Weighing the Worth of an External Audit [Compliance Week]
Does the external audit still have value? Some people have questioned that notion. Despite that grave assessment, there are still many that believe that the external audit has value. However, most have no illusions about the challenges before the profession.
Colleen Cunningham has a post up at Compliance Week with her thoughts:
[W]e need a fundamental shift away from the rules and complex accounting standards we currently use in the United States. The move to International Financial Reporting Standards would certainly help. IFRS is based more on principles and concepts, and while some people worry that these are “lesser” standards than U.S. GAAP, I believe that we will see more transparency about choices, options, and assumptions through enhanced disclosure under IFRS…
Perhaps the audit opinion should be less boilerplate to allow the auditors to provide more information and commentary. This could add needed transparency. Unfortunately, the litigious environment in which we operate would make this a risky proposition.
We like these ideas but more information and commentary would mean…more professional judgment! Hopefully the PCAOB would be okay with that idea because the trend seems to be that auditors can’t be trusted to do their jobs.
AICPA Submits Comment Letter on IRS PTIN Proposal [Journal of Accountancy]
The AICAP submitted a letter to the IRS re: the proposed reg that would, among other things, require Preparer Tax Identification Numbers (PTIN) for tax professionals that don’t sign the returns. T
he AICPA isn’t so thrilled with this idea, and the JofA reports some of their thoughts, “(1) a successful implementation of registration and use of PTINs, along with the imposition of Circular 230 on all preparers should be sufficient to address unethical and/or incompetent tax return preparation and provide tremendous gains to tax administration in general; (2) it may cause confusion among taxpayers about the relative qualifications of tax return preparers; and (3) the additional burdens to the tax preparers and pass through of these costs to the taxpaying public should be considered.”