With the start of 2006 here, we took a look at replies from industry leaders when asked in the fall of 2005 if they felt the profession had successfully burnished its reputation and moved beyond the scandals of a few years ago.

Through January, WebCPA will post new comment collections each week, featuring thoughts from many of the individuals who made Accounting Today's 2005 Top 100 Most Influential People list.

This week, among others, thoughts from Financial Executives International president and chief executive Colleen Cunningham; noted securities lawyer Melvyn Weiss; chairman of the Financial Accounting Standards Board, Robert Herz; and the founder of the Association of Certified Fraud Examiners, Joseph Wells.

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"Unfortunately, no. The damage done by a relatively small number of people in the profession continues to have residual effects inside and outside the industry. The majority of CPAs never even came close to the unethical behavior of the few, and the majority of CPAs serve their clients well, regardless of whether they are in public practice or industry. In my mind, CPAs continue to be among the most ethical, hard-working and trustworthy group of people. However, the public still gravitates towards the headlines of the scandals."

-- Randy Johnston, Executive Vice President and Partner, K2 Enterprises

"The idea that there is one accounting profession needs to be put to rest. There are at least four segments -- the Big Four, the super-regional and large local firms, the midsized and small firms and sole practitioners. With the exception of the Big Four, and one or two other national firms, most firms did not have their reputations tarnished. Given the demand for services from the Big Four, this segment of the profession has definitely moved beyond the mega scandals of a few years ago. Nevertheless, the threat of continued litigation continues to be a potential time bomb for any firm of substance."

-- August J. Aquila, Director, The Growth Partnership

"Progress has been made, but we have not completely moved beyond the scandals. The media is focused on all the 'bad guys.' We need more stories about the heroes."

-- Colleen Cunningham, President and CEO, FEI

"...Because these extremely close relationships between clients and professionals are the hallmark of the middle-market, regional and local firms that I have experience with, the problems of the last few years have had less of an impact than they did at the national and corporate level. While many business owners may have felt that collectively the profession had a 'black eye,' it was viewed as something happening to others -- a distant problem, but not one that hit home. Most business owners or senior executives continued to be steadfastly loyal and confident of the high level of skill and expertise of their own accountant, and few lost trust in the judgment or integrity of the firms they had been working with for so many years. It was my experience that the foundation they built at a personal level withstood this storm."However, among the national and international firms ... the relationships have always been more at arm's length, with less intense, personal interaction ... As a result, this audience had less commitment and personal involvement, and as such, was more skeptical after Enron, WorldCom and all that followed.

"Today, the profession has clearly moved passed all this. The middle market is still secure in its knowledge that the CPA is truly their trusted advisor, while the senior management of higher-end private companies and the C-suite executives at publicly traded organizations have developed a renewed respect for the independence and objectivity of CPAs. It appears to me that they need their CPA now more than ever. They expect the CPA to safeguard them by providing them with accurate reports -- as they have individual responsibility and accountability that did not exist pre-Sarbanes-Oxley ...

"Trust, combined with the accounting industry's public commitment over the last three years to ensure that no improprieties occur going forward, has helped to renew the profession's reputation more quickly than might otherwise have been anticipated."

-- Sally Glick, Chief Marketing Officer, Sobel & Co. LLC

"Yes. I believe the profession is much wiser today as a result of the scandals of a few years ago."

-- Chandra Bhansali, President, AccountantsWorld

"Yes. There has never been a better time to be a CPA."

-- Timothy Christen, CEO, Virchow Krause & Co. LLP

"Yes. The AICPA's 2003 and 2005 surveys show increasing public confidence in the accounting profession -- in fact, in some cases greater than ever before. In addition, we're graduating accounting majors in record numbers, and more high school students and undergraduates are looking to accounting as a career. The profession's leaders over the past five years deserve the credit and our gratitude for those positive trends. Tomorrow's leaders will need to continue their good work in positioning accounting as a profession whose integrity and high degree of financial literacy are resources not only our clients can benefit from, but our nation as well."

-- William Fingland, Managing Partner, BKD

"No. Failed audits and other improper conduct by auditors are still commonplace in the news today. For example, on June 29, 2005, The Wall Street Journal reported that 'a federal judge in New York denied [Deloitte Touche's] motion to dismiss a class-action lawsuit brought against its U.S. and international arms by shareholders and bondholders in dairy titan Parmalat SpA.' The SEC characterized Parmalat as 'one of the largest and most brazen corporate financial frauds in history.' ..."A return to consulting-centric accounting practices could reverse the forward progress achieved in the last few years ... Lack of independence has been at the heart of the audit profession's failures. Rite Aid, Waste Management, Enron and Xerox are only some examples of audit failures caused in part by a lack of independence. Also, the SEC is privately discussing the possibility of relaxing rules put in place two years ago to improve audits. Any moves away from an audit firm's purpose of detecting and preventing fraud will undermine the progress achieved in the last few years and further tarnish the profession's image.

"Another aggravating factor is the growing global nature of business. No real progress has been made in creating international accounting and auditing standards. As the top forensic accountant at a leading major accounting firm recently stated, he can, with a staff of two and one week's time, find a major accounting flaw or internal controls problem in virtually every foreign public company."

-- Melvyn Weiss, Senior Partner, Milberg Weiss Bershad & Schulman

"I believe many in the profession have made genuine and concerted efforts to better focus on quality and serving the public interest. However, given the continuing rash of restatements and reporting scandals, as well as the highly publicized issues regarding the promotion of abusive tax shelters by certain accounting firms, it would not be surprising if public trust and confidence in the profession is still somewhat shaky."

-- Robert Herz, Chairman, FASB

"Yes, but we must continue to improve the reputation of CPAs."

-- Ernest Almonte, Auditor General, Rhode Island

"We have come a long way since the scandals. However, I believe we have a way to go."My answer as to how to polish our reputation is to speak out on issues that affect our citizens. With this in mind, I have become a 'gadfly' to help keep the profession on its toes. I view this as an important role of an 'elder statesman.' Some of my speeches and remarks are aimed at galvanizing the profession to take a more proactive role in tax issues such as revising the alternative minimum tax, speaking out more forcefully with real solutions to Social Security and the effect of the president's and other proposed solutions on all taxpayers, as well as who is affected by the estate tax repeal and the practical alternatives to repeal. It is also the profession's duty to inform the public of the costs of unfunded retirement and health care liabilities and to lead the public in a re-examination of all government and spending policies.

"I have also been vocal in the Arthur Andersen matter, not defending Andersen for their unusually poor audits, but discussing the government's equally irresponsible action of putting them out of business. Only in showing that the CPA profession can take positions in the public interest on controversial subjects can we ultimately reestablish ourselves as the trusted professionals."

-- Stuart Kessler, Managing Director, AmEx TBS

"I think the reputation of the accounting profession as a whole has always been very high in the eyes of those who use it. However, I think that any suggestion that we are past the problems that started with Enron does not square with a reading of the newspapers any given week. The accounting problems are still out there and regulation is still perceived in the eyes of the public as not being sufficient."

-- Louis Grumet, Executive Director, New York State Society of CPAs

"Yes, and this was confirmed by recent AICPA studies that show that our reputation as the most trusted business advisor is even stronger today than before the scandals."

-- Roman Kepczyk, President, InfoTech Partners North America

"With regard to the 'scandals of a few years ago,' I can conclusively say that the profession I have serviced for over 25 years has moved well beyond these problems. My primary client base includes the 200+ firms beyond the Big Four. I have hundreds of individual data input from client satisfaction surveys that we have conducted during the past few years, and I can assure you that my client population (firms between $1 million and $100 million) has not lost a single client as a result of the scandals, nor has their reputation been tainted. They remain the most trusted advisors. As for the Big Four, they continue to stumble and are not yet beyond the scrutiny and skepticism of the public."

-- Jay Nisberg, President, Jay Nisberg & Associates

"The accounting profession has made great strides, but it has not completely moved beyond the scandals. Big Four firms continue to get mentioned in a negative light, and anytime there is another corporate scandal like Tyco, it is referred to as an 'accounting fraud' rather than 'management fraud.' But beyond the taint associated with Enron-type events, it doesn't appear that the profession has capitalized well on its role as most trusted advisor in that many in the profession are still far too passive or reactive in how they serve clients."

-- Mark Tibergien, Principal, Moss Adams

"From an investor's perspective, I believe the accounting firms are starting to put out a better product, mostly due to the inspections of the PCAOB. Ultimately, this will lead to an improved reputation as the number of restatements and errors in financial statements decline. However, recent events, such as those clouding the reputation of KPMG, continue to make this a long and difficult journey for the firms."

-- Lynn Turner, Managing Director of Research, Glass Lewis & Co.

"I wouldn't say we have exactly 'burnished our reputation, but the accounting scandals have actually generated new interest in the profession; business schools everywhere have been reporting marked increases in accounting students."But I continue to be appalled at the lack of anti-fraud training in higher education. In 1999, less than 2 percent of colleges offered a course in fraud examination to their students. Today, that number is about 20 percent, thanks in part to the accounting scandals and the ACFE's Higher Education Initiative, which offers free resources to universities that commit to adding a stand-alone fraud course.

"But my question is: What can the other 80 percent of schools be thinking? There is no single task more important than protecting the public from the corporate thieves that have permeated commerce. Sarbanes-Oxley aside, the cornerstone to fraud prevention is education, and tens of thousands of accounting students are not getting enough of it."

-- Joseph Wells, Founder and Chair, Association of Certified Fraud Examiners

"Yes and no. Certainly, we have been able to put the recent corporate scandals behind us and off of the front page. However, we have only to look at the new tax shelter cases to see that our image, while improved, is still quite fragile. We continue to be just one crisis away from losing the ground that we have recently regained."

-- Elaine Weiss, President and CEO, Illinois CPA Society

"This is an interesting question. There has been conflicting research performed on the subject. While professionally sponsored research seems to indicate that the profession has moved beyond the scandals, it appears to me that business decision-makers and those in government and regulation do not believe that the profession has revived its reputation."Furthermore, the scandals keep on a-comin', for example., KPMG and the tax shelters, the poor reputation of audits of pensions and other not-for profits, continued reporting of failed audits, and management fraud which the public feels should be discovered by auditors.

"The leaders and other members of the profession cannot keep their collective heads in the sand and believe that it can survive purely on the accomplishments of the prior four generations of CPAs. The historical tenets of being a CPA and an auditor, including independence, skepticism and an unbiased attitude, must be emphasized and nurtured into the new generation of CPAs."

-- Mitchell Freedman, President, Mitchell Freedman Accountancy Corp.

"With all due respect, this question actually made me laugh. It's hard to imagine the apparent hole the profession dug for itself in 2002, only to be handsomely rewarded with more business than virtually any firm can handle."Take the Big Four as an example. Their annual North American fees are approximately $25 billion. If you do the math in terms of the number of public companies that need to be Sarbanes-Oxley compliant within the next two years, the federal government has essentially created a $30 billion industry -- bigger than all of these firms were previously. Download the demise of Andersen into these four firms and you have created a trickle-down effect (of feeding firms smaller than yourself) that has essentially spread through the accounting profession like wild fire. The only unfortunate blip has been the inability to find talent to match up with the exponential growth opportunities.

"I think most businesses and individuals today understand that what happened was not reflective of all 47,000 firms and, without a doubt, the accounting profession has made a robust return."

-- Allan Koltin, President and CEO, PDI Global Inc.

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