Magazine article The CPA Journal

A Suggestion to Have Auditors' Personal Signatures on Audit Reports

Magazine article The CPA Journal

A Suggestion to Have Auditors' Personal Signatures on Audit Reports

Article excerpt

Audit reports on financial statements have a feature that differentiates them from many documents written by professionals. No personal signatures of the auditors appear on the reports; only the names of the firm that audited the statements appear on the documents. In contrast, personal names and signatures appear on both public and private documents written in many professions, often unaccompanied by the name (and responsibility) of the company employing the signers. The following are examples.

* Works of literature almost always contain the personal names of those who contributed to the work, including authors, translators, and editors, besides the name of the publisher.

* Scientific papers are always published under the names of the individual researchers. The authors are responsible for everything written in the paper. Author affiliation is nor required and appears mainly to enhance the reputation of the institution. this practice also exists in the publications--reports, exposure drafts, etc.--of the accounting profession, including those of the AAA and the AICPA.

* Usually, journalists sign their articles. The byline does not relieve the newspapers from the legal responsibility for the content of the report and article.

* Both hospitals and doctors are responsible for the health care and medication administered to patients. Individual doctors sign patient charts and medicine prescriptions and are responsible for the content of the documents. However, the personal signature does not absolve the hospital from medical malpractice claims.

* In the legal profession, the individual attorney and the law firm sign documents.

Applying this logic to auditor's reports, the personal signatures of the auditors should appear on the report of financial statements. The senior audit partner should personally sign, get the credit, and be responsible for the audit. Such a practice has several advantages for both the auditor and the audit:

1. Within the firm, personal responsibility will be unambiguously assigned to the auditors in charge of the audit and will not be diffusely shared by all audit partners of the firm.

2. The quality of the work done will be publicly associated with the auditors who performed the audit. Therefore, these auditors will try to establish, preserve, and enhance the audit quality. Also, potential auditees will be able to request the services of specific auditors, based on auditors' personal reputations, in the same way that patients request treatment by specific doctors based on the doctor's reputation.

3. Assigning a quality tag and reputation on a personal basis to auditors will increase auditors' independence from the firms employing them. …

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