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CPAs AS FIDUCIARIES: THE 15TH REASON

I'm both a CPA and an attorney and practice somewhere between the two professions. In the course of my estate planning work, I've recognized the special training that makes CPAs such logical candidates for serving as fiduciaries for their clients.

Michael Allmon expressed this very well in his November [California CPA] article. Allmon mentioned 14 reasons why CPAs make good fiducairies, but he omitted a very important one: the CPA's knowledge of the client's family situation.

When Allmon and I work with a client in preparing his tax returns, after a number of years we can't help but find out intimate details of the client's life: any possible marital problems, his children's accomplishments or difficulties, friction with partners or other co-owners and other personal concerns. By knowing about these concerns, and often counseling about them, we are better able to deal with them than a fiduciary coming cold into the situation.

What I hope you'll publish is a note adding this as a 15th reason why CPAs should volunteer to help administer clients' affairs after the clients are no longer able to do that themselves.

DAN OLINCY, CPA

Los Angeles

MEMBERS RESPOND TO IMPACT OF ENRON COLLAPSE

As a result of the Enron bankruptcy, the accounting profession must change the licensing regulations of all CPAs. This also requires changing and expanding the definition of "accounting" and the term "accounting practice." Here are my thoughts concerning this matter:

1. All accountants working in private industry, government and in educational institutions must be required to be licensed actively like those in public practice. Accountants who are CPAs working for these entities and institutions must be actively licensed as CPAs so they will be held accountable and to avoid the term "cooking the books" of private and public industries.

2. All accounting firms doing audit on a certain company must be precluded from offering consulting and other management services to the same company. This will strengthen the term "independence" to those performing audit services.

3. The number of CPAs in accounting firms that are incorporated, partnership, LLC or LLP must be limited to promote competition. The Big Five firms dominate the audit and consulting services to public companies. This will generate breaking up the Big Five accounting firms to promote more competition in the audit engagement services.

4. The above changes will require all state boards of accountancy to issue new and proper laws and regulations to effect the above changes.

SIMEON OREJUDOS, CPA

Daly City

Since the Enron and other audit failures, the XYZ debacle, and the collapse of the AICPA business ventures, I believe it is now appropriate for the Cal Society to inform the AICPA that its actions of proposing a new credential, permitting and encouraging an accelerating move to non-independence, and holding our profession up to public scorn have lost the confidence of Cal Society members in the management of the AICPA. It is time for the AICRA management to resign en masse and for the AICRA to replace them with leaders who will work to restore public confidence in auditors.

OTTO SEEMAN, CPA

Burbank

I find it hard to understand why SEC Chairman Harvey Pitt refuses to recuse him-self from any proceedings. This is an individual who has an enormous conflict of interest in his pursuit of change. Change is necessary, but why isn't the profession screaming and hollering about his involvement in the process?

ARTHUR HEISMAN, CPA

Los Angeles
COPYRIGHT 2002 California Society of Certified Public Accountants
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Publication:California CPA
Date:Mar 1, 2002
Words:578
Previous Article:The truth about frivolous tax arguments. (News & Trends).
Next Article:IRS, FTB, EDD and BOE answer your questions. (CalCPA News).


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