Dear Commissioners, This SEC proposed rule appears to severely restrict the scope of services that can be provided to clients by auditing firms. I wish to explain why I oppose the SEC's scope of services proposal.
Auditors are usually smart people, well-educated in many facets of business.
Naturally, as clients have contact with their auditors, and discuss business issues pertinent to the audit, they may develop a sense of respect for the auditor's abilities. Thus the client may wish to engage the auditor to consult on matters for which, as a result of the audit procedures, the auditor has developed a high level of understanding. Further, as the auditor consults with the client on a wide range of business matters, the auditor comes to a greater understanding of the client's business, which enhances the auditor's ability to perform the audit. Recently the Public Oversight Board, at the request of the SEC, appointed a Panel on Audit Effectiveness. This panel considered whether it would be appropriate to forbid auditing firms from providing non-audit services to their clients.