Message From the President

By Don A. Kiamie, Westchester Chapter President

Is the profession complacent?
One of the things that bothered me in my audit career was the resistance to change. The mentality was to do exactly what was done last year and no questions will be asked. Recently, I was at a company board meeting and we discussed a procedural change. One of the board members used the old cliché, If it ain’t broke, don’t fix it.

But I am of the opinion that things can always be done better. There is always room for improvement.

Until the late 1990s, when there was a whole bunch of accounting scandals, the profession had, in my opinion, been pretty quiet. The first major scandal I recall reading about in my auditing class at New York University GBA was the famous McKesson & Robbins case—the pharmaceutical company that had no inventory—which led to the auditing standard for a physical count of inventory in the late 1930s. Price Waterhouse was the auditor, and they were now famous for something other than counting the ballots at the Academy Awards.

The next scandal I remember hearing about was the DeAngelis salad oil scandal, which involved Peat Marwick (currently KPMG). Another scandal involving doctored inventory: the company filled huge storage tanks with water and put salad dressing on top, so that when the auditors counted and tested the inventory by sticking a finger in the tank and tasting the dressing mix, they didn’t realize the rest of the tank was only water.

It seems like after every major fraud, the profession as well as the government regulators have a field day for a few years, the profession then becomes complacent, and we end up with our next scandal. It is a cycle which seems to be getting shorter

Complacency in our profession should never be used as a security blanket. But yet again, change for the sake of change does not add value. Or does it?

Please note that the chapter will hold our December Tax Conference on Dec. 14. It will be devoted to individual taxes.

I hope I never forget to thank you, our members, for your wonderful support. Let’s make a change: Add value to yourself by taking advantage of the Society’s and the chapter’s benefits by actively participating in your membership.

I sincerely welcome your feedback, for that is where we grow in value.

Don Kiamie can be reached at 212-213-2112 or donalbert@mindspring.com.