A Disgusted Certified Public Accountant


It has been many years since I thought about why I left public accounting, auditing and specifically Arthur Andersen & Co., My first job was Andersen out of college and quite frankly, the job I still loved the most of many jobs I have had . But, first Andersen left me down and then, as I found out much later, so did the CPA profession. Andersen in the 1960’s and 70’s called itself the “Marines” of public accounting firms. I was proud to be selected and work for them in the auditing area. Andersen was beyond approach and prided itself in being independent in fact and perception. It was big enough to ward off any possibility of intimidation and tried to do the “right thing” in its role as an independent auditor of companies, big and small. Its partners and employees were proud of this independence, did what I considered excellent work, had long hours and were paid well.
But in the late 70’s and early 80’s the Firm began to change and it wasn’t for the better. The inclusion of consultants, first as staff than as principals and “partners” started to change the firm from a CPA firm to a CPA/Consultant firm. My position as an Audit Manager became fair game to the Andersen consultants to request that I start marketing some of Andersen’s consulting services to our auditing clients. This insidious marketing began to influence the minds of audit staff and partners and “independence” became less and less of an issue within Andersen. After a reflective period of time, I decided to leave Andersen as I did not see how I would be happy in this schizophrenic environment of independence of auditing and dependence on consulting revenues. While premature by 20 years and numerous lawsuits, Andersen succumbed to the consultant’s money and perished in the Enron scandal.
Unfortunately, the sad tale of poor ethics, no independence and auditing miscues did not end with Andersen’s demise but carries on to this day with both small and large public accounting firms. The government and mostly the CPA profession has not been able to regulate the profession. The profession has turned into a mishmash of auditing and consulting, wheeling and dealing and financial prostitution that has made CPA independence a joke. Public accounting CPA auditing has become like sliced white bread; prevalent and cheap. White bread still has some qualities as toast, but CPA auditing is without any redeeming values save the appearance of something it ain’t. It’s a real shame for me to watch my profession go down in smoke and mirrors.
The reason this issue comes up at this time is that I have now seen the most egregious instance of CPA malpractice in my 30 some years of being a CPA. Our little community of 70,000 just went out for sealed bids for a 5-7 year audit with two regional CPA firms and an incumbent ( 7 years) CPA small firm bidding on the audit. With a minimum of two CPA’s on the employee selection committee (can you believe it? - they get to select their auditor! Unbelievable!), the sealed bids came in with the incumbent CPA firm fee massively higher than the other CPA firms. The employee Committee then allowed the incumbent CPA firm to REBID at a much lower price and recommended their approval to the City Council. it was approved subject to the Local Government Commission approval, which is a rubberstamp joke. The reason the incumbent CPA firm gave to lower their bid was that the higher bid “would put the employee audit selection committee in a bind” by recommending their continued employment.
Either the CPA firm or the CPA employees or both need to take some CPA ethics courses and/or are hiding something from the general public with this “fee negotiation” and continued employment. This has got to be the most egregious act of CPA auditor ineptitude I have seen in my 30 years. It should be noted that the incumbent CPA firm has had numerous consulting engagements with the City outside its auditing role. Auditing and consulting the same firm should have been stopped by the CPA profession long ago after the Andersen debacle. But no, these independence conflicts continue on despite the clear warnings that this is not the true definition of an INDEPENDENT public accountants. Apparently, ethics with both the City CPA’s and the CPA firm have been lost- or were never there in the first place. If this is indicative of its definition of independence; CPA auditing has lost its bearings. Only third party audits (audits contracted with somebody other than the audited party) hold any hope of saving this once noble profession.
May the CPA audit profession Rest in Peace!

Terry Boardman, CPA
Greenville North Carolina
April 22, 2010