Chair's corner.

• Author: Castellano, James G.
• Position: Brief Article - Editorial

I'd like to extend to everyone a Happy New Year, and I hope you all enjoyed a safe and pleasant holiday. Let's together wish for an improved 2002.

As this newsletter was going to press, the results came in on the member referendum to create a global business credential (see page 1). While the credential is not to be, a lot was learned from the experience. The outcome of the vote demonstrates the collective will of our members and we must all unite behind it and move forward. It is important for all to know that the process was open and democratic, with all members having a chance to speak by casting a vote. In the end, the Institute will continue to focus on the future of the

profession, undertaking initiatives critical to our growth and encouraging members to engage in thoughtful discussion about the issues that challenge us.

Another topic that has been top of mind recently and has commanded headlines the last several weeks is the fallout from the collapse of the energy-trading company Enron. Finger pointing aplenty, I wanted to cut through the quagmire of blame and fault and tell you about positive initiatives that your Institute is developing, with SEC support, to improve the audit and strengthen our self-regulation. First let me say that protecting the public interest is the centerpiece of our profession's reputation, and we are as concerned as anyone about what is alleged to have transpired here and in similar situations. Our profession has zero tolerance for individuals--be they preparers or auditors--who don't comply with the rules.

But that's easier said than done. Lest you think we've come lately to the table, we were tackling the problems already (in fact, I spoke about such initiatives at the Oct. Council meeting). For example, new auditing standards relating to fraud and the audit process will be rolled out shortly; many of the recommendations contained in the POB's Panel on Audit Effectiveness report of Aug. 2000 are well under way; and several changes have been made to our peer review and disciplinary processes to make them more effective and efficient.

More specifically, in the weeks since Enron's demise, the leadership of the Institute and the large firms have had discussions with representatives of the SEC about what the profession can and must do to regain investor's confidence and to demonstrate our commitment to protecting the public interest. Along with the large firms, we asked the SEC to consider recommendations for...