Over the last two years or more, the AICPA has been investigating and admonishing Dr. Abraham Briloff for a letter published in Accounting Today. While the details of this controversy can be found in various reports, editorials and letters to the editor in Accounting Today, this case needs to be considered for some of its implications. In addition, this case has some important elements to consider in the historical life of the AICPA and the profession, especially in the area of enforcement of rules, ethics and accounting judgment.

During late 1998, I wrote up some notes on what was occurring then. In the broadest chronology, the practice that Abe has with his daughter was peer-reviewed for a compilation for a client in the year 1993. In January 1997, Dr. Briloff wrote a letter to the editor. Through disclosures by Dr. Briloff, we learned he was being investigated by the AICPA-based on a membership complaint; this too was reported in Accounting Today. At this point of the discussion, Dr. Briloff had met with officials from the AICPA’s accounting division following a visit to his practice from one of their representatives.

This commentary flows from that time and concerns how this matter might embarrass the profession and threaten the membership. Other elements of this case covered in my opinion pieces in Accounting Today relate to rule enforcement vs. accounting judgment, first amendment rights and the function performed by iconoclastic critics in self-regulating professions in place of addition governmental regulation.

Embarrasses the Profession
Some observers of the profession will undoubtedly see the AICPA investigation and trial of Dr. Briloff as a groundless, mean-spirited, partisan attack on one of the great accounting educators and writers of our time. The attack itself wastes the public confidence that the AICPA has built up with great effort and millions of its members’ dollars. Moreover, the AICPA persecution is embarrassing the profession among those whose goodwill we need in order to practice: creditors, investors, preparers, the general public and, unfortunately, our many competitors. This story made it to the New York Times business section.

More alarming is that this may be providing a powerful, misguided example to our already fierce competitors. These include bankers, insurance agents, lawyers, management consultants and system consultants, who, in special circumstances, might be able to do a better job in our attest function. This is excepting the fact that business and the public still trust us more. If actuaries, attorneys, bankers, computer analysts, economists (remember Federal Chairman Greenspan’s recent comments about weakening banking accounting standards), financial analysts, insurance agents, management consultants and others, by themselves or in conjunction, do at least as good a job of auditing as CPAs in certain circumstances, our auditing monopoly could be threatened. They could also hire CPAs themselves and again convince Congress to end the CPA monopoly on attestation services for financial statements. It is the good image of the profession that keeps these others legally out of our business.

Role of a Profession’s Prophets
Public persecution of our moral iconoclasts takes the ethical high ground away from the profession and makes us vulnerable to the other professions represented in Congress, who see our attest function as the Trojan Horse into their profession. The public, especially the investment community, is likely to see Dr. Briloff as more creditable that his AICPA persecutors. This fact alone should have warned the AICPA off a long time before this. In addition, while ethics critic to the profession, he may temporarily aggravate some. Many practitioners have come to the conclusion that accounting is more effective, relevant and much more profitable because of Dr. Briloff’s more than 50 years of critical conscience for the profession. His exquisite prose—almost poetry—and his stature in taking on the largest economic actors have done much to convince government policy makers not to intervene in the private self-government of the profession.

The Management of the AICPA
This persecution of Abraham Briloff also puts the honor and management skills of our profession in question. Much of our very profitable consulting business builds on the costly but necessary quality of our auditing assignments that Briloff’s criticism did so much to elicit. Moreover, AICPA persecution of its critics means that most members will perceive that they will not likely be able to express their concerns without retaliation, much less get their concerns acted upon.

The Ethics Division Punishment
Dr. Briloff refutes each of the five charges by providing concrete, well-reasoned arguments as to why good accounting judgment required some adjustment. In addition, the penalties assigned Dr. Briloff by the AICPA are suspect. The AICPA is putting Dr. Briloff on probation for a whole year as they snoop and pry into his practice and silence him. They are also requiring him to take 31 hours of course work. This again seems to many an example of personal vengeance. For one moment, reading the AICPA penalties assigned to Dr. Briloff, I thought that the AICPA was imaginative enough in their punishment sentencing to ask the accounting pioneer to teach rather than study 31 hours in AICPA courses. Alas, the imagination and the tact of the AICPA failed. They could have taken advantage of Dr. Briloff’s nature to help the profession to slide in their rule-enforcing goal. In addition, the penalty seemed excessive in other ways. A former AICPA president, Maurice Stans of Watergate, was a criminal convicted of five misdemeanors from his professional life and the AICPA did not level any penalty against him.

Prologue
Back in late 1998 when these notes were taken, the Ethics Division of the AICPA had recently found Dr. Briloff guilty and assigned him several punishments, which he later appealed to the Joint Trial Board, where he again lost. This was reviewed by an ad hoc committee of the AICPA which kept the judgment against him but dropped any requirements for Dr. Briloff. Since this did little to address the policy concerns of Dr. Briloff in AICPA rules for small-practice compilations, Dr. Briloff is pursuing the matter today in the courts. Please send comments and questions to the author at dwight@qtm.net.

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