Phoenix (Nov. 14, 2002) -- Comptroller General David M. Walker lambasted the profession for its lack of foresight and action, urged CPAs to adopt integrity, objectivity, service and competence as their core values and offered a new definition of independence for auditors at an industry conference here.
In tough-talking rhetoric at the American Institute of CPAs' "State of the Profession" conference, Walker squarely laid the blame for the problems of the profession at the feet of practitioners.
"This is not just Enron and WorldCom, it's Qwest, Tyco, Xerox, Global Crossing," he said, rattling off nearly a dozen companies which have needed to restate earnings due to accounting irregularities. "One word relates to CPAs - it's trust. And it's hard to gain and easy to lose."
Walker said CPAs need to change their attitudes towards independence, and should not make management decisions for audit clients or audit their own work if it's material to the subject of an audit.
"It's amazing how many people are still doing this and it taints our profession," he said. "We get paid for our judgment to do what's right, not what's defendable."
Walker also said that while he believes in self-regulation, in some areas it's unrealistic to expect the profession to regulate itself, namely, when it comes to independence.
"The profession is not in the lead, so we led," he said. He said the AICPA's model of disciplining its own was inadequate. "The worst that could happen to you is that you get kicked out and pay less dues."
In his view, auditors should be allowed to offer other services to their clients, but anyone who provides these services shouldn't be allowed to participate in the audit. His recommendations go further than what's contained in Sarbanes-Oxley, and it remains to be seen whether the new accounting oversight board will adopt them.
-- Tracey Miller-Segarra
