Discussant's response to critical requirements of a system of internal accounting control;

              Discussant's Response to Critical Requirements of a System of Internal Accounting Control
Jay M. Smith, Jr.
Brigham Young University
The first time I met Bob Sack was as a participant in the 1976 Trueblood Seminar that I attended. Bob led many of the case discussions we had, and I was impressed with his forthrightness and succinct comments. Many of you have pro­bably
had similar experiences with Bob. It was not surprising, therefore, to find Bob's paper also very succinct. So succinct at times, that the transition seemed to be missing between sections. For example, in the first part of the paper, Bob stresses that there are three levels at which one can address the subject of controls: (1) accurate financial statements, (2) protection of assets, and (3) development of operating and analytical data. He seems to argue that any controls at the third level would encompass any controls at the two higher levels, and that at the third level, a lower level of materiality would be required than would be true of the other two levels. He then selects the third level for his paper, but the body of the paper never touches this point again, either to substantiate the claim of all-inclusiveness, or to indicate how his critical requirements would have differed if a higher level of objectives had been selected. I found that one must read carefully to capture all the nuances Bob is implying. In fact, filling in between the lines is somewhat risky, for one is never sure if he is filling them in the way Bob would do it. On the other hand, on a topic like internal control, I, as a discussant, must ad­mit
that brevity and succinctness is a quality to be admired.
After receiving Bob's paper last week, I read through it and then decided I should do a little catching up myself on the internal control literature of the past few months, both from official sources and otherwise. I have found it increasingly difficult to keep up on accounting developments to use in the intermediate ac­counting
text I am involved with and also keep current in auditing literature. Reading material in either one by itself is a full job. Thus, some of the incoming auditing material had been filed in that proverbial drawer marked "To Be Read Later." "Later" arrived, and I went through the pile and identified the many pamphlets, articles, research reports, exposure drafts, and statements issued on the general topic of internal control. The FCPA has triggered a flurry of activity by almost everybody even tangentially related to accounting in the general topic of internal control. Just a comment on the inevitable move to alphabetical iden­tifiers.
FCPA sounds like some special type of CPA. Perhaps it is fitting to have accountants increasingly involved in an act that almost bears the name of the pro­fession.
Most of the publications I scanned were prepared by national CPA firms and were directed to management in an attempt to help them meet their newly defined
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