CCR Supports Audit Panel's Draft.

• Position: Committee on Corporate Reporting - Brief Article

In a letter to David Pearson, staff director of the Public Oversight Board's Panel on Audit Effectiveness, FEI's Committee on Corporate Reporting largely supports the recommendations contained in the panel's exposure draft but asserts that "the panel has not allowed sufficient time for interested parties to comment." Nevertheless, OCR commended the panel on "the well-thought-out scope of the project and the comprehensive nature of its recommendations."

CCR endorsed the panel's recommendations to enhance the importance of the auditing and accounting services within consulting firms. The letter states that while consulting practices have provided the "primary growth engine" for the major accounting firms over the past decade, the accounting and auditing side of the businesses have certainly remained the "backbone" of such practices. Any move towards a greater attribution of value to the audit function, CCR believes, would be welcome.

CCR offered a series of suggestions for modifications in the exposure draft:

* Forensic-Type Fieldwork Phase. The Committee supports any move to strengthen the process of risk assessment for fraud in the planning stage and to train auditors to be more fraud-conscious. However, it asserts that to go beyond "healthy skepticism" into the realm of "presumption of fraud" will "undoubtedly lead to a disruption of the free flow of...