While reading the August 2002 issue, I noticed the JofA is working much harder to catch up with the public’s perception of the financial reporting crisis. Keep it up!
I particularly agree with Professor Hass’s comments in “ Hazy Reporting ” (page 47). Marketplace standardization of key performance measures is one of the major issues in this crisis. We must have comparable financial information about companies and their industries.
The great pillar of comparability is independence. This used to be the greatest strength of our profession, but it appears that lately we’ve been distracted from that principle. I would like to see our profession press for tougher standards on independence for all industries as well as for CPAs.
We ought to demand that solid walls of separation be constructed between corporate audit committees and management. The authors of the U.S. Constitution designed an effective system of checks and balances with separation of power for the government more than 200 years ago. Now we know it’s time to bring this kind of system into the business world. This might not be a popular idea with our clients, but it surely would inspire public confidence.
Tom Louderback, CPA
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