What economic impact would the proposed rules have on the current system of partnership compensation in accounting firms?
The new and more stringent independence rules, which will further restrict non-audit activity, should be sufficient to minimize partner’s economic dependence and the resulting potential bias to please. There is a line here that needs to be carefully drawn because it could restrict the ability of audit practices to attract the best and the brightest people. Reality is that this potential economic bias can never be totally removed from audits as long as companies pay CPAs to perform their audits. Accordingly, this rule appears to be overly redundant. The Commission’s pursuit of comments on these matters is commendable. The volume of considerations is immense. As a small firm practitioner, we wish we could respond in more depth, but we do not have personnel dedicated to this type of administrative efforts, as do the big firms. As a result, our response and the responses of many of our fellows will likely be modest in comparison. We also may not be aware of all the possibilities respecting
