US Securities and Exchange Commission (SEC) chairman Arthur Levitt remains committed to upholding the independence of accountants at a time when it is possibly 'threatened' by reorganisation plans at the largest firms. Mr Levitt, speaking in Hong Kong yesterday at an Asia Society and Securities and Futures Commission lunch, said integrity, transparency and fairness served as the bedrock of a strong and trustworthy financial reporting framework. 'Independence is at the core of the accounting and auditing profession, the very essence that gives an auditors' work its value,' Mr Levitt said. 'It is not enough that the accountant on an engagement acts independently. ' For investors to have confidence in the quality of the audit, the public must perceive the accountant as independent.' Such a concern comes at a pivotal time in history for the profession, Mr Levitt said. In recent months, large accounting firms such as Arthur Andersen and KPMG have sought to monetise some or all of their consulting businesses. He considered these moves had the potential to advance public interest by returning the core focus to accounting and auditing. However, they had to be accomplished without creating conflicts of interest resulting from any long-term financial relationships. His comments come at a time when the SEC has been investigating conflicts of interest involving auditing-firm employees who hold investments in publicly held audit clients. The investigation was triggered by a report showing there had been more than 8,000 violations of the SEC's auditor-independence rules by employees of PriceWaterhouseCoopers LLP. Mr Levitt said the SEC would, in coming months, consider how to address the long-term ramifications of the restructurings on both auditor independence and investor confidence. 'When an audit firm performs valuations of numbers that appear in its clients' financials, the mandate for independence is threatened. When an audit firm also keeps its clients' books, the principle of independence is undermined. 'And when some firms take on tax and other assignments where the size of the fee is based on the answer given, one has to wonder how such a practice is consistent with a culture that has long prided itself on objectivity,' he said. As SEC chairman, Mr Levitt is responsible for effective enforcement in and regulation of US capital markets. Yesterday he also expressed a strong belief in eradicating selective information disclosure by listed companies. He said a new proposal on stricter rules had resulted in heated discussion in the US. 'In a time, when instantaneous and free-flowing information is the norm, 'whispered' information is an insult to the principles of free and open disclosure upon which the success of our capital markets are based,' he said. The SEC's new proposal requires that, when a company discloses material information, it does so through public disclosure rather than limiting the information for the benefit of an audience of a select few.