Pitt seeks era of respect, cooperation between SEC and CPAs

Turning his back on years of acrimony, Securities and Exchange Commission Chair Harvey Pitt is promising a new era of civility and cooperation between the SEC and CPAs — and is asking CPAs to make the same vow.

In an address to the AICPA Council, Pitt cast aside the historically troubled relationship and presented his vision for a "kinder and gentler" alliance between the SEC and the accounting profession.

"Somewhere along the way, accountants became afraid to talk to the SEC, and the SEC appeared to be unwilling to listen to the profession," Pitt said. "Those days are ended. ... It is my firm commitment to encourage you all to discuss your issues, raise your concerns, and work together with us to find solutions, without fear of recrimination."

Pitt succeeded long-time SEC Chair Arthur Levitt, who often butted heads with the profession — most recently over issues related to auditor independence. Pitt's ascension has been praised by CPAs, who view the new SEC chair as a friend of the profession.

He did his best to convey that image in October, telling CPAs they no longer have reason to be suspicious of their relationship with the SEC. With the help of new Chief Accountant Bob Herdman, a former AICPA board member, Pitt said the SEC has the leadership in place to make sound decisions — and to do so in a respectful manner.

"When I was growing up, I was always taught to be wary of the man who says, 'Hi, I'm from the federal government, and I'm here to help you,'" Pitt said. "But for better or worse, that is exactly what I am saying, and what I hope to achieve."

Improve the reporting system?

Pitt also presented a vision that includes improvements to the financial reporting system, to bring it in line with a "global world of rapid communication." In an era of instant information, Pitt said the time has come to rethink a disclosure system that was built around the concept of periodic — i.e., quarterly — disclosure.

"Technology will play a very exciting role in this process," he said. "We should consider how technology can put information into investors' hands more promptly and help investors sort through material in a user-friendly way."

Regardless of what changes, if any, are made, Pitt said the financial reporting model will continue to be based on core principles such as consistency, verifiability, credibility and integrity. He also vowed to get input from all SEC constituencies and offer "full transparency" of any conclusions before any changes are made.

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