In the United States, when an accounting firm is engaged by a business client to carry out an audit, it is generally understood that the firm’s state licensed professionals will work with the public interest in mind and not necessarily the clients.
In other words, the firm carries out the audit for the benefit of all stakeholders which includes: shareholders and investors, creditors (including lenders) the federal, state and local tax authorities and of course the general public.
Generally Accepted Accounting Principals
After all, without someone watching over businesses to make sure that they play by the rules, our society would almost certainly take a turn for the worse.
Certified Public Accountants and other licensed professionals who provide a range of accounting and audit services to businesses either individually or through a firm are the traffic cops of commerce. The people we rely on as a society to keep their clients in check and above all, toe the line when it comes to keeping financial records and paying taxes.
Consequently, when an accounting firm is identified allegedly not working in the public interest, they not only betray the public’s trust but they place at risk their reputation in their profession and the various state accountancy boards across the country which license and supervise them.
Betrayal of trust
Unfortunately, here in Charlotte, several local CPA firms believe that it is an acceptable business practice to look the other way when clients (or their employees) cheat the system. This of course, includes defrauding the federal, state and local tax authorities.
Even the partners at one of the so called “big four” CPA firm located on North Tryon Street in uptown Charlotte, appear to have forgotten about the EnronCorp scandal and the consequences for that company’s auditors Arthur Anderson LLP whose partners appeared to place earning “fat” fees over integrity and meeting the public’s trust.
Here’s the problem for Charlotte; poorly supervised accounting firms on the part of the North Carolina State Board of Certified PublicAccountant Examiners can eventually lead to a lack of faith in the financial records produced by all local CPA firms (good and bad), resulting in investors, lenders and even start-up business giving Charlotte, the region and even the state a wide birth.
Not exactly what a growing city and region needs in order create jobs.