Lottery System Would Help


I agree with the letters, “ Disappointed with JofA News ” and “ Profession Needs Monitoring and Control ” ( JofA , Sep.02, page 13).

I, too, believe lack of independence is the primary problem in the auditing process. Our leaders have for decades foisted on the American public the folly that we are independent because we say we are. The SEC and the rest of government have bought into that notion. No auditor can possibly be independent when the auditee hires and fires the auditor. The fact that the client pays the auditor isn’t the problem; the core problem is the hiring and firing.

The conflict would be eliminated if the SEC instituted a lottery to pick auditors and, after the first one was held, rotated 20% of audits each year, getting every publicly held company on a five-year rotation, or rotated one-third of audits each year, putting companies on a three-year-rotation schedule. Price bidding should never be part of the equation. Qualifications bidding should be required to get into the audit lottery pool in the first place. For example, a firm that lacks the adequate staffing, experience and specialized education to audit WorldCom would not be allowed in the lottery for that audit. Also, failure to detect the incorrect capitalization of several billion dollars of expenses should be a clear sign the auditor isn’t qualified.

William E. Owens, CPA
Roswell, Georgia


Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.