“Restoring Public Confidence” ( JofA, Apr.02, page 37) notes that “not only does our profession have zero tolerance for any CPA who does not adhere to the rules but, in the wake of the Enron collapse, is prepared for unprecedented change.”
In my opinion, one of the biggest failings of our profession right now is not that we don’t intend to adhere to the zero tolerance principle. Rather it is enforcing the rules when a CPA or CPA firm does not. Missing in all the rhetoric are the actions taken by the profession to get to the bottom of this and do something about it promptly.
Is there any reason to believe proper audit standards were applied at Enron? Does destroying documents in the face of a government review warrant a close look by the profession? And can we believe peer review is to be taken seriously in view of recent events? Does this warrant an investigation now?
So, what is happening? We spend a great deal of money on an ad campaign to assure the public how righteous our profession is. All kinds of articles tell CPAs of the good steps we have taken over the years, including the SEC practice section and the O’Malley panel. But where is the mention of a review of our own procedures so we can do something when it is clear we have passed the zero-tolerance point? What good is zero tolerance if nothing happens to those who don’t adhere to it? An ad campaign without internal introspection is not going to save us. It is just a matter of time before we have more Enron-type problems.
Unprecedented change has to include the steps we need to take to deal with these types of situations—now and in the future. The public rightly does not have confidence in a profession that clearly has something wrong and cannot or will not address the rule breakers. Other steps being taken now will be for naught if rule breakers face no downside risk. This is clear to the public—it should be clear to us as well.
We worked too hard to get our profession to where it was. We need to work just as hard to get the ship back on the proper course. We owe much more to ourselves and to the people who went before us who kept this profession on a lofty perch of excellence and at the top of the public’s confidence.
Dorsey Wittig, CPA
Vice President and CFO
Software Armada, Inc.