The Auditors Report

Report of the President

Jean C. Bedard
INSIDE
Features

Tapping Scarce Resources: Obtaining Access to Auditor Participants and Proprietary Audit Firm Data

ASB Update

Frequently Cited Authors of Articles Appearing in Auditing: A Journal of Practice & Theory—An Extension

Report from the Communications Committee

2004 Annual Meeting Program—Scedule of Audit-Related Concurrent Sessions

Summary of the XVIIth Deloitte/University of Kansas Symposium on Auditing Problems

Have You Seen...?
by James Lloyd Bierstaker, John T. Reisch, and Dennis M. O'Reilly

Calls for Papers

Calls for Nominations and Papers

Call for Papers and Volunteers—Auditing Section 2005 Midyear Meeting

2004 ABO Conference—Call for Papers

16th Symposium on Auditing Research—Call for Papers

PDF Version
of Newsletter
(for printing)


Auditing Home Page
Fall 2004 Issue Deadline
The deadline for material to be included in the Summer 2004 issue of The Auditor's Report is September 15, 2004. The preferred format is a Word file attached to an email message. We also are open to any proposals for materials that anyone would like to submit. Please send all material and proposals to the Editor at the address below by September 15, 2004 to ensure timely publication of the issue:

Rich Houston, Editor
James Bierstaker, Associate Editor
Box 870220 / 310 Alston
Culverhouse School of Accountancy
Culverhouse College of Commerce
The University of Alabama
Tuscaloosa, AL 35487-0220
Phone: (205) 348-8392
Fax: (205) 348-8453

Email:
rhouston@cba.ua.edu

The address of the Auditing Section's Home Page on the
World Wide Web is:
http://aaahq.org/audit/index.htm

Jean C. BedardGreetings to fellow members of the Auditing Section! This message contains six news items regarding Section activities since my report in the Spring issue, and closes with an important request. This is my last President's Report, and I want to take this opportunity to thank all who have served the Section this year. The work we do in audit education and research has always been important, but now it is crucial. It is especially gratifying, during this time of change in our profession, to participate in an organization in which so many members have been willing to give their time to work toward achieving the Section's goals.

First, building on the great success of the 2004 Midyear Conference in Clearwater Beach, our 2005 Midyear Conference planning committee, chaired by Mark Peecher (University of Illinois) and Billy Soo (Boston College), is beginning to develop the program for our upcoming meeting in New Orleans, on Friday and Saturday, January 14–15. This meeting will be immediately preceded by, and co-located with, a one-day conference celebrating the 25th Anniversary of Auditing: A Journal of Practice and Theory. A single registration fee will cover both events, including a special dinner on Thursday, January 13, which will close the 25th Anniversary Conference. Please consider submitting your best papers to the 25th Conference (due June 30) and/or the Midyear Conference (due September 1). Papers accepted for the 25th Anniversary Conference will be published in a supplemental issue of AJPT. Papers submitted to the 25th Anniversary Conference, and not accepted for that event, will be automatically held over and considered as submissions for the Midyear Conference unless the author elects otherwise. Of course, you may submit papers only to the Midyear Conference, as usual. See the Auditing Section's web site for detailed information.

Second, the Auditing Section's Practice Advisory Council (PAC) recently has launched two important new activities. First, in a previous email to the membership, we announced the PAC's Research Initiative. In this initiative, the PAC has agreed to help researchers obtain data to accomplish research projects on two specific topics of interest to the profession: (1) risk assessment; and (2) Sarbanes-Oxley Section 404 internal control evaluation. Proposals (which are due July 1) will be evaluated by a task force of academics and PAC members, chaired by Mike Willenborg (University of Connecticut). Going forward, this activity will be under the purview of the Research Committee. The Auditing Section's web site provides specific guidance for submissions. The PAC also is beginning an Education Initiative, whose overall goal is to assist auditing faculty in keeping current on issues facing the profession. As its first activity, the Education Initiative Task Force has planned a panel for the AAA Annual Meeting, entitled: “Auditing Section Practice Advisory Council: Preparing Students For Today's Audits.” Panelists will include Steve Blowers (EY), Craig Crawford (KPMG), Lyn Graham (BDO Seidman), and Mark Beasley (North Carolina State University). The Task Force currently is chaired by Bob Allen (University of Utah) and Randy Elder (Syracuse University). We are grateful to the members of the PAC for their willingness to help improve the quality of our teaching and research. Current members of the PAC include John Fogarty (Deloitte & Touche, Chair), Craig Crawford (KPMG), Gretchen Fischbach (AICPA), Lyn Graham (BDO Seidman), Michael Hrapsky (GAO), Jim Lee (PricewaterhouseCoopers), Daniel Montgomery (EY), Mark Scoles (Grant Thornton), Trevor Stewart (Deloitte & Touche), Jodi Swauger (Institute of Internal Auditors), Jim Sylph (IFAC), and Bruce Webb (McGladrey & Pullen).

My third news item concerns the Section's relationship with the Public Company Accounting Oversight Board. One of the important points in the proposal to the PCAOB that was presented last June by Zoe-Vonna Palmrose (AAA Research Director), Joe Carcello (the Section's Past President), and myself, was that the Section and the Association stand ready to provide academic input to the Board to assist in fulfilling their activities. One key way of providing academic input is to place some of our best faculty in positions of responsibility around the Board. Several recent key appointments have been made in that regard. First, the Board has announced its initial Standing Advisory Group, which includes four (current or former) academic members: Zabi Rezaee (University of Memphis), Kay Tatum (University of Miami), Lynn Turner (Colorado State University), and Art Wyatt (University of Illinois, retired). Second, the U.S. Securities and Exchange Commission has appointed Andy Bailey (University of Illinois, retired) as Deputy Chief Accountant. Andy will have responsibility for liaison between the SEC and the PCAOB. Third, Audrey Gramling (Georgia State University) has been appointed as an Academic Accounting Fellow in the Office of the Chief Accountant at the U.S. Securities and Exchange Commission. Audrey's appointment is for a one-year term beginning in August. Her experiences will include working not only with the Chief and Deputy Chief Accountants but also with the PCAOB as the Board continues its rule making activities.

Fourth, I want to highlight the upcoming AAA Annual Meeting in Orlando. This location always generates a good turnout for meetings, so I hope to see record numbers of Auditing Section members there! In addition to the great general program planned by the Annual Meeting Committee at the AAA level (including Auditing Section members Doug Prawitt and Steve Glover, both of Brigham Young University, who are chairing the meeting), there is a great lineup of activities specific to the Auditing Section. Our speaker for the traditional Monday noon Auditing Section luncheon will be Andy Bailey, whom you all know as a past President of both the Auditing Section and of the American Accounting Association. As I noted above, Andy has recently begun his appointment as Deputy Chief Accountant of the Securities & Exchange Commission, with responsibility for liaison activity between the SEC and the PCAOB. His insight on this important role, and the implications of the current environment on education, research, and audit practice, should be extremely interesting.

In addition, our Annual Meeting Coordinator, Mike Ettredge (University of Kansas), and his supporting cast of reviewers, have worked very hard to put together a great program of auditing-related research and panel sessions. Mike received 80 paper submissions, of which 52 were accepted (38 for concurrent paper presentation sessions, and 14 for the Research Forum). Thus, the Auditing Section has seven more paper slots at the Orlando meeting, compared with last year's meeting in Honolulu. In addition to concurrent paper and Forum sessions, there will be two panel discussions. One is the Practice Advisory Council Education Initiative panel referred to in the above paragraph on PAC activities. The other panel focuses on internal auditing issues. This panel, developed by the Academic Relations Committee of the Institute of Internal Auditors, is entitled “Internal Auditing and the Sarbanes-Oxley Act of 2002: Lessons Learned and the Implications for Education and Research.” The panelists in this session have been intimately involved in leading control certifications within their organizations. This panel will be moderated by Morley Lemon (University of Waterloo). Many thanks to Mike and to all others who helped put the Annual Meeting program together.

Fifth, I want to highlight some activities of the Section's standing committees. Specifically, as we began this academic year, I asked each of the committee chairs to engage their members to consider what changes might be made in committee structure and/or function to accommodate the changing needs of members in the current environment. At this point, several such changes have been made, which I note below along with other committee activities.

The Auditing Standards Committee (chaired by Dana Hermanson, Kennesaw State University) presented comment letters to the PCAOB and COSO last fall and winter. Because of the role of the PCAOB in setting standards for public companies, along with the ongoing work of the U.S. Auditing Standards Board in setting private company standards, and the International Auditing and Assurance Standards Board in setting international auditing standards, there is the potential for the Auditing Standards Committee to become overburdened by the need to comment on important standards being developed by multiple boards. To relieve the ASC somewhat, we have moved one of their tasks to the Communications Committee. This task is an important marketing effort of the Auditing Section, of which many members may not be aware. Specifically, each year we identify a set of key decision-makers who could benefit from learning of the research that is published in Auditing: A Journal of Practice and Theory. These individuals range from standard-setters (e.g., Auditing Standards Board, PCAOB members and staff) to influential members of the U.S. Congress and the financial press. Each of these individuals is sent issues of AJPT, under a signed letter from the Section's President. This year, the Communications Committee, headed by Jeff Payne (University of Oklahoma), helped identify the influential individuals and prepared the address list for the mailing. Thanks to Jeff for graciously agreeing to add this task to those already performed by the Communications Committee.

Going forward, the Education and Research Committees will have responsibility for working with the PAC to manage the Education and Research Initiatives mentioned previously. The work of the Task Forces handling these initiatives will be integrated with other activities of the Section's standing Education and Research Committees. My thanks to Don Tidrick (Northern Illinois University) and Steve Salterio (Queen's University), current chairs of the Education and Research Committees, respectively, for their fine work this year. Beginning in Joe Carcello's presidency, and continuing under mine, these two committees have focused on providing members with tools to help their teaching and research. Members interested in learning about the instructional resources and research advice provided by these committees should consult the issues of The Auditor's Report published in 2002–2004. As an example, the current issue contains an article authored by Steve Salterio that brings together helpful advice from a number of researchers on how to work with auditing firms to obtain access to participants and archival data.

Also in the realm of committee activity, the Membership and Regional Coordinators Committee (Chair, Dave Sinason of Northern Illinois University; Vice-Chair and Southeast Regional Coordinator, Julia Higgs of Florida Atlantic University) has responded to the need to inform our members about changes in the current business environment that have affected the auditing profession. The programs of this year's regional meetings, including both panel and paper sessions, contain ample evidence that the regional meeting planners are providing content to help faculty keep their teaching and research current with the rapidly changing environment. In addition, auditing practitioners are well represented on panels relating to current issues such as Sarbanes-Oxley Section 404 compliance, audit standard-setting, etc. Again, my thanks to all the regional coordinators who helped put together this year's programs: Northeast Region: Saurav Dutta (SUNY-Albany); Ohio Region: Dennis O'Reilly (Xavier University); Mid-Atlantic Region: Dick Riley (West Virginia University); Southwest Region: Tim Louwers (Louisiana State University); Western Region: Elizabeth Almer (Portland State University); and Midwest Region: Sandra Shelton (DePaul University).

Sixth, I extend congratulations and welcome to our newly elected officers: Mark Beasley (incoming VP-Academic), Kay Tatum (incoming Secretary), and Scott Showalter (both incoming and current VP-Practice). Scott filled an incomplete term in 2002-2004, and now begins a new full term. (Special thanks go to Scott for volunteering to continue, while knowing what the job entails!) Also, my sincere thanks go to the members of this year's Executive Committee: Joe Carcello (Past President), Linda McDaniel (Vice President–Academic), Scott Showalter (Vice President–Practice), Jeff Cohen (Treasurer), Bill Dilla (Secretary), and Karen Pincus (Historian). This is an outstanding group of committed, caring individuals; it has been a great honor to work with them. Please join me in recognizing Joe and Bill, whose terms are ending, at the Auditing Section Luncheon in Orlando, for their outstanding service.

Before the curtain falls on this report, I want to voice a concern, and on behalf of future generations of accounting and auditing students, ask for your help. Those of us who have been involved in hiring new faculty over the past few years have become aware of a severe decline in the numbers of students entering accounting doctoral programs. We can all speculate on the reasons for this trend, but my purpose here is to ask that you all try to help reverse it. I urge you to consider the students in each of your undergraduate and especially in your Master's classes, and choose one or two who you think have the potential to become professors. Then, take them aside and tell them of your high opinion of them, and offer to give them information about the benefits of an academic career in accounting. Some will say they want to spend some time in practice prior to considering this career option, and we certainly want to encourage that. But for now, just plant the seed – maybe your interest will make a difference in the long term. The encouragement of some of my professors at the University of Wisconsin made a difference for me in choosing an academic career in accounting, and I'm sure all of you can think of some individual whose words meant a lot in this regard. After all, if we don't do it, who will?

On that note, I will close this report. The next issue of The Auditor's Report will feature the initial comments of Linda McDaniel (University of Kentucky), the incoming President. I have greatly appreciated the opportunity to serve the Section, and will continue to work with the Executive Committee in 2004-2005 to continue some of the initiatives begun during this year. I hope that you all have a productive and/or relaxing summer!