In light of recent business failures, the public has expressed concern about the usefulness of the financial statement audit and the auditor's report. Because of these concerns, the accounting faculty at a local university has organized a panel to discuss the function of the auditor's report and the possible expansion of the auditor's responsibilities.

The faculty has invited a representative from industry, the investment community, and the banking community and you, a professional accountant in public practice, to sit on the panel.

You have noted the following excerpts from presentations by the other participants.

Mr. Don Bogart, Vice-President, Finance, Casablanca Indus¬ tries: Our audit fees, in my opinion, are already far too high. I believe you should reconsider the need for increased auditor involvement and perhaps even the need for an annual audit, which has become an unnecessary evil. If the auditor's role is to be expanded, something must be done to reduce the costs and maximize the benefits.

Ms. Elizabeth Ashton, Financial Analyst: I would be more comfortable if the independent auditor attested to business viability, management credibility and future-oriented data. We question the relevance of audited financial statements to the decisions we have to make.

Mr. Richard Shivas, Senior Corporate Loan Officer: I agree with Elizabeth. In addition to historical-cost financial statements, we need current value and prospective information on which to base our decision. We would like more assurance from the auditor than is presently conveyed with the financial statement audit that the company will be able to turn its assets into profits. We are tired of hearing about problems when it is too late.

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