Friday, May 11, 2007
Treasury Secretary Paulson continues his deregulatory campaign. He plans to create an advisory committee to develop recommendations about how to make life better for accounting firms, including recommendations about limiting their liability. According to the Treasury Dept., accounting firms face too much liability if they fail to spot problems, forcing them to take a rigid approach in their audits which, in turn, makes the businesses being audited less liable to take risks that will result in better mousetraps, more productivity, etc. (Can anyone name a single financial fraud case that was motivated by anything other than management's desire to manage earnings and improve the appearance of short-term profitabilty?) See WSJ, Paulson Plan Is Taking Shape.