Because of several infamous cases of failure of the independent auditor to detect fraud and white-collar crime, the audit profession may change forever. Auditors are increasingly being held responsible for ferreting out instances of management misdeeds, a task that they currently cannot or will not perform. The accounting profession, which generates $46 billion in annual revenues, currently faces 4000 negligence lawsuits totaling $15 billion, with more to come. Can the profession face up to the challenge? The author thinks not, unless it does business differently.
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References
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2. Joseph T. Wells, Cooking the Books: What Every Accountant Should Know about Fraud [video training program] (Austin, TX: National Association of Certified Fraud Examiners, 1991).
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3. Ibid.
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4. Ibid.
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5. Ibid.
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6. Thomas McCaroll, “Who's Counting?”Time, 13 Apr. 1992, p. 48.
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7. R. K. Mautz and Hussein A. Sharaf, The Philosophy of Auditing (Sarasota, FL: American Accounting Association, 1961), p. 14.
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13. Ibid., p. 49.
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14. Ibid., p. 48.
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15. Ibid., p. 49.
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16. Ibid.
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18. Abraham J. Briloff, More Debits than Credits (New York: Harper & Row, 1976), pp. 313-333.
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19. United States v. Goldblum, Docket no. CR 13390 (Cent. Dist. CA), 1974, pp. 143-44.
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23. Mautz and Sharaf, Philosophy of Auditing, p. 140.
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24. Wells, Cooking the Books.
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25. Ibid.
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26. Cashin, Handbook for Auditors, pp. 1-7.
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27. R. Gene Brown, “Changing Audit Objectives and Techniques,”Accounting Review, 43:697 (Oct. 1962).
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28. Robert H. Montgomery, Auditing Theory and Practice, 4th ed. (New York: Ronald Press, 1912), p. 4.
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29. Ibid.
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30. American Institute of Certified Public Accountants, Inc., Statement on Auditing Standards Number 53 (New York: American Institute of Certified Public Accountants, 1987), pp. 2-3.
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31. Wells, Cooking the Books.
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