What the Collapse of the Large Firms Would Mean

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July 17, 2011

Comments

Francine McKenna

During your essay I went from disagree to agree to disagree again. You ask for a rethink of the audit report, but not of the structure by which audit services are to be procured and paid for.

The auditors do serve the corporation and its shareholders but must not be beholden to management. There are a million ways to move their current toady behavior in the right direction, but we have seen that beholden Audit Committees can rarely accomplish it.

Richard E. Brodsky

As always, you criticize every solution to what you recognize as the fundamental problem -- expecting the dog (auditor) to bite the hand (client) that feeds (pay) him -- but, as usual, you offer no actual solution, other than bromides such as "putting aside inflated language, moderating unrealistic expectations, and nurturing the profession’s acknowledged and considerable expertise." Please set forth in simple terms, in concrete words, exactly what changes, if any, you would make to the current model of providing an acceptable level of assurance that the client does not cook the books.

Jim

Thanks Francine --
As usual we are largely on the same page -- except for my consistent difficulty with government-provided or even government-managed assurance. Here, though, to use the chance to fundamentally re-engineer the language of the current obsolete report would be a huge improvement over the other actions taken by the bureaucrats in recent history.

Jim

Thanks Richard -- I appreciate the acknowledgement as to the fundamental nature of the problems.I would feel more acutely the point of your needle about "bromides" if I had not in fact been offering details on a possible sustainable future since the launch of this blog's predecessor, my column in the International Herald Tribune, in 2002.
Since those column-length pieces cannot achieve the necessary "holistic" attention demanded by the complexity of the issues, however, it's right to think of a unified summary -- for which this comment process is not adequate (links being impossible) and because I am away from my archive until next month.
So a post is coming, and likely a link to a new Page for the purpose as well.

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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