Bigger Than Enron

An interview was done with Harvey Pitt about Enron, he is a prominent lawyer who represents Wall Street firms and the accounting industry. He has also been the Chairman of the Securities and Exchange Commission since 2001. From his interview, I learned that they had problems because he felt that thier problem was dealing with a system that was built 68 years ago, with no computers or technology. They asked him why they don't take a tougher approach like being affiliated with the SEC, and his answer was about the money. The budget for that would be 250 to 400 million dollars per year. He goes on talking about the audit committee and senior management. He says audit function is done by the audit committee and not by senior management, and you have to go into who appoints the audit committee. The issue there is that the audit committee is subject to the control of the CEO. It is just a back- door way of getting around the rule. Action is needed and that is why he said they are going to get tough with the new proposal they are putting out. People are saying that the reforms they are proposing are not going to get the job done and are half- hearted but Mr. Pitt is confident that they are going to succeed and sounds sure of it.
The link to Harvey Pitt's interview: ttp://www.pbs.org/wgbh/pages/frontline/shows/regulation/interviews/pitt.html