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EXCERPT: The Reliability, Role and Relevance of the Audit: A Turning Point

May 9, 2011 (SmartPros) The PCAOB today published to its Web site the text of the following speech from Chairman James R. Doty at Baruch College in New York, NY.

Thank you John [Elliott (Dean, Zicklin School of Business)] for that kind introduction. I am honored to be with you today. I also want to commend Norm Strauss for his work to convene this conference. For 10 years now, Norm and the Zicklin Center have fostered a meaningful dialogue among policy makers and practitioners on current accounting and auditing issues.

Accounting and auditing are more important to American society than ever. Auditors may look back on this time as the moment when they turned to seize the future. This may seem odd, given the extent to which they have been questioned since the financial crisis. I am thankful for the opportunity to explain.

I intend to focus my remarks today on auditing. There are obviously important accounting issues to discuss and debate as well. But since February 1, when I became Chairman of the PCAOB, auditing has preoccupied me. The public policy questions relating to the role of the auditor and the societal value of the audit deserve ample attention.

I do have to say, though, that the ideas I express today are my own and should not be attributed to the PCAOB as a whole or any other members or staff.

As was the case nine years ago, before the PCAOB was created, auditors find themselves at a point where their role and relevance are being debated.

Reliable financial and economic data is one of the fundamental assumptions of American society that sets us apart. We value a culture of honest representation and must continue to do so to promote our economic success.

Our system of capital formation relies upon the confidence of millions of savers to invest in companies they trust. The auditor's opinion is critical to that trust. There are, of course, formidable forces that work against that trust.

First, the payment model....

Read the rest of Chairman Doty's keynote address here.

2011 SmartPros Ltd. All rights reserved.

Source: PCAOB

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