New AICPA Audit Commission -- Will the real questions please stand up?;

              2
The New AICPA Audit Commission— Will the Real Questions Please Stand Up?
Stephen D. Harlan, Jr.
Peat, Marwick, Mitchell & Co.
The AICPA's Board of Directors has recently authorized the appointment of a Commission to make a full-scale study of the functions and responsibilities of independent auditors. It is my understanding that the Commission will consist of seven members, with four members coming from outside the CPA ranks and three from within. The Commission members are yet to be appointed, but I understand the chairman will be from outside the auditing profession. Basically, I believe the establishment of such a Commission is a very positive step that can lead to vast improvements in the world of auditing—IF. If the right issues are addressed and the right questions asked.
During the past fifteen years, as we all know, the auditing profession has come under severe attack. This is particularly true today with increasing pres­sures
from the regulatory bodies, the courts, and society as a whole. The volume of suits filed against auditors has gone up dramatically in the past few years. Also, the grounds for these suits appear to be widening, as indicated by the fact that criminal indictments are being sought and returned against auditors. It seems as though every day is a new day with a different set of ground rules and the auditor is caught somewhere in the middle.
If this is true, then can the mere establishment of a Commission to study auditing be effective? In order to address that question, let us examine the Commission's potential charge as it might be gleaned from the questions con­tained
in the March 11, 1974 issue of The CPA:
1. What responsibility should an auditor have for detecting fraud?
2. Should auditors monitor all financial information released to the public and, if so, what should be the extent of their responsibilities?
3. Should the auditor's standard report, particularly the phrase "presents fairly," be changed to express better the responsibilities of auditors?
4. What mechanisms should be adopted to strengthen the functions of auditors?
5. Is the mechanism for developing auditing standards adequate?
6. What should the profession do to reduce the risks of misunderstand­ing
about its role?
In reading these questions, I get the feeling we are continuing to take the same old approach that we have in the past. The questions appear to be ad­dressed
primarily to segments of our activities and do not deal with the broader
21