[IMGCAP(1)]Lets be honest. Between the thousands of quality audits done every day by diligent CPAs and the headline-grabbing debacles like Madoff and Enron, which do you think sticks out more in the publics mind? We all know the answer to this.
Cases like Enron have become shorthand for financial malfeasance the world over and have left an indelible mark upon the public imagination. Enron itself, in fact, is the subject not only of an upcoming HBO original movie but a Broadway musical.
The actions of crooks might make for good theater, but when a CPA conducts an audit, the public is not looking to be entertained. Theyre looking for quality work that will help them navigate complex financial concerns. Despite some high-profile ethical failures, the CPA is still a trusted professional. As such, quality should be the driving force in all of our work.
Whether weve been hired by a company or a township, all expect honest and high-quality work. This is because, as licensed professionals, we provide services that members of the public rely on to make decisions about their financial well-being and to learn how their tax dollars are being spent.
In public opinion surveys, CPAs frequently outscore most other professions due, in part, to our continued emphasis on ethical behavior. This emphasis has resulted in a code of professional conduct and support of independent standard settings, among other things.
CPAs have an ethical responsibility to see that an audit is done right. We need to educate the investing public as well as our clients on the standards of our profession and why quality audits matter. We need to let them know that a quality audit is extremely beneficial to a company as part of its system of checks and balances, and how it can help them detect problems early on.
We also have an obligation to each other. When I started seeing some of our fellow CPAs place fees above doing quality work, I realized as the president of the New York State Society of CPAs that I was in a position to do something about it. This is why I made the theme of my presidency at the NYSSCPA Quality Matters, with my overall goal of raising the bar on audit quality.
After all, when an accountant puts the CPA designation after her name, she is trading on the reputation of the entire profession. Attention to the things that comprise its code of honor, including ethical standards, education and peer review, will help bolster it. Sloppy, unethical or just plain lazy work, though, can only degrade it.
The passage of the new accounting reform law in New York State is a step in the right direction. The new law brings regulations of our profession into the 21st century and will help to ensure that the public is protected. Under the new law, New York CPAs of all types using the skills and competencies of their profession must register with the State Education Department and continue to maintain their licenses through continuing professional education. Those who dont may be subject to charges of unprofessional conduct, perhaps prompting investigation from the New York State Office of Professional Discipline.
The Quality Matters campaign has focused on educating corporations, municipal leaders and the general public on ways to improve the audit process and the standards to which CPAs are held. The public knows so little about the auditing profession. It is our responsibility to educate them. How can a client know theyre getting quality work if theyre completely unfamiliar with what, exactly, constitutes quality? And if the client doesnt know how to ask for quality work, how can we expect to raise the bar enough so that the world demands it?
Everyone, from the auditor to the client, shares in the responsibility for a quality audit. All parties need to understand their roles and responsibilities in the audit process before it begins. Early and frequent communication makes it much more effective. On an audit quality checklist, it is important to include a disciplinary component for quality review, an effective governance structure, and clear definitions of the auditors mission and the shared responsibilities between the auditor and end user.
As a whole, the profession has not failed in delivering quality audits; headline-making accounting scandals continue to be the exception, not the rule. Still, such headlines hurt both the professions image with the public and diminish the trust that we, as professionals, work so hard to maintain. As infrequent as they are, audit failures underscore the need for a renewed and continual call to quality. The goals of the Quality Matters campaign are to help the profession improve communication with the public, help end the practice of low-ball bidding, and underline managements role in an audit.
David Moynihan, CPA, is president of the New York State Society of CPAs, the oldest state accounting association in the nation. Moynihan is the partner-in-charge of the audit and attest practice group at Testone, Marshall & Discenza LLP in Syracuse, N.Y.
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