This is my third and final report as President of the Auditing Section. Serving as the President of the Auditing Section during the past year has been one of the highlights of my professional career. Thank you for giving me the opportunity to serve the Section in this manner.

I wrote my second report immediately after the Midyear Conference (MYC) in Huntington Beach. The 2003 MYC was a great success. Bob Ramsay and his entire committee deserve our thanks for the conference’s success, as do Mark DeFond and his committee for the Doctoral Consortium’s success. This issue of The Auditor’s Report includes information about the 2004 Conference, which will be co-chaired by Steve Glover and Doug Prawitt. The deadline for submitting papers is September 1, 2003. I know that Steve and Doug would like to hear from you if you are interested in volunteering to review papers for the 2004 MYC. I also am sure that Mark Zimbelman, chair of the CPE Committee, and Ron King, chair of the Doctoral Consortium Committee, would be interested in your suggestions.

In this report, I want to tell you about a number of ongoing Section initiatives. These initiatives include: (1) the Section’s approach to the Public Company Accounting Oversight Board (PCAOB) to develop an ongoing relationship between our two groups, (2) our efforts to restaff and revitalize the Section’s Practice Advisory Council (PAC), (3) our planning for a conference in 2005 to celebrate the 25th anniversary of Auditing: A Journal of Practice & Theory (AJPT), and (4) significant activity by all five of the Section’s standing committees.

First, as I told you in my spring report, the Executive Committee believes that it is in the best interest of both the Section and the PCAOB for our two organizations to have a close working relationship. I have met with Charles Niemeier (the PCAOB’s Acting Chair) to discuss how that relationship might unfold. Subsequently, the Section’s Executive Committee submitted a proposal to the PCAOB on how we believe the Section could serve the PCAOB and the investing public. As you might imagine, the activities of the PCAOB also are of interest to our parent organization, the American Accounting Association (AAA). We are working with Bill Felix (the incoming President of the AAA) and Zoe-Vonna Palmrose (the AAA’s Vice President–Research) to provide a coordinated approach that takes advantage of strengths at the AAA and Auditing Section levels. In this spirit of cooperation, Zoe-Vonna, Jean Bedard (the Section’s incoming President), and I will travel to Washington, D.C. to present our proposal to the entire PCAOB. I hope to provide you with further details of our meeting with the PCAOB at the Section’s luncheon in Hawaii.

My second item relates to our Practice Advisory Council. The PAC was established in the mid-1990s, with the primary goal of developing a closer working relationship between our Section and the practice community. Largely because of Tom Powell, the PAC was reasonably active in its early years. Recently, the PAC essentially has become dormant and currently has a staff of only three individuals. John Fogarty, a senior partner with Deloitte & Touche and a member of the Auditing Standards Board, is chairing the PAC. Jean Bedard, Scott Showalter (the Section’s Vice President–Practice), and I met with John Fogarty and one of his fellow partners, Trevor Stewart, in New York City on April 7, 2003. We discussed short- and long-term goals for the PAC, and how we would staff the PAC. John hopes to fully staff the PAC and hold a conference call of PAC members before the AAA Annual Meeting. The PAC plans to develop a session for the 2004 MYC in Clearwater. I hope to provide you with further details of the PAC’s success in accomplishing these goals, as well as elaborate on the long-term objectives for the PAC, at our luncheon in Hawaii.

My third item relates to the 25th anniversary of AJPT, which falls during 2004–2005. The Executive Committee has been exploring whether the Section should sponsor a research conference to celebrate the 25th anniversary of our journal, with the papers presented at this research conference to be published in a special issue of AJPT. Jean Bedard is the chairperson of a preliminary planning committee to explore the desirability, feasibility, and logistics of holding such a Section-sponsored conference (other members of Jean’s committee are Joanna Ho, Jack Krogstad, and Bill Messier). Jean’s committee has forwarded its report to the Executive Committee, recommending that the Section sponsor a research conference to celebrate the 25th anniversary of AJPT. Bill Messier has agreed to forgo $15K of the $20K annual stipend that the Section historically has provided the editor of AJPT, with the understanding that this money will be used to subsidize the 25th anniversary celebration. Therefore, the Section has at least $45K to subsidize the cost of an AJPT 25th anniversary research conference. The Executive Committee still must make a decision as to whether the Section should sponsor this conference, as well as numerous smaller decisions related to the logistics of the conference. I hope to provide you with further details in Hawaii.

Fourth, I want to update you on activities of the Section’s five standing committees: Auditing Standards; Communications; Education; Membership and Regional Coordinators; and Research. All five committees have been extremely active this year. I previously commented on the activities of all of these committees in the Spring 2003 issue of The Auditor’s Report. In this issue, I highlight only those committee activities that have occurred in the three and a half months since I wrote my last report.

The Auditing Standards Committee (chaired by Brian Ballou) recently submitted a series of comment letters to the Auditing Standards Board on the seven exposure drafts of proposed auditing standards related to risk assessment. Brian’s committee also continues to work with the AICPA to have practice summaries of articles published in AJPT placed on the AICPA’s web page.

The Communications Committee (chaired by Jeff Payne) has developed a completely new design for the Section’s web page. The redesigned web page represents a substantial improvement in terms of both layout and ease of use. I expect the new web page to replace our existing web page before the 2003 AAA Annual Meeting.

The Education Committee (chaired by Don Tidrick) is working to compile a listing of ethics-related instructional resources and information about projects and group assignments that members have used successfully in their auditing courses. The outcome of these initiatives will be presented in future issues of The Auditor’s Report.

The Membership and Regional Coordinators Committee (chaired by Bob Tucker) is responsible for helping to plan auditing-related content at regional meetings and for spearheading the Section’s efforts to recruit new members. The Regional Coordinators organized a number of high-profile speakers for this past spring’s regional meetings. The Regional Coordinators also have been active promoting the Section to nonmembers by (1) contacting faculty members expressing an interest in auditing (per Hasselback’s Directory) but who are not members of the Section, (2) contacting Ph.D. coordinators to provide information on the benefits of Section membership to students in their doctoral programs, and (3) providing this information to attendees at the regional meetings and other potentially interested parties. To support these efforts, the Executive Committee has prepared a brochure on the benefits of membership in the Auditing Section. For those of you interested in seeing an electronic version of this membership brochure, you may review it on the Section’s web page.

The Research Committee (chaired by Steve Salterio) is drafting a series of articles for The Auditor’s Report on how members can retool their skills in research methods. This issue includes an article by Steve Salterio on retooling in experimental research methods. The Fall 2003 issue of the newsletter will include an article by Mike Willenborg on retooling in archival research methods. In addition, the Research Committee is planning a panel session for the 2004 MYC on best practices for gaining access to research participants and proprietary archival data.

I have made a number of references to the Section’s luncheon at the upcoming AAA Annual Meeting in my report. I am excited about our luncheon speaker, George Diacont, recently appointed as the PCAOB’s Director of Registration and Inspection. Mr. Diacont has 24 years of experience with the SEC, where he served as Chief Accountant–Division of Enforcement and Acting Chief Accountant–Office of the Chief Accountant. Mr. Diacont served most recently as NASDAQ’s Chief Accountant–Listing Investigations. I know how interested our members are in the activities of the PCAOB. We are fortunate that Mr. Diacont is willing to travel all the way to Hawaii to tell us about the PCAOB’s registration and inspection efforts.

In addition to our luncheon speaker, the Section’s Annual Meeting Coordinator, Bryan Church, has put together a great program of auditing-related paper and panel sessions. Bryan received 103 submissions, up from 77 submissions in 2002. Forty-five submissions were accepted (33 for auditing sessions, 11 for the forum, and one submission for a panel session). The panel session is on XBRL-related assurance/auditing issues and research opportunities. Bryan and I want to thank the reviewers for their timely and substantive feedback on the 103 submissions sent out for review. Michael Ettredge will chair the 2004 Annual Meeting Committee.

This is the last issue of The Auditor’s Report for which Mark Taylor will serve as Editor. Mark has served the Section and its members well during the past three years as Editor of The Auditor’s Report. During Mark’s tenure, the newsletter has: (1) celebrated its 25th anniversary with a special edition, (2) been transformed from hard copy distribution to electronic distribution, enabling the Section to provide you with a greater amount of information on a more timely basis and for a lower cost, and (3) introduced new columns and features, the most prominent being the “Have You Seen These Instructional Resources?” column. Please join me in thanking Mark the next time you see him for his outstanding service on behalf of the Auditing Section. Rich Houston will serve as the editor of The Auditor’s Report beginning with the Fall 2003 issue of the newsletter.

I want to thank all of my committee chairs and those members who served on committees for their truly outstanding work during my year as president. I particularly want to thank and recognize the chairs of the Section’s five standing committees—Brian Ballou, Jeff Payne, Don Tidrick, Bob Tucker, and Steve Salterio. Without the efforts of these individuals, and all the other Section members who chaired and staffed our committees, we would not have been able to accomplish anything this year. Thank you!

Finally, I want to recognize and thank the members of this year’s Executive Committee: Michael Bamber (Past President), Jean Bedard (Vice President–Academic), Scott Showalter (Vice President–Practice), Rick Tubbs (Treasurer), Bill Dilla (Secretary), and Andy Bailey (Historian). It truly has been a privilege and an honor to work with individuals as talented and dedicated as this group. The Section will give special thanks to Michael, Rick, and Andy when their terms on the Executive Committee end in August. We will specifically recognize their efforts at the Auditing Section Luncheon in Hawaii. I hope to see you all there.