I come before you today in my capacity as Chairman of the Consumer Federation of America, a non-profit consumer advocacy organization. I also have the privilege of speaking for two other consumer organizations, Consumer Action and Public Citizen, which I serve as a member of the board. Our nation's current prosperity and future financial security are tied up, as never before, in our financial markets.
Stock prices are simply the response of buyers and sellers to information about public companies.
Some of the most important information investors rely on is contained in companies' financial statements. It is the auditors' job to ensure that these financial statements are prepared according to generally accepted accounting principles and, therefore, are reasonably reliable. The faith that the markets place in the pronouncements of auditors is founded on the auditors' independence. That independence is what allows them to bring an appropriate objectivity, even skepticism, to their examination of the company books. There's no doubt about it, auditors today are less independent than they were just a decade ago.