The auditing profession is in danger of becoming completely irrelevant. And our supposed advocate is leading the charge.
The AICPA has lobbied hard for Congress to pass a law that prohibits auditor rotation. And on January 8, 2013 the House passed it.
The AICPA is controlled by the big accounting firms. And the big accounting firms want to keep their lucrative corporate clients and do not want to listen to the edicts of the PCAOB – which is considering requiring auditor rotation for publicly traded US companies.
So the AICPA, the big firms, and a handful of corporations convinced the House that auditor rotation costs everyone too much time and effort to no good end. How short-sighted and selfish.
Does no one remember Enron and Arthur Anderson? Does no one remember the essential role of the auditor – to express an independent and objective opinion on whether the financial statements are presented fairly? Does no one remember those the auditors work for – the investors and the public who do not have access to the inner circle of corporate decision making?
This is another example of big money and corporations getting their way at the expense of a powerless and understandably clueless public. The majority of citizens have no idea what auditors do and don’t do, so this news will not cause them any alarm.
The PCAOB is fighting to make audit reports more transparent and real to readers so they will understand what auditors do. And do I need to tell you who is resisting this improved transparency and accountability? Yes, the AICPA, the big accounting firms, and jumbo corporations. They don’t want transparency or accountability for their actions.
If auditors are now simply technicians and quality control reviewers who help the corporation create financial statements, who is standing for the public? Who is keeping watch?
It hasn’t been the auditors for a long, long time. And this law, if it passes ensures that auditors haven abdicated their essential role to… to no one. No one will be watching to make sure that corporations don’t lie to the public.
If this law passes through the Senate, auditors should change their name to something else more descriptive – such as “technical reviewers” or something to that effect - because the objective, independent auditor is dead, thanks to the short- sighted, greedy CPAs at the AICPA who are holding a gun to their own head.