US Securities and Exchange Commission Chairman Harvey Pitt said the accounting profession should be supervised by a new governing body made up of both accountants and non-accountants.
The new board would be able to compel parties to turn over documents and to take testimony, said Pitt.
“We initially envision a public body that will be dominated by public members with two primary components — discipline and quality control,’ Pitt said at a Thursday news conference.
In describing an oversight board the could look like the one supervising the Nasdaq stock market, Pitt said all disciplinary actions or decisions involving accountants should be subject to SEC oversight.
“The body should be empowered to perform investigations, bring disciplinary proceedings, publicize results, restrict individuals and firms who have failed to meet ethical or competent standards from auditing public companies,’ he said.
Pitt aid there should be no role in the new board for the American Institute of Certified Public Accountants, the trade group that now conducts reviews and hands out discipline to accounting firms.