Discussant's response to relationship of auditing standards to detection of fraud;

              Discussant's Response to Relationship of Auditing Standards To Detection of Fraud
John J. Willingham
University of Houston
I believe it fair to begin by summarizing George Catlett's paper as an affirmation of the conventional wisdom of the accounting profession. Adherence to the standards of a profession must always be seen by responsible citizens as admirable, and therefore criticism is difficult. In this regard, I will not present esoteric criticism that sometimes characterizes the remarks of teachers in situa­tions
such as this, nor will I dwell at length on selected statements in the paper. However, if you will indulge me, I wish to respond to one statement because it sets a tone for the paper and for the conventional wisdom of the profession which I would like to see changed. Under the heading "Representations by Clients," the following statement can be found: "[Auditors'] . . . responsibili­ties
do not include infallibility or clairvoyance."
"Responsibilities" of CPAs
In this statement, as well as in many other parts of the paper, either ex­plicitly
or implicitly, Catlett suggests that the detection of fraud could become a "responsibility" and an onerous one at that. Presently it is reasonably clear, at least to accounting practitioners and students, that detection of fraud is not an objective of the ordinary examination of financial statements. However, should this objective be undertaken by CPAs, it would not necessarily constitute a new "responsibility." Should such an objective be assumed, it seems likely that it would result from a demand for service either directly from clients or indirectly from clients through a governmental or other agency charged to represent the public. Further, I might add, that assumption of such a "responsibility" should carry with it appropriate remuneration.
I am suggesting that the services or functions of a profession evolve over time and the nature of these services is dictated largely by customers who demand services and are willing to pay for them. Finally, I am also suggesting that the accounting profession should feel flattered and privileged to be asked to extend its services to a desirous public. This is, of course, a simplification of the rather complex problem of attesting to the material absence of fraud in the operations of an entity. To clarify my position, however, I would like to take up several specific topics included in the subject paper and attempt to relate them to this potential extension of the attest function.
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