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February 15, 2011

Comments

TJ

I would support this move. The auditors could be organized similar to a Crown Corporation in Canada, and built with hard checks and balances in place.


Al Mac

Your government health inspector argument could largely be applied to private sector annual audit reports. I'm not advocating Government-performed audits, just the limitations of the main analogy.

Jim

Thanks, Al -- I'd agree with enthusiasm -- but then I've been arguing for years the obsolescence of the audit model inherited from Victorian times. Nothing less than a fundamental re-engineering is going to bring about the change that is coming; the only real questions are "when" and "how disruptive will it be?"
Jim

Jim

Thanks TJ -- This model has been floated, in the form of government charters for "audit only"firms serving public companies. I wrote on it on June 10, 2008 -- see my archive. What is needed is a holistic "blank page" approach that would cover ownership, capitalization, scope of ancillary services by the firms and their affiliates, liability, law enforcement and oversight. That's for starters, Tough, but doable, if only there were the will and the vision.
Jim

Michael G Murray CPA

I think government audits would be great, kinda like the IRS. But hold the report until management has had a chance at the supervisor, appeals, audit court, and district court to sort out the "correct" accounting. It would be even better if juries of average citizens were to decide the issues. Who needs professionals?
On a serious note, something needs to be done. Rarely is the government the answer.

Mel Dick

Jim, Having been a partner at a Big 5 firm and then an owner of several restaurants, including taking over restaurants that were considered the "best" around I find your analogy to restaurant inspectors very interesting. The quality standards in restaurants are not dictated so much by annual inspections by someone who may or may not really understand the business, rather by the pride of the restauranteur and their head chef to provide a quality product and most importantly by customers who will vote with their feet if quality and standards are not good. If the current audit process doesn't meet the needs of users, ultimately the public will demand something different. Better the private sector than some government sponsored audit. That said, the private audit sector needs to change to meet the needs of all users if it is to stay relevant.

vimax

I'm not advocating Government-performed audits, just the limitations of the main analogy. Cover ownership, capitalization, scope of ancillary services by the firms and their affiliates, liability, law enforcement and oversight.

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  • © 2007-2019 James R Peterson Special thanks: Francine McKenna. Always with love: Kat and Julie. In memory: Bob White, Stuart Kadison