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Treasury issues final report on CPA profession

Treasury_reportDuring our town hall presentations, I am constantly making the point that the CPA profession in the U.S. is growing in its importance as our financial markets grow in complexity and importance. This report is yet another example of the public interest that is the foundation of the CPA license.

In the midst of all of the bailout news, the U.S. Treasury voted to release the final report of the Advisory Committee on the Auditing Profession on Sept. 26, 2008. The blue ribbon committee was co-chaired by former SEC Chairman Arthur  Levitt and former SEC Chief Accountant Lynn Turner.

Speaking about the committee and the importance of the CPA profession, Treasury Secretary Henry Paulson said in the press release, “All of us thought accounting was right in the center” of capital market competitiveness. He added, "The lifeblood of capital markets are the financial statements, and the sustainability of the auditing profession is critical to investor confidence in our capital markets. Since that time, this has only become clearer, given some of these developments.”

The report was started in 2007 as part of the Treasury's U.S. capital markets competitiveness initiatives. The purpose of the committee was "to examine the sustainability of a strong and vibrant auditing profession."

The final report contains some 30 recommendations in three main categories:

  1. Human capital
  2. Firm structure and finances
  3. Concentration and competition

Here is the Treasury's fact sheet with a summary of its recommendations.

The AICPA was heavily involved in participation, with Barry Melancon serving on the committee and many CPAs providing testimony throughout the committee's duration (including our own MACPA member, Lisa Cines of Aronson & Company).

The recommendations will be sent to the FASB, the PCAOB and the SEC for consideration and implementation.

Among the major recommendations/issues discussed were  a call for increased education in our profession for IFRS readiness, XBRL and Fair Value Accounting. Some other highlights include liability reform to reduce the risk to auditing firms, a new fraud center at the PCAOB and a call for financial disclosure by CPA firms.

This is the second major report dealing with the CPA profession) in two months. The first was the SEC's Complexity Committee (CIFiR), released July 31, 2008. Read the full report.

Speaking of IFRS and XBRL, here are some recent resources from us:

Don't miss "U.S. Accounting Standards: Going Global (IFRS)" on Oct. 22-23 at the Marriott Harbor Beach Resort and Spa in Fort Lauderdale. The event is co-sponsored by the Florida Institute of CPAs, the Maryland Association of CPAs and the Ohio Society of CPAs.

And check out our special presentation on XBRL done in the virtual world of Second Life at our blog post XBRL and the International Future of Financial Reporting. (Click on the archive video to view the one-hour session.)