In whose interest? A critical examination of public interest appeals made by the public accounting profession in the USA

Thornburg, Steven

doi:10.1504/ijca.2013.053356

Cited by 5 publications

(4 citation statements)

References 19 publications

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“…(P15, Auditor) Partners are under pressure [C7] to retain and grow client revenue [C2] while also performing their role in safeguarding financial reporting quality [C1] . This conflict has long been acknowledged as a threat to auditor independence and quality (Lee, 1995;Sikka, 2009;Thornburg and Roberts, 2013). The concern is that the vested interests of auditors to maintain a profitable [C7] enterprise may result in them "taking the eyes off the ball" (P08, Auditor).…”

Section: Internal Culture Of Quality Controlmentioning

confidence: 99%

Audit quality implications of regulatory change in South Africa

Ndaba

Harber

Maroun

2021

JAEE

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PurposeThis paper explores how technical constructions of audit practice are influenced by mandatory audit firm rotation (MAFR) regulations. The paper responds to calls for additional research on how external regulation influences audit quality and supplements the predominately quantitative research dealing specifically with firm rotation and its relevance for audit quality.Design/methodology/approachData are collected from South Africa which is the latest jurisdiction to adopt MAFR (from 2017). Detailed interviews with 49 participants comprising 24 audit partners and 25 non-auditors are conducted to explore how MAFR can impact audit quality. For this purpose, audit quality is defined according to a schematic developed interpretively and based on professional auditing standards and the prior research on audit quality.FindingsThere is no guarantee that MAFR will bolster auditors' independence or contribute to a more thorough audit approach. On the contrary, the effort required by incoming audit firms to gain an understanding of new clients coupled with material tendering costs is expected to decrease the profitability of audit engagements with adverse implications for audit quality. A loss of client experience and staff retention challenges may contribute further to a decline in audit quality. There may be some improvements to audit practice when an incumbent firm's work is going to be scrutinised by a new auditor but audit methodologies, including the nature and extent of testing performed, are not expected to change significantly because of MAFR. In this way, the regulation may be a symbolic response to a perceived decline in audit quality and auditor independence rather than part of an effective strategy to encourage more rigorous audit practice for the benefit of the users of financial statements.Originality/valueThe current paper provides one of the first exploratory accountants of how MAFR is expected to impact audit practice and, in turn, audit quality. The research responds to the call for more field-work studies on the mechanics of the audit process by engaging directly with practitioners instead of relying on inferential testing of broad audit quality surrogates. The study also makes an important empirical contribution by providing primary evidence on how external regulation influences audit practice from a seldom studied African perspective.

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Section: Internal Culture Of Quality Controlmentioning

confidence: 99%

Audit quality implications of regulatory change in South Africa

Ndaba

Harber

Maroun

2021

JAEE

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“…Researchers have examined the public interest responsibilities of the public accounting profession, in particular, through both functionalist and conflict perspectives (e.g., Parker 1994;Roberts and Dwyer 1998;Baker 2005;Thornburg and Roberts 2013). These studies generally explore whether and how well the actions of the public accounting profession comport with a strict functionalist definition of its public interest responsibilities.…”

Section: Conceptual Development and Research Questionmentioning

confidence: 99%

“…These studies generally explore whether and how well the actions of the public accounting profession comport with a strict functionalist definition of its public interest responsibilities. For example, Thornburg and Roberts (2013) explore the accounting profession's motivations to invoke public interest arguments in various contexts, finding the profession's appeals to the public interest to be at odds with the profession's increasing focus on commercial activities. Although these studies acknowledge that the public interest and the public accounting profession's private interests may overlap, they generally view actions motivated by the public accounting profession's private interests as ones that deviate, at least to some extent, from actions that would be taken under similar circumstances if a strict functionalist public interest definition was followed.…”

Section: Conceptual Development and Research Questionmentioning

confidence: 99%

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

Baudot

Wallace

2016

J Bus Ethics

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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.

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“…As a rule, activities related to obtaining membership are publicly regulated, and those related to the management of organization resources are self-regulated. The topic of public interest is used by professional associations to justify the need for new regulations, defend their reputation in times of crisis, and reduce their exposure to the risk of failure related to professional conduct [27,28]. Accounting bodies seek to develop lobby and control mechanisms to ensure that their members are not exposed to reputational damage, under the umbrella of serving the public interest [29].…”

Section: Literature Reviewmentioning

confidence: 99%

Empirical Evidence on the Development and Digitalization of the Accounting and Finance Profession in Europe

et al. 2022

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The objective of this research was to evaluate the development and digitalization of professional services in the field of accounting and finance, as well as to calculate and compare several indicators of the development of the profession in each European country. We also sought to identify the factors that drive the development of the accounting and finance profession at the international level. We collected rich information on 337 professional associations in 40 countries in Europe. Using this dataset, 20 accounting and finance services and 14 membership services and benefits provided by professional associations were identified. Digitalization of the profession is a prominent membership service, but also a characteristic of country competitiveness. The results of the intergroup analysis showed that high-income countries have a significantly larger number of professional associations and services compared to middle-income countries. Furthermore, the accounting and finance profession in high-income countries covers a larger number of accounting and membership services. The size of the population and the competitiveness of the national economy are the main predictors of the development and digitalization of the accounting and finance profession in a country. This research has implications for professional associations and national regulators in reducing disparities between European countries on the matter of accounting education and service quality. The scale of this research can provide institutional actors with a holistic perspective on the accounting and finance profession at the national and international level.

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In whose interest? A critical examination of public interest appeals made by the public accounting profession in the USA

Cited by 5 publications

References 19 publications

Audit quality implications of regulatory change in South Africa

Audit quality implications of regulatory change in South Africa

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

Empirical Evidence on the Development and Digitalization of the Accounting and Finance Profession in Europe

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