KNOXVILLE—A University of Tennessee, Knoxville, accounting professor testified before U.S. Congress last week about regulatory initiatives being considered by several federal agencies and corporations.
Joseph V. Carcello appeared before the Capital Markets and Government Sponsored Enterprises subcommittee of the Financial Services Committee in the United States House of Representatives. He testified about mandatory audit firm rotation and reporting on internal control over financial reporting. These initiatives are being considered by the U.S. Securities and Exchange Commission, the Public Company Accounting Oversight Board and the Financial Accounting Standards Board.
“Mandatory audit firm rotation would require all public companies to change auditors after a certain number of years,” Carcello said. “This proposal is designed to make auditors more independent of their clients. Internal control audits are designed to assess whether a public company’s controls are adequate to provide reasonable assurance that financial statements provided to the public are accurate. This was an outgrowth of the frauds at Enron and Worldcom.”
This is the first time Carcello has testified before a Congressional oversight committee. He previously testified before a committee of the U.S. Treasury Department.
Others who testified at the same hearing included the chief accountant of the Securities and Exchange Commission, chairs of the oversight and standards boards, the chief executive officer of the American Institute of Certified Public Accountants and a representative of the U.S. Chamber of Commerce.
Carcello is the Ernst & Young and Business Alumni Professor in the UT Department of Accounting and Information Management, which is housed in the UT College of Business Administration. He also is director of research for the college’s Corporate Governance Center.
“I am honored to have had the opportunity to testify before a Congressional oversight committee,” Carcello said. “Very few accounting academics have this opportunity and, in my view, this opportunity showcases the fine business programs in UT’s College of Business Administration.”
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