What the Collapse of the Large Firms Would Mean

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July 31, 2008

Comments

anonymous

"shortness of vision"

That's pretty much all you need to know about the current state of affairs in the CPA profession. Personally, I think it's broken beyond repair.

Jim

Perhaps, Anonymous, but if the state of affairs is indeed "broken beyond repair," then the focus had best shift over to a the design and implementation of a replacement, or else all the sanctimonious rhetoric about how vital the profession ostensibly is to the world's capital markets comes to very little.

George Hill

The core of the problem has been the growth of inappropriate accounting procedures blessed by the FASB. The trend to LAWYER LIKE PROSE that could then be interpreted to serve special interests so as to mislead the public which allowed fraud under GAAP. Further the misuse of "fair value" accounting created false income "under the rules" and allowed the major mistatements.

Auditors must be professional and they have not been. Perhaps the shift to International Principles and the elimination of GAAP will be the solution. The issue is integrity, character, honesty, independence - the return to such professional standards would correct much of what the public distrusts.

Jim

Thanks to George Hill for his comment. The politicized nature of the standard-setting process is certainly an element -- but changes there involve not just the profession's challenge, but the interplay with the other players as well -- including issuers and regulators as well as standard-setters. So the idea of changes that are "necessary, but not sufficient" is definitely part of the dialog.

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  • © 2007-2016 James R Peterson Special thanks: Francine McKenna. Always with love: Kat and Julie. In memory: Bob White, Stuart Kadison