Who Is Policing the CPAs?

As a CPA licensed in both California and Arkansas, I have long been aware that many of the things that Arthur Andersen did with its services for Enron are grounds for professional discipline. Following is an email I just sent to the California Board of Accountancy on this matter. Perhaps if more people (CPAs and general public) were to contact them (and their equivalents in other states), they would become a little more active in this area.

KMK

Date: Tue, 05 Feb 2002 13:20:14 -0600

To: enforcementinfo@cba.ca.gov

From: Kerry Kerstetter

Subject: How did AA get away with its conflict of interest?

Dear CBA:

As Stephen DeRose mentioned in his article in the latest issue of your Update newsletter, the report of disciplinary actions is a popular section. You show a case with Dennis Morgan who was disciplined for violating the independence rules by auditing a company for which he had provided consulting services.

With the growing media firestorm over the Enron collapse, I’m sure I’m not the only CPA who is wondering how Arthur Andersen and the other Big 5 firms are allowed to do what appears to be the exact same thing as Mr. Morgan did.

With the spreading lack of confidence in the work of CPAs, I hope you are planning to feature this topic in your upcoming pronouncements, both for the public’s benefit, as well as for that of the CPA community.

Kerry M. Kerstetter

CA License 28695

Harrison, AR