In medieval times, scores of religious contemplatives grappled with such esoterica as how many angels could fit on the head of a pin - comfortably or otherwise. Despite failing religious education for two consecutive years, I don't feel that a theology pedigree is a requirement to ascertain that they probably never reached a consensus on such matters.Fast-forwarding several hundred years, Treasury Secretary Henry Paulson recently assembled what he hopes are the best minds to develop recommendations on more practical matters, such as how to sustain a "vibrant audit profession." The committee will spend one year wrestling with that equation, and along the way will tackle ancillary issues like audit firm concentration, audit quality, the process of recruiting and training accountants, auditor independence (not that again!), and the possibility of capping auditor liability in cases of corporate fraud. A 21-member committee, comprised of representatives from business, academic and regulatory circles, will carry out those ambitious marching orders. (For a full roster, see page 3.)

Paulson reportedly created the committee after a meeting in March with American Institute of CPAs chief executive Barry Melancon, who's now a member of the panel, and a number of other business leaders, in an effort to address myriad issues facing the U.S. financial markets. On a number of occasions, Paulson has fretted publicly over the competitiveness of U.S. markets, and helped dramatize those concerns with allusions to the "pendulum swinging too far," a reference to the strict mandates of Sarbanes-Oxley compliance and its effect on our competitiveness.

He has also expressed concerns over the amount of risk assumed by accounting firms should their auditors fail to flag accounting errors or, in a worse-case scenario, outright fraud. Predictably, that's made auditing firms "more diligent" (read: higher-priced) in their audits, which - again, to no one's surprise - has raised the ire of public issuers. The secretary was quoted as saying that the auditor's job is to deliver an opinion on a client's financial statements that conveys a reasonable, "but not absolute," assurance as to truth and fairness.

I imagine that should dredge up a rather contentious discussion among the panel members. On the one hand, those in favor of liability caps point out that another massive lawsuit such as the one that incinerated Arthur Andersen could reduce even further the number of global auditing firms. By contrast, an investor rights representative would argue that eradicating risk from performing quality audits would be a severe blow to shareholders.

Let's hope the Treasury panel will make more of an impact than did the President's Advisory Panel on Tax Reform of several years ago, which put forth a series of recommendations on changes to the Tax Code and then disappeared like a wiseguy in a witness protection program. Because unlike medieval times and their angelic computations, we need to debate things that are important.

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