Academic journal article Journal of Accountancy

Sees Profession as Scapegoat. (Letters)

Academic journal article Journal of Accountancy

Sees Profession as Scapegoat. (Letters)

Article excerpt

The failure of companies such as Enron and WorldCom is attributed to the CPAs' improper auditing of the books. As a result, Congress is attempting to micromanage the accounting profession. Our profession is being blamed because of Congress's own failure to provide the resources to the SEC to review the reports public companies submitted.

The unfortunate conclusion being drawn from the vast decline in stock values these days is that the CPA is the culprit. But it is management that perpetrates these major frauds. Congress is questioning the auditor's independence because he or she is being paid by the client. In his or her review, the CPA must rely on the company's internal auditor, who has the responsibility for disclosing irregularities and fraud. Although professional standards for internal auditors require that they be independent of company management, where were they when irregularities and fraud occurred at Enron and WorldCom? In those cases, was their independence compromised by management? Who is the culprit? Congress should have determined that before blaming the CPA profession.

For as long as I can remember, the accounting profession has been trying to find its role in auditing for fraud. …

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