Lately, the "Tiffany Network" has been more cubic zirconia than carat, especially when it comes to exercising sane judgment.
Prior to this year's presidential election, veteran anchorman Dan Rather was thisclose to flushing a 40-plus-year career down the nearest commode when he aired an unchecked report on President Bush's record as a member of the Texas Air National Guard that had more holes in it than the Miami Dolphins' secondary.
Then, last week, as millions of viewers were awaiting the climax of "CSI: New York," the network inexplicably cut away to a special report on the death of Yasser Arafat -- just five minutes before the late local news was slated to run in many of that network's major markets.
Needless to say, the switchboard was flooded with angry viewer calls and CBS was forced to rebroadcast the episode two nights later -- not an inexpensive undertaking. Then, not surprisingly, it also fired the producer responsible for the decision to cut away to trumpet the passing of a figure much of the country loathed anyway.
The aforementioned examples are what could generously be labeled "suspect" judgment. And somehow, with regard to bad judgment calls, the accounting profession is held to a stricter and more unforgiving standard than fields such as medicine, law and, of course, the Fourth Estate.
Can you imagine, for example, an auditor who had accrued Rather-like longevity at his firm, being given the relative free pass that the anchorman got if a similar poor judgment call resulted in a client company eventually restating their financials?
Somehow I can't.
Which is why I found it especially poignant that, during a recent conference on financial reporting issues, Public Company Accounting Oversight Board chairman William McDonough told the gathering of senior financial executives that standards -- whether accounting or auditing -- were no substitute for the quinella of judgment and disclosure from both auditors and their clients.
The chairman also went on to say that good judgment should not be usurped even by the trio of standards recently adopted by the PCAOB.
"Our goal is to help practitioners better understand the principles underlying the standards and appreciate why it's important that they use judgment in applying them," he said. "We expect auditors and issuers alike to exercise judgment."
He stressed that what he didn't want were auditors treating standards like a "detailed" checklist.
McDonough also said that the standards do not require a "one-size-fits-all audit program," but rather provide auditors "flexibility to tailor their audit programs to suit the size and complexity of the company undergoing the audit."
Loosely translated, standards are obviously necessary, but in many instances it boils down a judgement call.
Too bad CBS executives weren't listening.
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