This paper explores the importance of the public accountant’s role in society, and the unprecedented level of audit failure and breakdown in public trust in the profession. We are all familiar with the breakdown of trust in Wall Street, but during this time the accounting profession has been conspicuously silent. Fraud and misleading financials are not possible without auditors looking the other way. There has been an unprecedented failure of the accounting profession and its regulators, even after the passage of Sarbanes Oxley. Not only is there a financial cost to fraud, there is also a social cost, and a loss of trust in our institutions. There is an education gap in the accounting profession, and any social consequences or financial consequences to investors and society is often overlooked. This needs to change if trust is to be restored.

Richard H. Kravitz, CPA, MBA is a fellow of the American College of Forensic Examiners Institute (FACFEI), the American Institute of Certified Public Accountants (AICPA), New York State Society of CPAs (NYSSCPA), and ASSPA (American Society of Pension Professionals and Actuaries).

He is founding director of the Not for Profit Center for Socially Responsible Accounting (centerforsociallyresponsibleaccounting.com) and has authored numerous articles on financial fraud in the Financial Fraud Law Report, the CPA Journal and others. He is former executive vice president of Wolters Kluwer’s global legal and business publishing group, former president of Panel Publishers, and executive vice president of Aspen Publishers. At Thomson Reuters he was group magazine publisher for their accounting/tax publications and while at Deloitte Touche was a staff auditor in the financial services sector.

Complexity Level: Advanced