Rocky Horror House

Paradise, whilst actually a very attractive town on the Nevada Border is named after the casino rather than the topography. The towns name is actually a corruption of the phrase “pair of dice”!
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The most spectacular case they reported was of a class who were introduced to French one morning. After a day’s continuous instruction using Accelerated Learning they were given a test. The class average correct recall was 97%. They had apparently learned 970 words of French in a day!

Now whilst the basis measurement (not quoted in the article) must have been recognition of the English meaning of each given French word, there was one point of significance in the test. The students were never told the scope of the experiment at the outset. The researchers were sure (no doubt with justification!) that the instinctive reaction of the class would have been that to learn a 900 words in a day ‘was impossible’. The experiment quite clearly showed that ‘impossible’ is only in the mind.

Taken From: Accelerated Learning

The staff also has emphasized that, when evaluating whether a matter is an immaterial
business relationship under the current independence regulations, the matter must
be immaterial not only to the auditing firm but also to the audit client and other affiliated
organizations. See letter dated June 20, 1990, from Edmund Coulson, Chief
Accountant, to Mr. Robert Mednick. Read the rest of this entry »

The White Paper states that “the guidelines [for firm auditor independence codes]
would recognize the importance of materiality as a threshold consideration in applying the core principles.” (page This point is restated later in the Paper as a presumption,
“Immaterial interactions between an auditor or firm and an audit client should be presumed
not to impair auditor independence, absent evidence to the contrary.” (page 118;
emphasis in original) The White Paper also stresses that materiality has both quantitative
and qualitative aspects (page 127 n. 333), and that materiality may be assessed on
an individual audit partner or audit team level as well as the firm level. (page 127) Read the rest of this entry »

ABANDONING THE CURRENT SYSTEM. The current regulatory system is criticized at
several points in the White Paper as being a “command and control” approach, overly
rigid, detached from “ethical moorings,” and so on. (pages 10, 96–102 and elsewhere)
While the staff expects the ISB to review and improve that system, it should be done
only after full consideration of all reasonable alternatives, including the alternative of
simply updating and clarifying that system. Read the rest of this entry »

LEGAL LIABILITY—LITIGATION RISKS. Contrary to the arguments in the White Paper
(page 82 and elsewhere), potential legal liability in a civil proceedings is not a deterrent
to compromising independence. No firm, to the best knowledge of the staff, has paid a
judgment or settlement in a private civil proceeding solely as a result a finding of a loss
of auditor independence. The arguments and statistics in the White Paper addressing
legal liability and litigation costs simply are not relevant to this issue. Read the rest of this entry »

Arguments in the White Paper that having a firm other than the auditor provide nonaudit services impairs the auditor’s access to client information (page 73 n. 187 and elsewhere) are disturbing. If the auditor does not receive all the information necessary to conduct a thorough audit and full cooperation from the client, the Commission expects the auditor to indicate that there is a “scope limitation” on the audit and appropriately qualify the audit report. Thus, it is the independent auditor’s obligation to conduct a professional audit that assures the integrity of the financial markets, not an array of services provided to the client. See United States v. Arthur Young, supra, at 818–819. Read the rest of this entry »

Some people have some strange sexual habits. Some of them like to have some homosexual relationships. Some other prefers to swinging sexual habits, and some other prefers some orgy parties to release their sexual desires. Some of the also have some unusual sexual habits called as the bi-sexual. They could have some sexual relationship to either man or woman. Read the rest of this entry »

In considering an auditor independence issue, however, the primary focus should be on whether the conduct is reasonable in the eyes of the investors, rather than the costbenefit analysis done by a firm to see if providing a service to an SEC audit client is worth the cost or whether there is any potential harm to the firm’s reputation. There is a profound social benefit, which is not developed in the White Paper, in having investors maintain confidence in the audit process and in the integrity of the securities markets. This benefit cannot be quantified, but it is real nonetheless. Read the rest of this entry »

B. Need to remain focused on investor confidence

The White Paper presents a variety of issues and arguments that could lead the reader away from the central goal of constructing auditor independence guidance that assures investor confidence in the independent audit and in the securities markets. These issues and arguments are discussed below. Read the rest of this entry »

A. Need for Interpretative Guidance

The White Paper criticizes practice as a “command and control” system because it is detailed and cumbersome. It is true that the current body of SEC and AICPA guidance regarding independence consists primarily of “case law” in the form of ad hoc interpretive guidance issued over the years. As noted earlier; however, there is the possibility that the proposal in the White Paper for a short list of auditor independence principles, and the issuance of Read the rest of this entry »