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The Varying Concept of Auditor Independence

Shifting with the Prevailing Environment

By C. Richard Baker

AUGUST 2005 - As CPA Journal Editor-in-Chief Robert Colson observed in his March 2004 column, “Auditor Independence Redux,” the concept of auditor independence has varied over the last 150 years. In a general sense, auditor independence has borne a relationship to the prevailing commercial environment in different time periods. There has not, however, been a clear transition from one concept of auditor independence to another. Frequently, more than one idea of auditor independence has been present in the discussion about independence between professional accountants and auditors, regulators, and the general public.

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August 2005 Issue

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Features

Auditor Independence

The New Schedule M-3

Stock Option Showdown

Partnership Compensation

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Essentials

Publisher's Column

Perspectives

Accounting for Stock Options

In December 2004, a decade after bending to Congressional pressure and backing away from requiring the expensing of options on financial statements, FASB issued a revised standard to recognize stock-option compensation as an expense on income statements. Full Story

Perseverance Brings Results: Improving Accountability

The New York State Legislature accomplished much this year. First, it passed the state budget on time for the first time in more than 20 years. This gave it time to thoughtfully and thoroughly deal with other important issues, including reforming the financial management of school districts. Full Story

CPAs in China: Fascinating Similarities and Differences

AUGUST 2005 - My first stop in China, even before visiting the Great Wall and the Forbidden City, was the offices of the Chinese Institute of Certified Public Accountants, whose headquarters are in a beautiful, modern building in the heart of Beijing. Full Story

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.