COMMISSIONER HUNT: I understand that. I still think this agency, as an institution, might be very interested in seeing that information.
COMMISSIONER CAREY: Could I ask another question,Mr. Chairman? Strange, because he brought up what I have long thought was a very interesting topic, which is that the divergence between the consulting arm and the auditing arm of Big 5 firms is driven more by market forces than regulatory concerns.
Given that, why is there, on the part of the three of you here today, resistance to something that is, perhaps, evolving quite naturally?
MR. STRANGE: First of all, what we are separating is not everything on this list of what you would call non-audit services. It is our systems integration business, and it has evolved to where it has evolved. Because of the needs for capital it needs a different business model. It competes for a different type of professional with a different set of competitors.
It’s not something that we necessarily intended 20 years ago when we started it but what it has evolved to, and we are reacting to that and have been reacting to it long before this rule-making started. We actually began to talk to Chairman Levitt and the chief accountant some two yearsago about this subject. Continue reading “I understand that very much and appreciate that”