We appreciate and thank Charles Landes and Michael Glynn for their letter commenting on our article. Rest assured that we are not discrediting the quality of the work of a CPA, nor was that our intent. Our intent was quite the opposite: the CPA credential is a designation to be valued, cherished, and protected, and it should not be allowed to become just another of the alphabet soup designations following an individual’s name on a business card.
The problem we see is that, since the “preparation of financial statements service” is not an attestation service, it can be provided by anyone who knows how to put together a set of financial statements. There are many individuals who are not CPAs who can competently prepare financial statements, most times just as accurately, at less cost, and with the right to include the same or similar wording in a legend on those statements if they chose. When a CPA attaches his name and credential to such financial statements, it bestows the CPA’s “imprimatur” upon those statements, even though the CPA has not, in agreement with the standard, made any effort to verify them. That is, in our estimation, selling the public’s perception of the profession’s ethical behavior, diligence, and precision when in reality the CPA is not taking any responsibility whatsoever for the amounts displayed on the statements.
Furthermore, we do not say that the CPA cannot affix his or her name to the legend. We suggested that the CPA should avoid doing so. Our point is simply that by not including the CPA’s name in the legend, the CPA will “reduce engagement risk.” We agree that there are many high-quality CPA firms, the trusted advisors of their clients, who are performing preparation services for their clients. One needs to remember, however, that we live in a litigious society, and we would prefer not to have the courts determining our professional responsibility, as was the case in 1136 Tenants’ Corp.