Despite a year of bad headlines, we all know that most accountants are “good guys”—that is, intelligent men and women of character who respect their role as the cornerstone of the capital formation process. Nevertheless, recent company failures caused by a few bad apples have vividly demonstrated some of the profession’s weaknesses and brought a spotlight to bear on the quality of audit and attest services.
The public has said it’s fed up with accounting lapses, and the marketplace is urging accountants to do a better job. The remedy—the Sarbanes-Oxley Act’s internal control certification requirements—has expanded accountants’ responsibilities. Here’s how your firm can undertake a cultural tune-up, improve partner and staff performance and reduce risk and the potential for related litigation costs.
MAKE A COMMITMENT
There are two basic risks for firms: catastrophic service failure, such as that incurred from providing inaccurate audit-related services, and business failure caused by losing top-quality clients. A firm that merely reviews completed audit engagements to check whether staff complied with procedures or makes sure partners and staff members have met continuing education quotas isn’t doing enough to mitigate its risk.