Houston (Feb. 14, 2002) -- Terming this "a watershed moment in the history of our capital markets," KPMG chief executive and chairman Stephen G. Butler called for a number of reforms at a gathering of 1,200 energy industry executives here Wednesday.
Speaking at a special session of the Cambridge Energy Research Associates conference, Butler urged action by auditors, corporate executives and financial management, directors and audit committees, investment bankers and analysts, rating agencies, the SEC, and accounting standard setters. "All of these participants share some responsibility for the current crisis. All of them have an important role in restoring confidence," Butler said. "We can't restore confidence by simply doing better audits of information that is not relevant to investors or can't be understood by them."
The reforms Butler outlined include:
Getting the Financial Accounting Standards Board to act faster to fix flaws in current accounting and broadening the business reporting model to provide more information on intangible assets, leading indicators, and corporate risks and opportunities.
Engaging the investor community in standard setting.
Finding alternative funding structures for standard setting to eliminate the perception that the accounting profession dominates the process in its own self-interest.
Getting the SEC to encourage companies to experiment with new types of non-financial disclosures.
Constructing appropriate safe harbors to encourage innovation and protect against frivolous lawsuits.
Continuing to invest in the research and development necessary to reinvent the audit, to cover a wider bandwidth of business information and to permit real-time assurance.
-- Electronic Accountant Newswire staff
