The high-profile insider trading case involving a KPMG lead audit partner could add fresh impetus to a Public Company Accounting Oversight Board proposal for auditors to add their names to audited financial statements.

The Securities and Exchange Commission and the Justice Department filed charges against Scott London, the former partner in charge of KPMG’s Pacific Southwest audit practice, for providing inside information on five client companies, including Herbalife and Skechers, to a golfing friend, jeweler Bryan Shaw (see KPMG Resigns from Herbalife and Skechers Audits after Senior Partner is Implicated in Insider Trading and SEC Charges Former KPMG Partner with Insider Trading). Shaw used the information to make successful stock trades and shared the proceeds with London, who is also facing criminal charges from the Justice Department. Shaw, however, reportedly cooperated with the FBI and secretly recorded their conversations.

Patrick Craine, a former enforcement attorney with the SEC and the Financial Industry Regulatory Authority, and now a partner in Bracewell & Giuliani’s White Collar Defense practice, believes the case may give the PCAOB more reason to press for auditor identification.

“This is really an old school insider trading case where a friendship develops on the golf course and a cooperating witness with a wiretap was able to catch the person red-handed, where they had tapes, they had cash exchanged, and they had details on gifts,” he told me Friday. “So from a practical standpoint, this is a lot like the traditional insider trading cases that you used to see.”

However, Craine sees it as an aberration for a Big Four firm to engage in this type of conduct.

“From a practical standpoint, its implications on accounting firms will be relatively limited. But what is likely to change is the PCAOB had proposed a rule in October 2011 that would have required all of the audit firms to disclose the audit partner for the clients. If you look at a case like this, KPMG initially failed to disclose the name of the audit partners involved. Even once the name of the audit partner was disclosed, you had no idea what other audits he may have been leading. And as an investor, it would have been very interesting to know what other audits he was leading because they were likely to have implications as well, so it wouldn’t just be Herbalife and Skechers, but maybe others.”

KPMG revealed the insider trading scandal on April 8, but did not publicly identify the clients. Then on April 9, Herbalife and Skechers announced that KPMG had resigned as their auditor. But it was not until April 11, when the SEC announced its charges against London and Shaw that the other three clients were revealed: Deckers Outdoor Corp., RSC Holdings and Pacific Capital.

“I’ve read that the PCAOB is likely to have those rules re-proposed or adopted later this year,” said Craine. “In terms of the practical implications for accounting firms, that’s one that may really change things, and from a liability standpoint, it’s something that would be relevant and important to accounting firms.”

A PCAOB spokesperson declined to comment on any cases involving specific accounting firms, but confirmed that the proposal to identify the auditor—but not require a signature—is on the standard-setting agenda for some time during the next six months.

Charles D. Ellis, the founder and former managing partner of the business strategy consulting firm Greenwich Associates, compared KPMG’s situation to that of the defunct auditing firm Arthur Andersen, which collapsed in the wake of the Enron and WorldCom accounting scandals. Ellis wrote the best-selling book, “Winning the Loser’s Game,” and has just published a new book, “What It Takes: Seven Secrets of Success from the World’s Greatest Professional Firms” in which he includes a chapter discussing Andersen’s downfall and the steps great firms must take to overcome challenges and maintain excellence.

“When professionals who are supposed to be independent get too close to clients, it turns out to be dangerous,” he told me Thursday. “For example, if an auditor is friendly with a financial officer, they might raise questions informally and work things out quietly just between the two parties, rather than raising them seriously with the audit committee.”

When he came out of graduate school, Ellis recalls Andersen had a sterling reputation, but gradually the firm’s values grew more malleable. “The integrity of the disciplines had gotten soft, and individuals were much more focused on what’s in it for me and what’s in it for the firm,” he said. “That shift away from ‘the client comes first, the firm comes second and I come third,’ which was absolute, got shifted over to ‘what’s in it for me personally.’ Once you say something like that in a personal setting, it’s very hard to maintain professional integrity when you’re up against chances to make some money.”

Ellis has served on a number of audit committees and he believes it’s a good idea not to get too chummy with the auditing firm.

“Every organization I’ve been involved in where I’ve served on the audit committee, I’ve believed it is really important that we not be friendly with the auditors,” he said. “I think anybody who is being audited should never be friendly with the auditors, and I believe the auditors should never be friendly with the people they’re auditing. Polite? Yes. Courteous? Yes. Helpful? Yes. Cheerful, clean, brave and reverent? Absolutely. But never personal friends.”

Big Four firms like KPMG and the others might want to take a lesson from Andersen’s demise, no matter which standards the PCAOB ultimately sets for them.

“If it could happen to the very best professional firm of any kind in the world, it could happen to any professional firm,” said Ellis. “Having the rules is fine. Having the rules have meaning is very different. And it’s up to each organization and its leadership to be sure it has real meaning. You study these great firms, and the senior people set the example over and over again, and they make darn sure the example is clearly understood.”