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Discussant's Response to Future Extensions of Audit Services; Meeting Investors' Future Needs John C. Burton Columbia University Historically, when I have been asked to comment on the observations of a leading member of the public accounting profession I have been in the position of saying, "Go faster; look at the potential benefits of innovation rather than emphasizing the costs and dangers." After reading Don Bevis' paper, I am happy to be able to say "three cheers!" It may even be that some of my remarks might be interpreted as urging deliberate rather than precipitous speed toward some of his well articulated objectives. Two Principal Extensions The paper develops two principal extensions of the attest function: reporting on forecasts and reporting on management performance. I concur that both are logical and needed. It has long been my view that the current short form report which is the auditor's principal public output represents an enormous public under-utilization of the competence of the highly talented professionals who perform audits. To render a standard report, substantial economic and human investments must be made which could logically lead to far greater and more useful public output than two standard paragraphs. This is not to belittle the importance of the attest function today, since I believe it is one of the underpinnings of our capital markets and corporate system, but simply to call attention to the opportunity costs which exist. The paper devotes far more space to the subject of forecasting, and it develops the subject in an interesting and thoughtful manner. The discussion of auditing standards applied to forecast data and the illustration of possible audit reports on forecasts are significant contributions. They go far to indicate the conceptual feasibility of this extension of auditing within the broad framework of auditing standards today. The second major extension discussed in the paper suggests an auditor's report on management performance, but the topic is only considered superficially. The author asserts his faith in the CPA's competence to undertake the task of evaluating management, and he incorporates by reference the article by Langen-derfer and Robertson on the theoretical structure for such audits, but he does not offer any significant new insights of his own. While the fact that he supports such an extension of the auditor's function is in itself significant, one might have hoped for the same kind of new insights as to how this might be done as are found in the discussion on audits of forecasts. 67
Object Description
Title |
Discussant's response to future extensions of audit services, meeting investors' future needs |
Author |
Burton, John C. |
Contributor | Stettler, Howard, ed. |
Subject |
Auditing Financial statements -- Forecasting |
Citation |
Auditing looks ahead: Proceedings of the Touche Ross/University of Kansas Symposium on Auditing Problems, pp. 067-069 |
Date-Issued | 1972 |
Source | Published by: University of Kansas, School of Business |
Rights | Contents have not been copyrighted |
Type | Text |
Format | PDF page image with corrected OCR scanned at 400 dpi |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Library. Accounting Collection |
Date-Digitally Created | 2010 |
Language | eng |
Identifier | Auditing Looks Ahead 1972-p67-69 |