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March 31, 2011


Independent Accountant

Bravo. However there is another question which must be asked: Does Congress want good audits of TBTF financial institutions if they audits would reveal their insolvency? I don't think so.

Just Da Facts

Audit fees are getting lower, not higher. Just go look at the trend of the Fortune 100 over the last three years...


As much as I think the Big 4 is, to borrow the title of Mike Brewster's book "Unaccountable", this smacks of being a CYA blame-fixing show trial with people outside "the profession" -lawyers and bureacrats -insisting accountants should have a crystal ball.

Yet, the federal government has been promising it could prevent the next "crisis" since the passage of the SEC act in 1933 and with each new law, we hear the same solemn intonations about the "integrity" of our capital markets. We get more lawyers dictating accounting (SOX made the takeover a fait accompli), more bureacrats and more "crises". NO doubt this hearing will produce recommendations for more laws, regulations, lawyers and bureaucrats and there will still be more crises.

An audit, remember is not designed to assess the robustness of a business-nore should it-because it can't . Admittedly an extreme example: should TEPCO's auditor be held responsible for its financial failure after the issues with its reactors after the earthquake/tsunami?

On the other hand, AIG was an insurer, examined according to statutory accounting principles by the NY Insurance Dept. Such an examination IS designed to assess the near term solvency of an insurer and apparently they missed it's then impending doom as well.

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The work for auditors is getting more,whereas the pay for auditors is decreasing.The reason may be growing number of students would like to choose accounting as their major,which has fulfilled the demand of the market.

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