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On page 18 of the report it states, "Assembly participants agreed that professionalism within the accounting industry has declined and that many auditors both feel and exhibit less pride in their work."

That seems a major indictment of the profession, so one would expect a further analysis of what has caused this decline and some suggestions for improvement. Alas, the analysis borders on trivializing the major threats against the profession and the suggestions become self-serving.

The report starts to address this issue by claiming that in a world with a proliferation of rules by various government entities, "the public accounting profession risks becoming a quasi-arm of government agencies." I have a difficult time fathoming this statement because public auditors have been performing audits because of Congressional and SEC regulations since the mid 1930s. Of course we are a quasi-arm of the government! That was the deal struck with Congress as it was debating and fashioning the securities acts of 1933 and 1934. Congress and President Roosevelt originally planned on employing government auditors to conduct audits of public corporations, and the accounting profession lobbied them to change their minds and allow the private sector to perform this task, claiming that it could do so more effectively and more efficiently than government auditors. Congress and President Roosevelt concurred, and public accountants have been engaged in quasi-government activities ever since.

Perhaps the participants actually meant that the escalation in rules have pushed judgment to the side, making the task less interesting. Given that Rule 203 of the Code of Professional Conduct allows CPAs to set aside any rule that escorts the financial statement users toward wrong deductions about a company's economic history, I don't understand the problem. Have accountants become so terrified of lawsuits that they refuse to invoke Rule 203? If so, conference participants should have asked why this state of affairs has occurred and how the profession can rectify this situation.

The report also contends that the profession must attract "the best and the brightest" students. I have taught university accounting for about 30 years and have heard this statement over all of those years. I believe CPAs actually believed this declaration 30 years ago because they did something to attract "the best and the brightest." But not today. I can remember the days when the mean salary of accounting undergraduates ranked in the top five average salaries of all majors in the university, generally only behind computer science and some engineering majors. Today the average compensation of accounting students might not place in the top five majors in the college of business alone. If the profession really wants "the best and the brightest," the solution is easy. Increase the wages.

The author of "The Future of the Accounting Profession" doesn't even mention the salary issue; instead, the author asserts that students might fear lawsuits. This comment serves as a smokescreen to promote "reform" with respect to "frivolous" lawsuits. The profession lobbied hard and gave members of Congress millions of dollars to enact reform in the 1990s. In 1995 Congress rewarded the profession by passing the Private Securities Litigation Reform Act, which made it more difficult for plaintiffs to file a class action suit against business enterprises, corporate managers, and public auditors and curbed the awards when plaintiffs won. Plaintiffs tried the state courts, but in 1998 Congress put an end to this strategy by enacting the Securities Litigation Uniform Standards Act, which requires class action lawsuits brought because of accounting issues to be filed in federal court. The profession already won "reform" -- but at what a cost! These laws removed some major disincentives to prevent securities fraud, and we all know what happened when these disincentives took effect. No, we don't need any more reform -- nor do we need to pretend that the lack of luring "the best and the brightest" results from legal risk aversion.

The monograph attempts to link the decline in the professionalism in accounting to the separation of consulting from accounting, and it maintains that employing some of these consulting experts may be invaluable in the audit process. First of all, the accounting firms can still employ these nonaccounting experts or have them on a retainer. Nobody prevents these organizations from hiring those capable of assisting them when rendering an audit opinion. On the other hand, we should recall that these separations did not begin until 2000. If consulting experts would assist the firms in supplying better audits, then we would expect to find excellent audits during the 1990s. Given the hundreds and hundreds of accounting restatements during that time period and the accounting scandals at Boston Chicken, Waste Management, Sunbeam, and Cendant -- just to name a few -- I have to reject this hypothesis.

Professionalism within accounting may have declined and many auditors might feel and exhibit less pride in what they do, but this conference does not help us to understand why. Instead of taking the tack it did in this report, I think it would have been more profitable to examine what instigated less professionalism into our industry. What social and psychological and economic forces brought this about? And what will the profession do to change course and still serve the public interest? Unfortunately, these questions remain unanswered.

To obtain a copy of "The Future of the Accounting Profession," go to http://www.americanassembly.org

J. EDWARD KETZ is accounting professor at The Pennsylvania State University. Dr. Ketz's teaching and research interests focus on financial accounting, accounting information systems, and accounting ethics. He is the author of Hidden Financial Risk, which explores the causes of recent accounting scandals, and columnist of The Accounting Cycle for SmartPros.com.