CIESIELSKI: Again, I’m from the outside, but Idon’t feel what’s being proposed is a big impediment

MR. I think you can still develop proficiencies outside of developing them in consulting relationships with your audit clients, and you can transfer those proficiencies to audits when need be.

Auditors have always had to call in specialists when matters are outside their understanding. So if you’ve got this healthy IT consulting side that just doesn’t work on any audit engagements, I don’t see why you couldn’t pull them in to help work on the audit if they’re working on audit type work, not advocacy type consulting arrangements for your audit client.

COMMISSIONER UNGER: Are you familiar with the revenues of the accounting firms? Because I guess I should have asked which I didn’t, if you’re still here, is what percentage of the consulting revenues come from non-audit clients.

COMMISSIONER CAREY: Jack, of the really spectacular accounting disasters we’ve witnessed, is there any one or more that you think can be directly traced to a lack of auditor independence?

MR. CIESIELSKI: Good question. It’s hard toanswer that objectively because we don’t know how much non-audit services mattered to the auditing firm in any of those instances. I would say that in some of them I’ve seen the audit committee didn’t seem to have an extremely strong background in finance and accounting matters.

But in the extreme examples we’ve seen since 1998, outside of what has been written in books I can’t see anything in the publicly-available information that would lead you to believe that there is an impairment of independence because of consulting.

I think you really have to go back to the nature of the services performed

There should be some more information, perhaps, like I said, in the proxy that gives you some reason to be concerned when you see it arise.

And as I said, I think that would be a very good impetus to the auditing firm to make sure that the job is done right so that they’re not in the embarrassing situation of having to answer a question like that, that the information in the proxy would spell out.

COMMISSIONER HUNT: Sir, one of the arguments that you made — hold the view of the panel, I guess, that preceded you, which is a little opposed to your view, is that many of the clients, essentially, want one-stop shopping, that they want to be able to go to one large firm and get consulting advisory services as well as their auditingservices and, arguably, in the future, their legal services as well.

MR. CIESIELSKI: I would say that 75 percent of the publicly-held firms don’t desire one-stop shopping, and of the other 25 percent some may request one-stop shopping, and some are sold one-stop shopping.

Do you think that that desire for that one-stop shopping really should — is a realistic one that we should pay attention to?

COMMISSIONER HUNT: Do you think there is possibly a threshold level of consultants’ fees beyond which we should — vis-a-vis auditing fees beyond which we should say you can’t go?

MR. CIESIELSKI: No. title loans AR I don’t think you can get a certain dollar level or a certain percentage fee level because any time you draw a bright line like that there’s always, you know, somebody that will run right up the line and not trip over it. Inflation changes things like that.

In the proposal, there was the alternative proposal of non-audit services being barred for audit clients except for those that are a natural outgrowth of the audit process such as business risk, assurance services, and the like.