I am putting the finishing touches on this month's newsletter, and am including comments regarding the revelation that certain GIPS(R) verifiers feel that it's not necessary for them to conduct "fieldwork." That is, they feel that they can conduct a thorough verification from the comfort of their offices.In our verification advertising piece we state that we don't conduct "remote verifications." Sorry, but we're not quite that good. We feel we NEED to be in our clients' offices to review their records, investigate issues that might arise, and engage in spontaneous dialogue, when necessary. We also enjoy meeting with our clients face-to-face, in order to enhance our relationship with them. We consider our clients friends, and look forward to these visits.
The quality of verifications has been questioned for as long as the work has been done. We wanted a process to verify the verifiers back in 1992. We at least need some guidance regarding this matter: hopefully it will be forthcoming.
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When I was getting my accounting BA (when dinosaurs were stilling roaming around), the professors would always talk about their experiences and the big 8 auditing firm. By the time I graduated, it was the big 6. Now, about the 3 or 4 are left. If the big auditing firm can't find a way to audit their work, I have a strong doubt GIPS would come up with an efficient way anytime soon.
ReplyDeleteTo the verifiers, I hope you put more emphasis in testing the returns calculation and not the process. If the returns (not the mathmatication or equation) could be adjusted based on the underline data/flows, then checking rest of the process becomes meaningless.
The accounting profession has a self-check process: peer reviews. This can be helpful to add some credibility to what the firm does. But for non-accounting firms there is no such process. It is obvious to me that something is needed.
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