Streckfus Says Final Intermediate Sanctions Regs Shouldn't Reward Accountants

[2] Recently the Washington Post ran a two-part series on this very topic. The first article, on December 5, was entitled, "The Numbers Crunch/Accounting Errors Cost Billions/After Enron, New Doubts About Auditors." The former chief accountant of the SEC, Lynn Turner, is quoted therein as stating, "Financial fraud and the accompanying restatement of financial statements have cost investors over $100 billion in the last half-dozen or so years." Both articles spotlighted a profession that is out of control and destroying public confidence in its independence and integrity.

[3] Business Week, in its December 17 issue, editorialized to similar effect: "Nothing less than an overhaul of the auditing profession is now required to police accounting standards. . . . Unless the Big Five auditing firms clean up their act, they will wind up with a federally chartered oversight body."

[4] In view of this additional evidence as to the inherent unreliability of accountants. I hope that the advice of counsel provision in the final regulations -- § 53.4958-1(d)(7) -- does not include accountants. I personally have nothing against accountants, In fact, some of my best friends are accountants. But even they admit that most accountants cannot be relied upon to give fair, impartial opinions. So I again ask you and your colleagues at Treasury and the IRS the question, why reward a profession that is in desperate need of reform and reclamation? I hope the answer is clear to all of you.

Sincerely yours,