FEBRUARY 24, 2017 RECENT DEVELOPMENTS
An article in Bloomberg News examined the question of just how far the new SEC Chief, Jay Clayton, (if confirmed) would scale back "anti-business" regulations. As has been widely reported, President Trump believes that laws like Dodd-Frank and Sarbanes-Oxley (SOX) overly restrict companies and have caused a significant reduction in the number of initial public offerings (IPOs). Mr Clayton, a securities lawyer who has written about the onerous burden these laws place on start-ups, is expected to start senate confirmation hearings next month.
Though a concern of mine from the beginning, this is the first article I've seen reporters speculate that auditors may push for SOX independence rules restricting auditors from performing certain consulting services to be loosened.
I'd be the first person to say there are elements of the SEC's independence rules that need re-examination (because they are especially onerous, couldn't possibly impair a firm's independence, and/or are near impossible to comply with). Incorporating a materiality standard to certain rules would make a lot of sense and improve compliance. However, I think that any wholesale loosening of the rules -- e.g. those that prevent the same firm from keeping the client's books, designing their financial information system, or representing the audit client in litigation -- would be huge mistake, courting a slippery slope we've already been down.