chair's corner.

• Author: Eddy, Kathy G.
• Position: American Institute of Certified Public Accountants - Brief Article

Now that the SEC's final compromised rule on auditor independence has been released, I want to be sure each of you knows that the AICPA served as your advocate during the arduous negotiations to reach a reasonable outcome. Press reports talked about the "Big Five" representing themselves in person. But as the national home for all CPAs, the AICPA's involvement was to represent the entire profession. In particular, we fought hard to make certain that smaller practitioners were protected -- and the final rule greatly reduces the impact on those members.

Most importantly, we believe smaller firms would be unaffected by the SEC's rule were state boards of accountancy or other regulatory agencies to adopt the rule as it now is written. Ensuring that such a "ripple effect" does not cause harm to those not intended to be covered by the SEC's rule was and remains a high priority. Be assured we will be vigilant in monitoring state board and regulatory actions with respect to the rule.

Suffice it to say that we would have preferred less government intervention into our self-regulatory process, and that we indeed have concerns with certain areas of the rule. However, because of all the work we did, the final rule will hot be as detrimental as it could have been, had the rule been adopted as originally proposed.

We explored the issues of smaller firms, gleaning insight from the leadership of medium and small firm committees (e.g., Group B, Private Companies Practice Section and Management of an Accounting Practice). Smaller firms were protected in the end, and here's how:

* There are no prohibitions on "expert services." The SEC originally wanted to prohibit accounting firms from providing this service to audit clients. Furthermore, we worked to be certain that the service areas contained in the rule...