In the wake of several public accounting scandals and the subsequent demise of one of the nation’s largest accounting firms, The American Assembly convened this timely meeting, November 13-15, 2003 in Leesburg Virginia. “The Future of the Accounting Profession” brought together over fifty emerging leaders and established policy and lawmakers. Participants discussed the heavy reliance on audits and the need for greater judgment within the accounting profession.
The initiative was directed by Roderick M. Hills, President, Hills Enterprises, and Russell E. Palmer, Chairman & CEO, The Palmer Group. William H. Donaldson, Chairman of the Securities and Exchange Commission, gave the keynote speech.
The group concluded that auditing a company’s financial statements has become more of an art than a science in our increasingly complex global economy. Participants agreed that the accounting profession has come to rely too heavily on a maze of complex and prescriptive rules instead of their own expertise and professional judgment, which led to the series of accounting scandals that were so well-publicized in the past decade.
To guard against this, the group urged companies to recognize that nearly every number on a balance sheet or income statement is the result of a series of estimates and assumptions with very little review by auditors. The group’s report urged the accounting profession and independent audit committees to ensure that such judgments are reviewed by experienced professionals who are the best qualified to value such complex transactions.