New SAS 99 responsibilities.

In a remarkable roundtable discussion captured on video and DVD, four leading authorities on the new fraud-targeting SAS 99 exchanged views on the tricks and traps of detecting and handling malfeasance in the executive suite.

The participants represented a broad cross-section of perspectives:

* Mark Beasley: Professor of accounting at North Carolina State University, who has written extensively on auditing and accounting matters in general and fraud and its relationship to auditing in particular. He was a member of the task force that wrote the new fraud audit standard.

* Elliott Leary: A CPA, a partner with KPMG, and a retired FBI agent who specialized in fraud.

* Jo Ann Golden: President of the New York State Society of CPAs, and managing partner of a 100-person firm.

The two-hour session, first aired as a live webcast, was moderated by CPA Michael Ramos, author of a best-selling SAS 99 implementation guide. It also featured a dramatic re-enactment of a fraud scenario.

All Dec. 31, 2003 audits must comply with the new requirements, including the planning for those audits. It will take time to train staff and incorporate the SAS 99 requirements into existing auditing procedures. Firms that haven't already prepared must start now.

Here are some highlights from the panel discussion:

MARK BEASLEY: The new project actually was created long before what we've experienced in the last year. Back when SAS 82 was issued in the late 1980's the Accounting Standards Board committed to look at its effectiveness by the year 2000.

ELLIOTT LEARY: What you're trying to do is change an attitude and change behavior, so that when an auditor walks into an engagement, they won't just take at face value anything that's told to them, and to not just trust every piece of paper that's put in front of them. Some of the ways of training them is by having the person become aware of historical frauds that have taken place so that they have some background in what they may be faced with in the future. You also learn interviewing techniques to look for deceptive behavior, which increases your awareness that there are people out there whose intent may be to deceive.

JO ANN GOLDEN: One of the things that's very difficult is dealing with what the client's, versus the staff's, expectations are in terms of really addressing the issues. The second phase is when you're looking at the evidence that you're using to vouch. You must bring a critical evaluation of the evidence.

I think that there's a whole continuum of expectations depending upon the sophistication of the client. So you have an education that you really need to do with a lot of the smaller clients to really let them know what their expectations should be realistically. And I think that's very important. It's getting your client on the same wavelength as to what you're going to do for them.

Adapted from "Fraud and the Financial Statement Audit: Auditor Responsibilities Under New SAS." Available at www.cpa2biz.com.