Accountants as Scapegoats?

BY ROBERT D. MOORE

If the SEC is so concerned about the conflict of interest between accountants who render opinions and the consulting arms of their firms (see “The Proposed SEC Rule on Auditor Independence and Its Consequences,” JofA , Oct.00, page 26) , then why hasn’t it been concerned about enforcing the Glass-Steagall Act?

When commercial banks overlend to large corporations so their investment banking arms can collect huge fees, there is a tremendous risk to the banking system.

The worst cases of overvaluation in this stock market—the ones that would cause the greatest disaster should the market go down during a recession—are those where the fundamentals (based on an accountant’s audited statements) have no influence on the stock prices. The price of these “story stocks” is influenced instead by momentum trading, investor euphoria and optimistic projections that may never materialize.

Blaming the accountants for trivial differences in the treatment of various items is just an attempt to divert the blame for a possible disaster from Wall Street to the accounting profession.

Robert D. Moore, CPA
Jamestown, New York

SPONSORED REPORT

Keeping client information safe in an age of scams and security threats

A look at the Dirty Dozen tax scams and ways to protect taxpayer information.

TECHNOLOGY Q&A

How to create maps in Excel 2016

Microsoft Excel 2016 has two new mapping capabilities. J. Carlton Collins, CPA, demonstrates how to make masterful 2D and 3D maps in Excel 2016.

QUIZ

News quiz: IRS enforcement, a hot job, and audit value

The IRS’s 2016 Data Book, a “hot job” of particular interest at this time of year, and insight into how executive and audit committees view the insights from financial statement audits received attention recently. See how much you know with this short quiz.