Meeting Recap

by Rick Osborn

Richard (Rick) Sweeney, the recently appointed Executive Director of the Board of Accountancy of the State of Washington, touched on the past, but emphasized the “bright” future where CPA’s and other certified professionals need to “shine their light”.  He noted the growing understanding on the part of the Congress and some legislatures that perhaps Sarbanes-Oxley (SOX) may have gone farther than needed.  The realization is being communicated that the Auditing Standards may not have been “broken,” they were not being followed, and the capability to enforce the standards was lacking.

Rick indicated that all professionals and CPA’s in particular needed to put forth an effort to recapture and enhance their credibility.  He mentioned that of the 630,000 CPA’s nationwide, only 20% actually perform financial statement ‘Attest’ work with the majority involved in the recording and financial statement preparation functions.  Additionally, most of these CPA’s are working for firms to which SOX does not apply.  This does not exempt the non-Attest CPA’s from the industry ethical standards; it just means that they need to be applied with their company during the day-to-day accounting work, not just one time a year when the financial statements are prepared for audit.

Rick presented the concept as to whether, due SOX, there are two CPA populations and perhaps a need to discuss the need for different accounting and attestation standards.  Rick went on to suggest that perhaps one change that is needed is a “reclassification” of the balance sheet.  The “reclassification” would relate to the precision of the number and the availability of substantive evidential matter to corroborate the numbers.  He also emphasized the need to better communicate judgments and understandings about the numbers as becoming “less” precise. 

In closing, Rick indicated that the Certified Public Accounting professional “cup” may be “half-full” due to the highly publicized audit failures, since the profession is still held in high esteem by the public.