Call for Better Audits of Public Companies
Rep. Richard Baker’s (R-La.) suggestion that auditors be retained by the stock exchanges to audit public companies and that the fees be paid out of a fund created by levies on the companies does sound “imaginative,” as Ronald Brownstein calls it (Feb. 11). The protections afforded investors who rely on audits are only as good as the quality of the audits and the competency of the auditors.
Baker’s proposal brings to mind two comparisons, HMOs and baggage checkers at airports. In an effort to provide the “appearance” of absolute independence, Baker would have Congress turn the auditing profession into what is only a small step away from a unionized bureaucracy of the semi-competent. Like so many congressional solutions, Baker’s proposal brings to mind H.L. Mencken’s comment that for every complex problem, there is a solution that is simple, elegant and wrong.
Kip Dellinger CPA
Los Angeles
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