Accounting Standards and the Professional Auditor

Throughout the years, the relationship between accounting standards and the professional auditor has changed so much that they seem to be in separate environments. Since 1972, accounting standards have been developed by the Financial Accounting Standards Board (FASB), which is an independent entity rather than a part of the accounting profession. The FASB adopted a conceptual framework as well as an open and neutral process for developing standards. Practitioners are no longer directly involved in the standard-setting process and are in the difficult position of having responsibilities to both their clients and to the public. A sometimes adversarial relationship has developed between practitioners and the FASB as practitioners seek to find loopholes in the standards issued by the FASB. Leaders of the accounting profession need to consider what the profession's role in setting accounting standards should be and whether the current system can survive.