The Treasury Department's Advisory Committee on the Auditing Profession on May 5 issued a draft of its final report. It is broken down into a number of sections, each with detailed recommendations with regard to auditing and the auditing profession.
I really don’t want to write this column so quickly after the draft report’s issuance, but I don’t have a choice, as there only is 30-day period for comments. I wish there was more time to publicize the report so interested parties that were underrepresented on the advisory committee could absorb and study the recommendations and state their views. To help those parties, here is my Rorschach reaction to the six recommendations in Section VII, Concentration and Competition. My colleague, Bill Carlino, commented on one of the other sections in his column yesterday Recommendation 1. Reduce barriers to the growth of smaller auditing firms consistent with an overall policy goal of promoting audit quality. Because smaller auditing firms are likely to become significant competitors in the market for larger company audits only in the long term, the Committee recognizes that Recommendation 2 will be a higher priority in the near term. Reaction: Unfortunately, a throwaway recommendation that deserved much more immediate study, with a discussion needed of out-of-the-box possible immediate solutions.
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