August 1999

Letters to the Editor

To the Editor:

I refer to the following item in your July issue under Disciplinary Matters:

Abraham J. Briloff, of New York City, was admonished by the Joint Trial Board for violating Rule 202, Compliance with Standards of the Society's and AICPA's Codes of Professional Conduct, in connection with his compilation report on a nonprofit organization's financial statements for the year ended August 31, 1993, and his audit of a nonprofit organization's financial statements for the year ended August 31, 1993. Briloff's request for a review of the decision of the trial board was denied on March 10, 1999, the effective date of the admonishment.

This statement can and has led to false and misleading inferences by our colleagues; accordingly I respectfully request that you make known to the members the circumstances leading to the determination by the Joint Trial Board last October 9. Thus, despite the fact that the financial statements were promulgated by my office more than five years ago and had been most meticulously scrutinized by the peer reviewers and by committee after committee of the AICPA, not a single error was determined with respect to any of the statements; no figure had to be revised nor restated. Then, "Where's the beef?" Briefly:

* In so far as the compilation report is concerned, the Joint Trial Board judgment was that a) the letter accompanying the report did not include a statement that "the compilation had been performed in accordance with standards established by the American Institute of CPAs," and b) the report included a third paragraph which in my professional judgment I believe to be significant to this engagement despite the fact that the "book of rules" states that "other procedures that the accountant may have performed before or during the compilation engagement should not be described in the report."

* Insofar as the audit engagement of the Psychoanalytic Research and Development Fund, Inc. was concerned, the Joint Trial Board faulted me for my failure to obtain a representation letter. It should first be noted that the files carefully reviewed by the representatives of the AICPA included an abundance of written representations deemed essential under the circumstances. Nonetheless, I refrained from requesting a representation letter per se, because such a letter under the circumstances would be absurd; thus, the Fund with less than $400 thousand in total assets has no CFO and the "CEO" of the organization is an eminent psychiatrist who could not spell GAAP and accordingly, could not truthfully assert that the statements submitted by us were in conformity with GAAP.

In sum, your July 1999 Trusted Professional item failed to state material facts necessary in order to make your report not misleading. Accordingly, I respectfully request that you correct that failure by the publication of this letter. I shall submit a copy of the transcript of the October 9 hearing of the Joint Trial Board to the AICPA library which should then be made available on the AICPA website.

Should you require anything further in this regard, please advise.

Sincerely,

Abraham J. Briloff, Emanuel Saxe Distinguished Professor Emeritus, Baruch College