Some Possible Solutions
What, then, is the solution to these fundamental misperceptions and the many dangers to the profession that flow from them? Apart from fundamental changes in the legal system (which are beyond the scope of this article), the solution lies with the accounting profession itself educating others about what it can and as importantly cannot do. Like the medical profession, auditors originally were cloaked in a myth of infallibility and did not work overly hard to dispel it. Who would? But, clearly, that myth has now been put to rest, at least within the legal system.
Nonetheless, the relaxation of prohibitions against client solicitation by auditors, coupled with the increased offering of tax and management consulting services by accounting firms and their efforts to make known the fact that their services are not merely fungible, have all led the profession into approaching clients or prospective clients with arresting phrases such as, "We're more than just your auditor, we're your business advisor." Such phrases are both symptomatic and causative of the current misperceptions of the profession by others.
Attracting new business is, of course, essential to survival, but the profession has to be a bit more circumspect in selling its wares. Somewhere between infallibility, on the one hand, and mere bookkeeping, on the other, lies the truth as to what it is that auditors do and what they do requires great skill and good judgment and is of significant value to clients and society as a whole. That is the message the accounting profession should be trying to get across.
For example, and apropos the myths outlined above, auditors often do, in fact, detect defalcations or other frauds or irregularities, and, even more often, suggest internal controls that tend to prevent or inhibit their occurrence. They also exert pressure on company managements that tends to deter such practices, even during difficult business periods.
In short, auditors must take it upon themselves to better educate the rest of the world as to what they do and do not do for another reason: nobody else will do it for them. That is particularly so since the present world view leaves auditors as ideal scapegoats for company managements, the companies' shareholders and creditors, bonding companies, governmental agencies and, of course, for all the lawyers representing those various interests.
Unfortunately, most of the current education by auditors as to what, in fact, they do and do not do comes at the last possible moment and to the smallest audience: namely, in legal presentations to judges, juries or administrative bodies in defense of lawsuits or other proceedings brought against them. Obviously, jural bodies must be educated, too, and that is where defense lawyers and skilled and responsible expert witnesses come into play. But the process needs to begin much farther up the line.
Where would all this education lead to? It would not lead to auditors being immunized against liability any more than the properly conducted audit can fully insure the company and the public as a whole against fraud or other business crimes.
Due to its judgmental characteristics, limited scope, and far-ranging effects, auditing, even when properly understood, will never be a risk-free calling. But if the expectations as to the role of the auditor are reduced generally, even by a comparatively modest degree, some healthy realism and juridical balance could be restored.
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