Arthur Levitt's I Told You So
As Wen Stephenson of PBS's Frontline pointed out, Pitt was perhaps the most controversial and embattled SEC chairman since his predecessor, Arthur Levitt.  Levitt was a Clinton appointee who served as the SEC chairman from 1993 to 2001. While Pitt was criticized for his professional closeness with big business and the accounting profession, Levitt was often criticized for just the opposite , since he was often attacked by both corporate America and the accounting profession. This is probably why a September 2000 issue of BusinessWeek dubbed Levitt the "Investor's Champion." 
Unlike Pitt, Levitt was known as a tough regulator , and his victories included the censuring of the National Association of Securities Dealers for collusive pricing practices, which resulted in Nasdaq dealers having to pony up more than $1 billion to settle the case, and the adoption of Regulation Fair Disclosure, which put an end to corporate officers tipping off analysts. Toward the end of his tenure, one of his main causes was to clean up the accounting profession. In a famous speech delivered at New York University on September 28, 1998, Levitt called for an end to the " numbers game."  Corporate managers, auditors , and analysts participated in the process of managing earnings by using a variety of tricks (Levitt called them "nods and winks") to meet earnings estimates ”all at the expense of high-quality , full disclosure. He felt that this had to stop to make numbers more reliable and to have the trust of the investing public.
Levitt felt strongly that one way to clean up the accounting profession, which at the time was facing a slew of accounting scandals such as those involving Cendant, Sunbeam, and RiteAid, would be to separate the accountants ' role as auditors and consultants for the same firms. Levitt felt that this was a huge conflict of interest. After all, if an accounting firm relies on a client for consulting fees, will it really wreak havoc on the accounting books in its auditing role? Toward the end of Levitt's tenure at the SEC, slightly more than half of the revenue of the Big 5 accounting firms came from consulting. Of course, there was a tremendous backlash from corporate America, which claimed that accountants who consult for it are in the best positions to audit it, and from the accounting industry, which didn't want to see its profitable consulting practices taken away. Less than two years later, on June 27, 2000, the SEC unanimously approved issuing Levitt's proposal. In the end, Congress defeated the proposal with the help of Harvey Pitt, who represented the American Institute of Certified Public Accountants (AICPA) in fighting the proposal.
Considering that Enron's auditor , Arthur Andersen, was also an important and well-compensated Enron consultant, many people now believe that an accounting firm providing both auditing and consulting services represents a serious conflict of interest. Senator Robert Torricelli, a New Jersey Democrat, told Levitt on January 24, 2002, "We were wrong. You were right."  However, there are still many people who believe that this conflict of interest is not problematic and is hardly at the heart of the problems plaguing the business environment today. On the other hand, many people also believe that separating consulting and auditor services will solve the problems. We feel that neither solution will be effective, and we discuss these ideas in Chapters 12 and 13.