U.S. audit firms’ aggressive growth strategies pose a direct threat to their ability to be objective, impartial watchdogs for investors, a pair of SEC officials cautioned Wednesday.
One merger or deal can turn accounting firm advisory clients into audit clients and run headlong into strict U.S. conflict-of-interest rules that require auditors to be independent in both fact and appearance, said Paul Munter, acting chief accountant at the Securities and Exchange Commission. He spoke Wednesday during a Practising Law Institute conference.
As firms’ business relationships and service agreements have grown in number and complexity in recent years, “it creates ...