[July 4, Bowling Green, OH] The July 4th holiday used to be known as Independence Day. Ever since I became an accountant, on this day I’ve been celebrating the notion of auditor independence from the corporations for which they are hired to provide an opinion on the financial statements. Every time a rocket would explode into a flash of color, I’d say, “Hooray for auditor independence!” (OK, I’m a bit weird.) But no more.
This Independence Day, I’m reflecting on the lack of independence between large CPA firms and the corporations that employ them. And I’m mourning.
More than ever, CPA firms view themselves as a company’s partner. All of the largest firms are creating huge consulting arms that are to provide billable services to their audit clients. But problems with audits and opinions have led to world-wide calls for increased regulation of the largest firms. I guess investors and auditors don’t see it the same way.
This July 4 there is no independence for CPAs.
The auditing profession sees this as a good thing. I don’t.
Debit and credit – - David Albrecht