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In this month's issue of The CPA Journal, there are two of what the editors call super articles--articles of special significance to readers.

The Future of Assurance Services

The first is the cover story on the future of assurance services. An AICPA Special Committee is in the second year of a two year project to make recommendations and give implementation guidance on moving audit and other attestation services out of the box into the expanded world of assurance services. The work of the committee holds the promise of new services that take advantage of the competencies and reputation of accounting firms and offer new value to decision makers. Robert Elliott, chair of the special committee, joined a group of stakeholders in the outcome of the work of the committee for a CPA Journal Symposium to discuss the findings and direction of the project to date. The editors present an edited account of the symposium, divided into three sections--a discussion among the panelists, questions from the distinguished audience, and the hopes and apprehensions the various stakeholder panelists have about the project.

The work of this special committee has the potential of creating a sea change of opportunity for the profession. Those professionals with vision and a willingness to take a chance should be able to take the work of the committee and begin to move in new directions of providing services-- services that have value, and for which, users will be willing to compensate the provider.

As can be seen from the discussion, there is much to be worked through and out. Regulators wonder what will be regulated. Management is not convinced of the added value. Boards of directors see the promise. And educators see the challenge and hope to participate.

A New Definition of Internal Control in An Audit

After about six or seven years of struggling to use "structure" when discussing internal control matters in audits of financial statements, auditors will now be required to revert back to just referring to it as internal control. The Auditing Standards Board recently issued SAS 78, which amends SAS 55, Consideration of the Internal Control Structure in a Financial Statement Audit. The purpose of the SAS 78
is to conform the
definition of internal control to the one developed by the Committee of Sponsoring Organizations (COSO) in its document Internal Control--An Integrated Framework. In so doing, the ASB concluded that internal control is not a structure: It is more of a process. Hence, the reversion to just plain old internal control.

But there is much more to the amendments than just dropping the S word. Author David Frazier and L. Scott Spradling, on the staff of Practitioners Publishing Company, give the full details in this month's article that shows the work ahead for practitioners through extensive excerpts from checklists and other practice aids. Peer-review findings indicate that it took some time for the profession to adjust to SAS 55 when it became effective in 1990. It shouldn't happen this time around. Let authors Frazier and Spradling help. *

Walter C. Schmidt, CPA

It was with great anticipation that we opened the time-capsule from the AICPA's 1996 Centennial Project. Much Internet traffic continues to be e-mailed concerning that committee's choice of the important dates in the evolution of accountancy. By reviewing the time-capsule documents, to which we now have access, we hoped to answer the most import question, why did they not include August 12, 1982?

Historical accounting documents were there; the first Accounting Research
Bulletin issued in September 1939, and the last, ARB 51, August 1959. We even found a copy of a much perused ARB 43 from June 1953. There was the first Accounting Principles Board Opinion, November 1962, and the last, APB 31, June 1973. Financial Accounting Standards Board Statement of Financial Accounting Standards 1, December 1973, along with SFAS 100, December 1988, were also saved for posterity. Who then would have thought that while it took them 15 years to issue 100 SFASs, we would have tripled the annual issue rate by 2096.

Nor did they forget our auditing heritage. Statement on Auditing Procedures 1, October 1939, and the last SAP, number 54, November 1972, were there to be found. Statement on Auditing Standards 1, November 1972 and SAS 50, July 1986 were there, too.

But alas, nary a word concerning the events that we all know have had the most dramatic impact on our profession then, and continue to do so today. Where was mention of the Haloid Company producing the first Xerox copying machine in 1950, or the fabled 914 produced in 1960? As every freshman accounting student today knows, the "914" was so named because it could make copies from 9-by-14 inch originals, and on ordinary paper, too.

Where was mention of 1976's three-minute facsimile machine? Where was mention of 1982's achievements in fax technology, with 20-second transmission rates and reasonable quality.

And how could they overlook Jack Kilby's and Robert Noyce's achievements in 1959? The invention of the microchip. Ask any sophomore what company Noyce founded and they will sing out--Intel Corporation!

Steve Jobs, Steve Wozniak, 1976, their garage, and the founding of Apple Computer was another historical event not mentioned. Nor did they mention 1975, and a Harvard dropout named William Henry Gates III, who at the age of 19, along with his friend Paul Gardner Allen, 22, founded Seattle's Microsoft Corporation--the company that made Gates a billionaire before he was 30. Quick, what did Gates score on his math S.A.T.? 800! But you knew that.

Yet we still held out hope for August 12, 1982. A time when we had 49 SFASs, 43 SASs, and we also had AICPA Accounting Interpretations, FINs, FTBs, SOPs, and SSARs just to name a few. But we could find no mention of, nor explanation for omission of, August 12, 1982, the date on which IBM introduced its first personal computer using Microsoft's disk-operating system! The date that has become the most frequently appearing "CPA Exam­History Section" question ever asked . . . Oh well, at times like this we can take solace in our accountants' motto, "Long Live Luca Pacioli!" *


The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

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