SEC Chairman Levitt Addresses Fall Council -- Focuses on Proposed Rule on Auditor Independence.

• Position: Securities and Exchange Commission

In a speech to the AICPA governing Council at its Oct. meeting, SEC Chairman Arthur Levitt delivered a passionate message about the need for a meaningful partnership with the profession to find a solution to the commission's proposed rule on auditor independence that would satisfy public interest concerns while maintaining the profession's ability to perform services that address the public's needs.

"One of the key issues for the profession has been the proposed rule's potential impact on small firms, were the SEC's rule to be adopted by state boards of accountancy or other regulatory agencies," said AICPA President & CEO Barry C. Melancon. "Prevention of such a ripple effect is a high priority for the AICPA, and Levitt has indicated that he shares this concern."

Other issues still to be resolved include self-regulation and the role of self-regulation in the future, and the definition of independence and how appearance plays a part in it.

Regarding the scope of services, the AICPA remains troubled by any broad restrictions, especially given the lack of...