Letters

Auditors Should Work Together
A New Accounting Culture (JofA, Oct.02, page 27) was an important call to action for CPAs overall. In my more than two decades of experience as an internal auditor, I have witnessed too many times when CPAs took the expedient route over the proper one because of fees, friendships or other business entanglements. Those times are changing.

My sole disappointment with the article was that not once did it mention the need for close, professional cooperation between external CPAs and the internal auditors in an organization. Unfortunately, it has been my experience that too often external CPAs view internal auditors as the poor sisters who couldnt cut it in public accounting. This belief could not be further from the truth.

External CPAs should consider internal auditors a key professional resourceone that knows the internal workings and culture of an organization in a manner external CPAs could never realize within the time available.

External CPAs also should actively solicit and involve the internal auditors as true partners in the audit process. An internal auditor would provide the impetus toward change needed in a companys internal controls and ethicschanges that internal and external auditors identify together. Coordination by external CPAs with internal auditorsand mutual respectwould make a leadership role involving internal control systems (as the article recommends is essential) so much easier to achieve for all CPAs and provide the full benefit of what the public needs so desperately today.

Donald Holdegraver, CPA, CFE
Director, Operations Analysis
University of Nebraska
Lincoln, Nebraska

In Favor of Regulation
The reprint of Mr. Melancons speech at Yale University was impressive A New Accounting Culture (JofA,Oct.02, page 27). However, it failed to address the real reason we are in this situation: Partners at the largest firms need to make the payments on their million-dollar houses and $80,000 Porsches.

Until regulation prevents this group from getting rich off the publics money, we will continue to have a problem. When it comes down to a choice between losing a client (and a bonus) or going along with a companys questionable accounting methods, too many auditors worry about how theyll make the next payment to support their extravagant lifestyles.

Daniel J. Sengstock, CPA
Scottsdale, Arizona

Ethics More Than Rules Compliance
The quiz, Test Your Knowledge of Professional Ethics (JofA, Oct.02, page 110), gave the technically correct answer to question no. 4: Is the engagement partner independent if his mother-in-law is the controller of the client? But it would have been better if the answer reminded readers that professional ethics call for more than compliance with the rulesthey also require objectivity. See Rule 102, Integrity and Objectivity of the AICPA Code of Professional Conduct.

If practitioners asked themselves the question, many would conclude that, in these circumstances, they could not be objective.

Arthur Siegel, CPA
New York City

Watch Your Appearance
In Test Your Knowledge of Professional Ethics (JofA, Oct.02, page 110), the answer to question no. 4 indicated that the CPA firm would be independent because the engagement partners mother-in-law (also the clients controller) is not considered a close relative or immediate family under the new independence rules.

The answer to this question may technically be correct, but I was under the impression that a CPA also must avoid any circumstance in which the appearance of not being independent is a possibility. In my opinion this clearly is a situation in which an appearance of a lack of independence should be considered.

If the answer to this question is really correct, then it is no wonder our profession has come under intense criticism by the public. Because I doubted the accuracy of the answer to question 4, I asked my wife for her opinion. She has no technical knowledge of independence rules, but there was no doubt in her immediate reply that the auditor would not be independent.

Is this really what you want to teach the AICPA membership?

David J. Hollister, CPA
Ellenton, Florida