Comment Letters August 18, 1995-rev 1 |
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Certified Public Accountants Broadway Plaza, Suite 306 16 N.W. 63rd St.
P.O. Box 13120 Oklahoma City, OK 73113 (405)848-7313 FAX (405)848-7316
James P. Luton Bruce L. Van Huisen
August 10, 1995
Ms. Dale R. Atherton
Vice President, Peer Review Division, File 3260
American Institute of CPA’s
Harborside Financial Center
201 Plaza Three
Jersey City, NJ 07311-3811
Dear Dale:
I enjoyed the meeting in Chicago very much and it was nice to see you again. I have looked over the exposure draft and have some comments. My first impression of the Proposed Statements on Quality Control Standards was that it only rearranged the original pronouncement so why do it. As I thought about it I decided that the change in emphasis of matters warranted the issuance. I like it as is although I could make some argument concerning some of the elements. As I told you, in a previous task force studying the nine elements, the majority of the task force believed that advancement and inspection should both be removed from the list. (There were no suggested additions.) The AICPA staff informed us, after the recommendation, that there was no way the SEC would accept a reduction in the number of elements.
The monitoring portion of the exposure draft does cause me two problems. The first is the portion dealing with pre-issuance or post-issuance review of engagements. I believe an expansion of this section to include examples of what is intended would avoid problems for both firms and peer reviewers. The second is paragraphs 10 and 11 dealing exclusively with smaller firms. I cannot disagree with the statement these paragraphs make but the idea of making it bothers me greatly. The inspection problem in some reviews follows poor supervision reviews and that follows poor audit performance. The same person who cannot do an audit also can’t do an inspection. I know of no auditing pronouncement that specifies small firms as needing special assistance to perform an audit. I believe the reference is more general and that is what should be done here. This interpretation will put all small practice units on the spot to justify doing their own inspection.
Members of American Institute of Certified Public Accountants
