University of Mississippi eGrove American Institute of Certified Public Accountants Newsletters (AICPA) Historical Collection 1978 CPA letter, 1978 American Institute of Certified Public Accountants Follow this and additional works at: https://egrove.olemiss.edu/aicpa_news Part of the Accounting Commons, and the Taxation Commons Recommended Citation American Institute of Certified Public Accountants, "CPA letter, 1978" (1978). Newsletters. 123. https://egrove.olemiss.edu/aicpa_news/123 This Book is brought to you for free and open access by the American Institute of Certified Public Accountants (AICPA) Historical Collection at eGrove. It has been accepted for inclusion in Newsletters by an authorized administrator of eGrove. For more information, please contact [email protected]. January 9, 1978 Vol. 58 No. 1 The CPA Letter A Semimonthly News Report Published by the AICPA AICPA Sets As reported in the November 14 issue, the AICPA’s Council has resolved that Open Meeting meetings of standards-setting committees and other committees whose activities Procedures have a significant public interest should be open to the public when standards are discussed or acted upon. Public notification will be given for open portions of the meetings of the following groups: Accounting and Review Services Committee, Accounting Standards Executive Committee, Auditing Standards Executive Committee, Federal Taxation Executive Committee, Management Advisory Services Executive Committee, Professional Ethics Executive Committee and the Quality Control Standards Committee; also, the Federal Government Executive Committee and the Board of Examiners. Notices will appear in the Letter for meetings scheduled for the third and fourth weeks following the issue dates. (Members who wish to be assured of sufficient advance notice should consider paying $5.00 a year to the circulation department for first-class mailing.) A daily updated recorded telephone service will identify meetings and agenda items for the following 10 working days. Also, changes from the original printed notice and information on special or emergency meetings will be reported. The telephone number is (212) 575-5694. Notice of Public The AICPA’s Quality Control Standards Committee will hold a meeting in Atlanta Meeting— Quality on January 24-25 at the Sheraton Inn — Atlanta Airport. Control Standards Open sessions will be held on January 24 from 1:30 p.m. to 5:30 p.m. and on January 25 from 10:00 a.m. to 3:00 p.m. The following documents will be discussed by the committee: □ A Guide to Implement the Voluntary Quality Control Review Program for CPA Firms — Performing and Reporting on Quality Control Compliance Reviews (consider draft for publication). □ Guideline for State Society Involvement in AICPA Quality Control Review Program for CPA Firms (consider draft for publication). □ Quality Control Standards for CPA Firms (consider draft for exposure). □ Report of Consulting Reviews Task Force (review task force report). The next scheduled meeting of the committee is February 27-28 in New York. AICPA Computer The AICPA’s fourteenth annual computer services conference will be held May Conference 22-25 at the Marriott Motor Hotel in Atlanta. The 3½-day conference will deal To Be Held with various aspects of computer-based business systems. New this year are five different tracks designed so as to allow registrants to choose a specific study path. The five tracks include courses in the following areas: basic computer auditing, advanced computer auditing, practice manage­ ment, industry applications and general topics in EDP. Registration fee is $225. Advanced programs will be available in March. For further information, contact Alan Frotman at the AICPA. - 2 - AICPA Member On September 9 , 1977, a hearing panel of the Joint Trial Board Division’s Tenth Expelled Regional Trial Board voted to expel a member of the AICPA and the New Jersey Society of CPAs for acts discreditable to the profession. One of the discreditable act charges was failure to take CPA courses as he had promised a trial board hearing panel in 1973. That panel had found the member guilty of performing substandard work in connection with a client’s financial statements in violation of the AICPA Code of Professional Ethics. In view of his statement of intention at the hearing to take CPE courses on reporting standards, the panel limited his penalty to an admonishment. The other discreditable act charge was refusing to deliver a W-2 form, which the ethics charging authority characterized as a “client record,” until his fee for accounting services was paid. In addition, the member was charged with failure to respond to requests by the AICPA ethics division to produce audit work papers in connection with a subsequent examination of financial statements of the same client that had been involved in the 1973 hearing. The member did not appear at the September 9th hearing. After hearing the charges, the panel found the member guilty of the discreditable acts charges but not guilty of the charge of refusal to deliver the client record because of insufficient evidence that the document was in fact a client record. Based upon its guilty findings, the panel voted to expel the member from membership in the New Jersey Society of CPAs and the AICPA and to withhold publication of name from the notice of disciplinary action. The member was advised of the hearing panel’s decision and did not request a review. The decision therefore became effective on October 10, 1977. Editor’s Note; A Council resolution was recently amended to require disclosure of the member's name following a finding of guilty in a disciplinary action. The above decision was made prior to this amendment. Federation of At a meeting last month, the Federation of Schools of Accountancy was estab­ Schools of lished. The group’s goal is the professionalization of accounting education in the Accountancy Formed United States, and it hopes to provide the impetus for the development of professional schools of accountancy, much like existing schools of medicine and law. CPAs To Be For the first time, accountants and auditing firms will be included in the economic Included censuses to be conducted by the Bureau of the Census, an agency of the Depart­ in Economic ment of Commerce. More than 2.5 million questionnaires will be mailed in early Censuses January to all larger businesses and industrial firms, plus some smaller businesses and a random sample of CPA practitioners and other professionals. The economic censuses are taken every five years to measure the extent of the nation’s economic activity. The data collected is used by businesses to compare their operations with others in their fields. The deadline for the return of the completed forms is February 15. Federal law requires that recipients complete the forms, but also guarantees the confidentiality of the information received. The CPA Letter, January 9, 1978. Published semimonthly, except July and August when monthly. Publication and editorial office: 1211 Avenue of the Americas, New York, N. Y. 10036. Second-class postage paid at New York, N. Y. Copyright © 1978 American Institute of Certified Public Accountants, Inc. Editor: Roderic A. Parnell Assoc. Editor: Stephen H. Collins A message to AICPA members on bylaw and Code amendments American Institute of Certified Public Accountants AICPA 1211 Avenue of the Americas, New York, New York 10036 (212) 575-6200 January 9, 1978 Dear Member You will soon be asked to vote on amendments to the Institute’s bylaws and Code of Professional Ethics. The proposed changes are a part of the profession’s overall response to recommendations of the Commission on Auditors’ Responsibilities and to congressional and other criticisms. Proposed actions and the reasons why they were believed to be necessary were explained in the August 1977 issue of the CPA Letter and in a special letter to all members dated August 31, 1977. At its meeting on September 17, the Council took action on its own authority on many of the proposals. In addition, it authorized a mail ballot of the membership to seek approval of the bal­ ance of the proposed actions. In the forthcoming referendum you will be asked to vote on the following bylaw amendments: 1 Expansion of the Board of Directors by adding three public members to be responsive to the criticism that there should be greater public involvement in the affairs of the AICPA. 2 Permission for nonpracticing members to serve as officers of the Institute and members of the Trial Board to give recognition to the importance of this group in the overall makeup of the profession. You will also be asked to vote on the following changes in the Code of Professional Ethics: 1 Modification of the rules on advertising, solicitation and incompatible occupations and repeal of the rule requiring notice to another practitioner of offers of employment to his employees. These changes respond to the serious legal questions that have been raised with respect to the current rules and are designed to strengthen the public interest orientation of our Code. 2 Adoption of general standards to apply to all areas of practice— audit, tax and management advisory services. This will avoid the confusion that would otherwise arise from piecemeal and differing standards for each of the major areas of practice. 3 Removal of an internal inconsistency in the independence rule. This is simply a technical change. Each of the proposals is endorsed by the Board of Directors, and Council approved the mem­ bership referendum by an overwhelming vote. The pressures on the profession during the past months have been unprecedented. The Metcalf Subcommittee Staff Study and the hearings which followed made it very clear that the profession would remain in the spotlight for some time to come. The recently published report of the Met­ calf Subcommittee sets a number of challenging goals which we should not ignore.