New York (Nov. 24, 2003) -- Exhorting auditors to “adopt an attitude of investor protection,” Dr. Douglas Carmichael, chief auditor of the Public Company Accounting Oversight Board, told an audience of CPAs and attorneys that one of the primary goals of financial statement overseers should be to drive audit quality.
“What does the auditor need to do to accomplish that objective?” Carmichael asked attendees rhetorically. “Auditors need better training in fraud detection. The audit-client relationship had serious problems and therefore needed to be changed.”
Carmichael’s remarks came during a keynote before members of The Foundation for Accounting Practitioners, here.
Carmichael also warned of a “bully culture” that pervades many companies and exerts undue influence over any and all audit objections.
He said that one of the goals of the PCAOB would be to help auditors reduce the number of financial restatements.
Other advice offered by the oversight board’s chief auditor included “looking at the general ledger and not just the trial balance,” and to “take SAS 99 [consideration of fraud in a financial statement audit] very seriously.”
“Basically, we need to restore professionalism, competency, independence and objectivity,” he said.
When asked about the ongoing debate about the potential of having two sets of standards -- one for public issuers and another, less rigorous set for private companies -- Carmichael was skeptical about the eventuality of dual guidelines.
“Users want the highest set of standards available. I don’t see any need for a lowering of standards for private issuers.”
-- Bill Carlino
