AICPA and Audit Firms Issue "The Promise of Our Profession"

August 23, 2018

AICPA and audit firms issue “The Promise of Our Profession”

AICPA President and CEO Barry C. Melancon, CPA, CGMA, was among seven accounting profession leaders who signed a recent public statement detailing the profession’s commitment to the capital markets and promise to newly-minted U.S. accounting graduates who will become auditors this year.

“Graduates will join a profession that is purpose-driven,” the CEOs wrote in their July 25 statement. “By helping to provide the capital markets with confidence and assurance in financial reporting, what we do matters to people far beyond our own. High-quality audits matter to workers, retirees, communities, investors, the capital markets, and the global economy. In the words of U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton: ‘The bedrock of our financial system is the audit.’

Melancon and the other CEOs noted that the profession is bolstered by robust accountability and oversight that we embrace for the trust and confidence it engenders. “In the United States,” they explained, “the auditing profession benefits greatly from the presence of a strong, independent regulator—the Public Company Accounting Oversight Board (PCAOB)—which was founded in 2003 and which establishes and enforces high standards in coordination with the SEC.”

“For our new hires, this sustained dedication to quality with independent oversight puts the profession on a solid foundation,” they wrote. “And it is one of many reasons surveys consistently show that U.S. investors have high degrees of confidence in U.S. capital markets, public companies, and audited financial information. Sarbanes-Oxley provisions requiring management and auditors to report on internal control over financial reporting have contributed to this confidence. Financial restatements have dropped off dramatically since 2005 and have trended down for five straight years.”

“Perhaps most important of all, the promise of our profession is a commitment to improve—continually,” they added. “Indeed, for auditors, continual improvement is more than a commitment; it is an imperative. As observed recently by SEC Chief Accountant Wesley Bricker: ‘Trust in the audit is nurtured as the profession consistently delivers audit quality and value to audit committees and the investing public. Trust can be nurtured or broken—it is neither static nor assumed.’ We pledge to adapt to the ever-changing environment in which companies operate and report financial information. In the ongoing global dialogue around audit quality, we will remain open to constructive new ideas that are carefully informed, again in Bricker's words, by ‘an assessment of the costs, benefits, and consequences (both intended and not) to the right expectations of investors and others.’ Our commitment to continuous improvement benefits our workforce as much as it does the capital markets in that it instills values that are essential to success.”

The seven CEOs concluded with this commitment: “We, along with the class of 2018, will continue to build on the auditing bedrock that has supported our capital markets for decades. That is our promise.”