Opening Statements of Committee Members

Opening Statement of Senator Debbie Stabenow (D-MI)

Hearing on "Accounting and Investor Protection Issues Raised
by Enron and Other Public Companies:

Oversight of the Accounting Profession, Audit Quality and Independence,
and Formulation of Accounting Principles."

10:00 a.m., Thursday, March 14, 2002 - Dirksen 538

Thank you, Mr. Chairman. Iím glad to be back for another hearing on this important topic.

Last week, I joined with Senators Dodd and Corzine at the introduction of the Investor Confidence in Public Accountability Act of 2002.

I am proud to be an original co-sponsor of this bill because I think it offers some common sense solutions to the problems that we have discussed in the first 6 hearings on this topic and that we will continue to examine in this Committee up to the Spring recess.

As this Committee has investigated investor protections and the accounting industry in light of Enron and other troubled companies, time and time again, we have heard about the need for an enhanced oversight mechanism for the auditing profession.

We have also heard about the potential for conflicts of interest when accounting firms offer both auditing services and consulting services to the same companies.

We have heard about the need for financial independence for an industry oversight board and we have heard about the need for financial independence for the Financial Accounting Standards Board (F.A.S.B.)

In addition, I suspect there are few who would argue that the S.E.C. has enough staff and enough money to do its job.

And, I think all of us would agree that increased financial disclosures and additional information about stock sales by corporate leaders benefit American investors.

These are the issues that I have teamed up with Senators Dodd and Corzine as well as with Senators Johnson and Boxer to address in our bill.

I look forward to working with them and to working with the Chairman. The Chairman has been a true leader in the Senate on this issue, holding the most thorough examination of the topic at hand.

As I have said before, our hearings donít necessarily make the headlines with subpoenas sent to Ken Lay and Andrew Fastow, but the work we do here is what is going to make the biggest difference at the end of the day.

We are going to move important comprehensive reforms that will ensure best practices are followed in the accounting industry, reforms that will better insulate oversight and standard setting boards from industry and political pressure, and most importantly of all, reforms that will give investors more thorough and accurate information about the financial health of companies so they can make better investment decisions.

That is the task before us and I look forward to working with all of my colleagues on both sides of the aisle to enact this bill this year.

Again, I thank the Chair and I look forward to hearing from our witnesses today.