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August 20, 2014


Robert F. Kelley

Only an hungry, auditor with low IQ would think this was a good idea.


Richard Brodsky

Jim, you mouth the words about the need to hold auditors accountable, but you balk at every suggested remedy: firm rotation, payment by users, government conscription. What would you do to prevent auditors from failing to do proper audits, agreeing to financial double-talk, or worse?


Sure, let the government take over assigning audits/managing payment. It has worked out so well with Medicare and Social Security, the Post Office and everything else the govt has gotten its incompetent hands on.

Jim Peterson

Richard -
Thank you for your thoughts, and for your expression of frustration, which I share.
As some time with the archives and topics of this blog will show, I have been exploring the so-called "solutions" since the 2002 launch of its predecessor, my column in the International Herald Tribune -- see, for example, August 7, 2011.
What emerges is the consistent unresponsiveness of these "solutions" -- including those you mention -- to the basic viability of a sustainable and useful assurance services model. The causes range from political impossibility (liability reform), marketplace limitations (new entrants, insurance), anachronistic or short-sighted regulation (scope of practice, independence, government take-over), to a combination of all of them (rotation).
Along with these barriers to achievability, the large firms remain exposed to the deadly shock of litigation, lacking either structures or capitalization to resist the forces that broke up Arthur Andersen in 2002 and Laventhol in the 1990's (see my post of November 30, 2011).
My desire is and has been for a "robust public dialog" -- which to be productive would require confronting deeply entrenched attitudes on traditional professional practices, organization and oversight.
Unfortunately, all of the interested parties retain their separate reasons for resistance to disturbing the status quo. But if it should happen, I would be eager to occupy any seat in the room.
Thanks again.

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