Letter in July/August Catalyst regarding "the leaders' roundtable".

• Author: Landes, Charles E.
• Position: Letters - Letter to the Editor

A response to Mr. Fay's letter that appeared in the July/August 2004 Catalyst critical of my comments:

Mr. Fay--As one of the panelists that you referred to often in your letter to the editor, let me begin by saying that I agree entirely with your last paragraph and that is the message that we at the AICPA (and I believe The Ohio Society) deliver frequently because it is the truth!

But please recognize that your own words use the phrase "vast majority," which by definition does not mean all. We can argue about what constitutes too many, but when I see and hear reports, specifically in the area of ERISA and governmental areas, that conservatively report that approximately one out of every 10 audits is found to be substandard, that to me is too many and we must act to correct that problem. The fact that these substandard audits are not making the headlines does not mean that they aren't happening nor does it diminish my concerns. Further, I did not say (as you suggested) that these substandard engagements are being conducted only by smaller firm practitioners. As a local firm practitioner for over 16 years in Cincinnati (total 25 years audit experience), I understand quite well that most smaller firms (just like most large firms) provide excellent audit quality.

More directly, my remarks that there are "too many CPAs out there who are too willing to do almost anything" was made in the context of too willing to take on new services, not that they are willing to flaunt the standards. Our evidence is very clear that many of these substandard audit findings in smaller firms begin with a CPA accepting an audit or attest engagement in which the practitioner does not have the necessary training or competencies to undertake the work. As professionals, we have a responsibility to understand the limits of our skills and to say no when we are not qualified to perform an engagement. And yet we see time and again CPAs taking on certain types of audits and assurance engagements later to find that they didn't understand the rules or standards. This is why the AICPA is being proactive in creating new Audit Quality Centers beginning with Government and ERISA.

On another point, you state that you were disappointed to read that I would question the quality of the peer review process and certain peer reviewers. Please recognize that I have spent over 10 years serving on various AICPA peer review committees (including Chair of the PCPS Peer Review Committee) as...