I am writing this report the day after President Bush’s State of the Union address. I have not checked with the Section’s Historian, Andy Bailey, but I think it very likely that this was the first State of the Union address that referred to accounting and auditing. The aftermath of the Enron collapse provides us with the opportunity and responsibility to contribute more to our profession.

It is certainly easier to hold students’ attention in my undergraduate auditing classes. The class discussion of the meaning and implications of reasonable assurance was more animated than normal! We also have a responsibility to help students put the recent events, and especially the related press reporting, into perspective. For example, my students were surprised to learn that document shredding occurs on all audit engagements, so before we pass judgment on Enron’s auditors we need to determine what documents were shredded.

The Enron-induced buzz in my auditing classes was also evident at the Midyear Conference in Orlando. Especially after the 25th anniversary conference last year in Houston, it is hard to claim that the Conference keeps on getting better, but that seemed to be the consensus of this year’s participants (and 270 in number almost matched last year’s record attendance). More details about the Midyear Conference appear elsewhere in The Auditor’s Report, but a special thanks to Jeff Cohen and his committee for a very successful conference. Thanks also to Dan Simunic for another successful doctoral consortium. The near-capacity attendance of 34 students is a promising sign for our future.

The Conference began with the plenary address by Kathy Eddy, immediate past chair of the AICPA board of directors. Chair of the AICPA board of directors is a full-time, but unpaid, voluntary position. As she is one of just three partners in a small firm, Kathy’s strong commitment to the profession and her willingness to sacrifice for the profession were not lost on the audience. The title of her speech was “What Role Should Academia Play in Updating the Financial Reporting Model?” She asked that we get more involved in the work of the AICPA and its various task forces and that, in particular, these task forces need our research. So does the ASB, which has many projects in the pipeline. She emphasized that auditing was the cornerstone of the profession.

The current relevance of our research was evidenced by sessions covering, for example, evaluation of financial reporting quality, auditor-provided nonaudit services, auditor litigation risk, evaluation of audit judgments, auditor dismissal and client acceptance, auditor independence, and audit committees and audit fees. In addition to sharing our own research, the Midyear Conference plays an important role in informing us of what is relevant and topical. To that end, there were panels on recent developments in assurance services, auditors’ interactions with boards and audit committees, auditing standards research opportunities, and e-assurance.

Ray Whittington, the academic member of the ASB, moderated the Auditing Standards Research Opportunities panel. I was very pleased to hear panelist John Fogarty, member of the ASB and co-chair of the Joint Risk Task Force, compliment the academic members of the fraud task force—Mark Beasley and Zoe-Vonna Palmrose—and recognize the role that academic research has played in their deliberations.

Another of the Section’s important functions is to facilitate communication between academia and practice. Chaired by Kay Tatum, the Section’s Auditing Standards Committee has been particularly active in communicating with standard setters and highlighting the latest auditing research relevant to their deliberations. The Committee prepared a review of the fraud literature for the ASB’s Fraud Task Force. The Committee as well as individual Executive Committee members have provided the ASB and SEC with comment letters on their recent initiatives.

The Auditing Standards Committee’s work on fraud led to The Auditor’s Report’s special issue on fraud detection (Winter 2001). This special issue has a wealth of fraud-related information for generating research ideas and for classroom use. The Committee will also email Section members when the ASB issues exposure drafts based on the work of the Fraud Task Force and Risk Assessment Task Force.

As another example of the Section’s outreach to practice, President-Elect Joe Carcello will be assembling an Auditing Section task force to monitor and comment on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) enterprise-wide risk management project.

One of the most important things we do at the Midyear Conference is present awards recognizing excellence among our colleagues. The Section has four annual awards. This year congratulations go to Barry Cushing (University of Utah) for the Outstanding Educator Award, Lynford Graham (BDO Siedman, LLP) for the Distinguished Service in Auditing Award, Mark Beasley (North Carolina State University) for the Notable Contribution to Auditing Literature Award, Jeff Wilks (Brigham Young University) for the Outstanding Auditing Dissertation Award, and Bob Libby (Cornell University) as Jeff Wilks’ dissertation chair. You can read more about this year’s winners elsewhere in the newsletter. Again I want to thank the selection committees for their efforts in selecting such worthy award recipients.

I am pleased to announce that the Executive Committee has approved a new award, the Innovation in Auditing and Assurance Education Award. You can read more about this award and the nomination process for this and the Section’s other awards in the newsletter.

The Executive Committee meeting and Section business meeting in Orlando received interim reports from the Section’s standing committees. Let me highlight just a few of these committees’ many activities. The Communications Committee is examining the case for a change in the name of the Section and the potential for a web-based practice-oriented journal. Last year the Membership and Regional Coordinators Committee surveyed 144 former members of the Auditing Section. The majority reported that changes in teaching and research interests lead to their departure from the Section. However, some reported that they had hoped to receive more support for teaching. The committee is working on ways to increase the teaching support provided at regional meetings. The Education Committee is working on (1) a survey of assurance services education practices, and (2) increasing the education-focused sessions at the Midyear Conference.¹ Finally, the Research Committee is continuing its work on the auditing research database. Specifically, the references from the Microsoft Word file have been moved to the reference database program endnote. The Committee is also updating the references. Expect to hear more about the reference database in the next issue of The Auditor’s Report. I want to thank the chairs and members of these committees for their outstanding work for the Section and its members. Contact information for Committee Chairs and Executive Committee members is available on the Section’s web site.

Of the other items on the Business Meeting’s agenda, I want to mention five. First, an important part of prior meetings was the election of officers. For the first time, we held this year’s election online, and 330 members voted. The Executive Committee deemed this first online election a success. Thank you to those of you who voted. For those who didn’t vote last year, please remember to vote this year! The winners were publicly announced at the Business Meeting. Congratulations go to Jean Bedard (Northeastern University) Vice President–Academics and President-Elect, Bill Dilla (Iowa State University) Secretary, and George Krull (Grant Thornton LLP) Vice President–Practice. The call for nominations for next year’s open positions also appears in this newsletter.

Second, Rick Tubbs’ treasurer’s report containing the Section’s Statements of Cash Receipts, Disbursements, and Cash Balance shows a significant drop in the Section’s cash balance, and reflects a structural cash flow deficit that the Section has had for some time. As a result, the Executive Committee proposed at the Business Meeting that dues be increased to $35 to cover the structural deficit and help rebuild the Section’s cash balance. The proposal passed unanimously.

The third item is Randy Elder’s report as the 2002 Annual Meeting Committee Director and Section Liaison. Randy reported that Auditing Section submissions of 77 papers were up slightly from last year’s 72, while total submissions of 626 were down from 676. Randy indicated that the AAA’s electronic submission and review process seems to be working well.

Fourth, Arnie Wright’s editor’s report appears in this newsletter. The number of submissions, turnaround time, and number of articles published reflect the great commitment of Arnie and his associate editors, Jane Mutchler and Ken Trotman. Arnie and incoming editor Bill Messier (Georgia State University) talked about the steps they will undertake to ensure a smooth transition. I am sure that we can expect a similar performance from Bill and his associate editors, Mark DeFond (University of Southern California), Rick Tubbs (The University of Iowa), and Hun-Tong Tan (Nanyang Technological University).

The last item I want to mention is that this is the 25th anniversary of our newsletter, The Auditor’s Report. Given the substantial content of The Auditor’s Report, calling it a newsletter is probably a disservice. Because of the hard work of our current editor Mark Taylor, and the editors before him, The Auditor’s Report is a wealth of information and a valuable resource for members. Mark has also done a great job in overseeing the conversion from hardcopy to electronic version of the newsletter.

Especially for those of you who could not join us at this year’s Midyear Conference, I hope this report gives you a sense of how much is happening in the Section. Despite the current controversy surrounding accounting and auditing, the Section is strong and committed to serving its members and supporting the profession. With a total of 17 committees, a lot of people are making real contributions behind the scenes. Thank you all.

¹ I am hesitant to categorize sessions as research- or teaching-oriented because both activities are symbiotic; nevertheless, I want to note that two sessions at this year’s Midyear Conference had a strong teaching focus: “Recent Developments in Assurance Services: Opportunities for Research and Teaching,” and “Attracting Students to Assurance Services: Innovative Approaches.” [Back to Article]