When Michel Barnier of the European Commission singled out auditors for enhanced scrutiny this week, he was reacting to anger, in Europe at least, over the "no bark, no bite" behavior of accounting "watchdogs" before, during, and after the financial crisis.Barnier, the EC's internal markets commissioner, proposed a wide range of new rules focused primarily on the largest audit firms. The recommendations are in draft form. A final version goes to the EC for debate in November. They include prohibiting audit firms from providing consulting and advisory services to audit clients — bookkeeping, tax advice, actuarial and valuation services, risk management, and legal services.
If some of that sounds familiar, it’s because the proposed service restrictions are close to those introduced by the Sarbanes-Oxley Law of 2002.
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