CPAs Find Correa’s Facts Don’t Add Up

Re “State Needs to Rein In Accountants,” Commentary, May 5:

I was disappointed to read the serious inaccuracies included in the opinion piece written by Assemblyman Lou Correa (D-Anaheim). He says stockbrokers can own an interest in California accounting firms. This is misleading. The law he refers to was designed to keep unrelated businesses from taking over accounting firms, and contains a number of safeguards to this effect. As such, a stockbroker would never own an interest in a CPA firm.

Correa also suggests that self-regulation has failed. This is also false. The profession has worked diligently to pursue state, national and self-regulation that is meaningful, effective and in the public interest. Mandatory peer review, continuing education and state and national regulation by the Securities and Exchange Commission and other agencies demonstrate that the profession is highly regulated.

We are committed to restoring faith in our profession and the financial marketplace, and our state association, CalCPA, supports the creation of an independent panel to oversee the profession’s role and responsibilities in performing audits of public companies.

Lastly, I disagree with the assemblyman’s state-by-state approach to his accounting proposals. A hodgepodge of conflicting state and federal regulations would create enormous public confusion. Investors would not be served if they were confronted with questions about whether auditors complied with special and disparate rules adopted by California, New York, Maine, Arkansas or other states.

Nancy Wheeler, CPA

Encino

*

The recent op-ed piece by Assemblyman Lou Correa contained false and misleading information. Professional audit standards and public expectation demand that auditors be independent and objective. This is a responsibility taken seriously by auditors and their firms. Our reputations and livelihood depend on it.

Correa was wrong when he wrote that stockbrokers can own an interest in California accounting firms, something that would create an obvious conflict of interest. California law contains many safeguards to ensure that non-accounting entities cannot take over an accounting firm.

Correa accused accountants of refusing to participate in the reform process. Nothing could be further from the truth. Legislators have received hundreds of letters from California-based CPAs on a variety of bills being considered. Dozens of CPAs have traveled to Sacramento to testify at hearings where Correa was present.

The California Society of Certified Public Accountants has been working to help craft effective reforms at the national level that would restore faith in our profession and the financial marketplace. It appears Correa is less interested in reform and more interested in political posturing.

David George

Chairman,

California Society of

CPAs, Irvine