As expected, the Treasury Department has created a new committee that will be charged with studying problems in the accounting industry.

But in somewhat of an unexpected move, former Securities and Exchange Commission chairman Arthur Levitt was selected to lead the effort, along with former SEC chief accountant Donald Nicolaisen.

Levitt, who headed up the SEC under President Bill Clinton, has spoken out loudly on a number of accounting issues, most recently criticizing proposals that would limit the rights of investors rights to sue.  Nicolaisen, a longtime partner at PricewaterhouseCoopers, left the SEC last summer and now sits on a number of corporate boards.

Keeping the U.S. capital markets competitive is fast becoming one of Treasury Secretary Henry Paulson’s signature issues. Early on in his tenure at the Treasury, Paulson put his support behind the work of the Committee on Capital Markets Regulation and in March he convened a day-long conference to speak with chief executives and accounting firm executives on a number of issues they face.

The committee is expected to take about a year to study topics such as the concentration of the Big Four and their exposure to potentially crippling shareholder lawsuits. The panel, whose other members have yet to be chosen, will begin its work in the fall.

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