The issuance of the so-called Final Report of the Advisory Committee on the Auditing Profession to the U.S. Department proves conclusively to me that many of the powers that be need to gain a better understanding of transparency. It isn’t what’s in the massive document that tells me this, but it is what is specifically left out of both the document and the press release announcing the report’s approval.
The release (HP-1159) didn’t mention that the vote wasn’t unanimous but 14-1, or that what was released wasn’t the final report, but the draft final report, which included the following statement, “All of the Committee members voted to issue the Committee report. (WE MAY NEED TO AMEND THIS SENTENCE IF ONE OR MORE COMMITTEE MEMBERS DO NOT SUPPORT THE REPORT)”
Cindy Fornelli, speaking in her capacity as the executive director of the Center for Audit Quality, commended the efforts of the committee members. But following the Treasury press release’s lead, the Center’s release referred to the draft document as the final report, and also neglected to report the 14-1 vote.
The “No” vote was cast by Lynn Turner, the SEC chief accountant from 1998-2001. I doubt that it was a coincidence that there was an opinion piece in The Wall Street Journal, entitled “How to Restore Trust in the Wall Street”, co-authored by Turner, which focused on the need for transparency in financial markets. I was excited when I read the piece until I understood its significance with regard to the Treasury announcement of the “final report.” Great spin, but no real transparency by Treasury there, and in today’s world any subsequent amendment to the report will get little news play.
I was also disappointed by another press release that came out the same day from the AICPA. The title read “AICPA Urges Congress to Reach Agreement on Tax Extenders Bill Before Recessing,” and the deck read, “Provision Equalizing Disclosure Standards for Tax Preparers and Taxpayers Is Included in House and Senate Versions of Extenders Bills.” Although a more, proper tone was set in the text, I found the deck very disturbing, I wonder how many viewed that deck as what now constitutes “real transparency” in action.
There doesn’t seem to be a real understanding of what constitutes transparency, and just as important, it is clear that sleight-of-hand and spin is what got us into this severe and long-lasting financial crisis.
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