LettersMore Travel Options
I enjoyed "Instant Access" (JofA, Mar.97), which discussed the different ways travelers can directly access and book airlines online. Your readers also may want to consider a site sponsored by the WORLDSPAN computer reservations system: http//www.worldspan.com .
At this site, travelers can check, compare and book from the schedules and low fares offered by approximately 400 participating carriers. The site allows travelers to book their own hotel and car reservations, so they save time. Airline ticketing is convenient and flexible. Once travelers book reservations, they can route the plans to their local WORLDSPAN travel agencies of choice for ticketing, or they can have the tickets mailed to their office.
Melissa J. Perry, CPA, CISA, CIA
Incomplete Data on High-Tech Tools
I was not impressed by "High-Tech Tools That Do the Job" (JofA, Apr.97). First, the article incorrectly claims the 1gb Iomega Jaz drive can store 100 times more than the 100mb Iomega Zip Drive. A gigabyte contains roughly 1,000 megabytes: The article has overstated the Jazs storage capacity tenfold.
Also, the article failed to mention the potential differences in maintenance and supply costs for each printer, which over the life of the printer can easily exceed the purchase price. Nor did it attempt to discern the differences in technical support with each printer. The comparisons are largely based on purchase price and pages per minute, both of which are poor measurements of a printers total lifelong cost, print quality and actual printing speed.
I question how the author came upon his choices of laptops. Toshiba, whose laptops have a high reputation for durability, quality and value, was not mentioned. Did the author actually speak to those most involved in computer purchasing and repair, such as purchasing managers and others?
Finally, although Apple Computer may be in an uncomfortable period at present, it still has many strong points that should be evaluated before they are dismissed. Macintosh computers have built-in networking, true plug-and-play integration of components, high-quality hardware and some of the fastest chips available in desktop computers. In fact, a recent offering by Apple operates both as a Windows-based, Pentium-driven PC and as the fastest desktop computer available on any platform, powered by a 300-MHz Motorola Power PC chip.
I think it fair to expect an article in the Journal of Accountancy to be written with the expertise and analytical depth employed by members of our profession.
Michael A. Spielman, CPA, Esq.
Editors Note: The Journal regrets the mathematical error that misstated the comparative storage capacities of different drives.
Fraud Standards Scope
The clarification of auditor responsibilities provided by Statement on Auditing Standards no. 82, Consideration of Fraud in a Financial Statement Audit , will not satisfy the greater part of the American Institute of CPAs membership, which has been looking for clarification for over 50 years. CPAs still have a problem with their responsibilities for discovering fraud that does not distort financial statement balances. This fraud can be very material, and CPAs find it difficult to retreat from discovery efforts and perilous to pursue without "generally accepted" principles and standards. Their predicament is heightened by client expectations that they disclose all material fraud. Many do not clearly understand that CPAs accept responsibility only for financial statement balance fraud. In my lectures on fraud I often have had entities describe a significant fraud that was discovered soon after a CPAs audit and remark that "the auditor was just here and missed it." It is difficult to explain to them that the CPA is not responsible.
The scary thing about all this is that literally no one is "proactively" auditing to discover fraud that does not involve financial statement balances. There is a bold presumption, impossible to support, embedded in AICPA declarations that most material fraud ultimately will surfacethanks to perpetrator greed and incompetenceand the victims will be compensated by insurance. Therefore, proactive auditing is not necessary. My experience has proved otherwise. There is an abundance of compelling evidence that the fraud universe comprises three categories of fraud: Category 1 includes all fraud that has been discovered and prosecuted and amounts to only about 20% of the universe. Category 2 generally includes all fraud for which the victim has discovered some evidence that fraud has occurred but not enough to guarantee successful prosecution. It includes about 40% of all fraud. Category 3 fraud is known only to the perpetrator, who is often competent and careful and thus unlikely to ever be discovered without proactive auditing. It amounts to 40% of the fraud universe.
Howard R. Davia, CPA