Harm to Users of Accounting Information

ACCOUNTABILITY IN PUBLIC ACCOUNTING

An important development which is in the process of occurring in contemporary American public accounting is a change in the way in which professional public accountants are held accountable for their actions ("National Commission on Fraudulent ...", 1987, 3-6). In the past, public accountants have often been able to (or, at least, have attempted to) avoid accountability on the grounds that either (1) the responsibility for any fraudulent action belongs with the client, and not with the professional accountant, or (2) their actions were in accordance with generally accepted accounting practices ("National Commission ...", 1987, 12). Such excuses are unacceptable in the late 1980s (Dingell, 1988, E2161).

The regulatory issues confronting the profession are concerned with ways in which standards of professionalism and accountability may be improved. In part, these issues were addressed in changes to standards for the profession. These standards were proposed by the AICPA (American Institute of Certified Public Accountants). They we

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n every three years, with a minimum of 10 hours of instruction each year. The continuing professional education requirements for those accountants not engaged in public practice increase in 1992 to 90 hours every three years, with a minimum of 15 hours of instruction each year. The last of the proposed six changes was an expansion of the postsecondary education requirements for future AICPA members. This proposal eventually received the approval of 82 percent of the AICPA members. After the year 2000, new AICPA members will be required to have credit for 150 semester hours or the equivalent. This new requirement is 30 semester hours higher than existing standards (Cottle, 1988, 76-80). INSTANCES OF USER HARM In the Wedtech case, both investors and governments were harmed by fraudulent financial accounting information (Dingell, 1988, E2161). The accounting information provided was not in accordance with GAAP, in that professional accountants reported information on the firm, which they knew to be false. In fact, when the CPAs involved discovered what was occurring in the company, instead of reporting the information in the firm's financial statements, they joined the firm, in order to acquire personal financial gains.
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Some common words found in the essay are:
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Approximate Word count = 1710
Approximate Pages = 7 (250 words per page)

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