not occur again. another important issue is public regulation and oversight. it is all right to make maximum use of sound self - regulation. but the auditing profession should realize that self - regulation alone does not suffice. like for example financial services, accounting and auditing services are of great importance to society. it is all right that such services are offered on a commercial basis in competition. but as a counterbalance, strong independent oversight has to be established. various initiatives are discussed in this context. it is important not to compromise but to make such oversight independent and powerful. licensing, examining audit practices and disciplinary measures are some of the crucial elements to be incorporated here. let me mention several other important issues that may help to restore confidence and trust. in the accounting area, we have to remember what i quoted from young arthur andersen : accounting principles and their implementation in daily practice have to aim at presenting a true and fair view of what was and is. this general principle has to override detailed rules and interpretations if necessary. it is not easy, it can be subjective and judgemental, it may lack comparability in the details – but in the end it is the only thing that matters. this of course is not something that is relevant to auditors only. it matters to all people involved in the reporting cycle. so it is a matter of education, of awareness and of discipline. regarding auditing, let me highlight a few important issues. partner rotation should be made mandatory. at least for so - termed public interest companies, e. g. listed ones, or financial sector firms. personally, i believe it should be applied more widely as it is a healthy discipline. peer reviews have to be strong and powerful. as a consequence of public oversight, independent reviewers need to be involved. and adverse results should have adequate response and, where necessary, disciplinary measures transparent to the public. strong audit committees can be very helpful to monitor both a company ’ s executive management and its internal and external auditors. they need to comprise independent non - executive directors only and to report to the full board. they are also the appropriate body to monitor the extent to which the audit firm performs consultancy engagements for the audit client, and to set principles and limits for such practice. finally audit firms have to be much more transparent. at least they should be as transparent and accountable as financial sector firms. i refer to what will be known as pillar iii in the new basel capital accord, that will require substantial

transparency from banks. i cannot see why global audit firms should be allowed to be any less accountable than listed companies in the united states or europe. this includes openness about partners ’ income. ladies and gentlemen, let me conclude. in 1994, i concluded my phd on auditor independence by stating that, at the end of the day, it all comes down to the ability to withstand pressure. that this is what matters most for the auditor ’ s reputation of integrity, and that without integrity auditors cannot exist. we have learnt a hard lesson from enron in that not only auditors ( or auditing firms ) can be threatened in their existence. we are all on call. there is a need to restore the ethos of public service, whether we are auditors, bankers, analysts, regulators or executives. in fact it matters to all players in the broad area of corporate governance. we all have a license from society to operate, as long as we adhere to essential ethics of public responsibility. thank you.