Auditing Section
American Accounting Association

Minutes of the Executive Committee Meetings
February 18, 1994

MEETING DATE: February 18, 1994

MEETING LOCATION: Oxnard, California

IN ATTENDANCE: Executive Committee Members: Robert Knechel, Ira Solomon, Steve Aldersley, Karen Pincus, Gerald Smith, Bill Messier. Others: Tim Bell (Research Committee), Tom McKee (Education Committee), Larry Ponemon (newsletter editor)

The meeting was called to order at 12:15 p..m. The first order of business was the unanimous approval of the minutes of the August 1993 annual meeting and Executive Committee meetings.

Bell/Solomon/Messier
Information/Action

Tim Bell reported on the two projects of the research committee, the Research Impact monograph and the consideration of guidelines for requesting research subjects. The initial drafts of the Research Impact monograph will be exposed for discussion in break-out sections at the USC/Grant Thornton Audit Judgment Symposium on February 21. The committee's work on possible guidelines for requesting research subjects appears to overlap with the interests of other sections. Consequently, Ira Solomon moved, Bill Messier seconded and the Executive Committee unanimously voted that: A report of the work to date by the Auditing Section Research Committee on guidelines for requesting research subjects from firms should be forwarded to the American Accounting Association Executive Committee for further consideration.

Knechel
Information

Robert Knechel reported that Michael Monaco, the CFO of American Express, has agreed to be the speaker at the section luncheon at the 1994 annual meeting.

Messier/Knechel
Information/Action

Bill Messier reported that the cost of the annual meeting luncheon in New York will be $40. A discussion of member reactions to the high cost of the luncheon ensued. Bill Messier proposed, Robert Knechel seconded and the Executive Committee unanimously voted that: The Auditing Section Chair should send a letter to the current and incoming AAA Presidents expressing the need to reduce the cost of future annual meeting section luncheons.

Bell/Knechel/Messier
Information/Action

Tim Bell reported on the planned KPMG Peat Marwick seminars at 1994 regional meetings and the firm's evaluation of the response to the seminars. Robert Knechel appointed a committee, consisting of Tim Bell and Bill Messier, to perform a sunset review of the seminar series. This committee will present a report at the August Executive Committee meeting.

McKee/Knechel/Solomon
Information

Tom McKee presented an education committee report covering three topics: (1) The 1994 Audit Education Conference had 124 attendees. Evaluation information was collected and will be reported at the next Executive Committee meeting. (2) A questionnaire on the supply of and demand for auditing cases has been developed and distributed; ideas being considered include creating an inventory of cases and conducting a case competition. (3) The current strengths and weaknesses of providing CPE courses from two sources within the section was discussed. As a result of this discussion, Robert Knechel moved, Ira Solomon seconded and the Executive Committee unanimously voted that: The Education Committee will no longer be responsible for putting on CPE programs; the CPE Director's charge should be amended to include responsibility for coordinating CPE programs at regional meetings and the Education Committee should appoint a liaison to the CPE Director to provide suggestions on education-related CPE topics. Ira Solomon agreed to rewrite the charge for the CPE Director.

Ponemon/Messier/Knechel
Information/Action

Larry Ponemon presented a report on the newsletter. The major issue raised was the receipt of various requests for paid advertisements. A discussion of the potential revenues versus administrative costs and efforts followed, as well as a discussion of establishing a policy for advertisements. Bill Messier moved, Robert Knechel seconded, and the motion passed by a 4-1 vote that: For a one year period beginning with the Summer 1994 issue, the Auditor's Report may accept paid advertisements of interest to members at prices consistent with similar AAA publications, providing that the editor first determine that no tax consequences would occur if advertisements were accepted.

Solomon/Pincus
Information/Action

Ira Solomon reported on the status of the dissertation award selection process for this year and presented a series of ideas on changing the selection process in the future. Ira Solomon then moved, Karen Pincus seconded, and the Executive Committee unanimously voted that: Beginning next year, the Chair-Elect of the Auditing Section shall appoint a committee consisting of a chairman (who may not be a member of the Executive Committee) and three members, each of whom must be independent of any potential nominees, to select the dissertation award winner, if any, for the year. Ira Solomon agreed to rewrite the policy statement for 1994-95.

Solomon
Information

Ira Solomon announced the regional chairs and vice chairs appointments for 1994-95 (list attached at end of minutes) and also announced new committee appointments for 1994-95 (list attached at end of minutes).

Messier
Information

Bill Messier reported on nominations for Section Officers and solicited names of additional potential nominees from the Executive Committee.

Smith
Information

Gerald Smith reported that Marie Hamilton at the national office has agreed to post updated service records for all section officers, committee chairs, directors, and regional chairs.

Pincus
Information

Karen Pincus reported on the AAA's new information system and temporary accounting problems during the transition to the new system. Due to these problems, which are being corrected, the Statement of Cash Receipts, Disbursements and Cash Balance (copy attached) for the first six months of fiscal year 1994 cannot be directly compared to the prior year's statement or the current year budget.

Pincus
Information

Karen Pincus reported on the Section's cash balance in comparison to various benchmarks (copy of benchmark comparison attached).

Knechel
Information

Robert Knechel reported that Larry Ponemon has been appointed as section liaison with the Professional and Ethics Committee of the AAA.

Knechel
Information

Robert Knechel reported on plans to date for the CPE program at the annual meeting.

Messier/Aldersley
Information/Action

Bill Messier presented a written report and recommendation from the Committee to Develop Criteria for Selecting the Editor of Auditing: A Journal of Practice and Theory and moved that the recommendations be adopted. Due to concerns that the reasons for a recommended change in selection committee composition were not clearly explained, the motion died for lack of a second. A straw vote indicated that the Executive Committee members favored the suggested criteria numbered #1 through #8, but needed a rationale for the proposed bylaw changes related to increasing the size of the Executive Committee and independence of the editor selection process from the Executive Committee. Bill Messier agreed to communicate these concerns to the Committee along with several questions about the possibility of changing the term an editor would be expected to serve.

Solomon
Information

Ira Solomon presented a report on the possibility of potential changes to the structure of the Executive Committee, such as adding a Member-at-Large, and potential changes to the election procedure. After a brief discussion of the report, no changes were recommended.

Knechel
Action

Robert Knechel tabled the scheduled discussion of the editorial policy of the Auditing journal due to the editor's absence from the meeting. Due to incomplete information, the scheduled discussion of increasing section contributions to the auditing profession was also tabled.

Aldersley/Knechel
Information

Steve Aldersley reported on the nomination process for the Distinguished Service award and Robert Knechel reported on the process for the Outstanding Educator award. Due to some errors in the Call for Nominations printed in the Auditor's Report, the nomination period is being held open longer than initially stated.

Knechel/Messier
Information/Action

Robert Knechel presented a report of the mid-year meeting planning committee, including a discussion of issues yet to be settled. Robert Knechel moved, Bill Messier seconded, and the motion passed 4-1 that: An annual mid-year Auditing Section Education and Research Conference will be held beginning in either 1995 or 1996, with a decision on the feasibility of a 1995 start date to be made within 30 days. Robert Knechel agreed to determine by the end of March whether a 1995 start date in Las Vegas would be feasible. Final approval for a 1995 start date, if feasible, will be obtained via a telephone vote, with results to be stated in an addendum to these minutes.

The meeting adjourned at 6:15 p.m.

Addendum on fax/telephone vote regarding mid-year meeting:
The mid-year meeting will be held in January 1995 in Las Vegas, Nevada.

Minutes submitted by: Karen V. Pincus, Secretary/Treasurer

NOTES:

1. The Statement of Cash Receipts, Disbursements and Cash Balance was compiled from monthly financial reports received from the American Accounting Association national office.

2. During fiscal year 1994, the American Accounting Association changed its information system. The changes went into effect on reports beginning in August 1993. The new information system provides some detail which was not available previously, including information about the sources of membership dues. For fiscal year 1994, $3,376 of the dues are from July with unspecified sources. For August to December dues, $3,055 are from old (repeat) members, $156 are from associate members, and $115 are from new members. Membership as of July 1, 1993 was 1769 with 1451 from the U. S. and Canada and 318 foreign members.

3. Journal subscriptions and sales of publications were accounted for in a single category before the Association changed its information system in August 1993.

4. Fiscal year 1994 net receipts from continuing professional education programs consist of receipts from two CPE programs conducted at the Association's August 1993 annual meeting.

5. Miscellaneous disbursements for fiscal year 1994 consist of UPS and postage charges not specifically related to distribution of the Auditing journal or section newsletter. The postage charges include allocated postage charges from the Association.

6. The suspense account balance represents a deferred income entry currently under investigation.