Guardians of the galaxy: public accounting and the public interest

2015 ◽  
Vol 7 (5/6) ◽  
pp. 466 ◽  
Author(s):  
Wm. Dennis Huber
Keyword(s):  
Public Interest ◽  
Public Accounting ◽  
The Public ◽  
The Galaxy

A reflective analysis of the “new audit” and the public interest

2010 ◽  
Vol 6 (3) ◽  
pp. 300-329 ◽  
Author(s):  
Timothy J. Fogarty ◽  
John T. Rigsby
Keyword(s):  
Public Interest ◽  
Motivating Factors ◽  
Public Accounting ◽  
Accounting Firms ◽  
Content Type ◽  
Social Good ◽  
The Public ◽  
New Business ◽  
Recent Developments ◽  
Audit Approach

PurposePrior to the sudden collapse of large companies following the turn of the century and the implication that the auditing of these enterprises had failed, the large public accounting firms sought to re‐engineer the audit. A comprehension attempt to convert that which had been designed as a social good into one more aligned with a commercial logic was halted by the legislative response to this departure from classic professionalism. Recent developments suggest that change in this direction is regrouping. The purpose of this paper is to provide a reflective analysis of the thoughts of the authors on the early development of the new audit approach.Design/methodology/approachMost of the information in the piece was garnered from conversations with public accounting partners during the era in question. Logical argumentation derived from the academic and theoretical literature is the primary method.FindingsAttributes of the firms' strategies during this period are outlined. Features of the new audit are developed, especially as they vary from the traditional audit. These techniques and approaches are analyzed in terms of their ability to serve the public interest. This paper argues that motivating factors of the new audit will continue to be a force even in the more hostile regulatory environment of today.Practical implicationsAn appreciation of the findings of the study is useful in maintaining a level of skepticism about changes to the audit that are advocated by audit firms. Users of audit services, regulators, and legislators would benefit from an appreciation of the recent past. The motivating factors underlying these changes to audit environment continue to operate over time as the social purposes of the audit are less likely to be converted by the firms to ones that can be commercially exploited.Originality/valueThe study contributes insights into the origins of the new business audit approach and related strengths and limitations. These factors should be considered as the approach is developed and moves forward into the future in order for the audit approach to be effective in performing its social functions.

Cook and Thomas, LLC: Balancing Auditor Liability, Client Confidentiality, and the Public Interest

2015 ◽  
Vol 32 (1) ◽  
pp. 17-32 ◽  
Author(s):  
Kelsey R. Brasel ◽  
Brian E. Daugherty
Keyword(s):  
Critical Thinking ◽  
Public Interest ◽  
Public Accounting ◽  
Difficult Situation ◽  
Auditor Liability ◽  
Accounting Firm ◽  
The Public ◽  
Optimal Balance

ABSTRACT In this case students are asked to assume the role of Alex Trifold, CPA, an audit partner for the public accounting firm, Cook and Thomas, LLC, who holds going concern information about an audit client that may impact other entities audited by Cook and Thomas. The case study illustrates how adherence to auditing standards may place auditors in a difficult situation when balancing the auditor's risk of litigation, the clients' rights to confidentiality, and the auditor's duty to the public. Additionally, the case provides exposure to prior litigation cases against auditors with unfavorable outcomes when auditors chose to protect their client's confidentiality, and, conversely, in cases where auditors chose to protect the greater public interest. The case requires students to engage in critical thinking by providing their viewpoints as to the optimal balance of limiting auditor liability, adhering to client confidentiality requirements, and simultaneously serving the public interest. The case study is appropriate for both undergraduate and graduate auditing courses.

Ethics and the Tax Profession: Restoring the Public Interest Focus

2010 ◽  
Vol 10 (1) ◽  
pp. 13-35 ◽  
Author(s):  
Martin Stuebs ◽  
Brett Wilkinson
Keyword(s):  
Public Interest ◽  
Adverse Outcomes ◽  
Fraud Triangle ◽  
Accounting Profession ◽  
Public Accounting ◽  
Tax System ◽  
Accounting Firms ◽  
The Public ◽  
Fundamental Causes ◽  
Tax Practice

ABSTRACT: Tax practice is an integral component of the public accounting profession. Although accountancy as a profession embraces a strong public interest notion, there is an inevitable tension in tax practice between serving the client and maintaining the integrity of the tax system. Resolving this tension necessitates an ethics-infused judgment process. Ethical failures over the past decade have weakened the tax profession and called into question the extent to which practitioners in fact operate in a manner consistent with the public interest. In this paper, we explore the fundamental causes of the ethical problems that have plagued the tax profession and provide a roadmap for reform of the tax profession. Using Cressey’s (1953) fraud triangle as a framework, we first examine the normative ideal for the tax profession. We then examine the recent tax shelter abuses perpetrated by the major public accounting firms and find results consistent with our expectations under the fraud triangle analysis. In essence, ethical breakdowns resulted from the loss of a public interest emphasis, which in turn led to the explicit pursuit of commercial gain at the expense of the public interest. That the frauds were perpetrated within the context of a profession founded on a public interest notion is particularly concerning. In response to the problems observed, we identify key cultural reforms needed within the accounting academy, the accounting profession, and the tax system in order to restore trust and the public interest character of the tax profession to center stage and so guard against further adverse outcomes.

scholarly journals PUBLIC-PRIVATE PARTNERSHIPS: ORIGIN, LIMITATIONS AND PROSPECTS FOR PUBLIC SECTOR ACCOUNTING

2020 ◽  
Vol 26 (1) ◽  
pp. 114-136
Author(s):  
Nyalle Barboza Matos ◽  
Andréa de Oliveira Gonçalves
Keyword(s):  
Public Interest ◽  
Choice Theory ◽  
Social Consequences ◽  
Shared Responsibility ◽  
Political Commitment ◽  
Public Accounting ◽  
The Public ◽  
Public Resources ◽  
Research Questions ◽  
Democratic Relations

ABSTRACT The main objective of this research is to identify and discuss theoretically the advances, limitations and perspectives pointed by international research to improve the accountability and evaluation aspects of PPPs. This is a theoretical essay based on the Public Choice Theory to show that the PPP accounting treatment is relevant to avoid lack of transparency and accountability, mitigating possible losses in the decision-making process and the ineffective allocation of public resources. The discussion of topics reveals the importance of public accounting in measuring the financial and social consequences that the shared responsibility of PPPs can have, defending the public interest and democratic relations. It is argued that different factors may influence PPP accounting issues, involving governance limitations, institutional weaknesses, widespread corruption, lack of transparency, weak regulatory environments, power imbalances between partners, lack of political commitment and trust. Finally, some accounting research questions and topics are presented that should be considered to prevent private interest from overriding the public interest in contracting a PPP.

COMMENTARY––A Public Interest View of Auditor Independence: Moving Toward Auditor Reliability When Considering and Promoting Audit Quality

2015 ◽  
Vol 15 (1) ◽  
pp. 53-63
Author(s):  
F. Todd DeZoort ◽  
Mark H. Taylor
Keyword(s):  
Financial Reporting ◽  
Public Interest ◽  
Audit Quality ◽  
Reporting Quality ◽  
Auditor Independence ◽  
Financial Reporting Quality ◽  
Public Accounting ◽  
Holistic View ◽  
The Public ◽  
Regulatory Bodies

ABSTRACT A longstanding view inside and outside the auditing profession is that the public accounting profession rests on the foundation of independence (Previts and Merino 1998), with regulatory bodies requiring auditors to be independent both in appearance and in fact. For many decades, regulators and stakeholders alike have held the view that auditor independence is the auditor's endgame. We review recent research on the Reliability Framework, which recasts auditor independence with other professional constructs, including integrity, competence, and objectivity, as co-antecedents of auditor reliability and audit quality. On that basis, this commentary advocates that a public interest view of auditor independence must account for the auditor's real reason for existence based on what stakeholders want and need: reliable audit services that facilitate financial reporting quality and protect the public interest. Recent initiatives by the Center for Audit Quality and its member firms, as well as the profession's regulators, reveal movement consistent with this holistic view. These developments indicate that the public interest view of auditor reliability is shifting toward a revised view of independence, along with other professional constructs that co-create audit quality and reliable financial reporting.

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