The Treadway Commission Recommendations For Education

Abstract

During the past ten years there have been significant changes in the ethical environment in which auditors and accountants work. In 1983, the American Institute of Certified Public Accountants (AICPA) appointed the Anderson Committee. In 1986, this committee issued its report, Restructuring Professional Standards to Achieve Professional Excellence in a Changing Environment. The AICPA in 1988 accepted the majority of the committees recommendations when it adopted a new Code of Professional Ethics. In 1985 the National Commission on Fraudulent Financial Reporting (Treadway Commission), was created and funded by the AICPA, private sector accounting firms, and other business entities. Among the objectives of this committee were consideration of the extent to which fraudulent financial reporting was taking place, consideration of the role of the independent CPA in the detection of fraud, and identification of acts that contribute to fraudulent financial reporting. As a result of this committee's reports, nine new statements on auditing standards were issued by the Auditing Standards Board in April of 1988. These standards address what has become known as the expectation gap?the difference between what the public and financial statement users believe auditors are responsible for and what auditors themselves believe their responsibilities are. (AICPA, 1989)