AICPA Roadshow Intended to Rally Membership

Leaders of the American Institute of CPAs have been traveling the country recently to inform constituents on current audit reform initiatives and to outline the position of the AICPA on behalf of the membership.

After similar presentations in Los Angeles and Dallas last week, AICPA President Barry Melancon addressed an audience of professionals and students in Arkansas on how the Enron scandal has challenged the accounting profession.

"For virtually every [certified public accountant] in this room, it is probably the most significant event in your career," said Mr. Melancon.

As part of the national effort, the AICPA is reiterating its position on several reform initiatives. Specifically, the AICPA supports:

  • Developing a new disciplinary system able to punish accountants who break the rules, but it should only be applied to accountants serving major corporations, not smaller, mom-and-pop businesses.

  • Ending a practice among accounting firms of offering clients help in preparing their books before auditors from the same accounting firm then check for errors or wrongdoing. This includes the sale of computer software and expertise that helps companies pull their books together.

  • Placing more power in the hands of corporate auditing committees to hire and dismiss outside auditors. Melancon said this power should rest with committees -- groups of corporate executives assigned the responsibility of dealing with auditors -- not the individual corporate leaders, who may pursue different agendas.

  • Making it a felony to lie to an outside auditor.

  • Improving the financial reporting system to better take into account the assets of 21st century corporations. Contemporary reporting standards remain stalled in the atmosphere of older, industrial age industries and do not take into account some vitally important assets, such as a product's popularity in a market place or a corporation's track record in meeting goals.

Mr. Melancon indicated that the AICPA does not support mandatory rotation of auditors every couple of years because the learning curve on understanding a client business is too steep and the opportunities for management fraud too great when breaking in a "rookie."

Additionally, the AICPA opposes any discussion of closing the so-called "revolving door" - the practice of employees of public accounting firms switching to go to work for their former clients.

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Tuesday adopted a new auditing standard and amendments in three areas of the audit that could pose an increased risk of material misstatement in company financial...
Read more from Larry Perry here and in the Today’s World of Audits archive.In my last article, I presented an overview of one of the first steps in the preplanning phase of an audit engagement: reviewing prior year...
Read more from Larry Perry here and in the Today’s World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (SPFs),...

Already a member? log in here.

Upcoming CPE Webinars

Oct 22This webinar will include discussions of important issues in AU-C 800, Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.