The nation's five largest accounting firms, facing a barrage of criticism over their work in auditing companies' finances, Tuesday vowed to abide by higher standards in the future.
"When businesses fail and public confidence wanes, all involved in the capital markets have a responsibility to actively seek to understand the core problems and pursue meaningful solutions," the chief executives of Arthur Andersen, KPMG, Deloitte & Touche, PricewaterhouseCoopers and Ernst & Young said in a statement.
The executives are Joseph F. Berardino of Andersen, Stephen G. Butler of KPMG, James E. Copeland of Deloitte & Touche, Samuel A. DiPiazza of PricewaterhouseCoopers and James S. Turley of Ernst & Young.
The accounting chiefs said they would jointly submit to the Securities and Exchange Commission recommendations by the end of the year that would encourage their corporate clients to provide better information about certain activities, such as trading operations and financial risk-taking, that may not now be the focus of auditors.
"Too often, financial statement disclosures are plentiful but may lack meaning," the executives said. "Many different streams of information--not just earnings--are needed for informed decision-making, and backward-looking financial statements delivered on a periodic basis no longer are sufficient to communicate real value and risk."
The goal is for this added information to appear as part of companies' 2001 annual reports, the executives said.