In his testimony before this senate committee, John H. Biggs urged Congress to authorize an independent agency with broad powers to oversee the U.S. accounting industry. As envisioned by Mr. Biggs, the new unit would have an independent source of funding, such as a fee on financial transactions, to make the agency free of pressures from corporations or from the accounting industry itself.
To assure the independence of auditors and to avoid conflicts of interest, Mr. Biggs also recommended that companies change their audit firms regularly. He observed that the Enron collapse underscores the overuse and abuse of stock options in corporate compensation.
Noting that corporations and accounting firms beat back previous efforts by the Financial Accounting Standards Board to set appropriate rules for the true cost of options to shareholders, Mr. Biggs asked that the Committee support reopening the debate on this important issue.
