Saturday, June 11, 2011

PCAOB Chairman James Doty Philosophises on Auditing and the Future

At the thirtieth SEC and Financial Reporting Institute Annual Conference, PCOAB head Doty pondered ways to make the audit profession more relevant, credible and transparent. Doty addressed the cultural impact of independence and skepticism and yet acknowledged that today's culture often places obstacles toward accomplishing these goals. Doty also hinted that changes may be coming in the style and substance of audit reports after an open meeting by the board this past March; mentioned that a proposal limiting the number of years which one audit firm could audit a specific client was under serious consideration; strongly urged auditors to be more forthcoming with audit committees and suggested that lead partners on audits might soon have to sign these reports in a similar way to how CEOs and CFOs certify financial statements.

Must-read material for anyone in auditing or financial accounting and probably worth the while of managerial and tax accountants as well. While at the University of Missouri as a doctoral student, I had the great opportunity to take a class with Dr. Joseph Silvoso, one-time president of the American Accounting Association. Dr. Silvoso would have been proud of Chairman Doty and his thought-provoking speech.


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