An Examination of the U.S. Public Accounting Profession’s Public Interest Discourse and Actions in Federal Policy Making

Abstract

Participation in the political process by the United States public accounting profession often blurs the role of the profession as advocates for the public interest with its role as advocates for its own private interests. In this study, we draw from prior theoretical and empirical work to investigate recent federal political activities of the public accounting profession to shed light on these sometimes contradictory roles. In particular, we investigate ten contemporary regulatory issues of interest to the AICPA. We analyze 36 AICPA legislative advocacy letters related to these issues that were provided to federal policy makers. In addition, we analyze the public accounting profession's federal lobbying reports that were submitted during this same time period. The analysis allows us to assess the public interest discourse present in the AICPA legislative letters as well as the extent of political action taken by the profession related to these issues based on the profession's lobbying efforts. Our analyses (1) demonstrate that the profession's discourse and actions often reflect both public and private interest motivations, (2) allow us to categorize the profession's advocacy efforts as arising from specific motivations, and (3) show that the profession's public interest arguments used to advocate for their policy positions change depending upon the specific legislative issue being considered.

Modern Slavery Disclosure Regulation and Global Supply Chains: Insights from Stakeholder Narratives on the UK Modern Slavery Act

“…It appears that interest groups have captured the regulation in a way that prevented the Anti-slavery Commissioner from working independently to curb modern slavery. This evidence is consistent with how regulatory capture is defined within the diverse literature (Levine & Forrence, 1990;Hantke-Domas, 2003;Baudot et al, 2017;Dal Bó & Di Tella, 2003;Hines, 1991;Paisey & Paisey, 2012).…”

“…Anti-slavery activists believe that the Act has been influenced by corporations and some believe that there is little legal scope to hold organisations accountable for slavery practices. There is a view that the regulation has been captured by powerful corporate groups for their own interests (Baudot et al, 2017;Hantke-Domas, 2003;Hines, 1991;Levine & Forrence, 1990;Paisey & Paisey, 2012), and that modern slavery disclosures, therefore, attempt to reduce business risk and do not address and reduce the risks of those falling victim to modern slavery. The interviewees observed that risk minimisation agendas, among both regulators and corporations, may not automatically reduce the severity of modern slavery practices within global supply chains.…”

“…In particular, the broader tension highlighted in the critical regulation literature is that a particular regulation could be thwarted by regulatory capture. Regulatory capture results in regulation that gains support from different constituencies but may in fact not be in the public's best interest (Baudot et al, 2017). History provides many examples of regulators prioritising the interest of the regulated who have power and wealth over that of the general public (Wilson et al, 2018).…”

Mandatory audit firm rotation: a critical composition of practitioner views from an emerging economy

“…To provide additional insights, the analysis was re-administered (after adjusting for questions specific to the internal operations of audit firms) with 115 non-auditors [16]. This was necessary considering the potential for auditor bias against external regulation (Baudot et al, 2017;Daugherty et al, 2012;Lee, 1995). Including the views of senior executives, audit committee members and institutional investors also provides a more complete account of the implication of MAFR for audit practice.…”

When the Client Is a Former Auditor: Auditees' Expert Knowledge and Social Capital as Threats to Staff Auditors' Operational Independence

“…Accordingly, rather than becoming a struggle to classify or distinguish between different “levels” of power, authority, or influence (Lukes ; ), the issue of power almost turns into a mere political problem: how do people mobilize and manage available resources to achieve their ends and fulfill their purposes? For instance, the U.S. public accounting profession has been able to influence political processes by mobilizing significant resources such as time, money, and access to influential politicians (Baudot et al ).…”