Journal of Accountancy

WebTrust Issues New Guidance, Builds Awareness

July 1999

Here’s an update on several WebTrust projects currently under way in the AICPA assurance services division.

New guidance

The AICPA electronic commerce task force released version 1.1 of the WebTrust principles and criteria. These principles and criteria address the needs and concerns of e-commerce users and are designed to benefit both users and providers. As e-commerce evolves and important issues such as privacy rights are raised, the task force expects to modify the principles and criteria regularly. Version 1.1 is effective for WebTrust reports dated on or after June 1, 1999. Practitioners must update reports issued on or before May 31, 1999 (under version 1.0), during the client’s next 90-day examination period after the June 1 effective date.

The task force expects to release version 2.0 in the fall. Among other things, the later version will expand the business practices disclosure principle to include new disclosures related to an online business’s information privacy practices and how consumer complaints are to be resolved.

Global expansion continues

Australia has joined the list of countries that have signed WebTrust license agreements with the AICPA. The United Kingdom and Ireland had previously signed. Other countries where agreements are expected shortly include New Zealand, France, Belgium, Sweden, the Netherlands and Germany.

Building awareness

The AICPA engaged a consulting firm, Infotech Strategies—which specializes in e-commerce-related issues—to help build awareness and visibility for WebTrust, particularly in policy-making circles in Washington D.C. As part of this initiative, the AICPA has already held face-to-face meetings with the European Union, the Online Privacy Alliance and the Federal Trade Commission. In June, the AICPA participated in the FTC’s public workshop, U.S. Perspectives on Consumer Protection in the Global Electronic Marketplace, and in the European Union’s conference on self-regulation of the e-commerce marketplace.

Commerce secretary cites WebTrust

In a recent statement, Secretary of Commerce William M. Daley pointed to the benefits of CPA WebTrust. Commenting on the results of a survey by the FTC for privacy policy statements on e-commerce Web sites, the secretary said, “The principles established by the Online Privacy Alliance and the seal programs administered by BBB Online, TRUSTe and CPA WebTrust couple strong privacy principles with independent enforcement mechanisms, creating real protection for personal information on the Internet.” The full text of Daly’s remarks is available at http://204.193.246.62/public.nsf/docs/survey-shows-two-thirds-of-web-sites-post-privacy-policies .

Richardson Honored for Technology Contribution

July 1999

Dana R. (Rick) Richardson was acknowledged in April at the 1999 AICPA Computer and Technology Conference in Denver for his lifetime contributions to the profession.

Since 1982, Richardson has been the keynote speaker at each of the AICPA’s annual technology conferences, producing a high-tech sight-and-sound show that leaves the audience not only entertained but more knowledgeable about current and future technology. His annual technology forecasts have become an institution at the conferences.

“Probably my best prediction was in 1991,” he says, “when I forecast that, of all the technologies in the 20th century, the Internet would bring the biggest change to the way we do business.”

Richardson retired from Ernst & Young in 1994, after 28 years—the last eight as the firm’s director of technology. He immediately launched a consulting firm, Richardson Media & Technologies, and a video production company, Dream Street Productions, both in New Canaan, Connecticut.

When he began his career at Arthur Young in the late 1960s, he was one of the earliest computer auditors. He went on to develop practice aids, guides and a standard on the use of computers in auditing. In 1981 Richardson developed the first computer-assisted auditing system, called the Arthur Young Audit Computer.

He is currently a member of the AICPA’s strategic planning committee.

The award was sponsored by Great Plains, the Intel Authorized Solution Provider program and Microsoft.

About the Publisher

By Carol E Curtis

July 1999 Vol. 188 No. 1

	Highlights
Publisher/Editor-in-Chief Colleen Katz ExecutiveEditor Barbara J. Shildneck Managing Editor Elizabeth Uva Senior Editors Katharine W. Coveleski Peter D. Fleming John von Brachel Michael Hayes Emily S. Plishner Stanley Zarowin Senior News Editor Robert Tie Associate News Editor Mavis C. Allen Assistant Editors Sarah Cobb Vincent Nolan Contributing Editors Maria Luzarraga Albanese Anita Dennis Nicholas J. Fiore Production Director Peter M. Tuohy Art Director Jeryl A. Costello Production Manager Gene Cioffi Senior ManagerPublishing Technology Robert DiCorcia Production Editor D. Hillel Lofaso Senior Production Associates Valrie Mason Patrick Dougherty Ingrid Medina Production Assistant Linda Robinson Associate Publisher-Advertising Gordon Hedwig Advertising Representatives Karin DeMarco Richard J. Flynn Gwenn Goldberg R.W. Walker, Co., Inc. Western U.S. Advertising Coordinator John Weinberg Editorial Offices 201-938-3292 e-mail: journal@aicpa.org Advertising Offices 212-596-6269 West Coast 310-450-9001 Classified Ads Gail Bender 1-800-237-9851	SECURITIES INDUSTRY PASSES Y2K TEST This spring Wall Street received news that gladdened the hearts of nervous investors and brokers as well as financial analysts. The securities industry completed a series of tests on its computer systems that demonstrated that the Street has successfully squashed the year 2000 computer bug threat. SEC Chairman Arthur Levitt said the tests show the securities industry is in good shape with respect to Y2K-readiness. Approximately 400 brokerage firms, mutual funds, service bureaus and clearing agencies took part in the industrywide tests. U.S. securities exchanges, Nasdaq and the Depository Trust Corp. also participated in the tests that spanned six weekends in March and April. For the tests, participants processed simulated trades on computer systems reconfigured to reflect the dates of December 29, 30 and 31, 1999, and January 3, 2000. The trades included equities, unit investment trusts, mutual funds, corporate and municipal bonds, options, government securities and money market products. The upshot—according to the Securities Industry Association (SIA), Y2K-related problems affected less than 1% of the 259,654 expected results. In addition, the Y2K problems that did crop up during the test did not disrupt the transactions that were being simulated. Any remaining errors were not Y2K-related. “I am heartened by the success the securities industry has achieved in addressing the Y2K computer problem thus far,” Levitt said. “Testing, disclosure and contingency planning remain the three key guideposts that will help to successfully navigate the millennial date change.” The SIA, which began planning for the industrywide test three years ago, worked closely with the SEC to develop the testing process. According to the SEC, the series of Y2K tests cost more than $100 million to run. RUBIN STEPS DOWN Robert E. Rubin recently resigned as secretary of the Treasury after more than four years in the post. Rubin, who worked for 26 years at Goldman, Sachs & Co. in New York City, said he was leaving because he wished to return to New York and to spend more time with his family. At the time of his resignation, Rubin received bipartisan praise for his economic policy leadership and his steady handling of budget issues. The 70th Treasury secretary, he succeeded Lloyd Bentsen in 1995. Rubin will most likely be followed in the position by Deputy Secretary Lawrence Summers. Summers, who has worked in the Treasury department for the last six years, assumed his current post also in 1995. He is said to share Rubin’s economic philosophy and policy approach. “Secretary Rubin is considered to be one of the most effective secretaries the country has ever had, but the expectation is that Larry Summers will follow very closely in his footsteps,” said Gerald Padwe, vice-president of the AICPA’s tax division. “We have worked with Mr. Summers on a few issues in the past. We’ve not always agreed, but the relationship has always been cordial—with a good exchange of information.”
Editorial Advisers Andrea Andrews, Ken D. Askelson, Robert C. Beheler, John C. Boma, Jacob R. Brandzel, Steven J. Brown, Jolene C. Brucks, Richard A. Burrell, R. Patrick Cargill, Benson J. Chapman, Elliott Scott Cohen, Henry M. Dachowitz, Susan M. Comeau Daniels, Rosemarie T. Dunn, Sandra English, Robert J. Freeman, John S. Gibbons, Alan Glazer, Dan Gould, Cindy Gustafson, Patrick T. Hanratty, Thomas P. Hess, Karen L. Hooks, James E. Hunton, Ann D. Jevne, Harold Wayne Joseph, Christopher G. Keller, Pamela S. Kemp, Frank J. Kopczynski, Jeffrey B. Kraut, Dennis B. Kremer, Daniel Laufer, William F. Laurie, Alan Levin, John Lewison, Joseph P. Liotta, Ellen M. Long, James V. Long, Mano Mahadeva, Patrick Michael McDonough, Patrick L. McNamee, Benjamin F. Mathews, Anita Meola, Robert R. Moeller, Roger H. Molvar, G. Philip Morehead, Bea L. Nahon, Nancy L. Newman-Limata, Lyne P. Noella, Edward T. Odmark, Stanley Person, Grover L. Porter, Mark L. Richardson, Wesley Riemer, David B. Robinson, Marshall B. Romney, Susan J.Rosenberg, Chester P. Sadowski, David Satava, Peggy Scott, Carolyn S. Sechler, Gary Shamis, Jeffrey D. Solomon, Ivan J. Sotomayor, Paul C. Sullivan, Keith Tobias, Gary R. Trugman, Norman D. Turnipseed, Robert Willens, Jon Arthur Wise, Mark A. Yahoudy

Harnish Cited for Innovative Technology Use

July 1999

Michael W. Harnish received the 1999 AICPA Innovative Users of Technology Award in April at the AICPA Computer and Technology Conference in Denver.

Harnish is the chief information officer at Dickinson Wright, a Chicago-based law firm with about 200 attorneys in six offices throughout the Midwest and Washington, D.C. Earlier, he was Crowe, Chizek & Co.’s partner-in-charge of technology. His primary focus at Dickinson Wright has been developing ways to enhance collaborative systems and transaction-processing systems. The project that led to his winning the Innovative User of Technology Award was the development of an extranet system for a client that automated its loan transactions. It resulted in reducing loan-transaction processing time by more than 400% and increasing the number of loans generated by the same number of employees by 500%.

“By pushing the envelope of technology, Mike is a role model for today’s CPAs,” says Louis Matherne, the AICPA’s director of information technology.

Harnish is a member of the AICPA’s business and industry executive committee as well as the American Bar Association’s futurist committee. He was the first chairman of the Institute’s information technology executive committee and membership division.

Great Plains, the Intel Authorized Solution Provider program and Microsoft sponsored the award.

Institute Announces Exam Award Winners

July 1999

The AICPA named the winners of the Elijah Watt Sells awards for the November 1998 Uniform CPA Examination.

Cynthia Faye Veinot won the gold medal by earning the highest score on the November exam. Veinot, who works for Deloitte & Touche LLP, is certified as both a Chartered Accountant and a Certified Management Accountant. She is a graduate of the University of Waterloo in Ontario, Canada.

Charles A.P.N. Carslaw of Reno, Nevada, won the silver medal, and Christopher D.H. Stauffer of Galva, Kansas, won the bronze.

The AICPA presents the Elijah Watt Sells awards twice each year to CPA candidates who have the highest combined grades on the four-section, two-day exam. The award was created to honor Elijah Watt Sells (1858–1924), a founding partner of Haskins & Sells (a predecessor to Deloitte & Touche) and was first presented in 1923.

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