White Papers & E-Books
Accountants Confidence Index
Free Site Registration
SAS No. 99: A reaction to accounting scandals
July 26, 2004
By Jeffrey Ong-Siong
The storms caused by the ongoing accounting scandals have left a wide path of damage in their wakes.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
One of the largest casualties has been the accounting profession’s reputation — traditionally our largest asset. If you want to get us where it hurts, our reputation is a good place to start. Our national and professional organization, the American Institute of CPAs, knew it had a monumental problem that needed to be fixed. The unfavorable alternative would most likely be a “quick fix” of the problem by those who do not really understand our industry.
The Sarbanes-Oxley Act that was passed by Congress would merely be the camel’s nose pushing its way under the tent. More legislation would certainly follow as each new scandal (Enron, WorldCom, Parmalat — take your pick) unfolds. We could hear the war drums banging out a steady beat. The auditing industry critics claimed that the accounting profession lost track of its charter — ascertaining that financial statements are in compliance with generally accepted accounting principles.
It was also claimed that years of selling ancillary services to our clients had created an atmosphere where “professional skepticism” — the auditors’ best weapon in upholding generally accepted auditing standards — was too often lacking. And many steps that were common in audits of long ago had been cut in the name of efficiency.
The business media echoed this call and created a growing, concurrent buzz among the public. Something had to be done....