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Journal of
Forensic Accounting
D. Larry Crumbley
Editor-in-Chief
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education
anticipation
investigation
verification
documentation
communication
anticipation
education |
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CONSIDER THIS ...
 Some interesting ideas to plug into your broad conceptual framework:
From the 1909 edition of Dicksee's Auditing:
"The objective on an audit may be said to be threefold:
1) The detection of fraud.
2) The detection of technical errors.
3) The detection of errors of principle."
– As quoted by Herman W. Bevis.
"Fewer than 10 of last year's 275 tips were unsubstantiated."
"We need leaders who are prepared to act on principle, with standards and values to guide them, even in the face of strong financial incentives to do otherwise. In fact, we need a lot of these people throughout our system. It is perhaps a paradox that in order for a market-based system to really work effectively, you need a lot of people whose behavior and action is not based on the market, but rather on standards and principles that help the market function.
– Kim B. Clark, Dean, Harvard Business School
"Accountants are the people who protect the truth."
– Arthur Levitt, former SEC Chairman
"I believe we have finally reached a point in our discussions where the appropriate question is no longer 'Can public accountants detect fraudulent financial reporting?' but rather 'Why have they chosen not to?'"
"If the accounting profession chooses to rise to this challenge, then it will reap the benefits of a renewed confidence in the integrity of its professionals. If the accounting profession shrinks from the challenge, then we will address it for them."
- William J. McDonough, Chairman, PCAOB, in testimony before U.S. Senate Finance Committee regarding "abusive tax shelters," October 21, 2003.
"If you're having trouble understanding the new rules the SEC has passed, or applying an accounting standard, or figuring out whether to make an announcement about an event that has occurred, or any of a million other decisions we all make every day, try to look at the situation from the point of view of the public markets, and that should point you in the right direction."
- Scott A. Taub, Deputy Chief Accountant, U.S. Securities and Exchange Commission in a speech at the University of Southern California Leventhal School of Accounting SEC and Financial Reporting Conference, May 29, 2003
"If information can be verified and can be relied on faithfully to represent what it purports to represent - and if there is no bias in the selection of what is reported - it cannot be slanted to favor one set of interests over another. Remember, there are two parties in any marketplace - buyer and seller. If accounting information favors one side it must disfavor the other. Neutral financial information may in fact favor certain interests, but only because the verifiable information points that way, much as a good examination grade favors a good student who has honestly earned it."
- from "The Meaning of Neutral Financial Reporting" by James J. Leisenring, FASB Vice Chairman
[Similar to the market opportunity of advising firms on their internal controls, and in conjunction with the professional audit advisory services (evaluating governance and external audit quality) spearheaded by progressive forensic accounting firms, an additional market opportunity is presented here as well: attesting to the neutrality of corporate financial reporting. Firms obtaining such endorsement would likely achieve a lower cost of capital.]
"If you have risk and reward related to your operation, we thought it was enough to say that it ought to be on your books."
– FASB Chairman Robert Herz, addressing the issue of banking "conduits."
"Fidelity will be rewarded."
– Attorney General John Ashcroft
"Let me use this forum to urge us all — and I include myself — to go back into the classroom and teach our students about self-control, self-restraint, and the responsibility of each individual to help protect our common good. Let the other units in the business school worry about their own cases: as accounting professors we need to help our students see that they are most often the go-between the company and the outside world. Our students must learn to ask themselves, "How will my audit, my financial statements, my financial dealing, affect this common good we share?"
– Robert J. Sack, 2002 AAA Accounting Exemplar Award Recipient
"We need to dash away once and for all, academic research that is nothing more than a 'tape spinning' exercise that has little or no practical implication or relevance. We need to see a ... future when academics, their institutions and their journals are able to break the chains the profession has placed on them. As we certainly are hoping to see more independence amongst the auditors, we should expect nothing less of those who profess to teach them. Keep in mind the sharp and bright minds in the classroom learn from watching the actions of those who teach and mentor them."
– Lynn Turner, former SEC Chief Accountant (now Professor at Colorado State University) in a speech for the RSM McGladrey Institute of Accounting Education and Research; National Speaker Series; at the University of Iowa - November 11, 2002
"See the obvious and investigate the doubtful."
– James Howell, SEC Trial Counsel
"The recent decisions and comments by noted Delaware [Supreme Court] jurists indicate that if corporations do not fix these problems, the courts may hold defendants, including directors, lawyers and accountants accountable for corporate greed out of control."
– Ira Millstein, Esq., of Weil, Gotshal & Manges LLP, as quoted in "Rebuilding Investor Confidence, Protecting U.S. Markets," a report of the U.S. House of Representatives Committee on Financial Services.
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