As I read the commentary by national consultant to CPA firms Steve Erickson ("Get independent: Escrow the fees," April 6-19, 2009, page 6), I found the voices of Seth and Amy from Saturday Night Live popping into my head, along with their "Really? Seriously?" routine.
Do you really think that escrowing fees will solve all audit problems? Really? Seriously?
First of all, who would these funds be escrowed with? Well, I suppose we would need a whole new industry specialty to escrow audit fees. And who better to do something like that than, say, an investment guy? I have just the specialist for you. Funds escrowed with this guy make unprecedented gains. I wonder if Bernie Madoff can manage escrowed funds from behind bars?
Secondly, you apparently believe that regulation and red tape can solve everything. For instance, escrowing fees will suddenly make auditors independent. Really? Seriously?
But I thought auditors were already independent. Aren't they supposed to be? So excuse my sarcasm here, but by escrowing the fees, we will suddenly give everyone ethics and morals, and make everyone do the right thing? Really? And they won't be able to figure a way around the escrowed fees system? Seriously? You don't think that unethical and immoral individuals will be able to subvert, manipulate or find a way around your proposal? Really? Seriously?
Lastly, I fail to see how escrowing fees automatically locks out collusion, negotiation or whatever it is that you are trying to say the problem really is. Are you saying that a fee-based relationship is, in and of itself, a conflict of interest?
I guess I really don't understand this part of your argument. You see, businesses charge fees for their products and services. Inherent in this system is the possibility for them to make mistakes. If a business makes too many of them, inevitably, they will probably go out of business. Really! And if they consistently charge too little or do a poor job, there is a good chance they will not be able to continue. Seriously!
So, it sounds to me as if you are trying to protect the escrowed, ethical, moral auditors from their audit quote mistakes. And then it sounds like you are championing a third party to oversee these audits, and the audit quote "mistakes." While we are at it, why don't we just make a whole new government department to oversee, regulate and manage these audits, and the mediation to go along with all of these audit quote mistakes? After all, the government will be independent, right? I mean, the government isn't influenced by anyone, like, say, for instance, special interest groups? Are they?
Really? Seriously?
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