A Logical Solution
To Auditor Honesty

Ms. Lee hit the nail on the head when she pointed out that auditors have an inescapable conflict of interest in that the companies they audit pay their fees. Although the majority of auditors are honest, capable and provide clients with an independent opinion on their financial statements, they cannot escape the pressure to "not bite the hand that feeds them."

Prof. Ronen's scheme for shifting the auditor's incentive from the company to an insurance carrier by requiring financial statement insurance is the first logical solution I have heard from anyone.

Winford Paschall , CPA
Fort Worth, Texas

Updated July 18, 2002