New Accounting Watchdog? (News)
Williams, Kathy, Strategic Finance
LAST MONTH A GROUP OF ACCOUNTING PROFESSORS AND PROFESSIONALS-- with the help of Ralph Nader's Citizen Works--formed the Association for Integrity in Accounting (AIA) "to restore and maintain the public's trust and confidence in accounting." It plans to focus on four main areas: watching the watchdogs, restoring professional independence, assuring corporate accountability and disclosure, and redeeming accounting education.
The mission of the Association is "to provide an independent forum to present and advance positions on a wide range of critical accounting and auditing issues, standards, and regulations affecting the accountability and integrity of the profession and the public interest in maintaining trust and confidence in accounting," says Linda Ruchala, an associate professor of accountancy at the University of Nebraska-Lincoln and a founding member of AIA.
One of the first things the group plans to do is reevaluate standards-setting and regulatory structures. It says its preliminary evaluation suggests eliminating the Financial Accounting Standards Board and requiring the Securities & Exchange Commission to live up to its original mandate for establishing financial reporting standards. "The evaluation and development of alternative structures for accomplishing fair and adequate financial reporting is our underlying top priority for the coming year," the group notes.
It also plans to visit auditor independence; promote an expanded concept of corporate accountability, which includes increased transparency for reporting stock options and derivatives and expanded environmental reporting; and call on educators to help accounting students think critically and independently "instead of memorizing technical and often flawed rule-based approaches. …