MEETING DATE: January 22, 1998

MEETING LOCATION: Mesa, Arizona

IN ATTENDANCE: Executive Committee Members: Barry Cushing, Tim Bell, Jane Mutchler, Lisa Koonce, Joe Carcello, Jack Krogstad. Guests: Bill Dilla (Chairperson of the CPE Committee), Morley Lemon (University of Waterloo and Chairman of the Education Committee), Bill Messier (Chairperson of the 1998 Mid-Year Meeting Program Committee), and Tom Powell (Chairperson of the Practice Advisory Council).

The meeting was called to order at 8:20 a.m.

Cushing

Information

Barry Cushing gave the Executive Committee members their head table assignments for the plenary session, business meeting, and Saturday luncheon.

Bell/Cushing

Information/Action

Tim Bell reported on the Auditing Section committee assignments that he has made for the 1998-99 year and solicited names from the Executive Committee for the remaining, unfilled positions. Barry Cushing reminded the Executive Committee of the need to form a Nominations Committee by August 1998 for purposes of selecting a new Editor of Auditing: A Journal of Practice and Theory. The Executive Committee provided names to both Tim Bell and Barry Cushing for these committee assignments.

Bell

Information/Action

Tim Bell led a discussion about his initial draft of the structure and charge of the new standing Communications Committee. After suggesting several changes to the proposed structure and charges, the Executive Committee adopted the proposed draft of the structure and charge (which is attached to these minutes).

Mutchler

Information

Jane Mutchler reported on the progress of the Section’s research project entitled "Independence and Objectivity" that is being funded ($87,000) by the Institute of Internal Auditors. She indicated that the project participants were to meet in April 1998 in Chicago to begin work on the project and also in New Orleans at the 1998 American Accounting Association meeting. Jane reported that the output of this 18-month research effort will be a Section monograph published by the Institute of Internal Auditors.

Mutchler/Cushing/Koonce/Bell

Information/Action

Jane Mutchler led a discussion about the possibility of the Auditing Section helping developing countries around the world with the advancement of their knowledge about accounting and auditing. She indicated that many developing countries have few textbooks or other resources on accounting and auditing. Jane further indicated that the World Bank had recently led an initiative to improve the dissemination of accounting and auditing knowledge in these developing countries and was requesting assistance from the Auditing Section.

Barry Cushing moved and Lisa Koonce seconded that: For the next one year period, the Auditing Section will print up to 100 additional copies of Auditing: A Journal of Practice and Theory and have the World Bank distribute them to developing countries. The motion passed unanimously. Jane Mutchler agreed to follow-up on contacting the appropriate American Accounting Association and World Bank personnel to ensure that these extra copies are printed and distributed.

Jane Mutchler moved and Lisa Koonce seconded that: When American Accounting Association members donate AAA memberships to department chairs outside the United States (under the AAA’s Gift Membership Program), the Section will "match" with the donation of a $15 gift membership to the Auditing Section. The motion passed unanimously. Jane Mutchler agreed to follow-up on implementation issues by contacting the appropriate American Accounting Association personnel. Tim Bell agreed to write a short paragraph of this gift-membership program for inclusion in an upcoming The Auditors’ Report.

Cushing/Krogstad

Information/Action

Barry Cushing led a discussion about the need for a description of the Section Historian’s responsibilities, should that position be formally approved (as an ex-officio, nonvoting member of the Executive Committee) by vote at the upcoming 1998 Business Meeting. The Committee agreed that should the Historian become a member of the Executive Committee, a job description should be formalized. Jack Krogstad agreed to write a job description for the Historian’s responsibilities, should that position be approved by vote at the 1998 Business Meeting.

Krogstad/Bell

Information/Action

Jack Krogstad led a discussion about the Auditing Section’s operating manual. Issues discussed included the types of items to include or exclude from the manual, the need to disseminate the manual to existing and incoming Executive Committee members, the need to retain old minutes in a separate archive file, and the possibility of creating an electronic version of the manual. Tim Bell agreed to have the operating manual converted to electronic form (via scanning) once Jack Krogstad finalizes its contents.

Dilla/Carcello

Information/Action

Bill Dilla (Chairperson of the CPE Committee) led a discussion about the communication difficulties encountered with the American Accounting Association’s CPE director and with the CPE director for the regional meetings. During 1998, these difficulties will contribute to fewer auditing-related CPE sessions at the annual and regional AAA meetings. The Executive Committee agreed that Bill should contact the AAA’s CPE director and work closely with her on planning the 1999 annual meeting CPE sessions. The Committee also agreed that he should check the AAA’s policy on reimbursement to CPE presenters as it appeared to be different than the Section’s policy (no reimbursement). The Committee also agreed that Bill should maintain closer contact with the regional meeting directors to ensure that auditing-related CPE sessions are considered for those regional meetings.

Joe Carcello led a discussion about the feasibility of distance learning and internet-based CPE programs being provided by the Section. The Committee agreed that the CPE Committee should study this issue. The Committee also agreed that an additional member be added to the CPE committee so that its charges could be accomplished.

Cushing

Information/Action

Barry Cushing led a discussion of the possibility of moving the Section’s Committee appointments from an August-to-August to a January-to-January timetable in light of the recent change of the Business meeting to the Mid-Year Meeting which is typically held in January. The Committee agreed to keep all appointments on an August-to-August cycle. Their rationale was that the Mid-Year Business Meeting would be a time for Committee chairs to present their plans for their Committee work rather than a presentation of their prior accomplishments.

Barry Cushing led a discussion as to whether the Executive Committee elected officers (elected at the Mid-Year Business Meeting) should be invited to attend the Executive Committee meeting typically held immediately before the start of the annual American Accounting Association meeting. The Executive Committee agreed that having the elected officers attend this meeting (before their duties technically begin at the Auditing Section luncheon at the annual meeting) would facilitate officer transitions.

Powell

Information/Action

Tom Powell, Chairman of the Practice Advisory Council, led a discussion about the progress of the Practice Advisory Council. The Executive Committee agreed to have the Practice Advisory Council hold a panel session on the topic of "real-time" reporting and auditing at the 1998 annual American Accounting Association meeting during the time slot that was previously designated for the Section Business Meeting. The Executive Committee also agreed that Tom Powell should work with the Section’s Research Committee to determine possible research projects which would have the joint involvement of practitioners and academics. Tom Powell agreed to contact and work with Dave Ricchiute, Chairman of the Research Committee.

Cushing

Information/Action

Barry Cushing led a discussion about the Section Webmaster’s request for $500-$1000 to hire an assistant to help him with the Section’s home page. The Executive Committee decided to not support his request on the rationale that those who agree to serve a volunteer organization should not be funded by the organization to hire others to do the work.

Lemon

Information/Action

Morley Lemon, University of Waterloo, reported on the status of the 1998 University of Waterloo Audit Symposium which is being co-sponsored by the Auditing Section. Morley reported that he would be meeting with Bill Felix, Editor of Auditing: A Journal of Practice and Theory, to determine the papers that would be published in the journal. Morley also asked the Executive Committee as to whether to publish the conference speeches and panel discussions. The Committee agreed that such a decision should be made by Bill Felix, Editor.

Messier/Cushing/Mutchler

Information/Action

Bill Messier, Chairperson of the 1998 Mid-Year Meeting Program Committee, reported on the status of the 1998 Mid-Year Meeting. Bill led a discussion about problems encountered during the meeting planning process. The Committee agreed that an early registration discount was necessary to discourage late, on-site registrations which make planning more difficult. Barry Cushing moved and Jane Mutchler seconded that: For future Mid-Year Section meetings, an early registration discount be used to encourage early registration. The motion passed unanimously.

Cushing/Mutchler/Koonce

Information /Action

Barry Cushing led a discussion about the request by the Future of Audit, Attestation, and Assurance Services Task Force that their three papers be included on the Auditing Section’s home page. Jane Mutchler moved and Lisa Koonce seconded that: The three papers associated with the work by the Task Force on the Future of Audit, Attestation, and Assurance Services be included on the Auditing Section’s home page and designated as a "Task Force Report." The motion passed unanimously.

Carcello

Information

Joe Carcello (Section Liaison to the 1998 Planning Committee) discussed the number of submissions received for the AAA meeting in New Orleans and his plans for paper presentations and panel discussions.

Carcello

Information/Action

Joe Carcello reviewed the Section's financial activity for the prior 17-month period from July 1996 through November 1997. Joe reported that the Section was financially healthy.

Joe Carcello also led a discussion about the low cost of a library subscription to the Section’s journal, Auditing: A Journal of Practice and Theory and suggested that the Section consider raising the subscription cost. The Executive Committee agreed that before making a decision as to whether to raise the subscription price, Joe Carcello should survey the library subscription cost of other Section journals and report back to the Executive Committee.

Cushing/Koonce

Information/Action

Barry Cushing led a discussion regarding a progress report from Stan Biggs, Chairperson of the 1999 Mid-Year Meeting Planning Committee, in which he reported difficulties finding someone who would speak for no charge at the meeting. Barry Cushing moved and Lisa Koonce seconded that: The Section authorizes Stan Biggs to spend up to $8,000 for a 1999 Mid-Year Meeting speaker. The motion passed with four yes votes and one abstention.

Bell

Information/Action

Tim Bell led a discussion about possible locations for the year 2000 Mid-Year Meeting. The Committee agreed that Orange County, California, or San Antonio, Texas, would be suitable sites for that meeting. Tim Bell agreed to begin working with the 2000 Mid-Year Meeting Planning Chair (Arnie Wright) to locate conference facilities in Orange County.

Cushing/Mutchler/Carcello

Information/Action

Barry Cushing led a discussion about the request from Stan Jenne, Chairman of the Membership Committee, to print additional membership brochures for purposes of distribution at regional meetings. Jane Mutchler moved and Joe Carcello seconded that: The Section print an additional 500 membership brochures. The motion passed unanimously.

Koonce

Information/Action

Lisa Koonce led a discussion regarding the request by Jean Bedard, Editor of The Auditors’ Report, for details on how to implement the transition of the The Auditors’ Report from paper copy distribution to only electronic distribution (web publishing). The Committee agreed that once the Winter 1998 issue is placed on the Section’s home page, Jean should have the American Accounting Association send postcards to all Section members indicating that the Winter issue is on-line. Those Section members wanting a paper copy of the newsletter would be required to send the postcard (or other communication) to Jean Bedard who would mail to them a print copy of the Report as it appears on the home page.

Koonce

Information/Action

Lisa Koonce led a discussion regarding the need to send newly elected officers the last two years of Section minutes. The Executive Committee agreed that the Section Secretary should send these officers minutes to facilitate their transition into office.

Mutchler/Carcello

Information/Action

Jane Mutchler led a discussion regarding the reimbursement policy for the Mid-Year Meeting Program Committee members and the Executive Committee members for travel expenses associated with the Mid-Year meeting. The current policy was reimbursement of up to $500 in expenses. The Committee agreed that this policy should remain the same for the 1998 Mid-Year meeting, but thereafter the reimbursement should be only for incremental costs associated with the Mid-Year meeting. Jane Mutchler and Joe Carcello agreed to redraft the policy statement on this matter.

The meeting was adjourned at 6:05 p.m.

Submitted by: Lisa Koonce, Secretary

Structure: Members appointed for three-year terms. Chair appointed for two-year term.

Charge:

1. Responsible for maintenance of the Auditing Section's web-site.

2. Responsible for oversight of the electronic dissemination of the Auditing Section's newsletter.

3. Assess the cost and feasibility of electronic dissemination of the Auditing Section's journal and other reports, studies, and administrative communications.

4. Interact/liaison with the appropriate representatives of the American Accounting Association (to be identified) on issues related to association-wide use of electronic forms of communication.

5. Work with the Education Committee to monitor the development and use of distance-learning models and report emerging trends to the members of the Auditing Section.

6. Foster innovations in the use of electronic forms of communication that will enhance the Auditing Section's ability to achieve its strategic objectives.

7. Communicate the progress and results of Committee activities to Auditing Section members in appropriate ways, including but not limited to the presentation of a brief report at the Section's annual business meeting.

President Barry Cushing welcomed approximately 90 members to the Auditing Section’s Business Meeting on January 24, 1998.

Barry Cushing conducted a voice vote on four proposed by-law changes which are detailed in an attachment to these minutes. The first three of the by-law changes were unanimously supported. The fourth by-law change was approved with one "no" vote recorded.

Jane Mutchler presented nominations for the positions of Vice President-Academic, Secretary, and Vice President-Practice. There were no nominations from the floor. Karen Pincus was elected Vice President-Academic, Jean Bedard was elected Secretary, and Jerry Sullivan was elected Vice President-Practice.

Joe Carcello, Treasurer, reviewed the Section’s financial activity for the period July 1, 1996 through November 30, 1997. A Statement of Cash Receipts, Disbursements and Cash Balance is attached to the January 22 Executive Committee minutes.

Bill Felix (Editor, Auditing: A Journal of Practice and Theory) presented a report emphasizing submission statistics, processing times, and acceptance rates. He also reported on his initiative to solicit articles from the large accounting firms regarding their new audit methodologies and from prominent practitioners.

Morley Lemon, University of Waterloo, reported on plans for the March 1998 auditing conference on the topic of Assurance Services to be held at the University of Waterloo.

Jean Bedard (Editor, The Auditor's Report) recognized column editors and solicited contributions from Section members. Jean also reported that the newsletter would only be in electronic form beginning with the Winter edition.

Tim Bell, Vice President-Academic, announced the deadlines and submission requirements for the Section’s outstanding dissertation award.

Joe Carcello, Annual Program Planning Committee, reported on the number of papers received for the annual meeting and the plans for the Auditing Section sessions at the 1998 annual meeting in New Orleans.

Jane Mutchler reported on the "Independence and Objectivity" monograph that various Section members are writing, under the $87,000 grant from the Institute of Internal Auditors.

Barry Cushing conducted a straw vote on Section member preferences regarding a dinner at future Mid-Year meetings. Business meeting participants favored keeping the current model intact where dinners are not provided as part of the conference.

Ray Whittington, Chairman of the Auditing Standards Committee, reported on their work and requested that members send relevant research to his committee.

Tom Powell, Chairman of the Practice Advisory Committee, reported on the activities of the PAC and described the panel on "real time" reporting and auditing that they would conduct at the annual meeting in New Orleans.

Bill Dilla, Chairman of the CPE Committee, reported on his committee’s progress and solicited input from members regarding CPE ideas for future meetings. Morley Lemon, Chairman of the Education Committee, reported on the activities of his committee. Stan Jenne, Chairman of the Membership Committee, reported on the activities of his committee.

Stan Biggs, Mid-Year Program Chairperson, reported on the progress of the 1999 Mid-Year Meeting which is to be held in Atlanta, Georgia from January 14-16.

Barry Cushing reported on his work regarding his initiative to involve more practitioners in the Section. He also reported on the Executive Committee’s continuing work on strategic planning.

The meeting was adjourned at 9:55 a.m.

Submitted by: Lisa Koonce, Secretary

Proposal I: The last sentence of Section V, part 1, of the current By-Laws now reads:

Each officer will begin serving his or her term immediately upon election.

It is proposed that this wording be changed to (changes in italics):

Each officer will begin serving his or her term at the time of the Auditing Section luncheon at the Annual Meeting of the American Accounting Association.

Proposal II: The sixth sentence of Section V, part 3, of the current By-Laws now reads:

The Nominating Committee shall present to the Secretary of the Section the nominations for offices of President, Vice-Presidents, Secretary, and Treasurer of the Section at least three weeks before the annual meeting.

It is proposed that this wording be changed to (changes in italics):

The Nominating Committee shall announce to Section members the nominations for offices of President, Vice-Presidents, Secretary, and Treasurer of the Section at least three weeks before the Section’s annual business meeting.

Proposal III: The last sentence of Section V, part 2, of the current By-Laws now reads:

The President and two other officers shall constitute a quorum.

It is proposed that this wording be changed to (changes in italics):

The President and three other voting members of the Executive Committee shall constitute a quorum.

Proposal IV: It is proposed that the Section historian be designated as an officer of the Section, that (as with other Section officers) the historian’s duties be specified in the By-Laws, and that the historian be designated as an ex-officio, non-voting member of the Executive Committee.

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