Madoff -- Where was the New York State Society of CPAs?

The firm of Friehling & Horowitz, auditors of sorts for Bernard Madoff's financial empire, belonged to the New York State Society of CPAs. You can go to their Web site and search for Mr. Friehling yourself. He's right there, a member, apparently in good standing. More than in good standing. A July 15 newsletter from NYSSCPA shows board members of their various chapters. David G. Friehling is shown as a board member for the Rockland chapter. Earlier in the year, on April 15, he has an article in the newspaper of the NYSSCPA and is identified as the president of the Rockland chapter. The newspaper is, ironically, named The Trusted Professional.

CPAs perform three levels of services on annual statements. They render compilations, reviews, and audits. A single person would have trouble doing a compilation on financials as complex as Madoff's. A proper compilation would have been impossible without a team of CPAs, and Friehling is reported to have worked alone.

But an audit?! It can't have been a secret in Rockland, or at the HQ of NYSSPCA, that Friehling & Horowitz audited Madoff. Any sensible CPA must have realized that he could not either (a) conduct an audit that would meet AICPA standards or (b) remain independent when clearly, he can't have had any other clients. He has no Web page and he runs from essentially a storefront. No alarms bells anywhere?

The NYSSCPA has noticed the Madoff scandal and published an article on it. The article does not note, as other journalists have, the peculiarity of Madoff's outside auditor.