The Enforcer

Because of that confidentiality factor, it's unclear just how serious the disputed issues really are. Still, there seems little danger that the audit weaknesses are going to reconfigure the accounting hierarchy anytime soon. For one thing, McDonough believes that the Big Four are actually "paying attention to doing audits better." The problems that were observed, he says, mainly reflect the lack of time to improve their processes before the initial PCAOB inspections. Moreover, while McDonough "cannot say that it is absolutely essential to the American people that each of the Big Four survive," he believes there is only a "remote" chance that one of the firms will be found to be as poorly managed as Arthur Andersen — and thus deserve to be put out of business.

But, he says, "we have to make sure." —L.C.

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