Discussant's response to "Is the second standard of fieldwork necessary";

              Discussant's Response to
"Is the Second Standard of Fieldwork
Necessary"
Andrew D. Bailey, Jr.
The Ohio State University
Introduction
Mr. Bintinger's paper is very interesting reading. The historical perspec-tive it brings to the topic is a useful one and one often forgotten by many of us who have a tendency to treat extant practice as if it has always been and ever will be. I found the evolution suggested by this scenario intriguing. We seem to have come nearly full circle in Mr. Bintinger's mind, beginning with a limited view of the control system where audits were very much balance sheet oriented, progressing to a broad business and management orientation to client service and now to a narrower focus which Mr. Bintinger believes . . diminishes the significance of the audit process and its relevancy to not only third parties, but also the client who has engaged us." Mr. Bintinger's position is that
[w]hile the second standard of fieldwork gives guidance in the conduct of the 'current' audit of the financial statements, it also is giving guidance to management so that 'future' audits would be able to be conducted. Thus the second standard of fieldwork is necessary to the articulation of our profession's judgment of this significance, and it should be reemphasized in our professional statements and engage-ments.
The Policy Approach and Precedence
The approach taken in Mr. Bintinger's paper can be characterized as historical or constitutional/precedence oriented [Danos, et al. 1986]. By this I mean that the argument flows by the development of the historical role of the framers of the "constitutional" elements of the auditing standards related to the study and evaluation of internal controls. This is quite clear in the statement of objectives put forth by the author:
This paper will examine the evolution of the second standard as interpreted in the auditing statements, and consider whether the intent of the original authors has been changed in the context of providing more precise guidance. . . . [T]he discussion developed herein is primariy based upon the officially issued documents of the profession itself.
If my interpretation of Mr. Bintinger's basis of argument is correct, Mr. Bintinger's attitude towards the newly promulgated Statement on Standards
162