Haskins & Sells at 80 years;

              X Haskins& Sells at 80 Years /
The Firm will mark its 80th anniversary in March.
In commemoration of this milestone, we have asked
managing partner Michael N. Chetkovich to comment on
where the Firm stands at 80 and where we are going as we
move toward our centennial year.
As a starter, what does it mean for a firm,
or for any organization for that matter,
to be 80 years old, or 100 or 50?
What is the significance of this?
MNC: A good question and one I've thought about a bit.
Certainly it's a time for a measure of humility a proper
occasion to recognize our great obligation to all those who
built the Firm and brought it to where it is today. They have
given us a sturdy vehicle to work with and move forward.
However, one can overdo the celebration of history. We
can't afford much time for looking back; there is too much
to do today. And it's what we do today that counts. Great
as tradition can be, and ours is, it should not get in the
way of progress.
With that in mind, what major developments do you see
the profession and the Firm approaching
in the years immediately ahead?
MNC: The profession is in a period of considerable
change and ferment and there are significant issues to be
resolved which are critical to our future direction. For
example, there is the broad question of the extent to which
our professional societies, specifically the American
Institute of CPAs, should and will act for the profession,
versus the individual firms, particularly the larger ones,
going their own way. We in H&S always have held to the
premise that a strong professional society was essential
to a strong profession. So we have felt that the best
approach to broad professional questions and issues was
through the Institute. There have been indications that
some of our contemporaries do not feel as strongly about
this philosophy as we do.
Regardless of one's philosophy this is something that we
must resolve if we are to move forward. Should we, for
example, develop auditing standards through the
profession or should each firm do it on its own? And
there are ethical questions, for example: how should we
distinguish between advertising and self-promotion versus
properly informing the public? There is no one answer,
nor a simple answer, to questions such as these. Certainly
there is room for and there should be a considerable area
for variation in how the individual firms operate—room for
innovation and individuality. On the other hand, I would
think and hope that on the broad issues that affect the
whole profession we ought to try to work out the answers
together, and by that I mean w^rk them out in a way that's
good for the public and for the profession, as well as for
the individual firms.
But to go back more specifically to your question of
significant developments affecting the profession and the
Firm. Of course, we have to be concerned about the
litigious environment we are in today, and we have to be
concerned over the attitude and activity of the Securities
and Exchange Commission as it affects the profession.
I am confident that some of the harsher aspects will be
mitigated as time goes on. Although the complaints and
criticism still seem to be mounting in volume, there has to
be a leveling off and a more realistic perspective taken of
the audit function and what can be expected of it.
You mean by the SEC and the public?
MNC: Yes. The SEC, the public, the courts and the
profession itself. And in this connection, I think the
AlCPA's appointment of a special commission to study
this whole question of audit responsibility—the commission
that Ken Stringer of our Firm is a member of—is a step in
the right direction. I don't know that any really
concentrated study ever has been given to this most
important subject. The courts, of course, have looked at it
to some extent. It has been looked at in pieces or from
certain points of view, but we've never really put the
function under close scrutiny and asked, "What can and
should be expected of an audit? How much reliance can
or should be put on it?"
We can't expect this group to give us complete and totally
definitive answers, but certainly this could be a long step
in the right direction. Auditing and accounting are rather
imperfect arts practiced in what we certainly know to be
an imperfect society. There is a tendency to expect a much
greater degree of precision from accounting and from
auditing than is inherent in the nature of these functions.
None of this is to say that we, as professionals, shouldn't
take a critical look at ourselves and sharpen our own
perspectives and our own tools on a continuing basis.
This kind of self-analysis and self-improvement is essential
to progress. We know that institutions and professions,
like individuals, all have to be prodded to some extent or
they can become complacent and unresponsive to
changing needs. We have to recognize that we have a
significant responsibility to a broad public and that a great
deal is expected of us.
The other side, as I mentioned, is that there should not be
an unreasonable level of expectation. Expectation should
be consistent with the realities of the situation. This, as I
see it, is the real problem of credibility; it's the gap between
expectation and performance. What we must consider is
whether the gap is a factor of unreasonable expectations
or of substandard performance or of some combination
of the two. What is the proper level of performance? And
similarly, what is a reasonable level of expectation? This
kind of gap is going to be with us for a long time, just as
it is with other professions, such as medicine and law, and
that's another thing we have to recognize.
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