Saturday, May 16, 2009

What Peer Review?

"Scientific issues often deal with items that are too complex and technical for many people to grasp. When these issues touch on public policy, the problem of educating the public is compounded because partisan special-interest groups often mischaracterize or disregard the best available evidence in order to further their agendas. ... A National Academy of Engineering report says, 'As a society, we are not even fully aware of or conversant with the technologies we use every day. In short, we are not "technologically literate".' ... 'Peer review is the process by which research and scholarship are evaluated by other experts in one's field. The depth and breath of formal peer review varies by field; for example, the number of reviewers, as well as whether or not they and article authors will remain anonymous to one another, differs across science, social science, and humanities disciplines.' ... Yet, as John Moore writes in Nature, 'It's been peer revieweed so it must be right, right? Wrong! Not everything in the peer-reviewed literature is correct. Indeed, some of it is downright bad science.' ... There is no warranty that the results are correct or that they can be reproduced. ... Yet, the term 'peer review' is often equated with 'gold standard'. Hence, the politically motivated, lazy or unscrupulous can use the peer-reviewed literature selectively to make arguments that are seriously flawed, or even damaging to public policy", my emphasis, Jack Dini, 3 May 2009 at:

As bad as peer review is in the hard sciences, it's worse in the CPA business. About 12 years ago Florida considered making peer review mandatory for CPA firms. As luck would have it, one member of Florida's House was a CPA. His fellow legislators were horrified when he told them large CPA firms had been peer reviewed since about 1977 and that peer review has and would do nothing to protect Floridians from crooked or incompetant CPAs.


Anonymous said...

Geez IA... maybe we should have a revolution... that would sweep away all this nonsense... although one never knows what would arise in the void...

(This is rhetorical) Where were the accountants in this financial crisis?

This was Enron x 10,000 and nobody saw problems on the books of any levered financial firms... ha ha... they fail... as a class of professionals they fail... them and rating agencies...

Independent Accountant said...

I have no good answer for you. Among the few people to wonder about the CPAs failures in the current "crisis" is Jonathan Weil at Bloomberg. The CPAs have been totally corrupted by their fee arrangement, just like the rating agencies.
The only solution I have ever offered to improving CPA performance is lawsuits. The more the merrier. Repeal 1995's Litigation Reform Act and let the plantiffs' bar clean up the mess. The SEC and PCAOB have been useless in the current crisis.
Yes, the current crisis makes Enron look like an embezzlement from a shoe store.

darkcloud said...

Excellent work here, IA.

As a fellow CPA, I too wish I could help Anonymous here. But, as you, I can't either.

Peer reviews are akin to a light spank on a baby's diapered butt.

And this current trainwreck truly is mega-madness, making Enron look like Skippy the Punk.