AICPA Chairman Affirms Accounting Profession's Commitment To Upholding The Public Trust; Delivers Keynote Address at S.E.C. Conference.

Business Editors

WASHINGTON--(BUSINESS WIRE)--Dec. 12, 2002

In a speech here today, William F. Ezzell, Chairman of the American Institute of Certified Public Accountants, affirmed the accounting profession's resolve to uphold the public trust and support the provisions of the Sarbanes-Oxley law.

Ezzell was the keynote speaker at the Institute's annual National Conference on Current S.E.C. Developments.

"What we need now is nothing less than a restoration of our profession," Ezzell declared before an audience of approximately 1,800 CPAs, regulators and reporters. "First, we need to restore a sense of shared purpose as a profession made up of diverse people, but dedicated to the same overarching goals. Second, we need to restore our reputation as a profession that works for the common good. Third, we need to rededicate ourselves to the bedrock principles and core values upon which the AICPA was founded more than a century ago."

Committed Professionals

Ezzell reminded the audience that for every wrongdoer, many thousands of CPAs uphold the highest standards of integrity, objectivity, independence and competence.

"In the midst of a business culture that often seems to embrace a philosophy of `anything goes,' and exerts enormous pressure to `get to yes,' the members of our profession have a responsibility to be prepared to say `no' in an authoritative and definitive way," he said. "Our commitment is to ensure that financial statements are full, fair and not misleading before they go out to investors."

Sarbanes-Oxley

Ezzell reinforced the profession's support of the Sarbanes-Oxley law.

"We want to do everything in our power to make sure the abuses that emerged over the past year never happen again," he said. "We hold ourselves to the highest possible standards, and we expect others to do the same. Sarbanes-Oxley is the law of the land, and we intend to do our part in its implementation."

Ezzell then described three areas in which the Institute is providing leadership: improved financial reporting, fraud detection and prevention, and standard setting.

Financial Reporting

"Making financial reporting more transparent and accessible is an important building block for rebuilding investor confidence," Ezzell said. "Financial statement audits should be crystal-clear windows into corporate America."

He listed the steps the Institute is taking to achieve improved financial reporting:

- The AICPA has endorsed a petition to the SEC designed to achieve

greater clarity in the reporting of off-balance sheet

partnerships;

- It supports the Financial Accounting Standards Board in ensuring

that the reporting model is revised in a way that offers

investors higher-quality information;

- The Institute is part of a global consortium whose goal is to

tap the expertise and experience of financial professionals from

around the world in an effort to improve methods of value

measurement and reporting;

- It is working to develop new approaches to auditing and is

engaging with others more broadly within the profession to

address the differing needs of accountants who service privately

held and small businesses;

- It is talking to users of financial statements to make certain

the profession is responding to their needs.

Fraud Prevention and Detection

Ezzell went into detail about the Institute's large-scale anti-fraud program, which was first announced in a September speech by Barry Melancon, AICPA President and CEO. The AICPA has accomplished several steps of the program. It has issued a new auditing standard - Statement on Auditing Standards (SAS) 99: Consideration of Fraud in a Financial Statement Audit - that gives auditors greater guidance in detecting material fraud. It also developed, with six other professional organizations, a set of anti-fraud recommendations for boards of directors, audit committees and management. Yesterday, the AICPA and the Association of Certified Fraud Examiners introduced a CD-ROM training program on fraud.

Standard-Setting

"We have an important responsibility in ensuring appropriate standard-setting for our own profession," Ezzell said. "To fulfill this responsibility, we need to have frequent and fruitful dialogue with the S.E.C. and the Public Company Accounting Oversight Board (PCAOB).

"We need to assess whether the problems arose from the standards themselves or from the failure to apply those standards appropriately in difficult and complex situations. The evidence so far indicates to me that the failure was in the performance."

Ezzell encouraged the PCAOB to rely on the current standard-setting processes, saying, "No one would want to have triple bypass surgery from a doctor who hadn't been in an operating room in ten years. No matter how much expertise the doctor has, his skills just aren't current. The same thing applies in the accounting profession. We need to set standards by calling on the experience of the men and women who are on the front lines, doing audits every day, and learning from every audit they conduct."

The AICPA National Conference on Current S.E.C. Developments concludes tomorrow. It is taking place at the Marriott Wardman Park Hotel.

The American Institute of Certified Public Accountants is the national, professional organization of CPAs, with more than 330,000 members in business and industry, public practice, government, and education.