Do management accountants and IMA have any specific concerns about SEC “activism” in the area of earnings management?
Minter: Arthur Levitt is the most active SEC chair in history. He’s been critical of the accounting profession, and in my personal opinion to some extent we’ve been guilty. I think the term “earnings management” is unfair because management has a responsibility to run the business. “Earnings manipulation” would, I think, focus more clearly on the improper activities that are at issue. I think a great deal of what the SEC has done under Levitt has probably been necessary. But I am concerned about how far the SEC might go, and I’m not sure we want to paint everyone with the same bad paintbrush. On the whole, I think that the condition of financial reporting in this country is good and that we have the best system in the world. CPAJ: In a related area, how are management accountants responding to the recently released report from the Public Oversight Board’s [POB] Panel on Audit Effectiveness? Minter: One part is controversial: The panel was nearly unanimous, except regarding whether audi
