

"We are at an inflection point--a critical stage in our corporate governance history," he said, and "while there has been intense and heated debate. I believe there can be little question that we are in a better place now than before we started, and that, indeed, recent regulation has been beneficial."

Quigley said that while holding strong views, his firm has been listening and reaching out: "To our clients as we assess our implementation experience; to our partners, in order to discern and share best practices; to third-parties, through surveys to better comprehend the pulse of the marketplace; and through collaboration within our profession and with our regulators."

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Difficulties should have been expected, he said, due to "uncharted waters; no one knew how great the challenges would be. The initial cost projections turned out to be greatly underestimated.... There were a lot of rules, but not a lot of guidance." And, much stress, Quigley said, "has emanated from Section 404, which is the apparent lightning rod for...