Comments on: A Guest Post From Professor Bob Graff: The Search For Value http://retheauditors.com/2010/01/11/a-guest-post-from-professor-bob-graff-the-search-for-value/ The Business of the Big 4 Audit Firms Wed, 08 Feb 2012 21:24:11 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Ken Biddick http://retheauditors.com/2010/01/11/a-guest-post-from-professor-bob-graff-the-search-for-value/comment-page-1/#comment-77967 Ken Biddick Tue, 12 Jan 2010 15:48:06 +0000 http://retheauditors.com/?p=3863#comment-77967 I understand your perspective and would say that your point regarding the requirement factor, “If the audit were not required what reasons would you have to still want one?” is where auditors and management have both destroyed the purpose and value. Quality is something that a selling party will use if they believe it creates a premium of at the very least choosing their product over one that should provide similar utility for the desired purpose. Consumers look for products with a UL mark or Good Housekeeping mark because it designates that an independent third party is attesting to the advertised utility and the product can be trusted to perform to a standard. Sellers willingly obtain these independent listing to compete in the respective space among all other products offerred. Sellers may even perceive that these marks are a requirement. Auditors and management seem to have forgotten that the audit attests to managements assertions about quality and adherance to a standard. The product represented in its various forms through; the stock, its contractual indebtedness, the ability to perform on its obligations, and its general value to the community are represented through the financial information it presents to the public. Regardless of the requirement by public filers to be audited, the auditors opinion would be sought after as the universal symbol of trust. I understand your perspective and would say that your point regarding the requirement factor, “If the audit were not required what reasons would you have to still want one?” is where auditors and management have both destroyed the purpose and value. Quality is something that a selling party will use if they believe it creates a premium of at the very least choosing their product over one that should provide similar utility for the desired purpose. Consumers look for products with a UL mark or Good Housekeeping mark because it designates that an independent third party is attesting to the advertised utility and the product can be trusted to perform to a standard. Sellers willingly obtain these independent listing to compete in the respective space among all other products offerred. Sellers may even perceive that these marks are a requirement.

Auditors and management seem to have forgotten that the audit attests to managements assertions about quality and adherance to a standard. The product represented in its various forms through; the stock, its contractual indebtedness, the ability to perform on its obligations, and its general value to the community are represented through the financial information it presents to the public. Regardless of the requirement by public filers to be audited, the auditors opinion would be sought after as the universal symbol of trust.

]]> By: Alp Malazgirt http://retheauditors.com/2010/01/11/a-guest-post-from-professor-bob-graff-the-search-for-value/comment-page-1/#comment-77615 Alp Malazgirt Tue, 12 Jan 2010 06:45:35 +0000 http://retheauditors.com/?p=3863#comment-77615 Hi Bob, My professional experience, some 20 years in the Silicon Valley, both in management positions of public companies and COO of my two companies, I have always seen auditors as Craftsmen, and not as Tinkerers. Maybe that is good, because Enron debacle is a prime example of what Tinkerers are capable of doing. When the pendulum swings the other way around, Sarbanes-Oxley is imposed like a death blow to any budding entrepreneurial, innovative company. The result is a devastating blow to finding money via the IPO way. Finding the happy medium between craftsmen and the tinkerers is only reserved to a very few in the world. I have not met any. But, on the other hand, I did not know you. :) Take care. Alp Malazgirt Hi Bob,

My professional experience, some 20 years in the Silicon Valley, both in management positions of public companies and COO of my two companies, I have always seen auditors as Craftsmen, and not as Tinkerers. Maybe that is good, because Enron debacle is a prime example of what Tinkerers are capable of doing. When the pendulum swings the other way around, Sarbanes-Oxley is imposed like a death blow to any budding entrepreneurial, innovative company. The result is a devastating blow to finding money via the IPO way. Finding the happy medium between craftsmen and the tinkerers is only reserved to a very few in the world. I have not met any. But, on the other hand, I did not know you. :)

Take care.

Alp Malazgirt

]]> By: Jiyoung Kim http://retheauditors.com/2010/01/11/a-guest-post-from-professor-bob-graff-the-search-for-value/comment-page-1/#comment-77564 Jiyoung Kim Tue, 12 Jan 2010 05:26:06 +0000 http://retheauditors.com/?p=3863#comment-77564 Good point. I used to stick to the materials or templates without thinking. Sometimes i think a generally described guidance is much better than too specified template for auditors to provide value to the clients. Good point. I used to stick to the materials or templates without thinking. Sometimes i think a generally described guidance is much better than too specified template for auditors to provide value to the clients.

]]> By: Craig Barber, Acting Associate Dean, SolBridge International School of Business http://retheauditors.com/2010/01/11/a-guest-post-from-professor-bob-graff-the-search-for-value/comment-page-1/#comment-77408 Craig Barber, Acting Associate Dean, SolBridge International School of Business Tue, 12 Jan 2010 01:33:03 +0000 http://retheauditors.com/?p=3863#comment-77408 Bob, I'd agree, however, I'd broaden your point. As an attorney, I would say most US attorneys are also almost paranoid about methodology and technique, and sadly lacking, or even blind, in the business and people skills areas, resulting in 'tinkering'. And the exact same comments about US medical professionals are too well known to require me to repeat them again for that field as well. I wonder, we do NOT have this problem with primary school teaching, for example, or counselling. Is the problem one that goes with "technical" fields, or what? Craig Bob, I’d agree, however, I’d broaden your point. As an attorney, I would say most US attorneys are also almost paranoid about methodology and technique, and sadly lacking, or even blind, in the business and people skills areas, resulting in ‘tinkering’. And the exact same comments about US medical professionals are too well known to require me to repeat them again for that field as well.

I wonder, we do NOT have this problem with primary school teaching, for example, or counselling. Is the problem one that goes with “technical” fields, or what?

Craig

]]> By: Brad Na http://retheauditors.com/2010/01/11/a-guest-post-from-professor-bob-graff-the-search-for-value/comment-page-1/#comment-77405 Brad Na Tue, 12 Jan 2010 01:27:41 +0000 http://retheauditors.com/?p=3863#comment-77405 Bob, it's great to see your article that you had emphasized and liked to discuss. I'm still tring to find client's value in many ways since the project is not the only value to decision maker of client. I am enjoying to learn this and hope seeing you soon. Bob, it’s great to see your article that you had emphasized and liked to discuss. I’m still tring to find client’s value in many ways since the project is not the only value to decision maker of client. I am enjoying to learn this and hope seeing you soon.

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