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In a 1988 article, Arthur Wyatt, a former member of the FASB, stated:
Practicing professionals should place the public interest above the interests of clients, particularly when participating in a process designed to develop standards expected to achieve fair presentation. Granted that the increasingly detailed nature of FASB standards encourages efforts to find loopholes, a professional ought to strive to apply standards in a manner that will best achieve the objectives sought by the standards. Unfortunately, the auditor today is often a participant in aggressively seeking loopholes. The public, on the other hand, views auditors as their protection against aggressive standard application.
Required
a. What does it mean to find "loopholes" in FASB pronouncements? How would finding loopholes be potentially valued by the management of a client?
b. Explain how auditors could be participants in "aggressively seeking loopholes" when the independence standard requires the pursuit of fairness in financial presentation.
c. How is professionalism related to the concept of fairness in financial reporting? Explain.
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