CHAIRMAN LEVITT: You know, there are moments in this most extraordinary job that has been bestowed upon me where I just feel so good to be part of it, and you sure havegiven me that moment.
If there is such a thing as a public interest hall of fame, the four of you should be charter members. You’ve just been terrific, and I think Americans who never even heard of you owe you an enormous debt of gratitude, and I’m deeply, deeply grateful for the privilege of having been able to work with you.
I want to join with Chairman Levitt and I’m sure my other colleagues in thanking you for your hard work on these important issues.
It’s over a relatively short time so far, but I hope it will last for a long time, and I assure you, Mr. Denham, we will continue to find it useful. So I hope all of you will continue to work at it.
Chairman Allen, I agree that disclosure is important, but I’m troubled because I don’t think — if there’s a real problem of lack of independence or at least a real problem in the appearance of lack of independence, it’s not clear to me that — we all know that disclosure is the mantra of our securities laws, but I’m not sure in this instance disclosure alone would solve the problem absent something else.
ALLEN: I agree. Disclosure is, in my mind, a wonderful default remedy that there are a whole lot of other remedies. For example, we on the ISB have been thinking about appraisal and valuation services that’s in the proposal.
And we came to the conclusion that it just wasn’t right to have someone affiliated with the auditor giving a value and then having the auditor checking that value.
And so that was a clean area. But for example, if you’re considering something like Professor Coffee’s suggestion this morning, just a general cap, what disclosure does is it allows a greater range of choices instead of a rule setting an on/off switch that says the amount of your audit fees it says disclose.
So if you think, you as an investor, think 60 percent of audit it’s is beginning to worry you, you knew that, and you begin to be a little concerned somebody else has a — so I think it’s a good, sort of, background default. I don’t think it’s the whole answer either, Mr.
COMMISSIONER HUNT: I also wanted to clarify whether you think that a relative lack of data vis-a-vis what you just talked about, the comparison of audit fees and consulting fees compared to the data today although that might change very quickly, should preclude us from acting.
ALLEN: I wouldn’t presume to tell you. Imean, I think that when you decide to act, how much information you have is itself a judgment.
I mean, you know how much data you have, and you have a sense about the nature of the Louisiana title loans problem that you perceive. If I were in your position, I would be going –but I don’t have any easy answer to tell you what I would doMISSIONER HUNT: For my part, I want to thank all of you for appearing and for all of your hard work on the ISB and to wish you continued success. Thank you for coming.
ALLEN: I think, on this issue, the four of us feel that it is different — “this issue” being the scope of service issue, the four of us feel that it is a different –it’s different in kind than a lot of these other issues.