Deloitte CEO: regulation will strengthen reporting, confidence.

• Author: Heffes, Ellen M.
• Position: FinancialREPORTING - James H. Quigley of Deloitte & Touche Consulting Group, Public Company Accounting Oversight Board - Interview

There is no question that the accounting profession and its practitioners are going through the most significant changes in their history. New rules are affecting how they do business and with whom, and they've gone from self-regulation to government regulation.

It's a time when all in the profession are working diligently to restore public trust, while being stretched at the seams with added work needed to meet new regulations in the face of human-resource challenges. Deloitte CEO James H. Quigley shared some of his insights about this moment in time with Financial Executive Managing Editor Ellen M. Heffes.

Quigley is slated to be a keynote speaker at FEI's Summit in Chicago, May 18-20. For the complete interview, go to: www.fei.org/mag/articles/3-2005_fr.cfm.

There has been much activity in your profession over the past few years; what are your views on some of the structural changes, and their impact on the Big Four and the companies they serve?

JQ: There is no question that the change and pace of change that we have experienced is unprecedented as to its magnitude. But certainly, the biggest change has been for our profession moving from our model of self-regulation to becoming a government-regulated profession.

The Public Company Accounting Oversight Board (PCAOB) is very important to us; they are a very important catalyst to help us as we work to restore trust. As [the] new standard-setter now, we have become accustomed to and ready to deal with the standards as they are articulated by the PCAOB.

Finally, the inspection process by the PCAOB, together with publicly recording the results of that process, are significant changes that we have absorbed or are absorbing. I want to emphasize that we're very supportive of the PCAOB. I have said many times, and feel strongly, that the regulated and the regulators have a shared responsibility to restore trust. We support the work of the PCAOB in this regard, and we are working in a cooperative way. We have a tension that you'd expect in that relationship between the regulated and the regulator, but when it comes to public interest matters, we're absolutely aligned.

Talk about your views on the PCAOB's recommendations to date, particularly on the scope-of-service limitations.

JQ: The most significant scope-of-service limitations were those that flowed directly from The Sarbanes-Oxley Act of 2002--that initial list of prohibited services--the most significant of which was the integration of services related to enterprise resource planning (ERP) systems. That didn't come from the PCAOB; that preceded them.

With respect to the PCAOB's scope of services released recently, related to tax, they wanted to review tax...