MR. ANTLE: I do, Commissioner Hunt. One is that economic theory tells us that, yeah, perceptions are indeed important in determining equilibrium prices and in determining how markets function. There’s no question about that. Prices are set by people’s actions which are, in turn, tied to their beliefs.
Economic theory also would suggest to us, though, that having beliefs that are at variance with reality is a situation that shouldn’t exist very long in a well-functioning economy. So that’s what, sort of, ties people’s perceptions back to reality.
COMMISSIONER UNGER: Is that the way it usually goes? In my experience, I’ve found that like it or not perception is the ultimate reality.
MR. ANTLE: Well, I have some sympathy for that view as well. The closer you get to Freud the more you believe that. But there are, hopefully, are forces in the economy that drive things, sort of, toward reality, although that process is very sloppy.
But I was going to say that since I’m here testifying for myself — I’m not representing anyone else –I have to say that one of the reactions that I have is that prohibiting certain types of services because people are concerned about this or that or there may be the appearance of a potential problem — I mean, I actually went through the document and highlighted everywhere where a concern showed up with non-audit services, and it just strikes me in a very basic sense not right.
I know I learned a lot from Professor Coffee’s talk and run-through of howauditor liability has changed over the years
One of the things we do is we let people have the freedom to go about and integrate and do the things they want until they, sort of, prove that there’s a — until we find a problem.
MR. ANTLE: Act prophylactically meaning that you think there might be a problem; therefore, you take some action in anticipation of that problem. Continue reading “I think thereare two strands in my belief about this”