Chair's corner.

For many of our members, this issue of The CPA Letter will arrive during one of the busiest times of the year. As you pause for a few minutes to catch up on recent events, I urge you to also take a moment to make sure that you are truly comfortable with each of those difficult decisions that you are dealing with this busy season. Whether working within the management of a company or providing tax, accounting or auditing services to clients, the focus on our profession to do the right thing has never been more important.

The AICPA staff and volunteer members of many committees have been extremely busy reviewing and commenting on the many proposals that the Securities and Exchange Commission put forth to implement the provisions of the Sarbanes-Oxley Act. These regulations will lead to significant changes in the public company audit arena and by the time you receive this newsletter, many of the proposals will have been finalized. Just as we worked with the SEC staff in commenting on the proposals, we will continue to work closely with the SEC, the Public Company Accounting Oversight Board and other interested parties to make sure that implementation of the new regulations will have a positive impact on audit quality and thereby enhance the public's confidence in financial reporting.

Early in the process of working with the implications of the Sarbanes Oxley Act and its regulations, we recognized that there was a potential for greater divergence in the standards for auditing public companies and non-public companies. Regardless of who sets audit standards, the PCAOB may promulgate certain actions for audits of public companies. Additionally, it is possible that some independence roles should or could become applicable for audits of public companies only. As the Financial Accounting Standards Board refocuses on its role post Sarbanes-Oxley, some have questioned whether the needs of non-public companies will receive adequate consideration in the new environment, particularly in light of the potential for harmonization of international standards.

The basic topics are not new and have been debated from time to time in this profession. To better understand member views on these issues in light of the current environment, we devoted time at last Oct.'s Council meeting to exploring whether or not we should look seriously at the need for dual standards for audit, independence or accounting. Following the Council meeting, this topic has been raised in other forums, such as the Group of 100 meeting and the Major Firm Group meeting. All AICPA committees and state CPA societies have been asked to consider these matters and to provide initial input by Mar. 31. No decisions have been made and we are still in the information-gathering stages. If you have views on whether it is appropriate at this time to revisit some of these issues, we would like to hear from you. If you are involved in committee service at either the state or national level, please take time to make your views known. If you would like to write, send your comments via e-mail to [e-mail].

Looking ahead a little to the Council meeting in May, the Professional Ethics Executive Committee is continuing to look at proposals that would enhance the transparency and timeliness of our disciplinary process. I expect that we will have some specific recommendations for the Council to consider regarding enhanced reporting of the results of disciplinary findings and related matters. I also expect that we will be dealing with changes for peer review for the non-public company audit sector in time for this year's peer review season. As you know, the PCAOB is charged with conducting the inspection process for auditors of public companies. That process will raise issues to be resolved for firms that do both public and non-public company audits.

There continues to be no shortage of issues to be addressed in this environment. On a positive note, as I have traveled and participated in meetings with groups of members around the country, I continue to find that the confidence level in the work of the individual CPA remains very high. Users of CPA services continue to say they have a great deal of trust and respect for the CPAs they deal with, notwithstanding the issues that have been raised in the media. For this trend to take hold more broadly, we must keep in mind the importance of each of us living up to our obligations to act with integrity and objectivity. Thank you for your efforts to enhance our credibility in what you do each day, every day.

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