Hostname: page-component-848d4c4894-m9kch Total loading time: 0 Render date: 2024-05-01T03:26:54.528Z Has data issue: false hasContentIssue false
  • English
  • Français

The Philosophy and Rhetoric of Auditor Independence Concepts

Published online by Cambridge University Press:  23 January 2015

Sara Ann Reiter  and
Paul F. Williams
Get access Rights & Permissions [Opens in a new window]

Abstract:

This paper analyzes the rhetoric surrounding the profession’s presentations of auditor independence. We trace the evolution of the character of the auditor from Professional Man in the early years of the twentieth century to the more public and abstract figures of Judicial Man and Economic Man. The changing character of the auditor in the profession’s narratives of legitimation reflects changes in the role of auditing, in the economic environment, and in the values of American society. Economic man is a self-interested and shallow character who offered the auditing profession little protection against involvement in corporate scandals. In the wake of recent accounting scandals, the profession is calling for a return to the character of Professional Man to restore trust in audits and the financial markets.

We also analyze the philosophical bases of the metaphors surrounding auditor independence. These metaphors, particularly the metaphor of independence as separation, create problems in conceptualizing independence concepts. How can you discuss appropriate relationships when your basic concept is one of separation, or no relationship? On the other hand, relational concepts of independence are also flawed if they are not based on a firm moral foundation. We suggest how the profession can act to rebuild its moral foundation through recognition of collective responsibility.

Type
Articles
Information
Business Ethics Quarterly , Volume 14 , Issue 3 , July 2004 , pp. 355 - 376
Copyright
Copyright © Society for Business Ethics 2004

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abbott, A. 1988. The System of Professions (Chicago: University of Chicago Press).CrossRefGoogle Scholar
Accounting Web. 2002. “AICPA Masses Troops to Fight Auditor Reform.” www.accountingweb.com/cgi-bin/item/cgi?id=74169&d=659&h=660&f=661, March 6, 2002.Google Scholar
Accounting Web. 2003. “PCAOB Proposes New Rules for Auditors.” www.accountingweb.com/item/97897, August 5, 2003.Google Scholar
Agrawal, S. P. 1975. “Auditor’s Independence: A Behavioral Perspective,” in The Nature and Purpose of Accounting, ed. Garner, D. E. and Murphy, D. M. (Belmont, Calif.: Wadsworth Publishing Company).Google Scholar
American Institute of Accountants. 1912. “Authority and Responsibility of the Auditor.” Journal of Accountancy 13: 360–4.Google Scholar
American Institute of Accountants. 1919. “Rules of Professional Conduct.” Journal of Accountancy 28: 451–4.Google Scholar
American Institute of Accountants. 1928. “Should an Auditor Act as Director? Should the Auditor be Stockholder?” Journal of Accountancy 45: 205–7.Google Scholar
AICPA. (2002). “Landmark Accounting Reform Legislation Signed into Law.” The CPA Letter (New York: AICPA).Google Scholar
Allen, K. 1991. “In Pursuit of Professional Dominance: Australian Accounting 1953–1985.” Accounting Auditing & Accountability Journal 4(1): 51–67.Google Scholar
Baier, A. C. 1995, “The Need for More than Justice,” in Justice and Care, ed. Held, V. (Boulder, Colo.: Westview Press, Inc.)Google Scholar
Bailey, A. B. 1995. “The Practicing Professional’s Mental Model: Are We Creating the Right Mental Models for New Professionals?” Issues in Accounting Education 10(1): 191–5.Google Scholar
Bartlett, R. W. 1991. “A Heretical Challenge to the Incantations of Audit Independence.” Accounting Horizons 5(1): 11–6.Google Scholar
Bartlett, R. W.. 1993. “A Scale of Perceived Independence: New Evidence on an Old Concept.” Accounting Auditing & Accountability Journal 6(2): 52–67.Google Scholar
Berryman, R. G. 1978. “Auditor Independence: Its Historical Development and Some Proposals for Research,” in Ethics in the Accounting Profession, ed. Loeb, S. B. (New York: John Wiley & Sons): 141–58.Google Scholar
Brabeck, M. 1993. “Moral Judgment: Theory and Research on Differences Between Males and Females,” in An Ethic of Care, ed. Larrabee, M. J. (New York: Routledge): 33–48.Google Scholar
Buckley, J. W., and O’Sullivan, P.. 1980. “Regulation and the Accounting Profession: What are the Issues?” in Regulation and the Accounting Profession, ed. Buckley, J. W. and Weston, J. Fred (Belmont, Calif.: Lifetime Learning Publications): 3–53.Google Scholar
Business Week. 2003. “Special Report: The Best & Worst Managers—Barry Melancon.” Business Week (January 13).Google Scholar
Carey, J. L. 1946. Professional Ethics of Public Accounting (New York: American Institute of Accountants).Google Scholar
Carey, J. L.. 1956. Professional Ethics of Certified Public Accountants (New York: AICPA).Google Scholar
Carey, J. L. 1969. The Rise of the Accounting Profession: From Technician to Professionals 1896–1936 (New York: AICPA).Google Scholar
Carey, J. L.. 1970. The Rise of the Accounting Profession: To Responsibility and Authority 1937–1969 (New York: AICPA).Google Scholar
Carey, J. L., and Doherty, W. O.. 1966. Ethical Standards of the Accounting Profession (New York: AICPA).Google Scholar
Carmichael, D. R. 1998. “A Conceptual Framework for Independence.” The CPA Journal 68(3): 16–23.Google Scholar
Carmichael, D. R.. 1999. “In Search of Concepts of Auditor Independence.” The CPA Journal 69(5): 38–40, 42–3.Google Scholar
Chandler, R., and Edwards, J. R.. 1996. “Recurring Issues in Auditing: Back to the Future?” Accounting, Auditing & Accountability Journal 9(2): 4–29.Google Scholar
Chase, W. A. 1906. “The Profession of a Certified Public Accountant.” Journal of Accountancy 2: 194–200.Google Scholar
Cole, E. B., and Coultrap-McQuin, S.. 1992. “Toward a Feminist Conception of Moral Life,” in Explorations in Feminist Ethics, ed. Cole, E. B. and Coultrap-McQuin, S. (Bloomington: Indiana University Press): 1–11.Google Scholar
Cooper, W. D. 1982. Carman G. Blough, Selected Contributions in Accounting (Atlanta: Georgia State University).Google Scholar
Craig, J. L. 1997. “Preserving Auditor Independence: An Interview with Michael Sutton, Chief Accountant of the SEC.” The CPA Journal 67(12): 16–22.Google Scholar
Edwards, J. D. 1978. History of Public Accounting in the United States (East Lansing: Michigan State University).Google Scholar
Elliott, R. K. 1994. “Confronting the Future: Choices for the Attest Function.” Accounting Horizons 8(3): 106–24.Google Scholar
Elliott, R. K., and Jacobson, P. D.. 1998a. “SEC Independence Concepts.” The CPA Journal 68(4): 14–20.Google Scholar
Elliott, R. K., and Jacobson, P. D.. 1998b. “Audit Independence Concepts,” The CPA Journal 68(12): 30–4, 36–7.Google Scholar
England, P. 1993. “The Separative Self: Androcentric Bias in Neoclassical Assumptions,” in Beyond Economic Man: Feminist Theory and Economics, ed. Ferber, M. A. and Nelson, J. A. (Chicago: University of Chicago Press): 37–53.Google Scholar
Ezzell, W. F. 2002. “Upholding the Public Trust.” Speech delivered at the 2002 AICPA National Conference on Current Securities and Exchange Commission (SEC) Developments.Google Scholar
Freidson, E. 1986. Professional Powers: A Study of the Institutionalization of Formal Knowledge (Chicago: University of Chicago Press).Google Scholar
Freidson, E.. 1994. Professionalism Reborn: Theory, Prophecy and Policy (Chicago: University of Chicago Press).Google Scholar
Gaa, J. C. 1990. “A Game-Theoretic Analysis of Professional Rights and Responsibilities.” Journal of Business Ethics 9(3): 159–69.CrossRefGoogle Scholar
Gilligan, C. 1987. “New Maps of Development: New Visions of Maturity,” in Women, Culture and Morality, ed. DeVitis, J. L. (New York: Peter Lang Publishing, Inc.): 279–307.Google Scholar
Glazer, A. S., and Jaenicke, H. R.. 2002. “A Pathology of the Independence Standards Board’s Conceptual Framework Project.” Accounting Horizons 16(4): 329–52.Google Scholar
Hunt, I. C. Jr. 2001. “Accountants as Gatekeepers—Adding Security and Value to the Financial Reporting System.” Speech by SEC Staff, http://www.sec.gov/news/speech/spch518.htm, (October 26).Google Scholar
Kinley, D. 1906. “The Field of Accounting.” Journal of Accountancy 2: 187–93.Google Scholar
Kinney, W. R. 1999. “Auditor Independence: A Burdensome Constraint or Core Value?” Accounting Horizons 13(1): 69–75.Google Scholar
Labaton, S. 2002. “S.E.C.’s Embattled Chief Resigns in Wake of Latest Political Storm.” The New York Times (November 6).Google Scholar
Labaton, S.. 2003. “Six Months Later, Audit Board Holds First Talk.” The New York Times (January 10).Google Scholar
Lakoff, G., and Johnson, M. 1980. Metaphors We Live By (Chicago: University of Chicago Press).Google Scholar
Lee, T. A., and Williams, P. F.. 1999. “Accounting from the Inside: Legitimizing the Accounting Academic Elite.” Critical Perspectives on Accounting 10(6): 867–95.Google Scholar
Levitt, A. 2000. “Remarks by Chairman Levitt re Rules on Accountant Independence.” Securities and Exchange Commission (June 27).Google Scholar
May, L. 1992. Sharing Responsibility (Chicago: University of Chicago Press).Google Scholar
McCloskey, D. N. 1985. The Rhetoric of Economics (Madison: University of Wisconsin Press).Google Scholar
Melancon, B. C. 2002. “A New Accounting Culture.” Speech delivered at the Yale Club, New York City (September 4).Google Scholar
Montagna, P. D 1974. Certified Public Accounting: A Sociological View of a Profession in Change (Houston: Scholars Book Co.).Google Scholar
Norris, F. 2000. “Accounting Firms, S.E.C. Agree on Rule to Limit Conflicts of Interest.” The New York Times (November 15).Google Scholar
Ponemon, L. A. 1996. “Practicing Public Accounting in an Unlicensed, Unregulated Environment.” The CPA Journal 66(8): 30–4.Google Scholar
Preston, A. M., Cooper, D. J., Scarbrough, D. P., and Chilton, R. C.. 1995. “Changes in the Code of Ethics of the U.S. Accounting Profession, 1917 and 1988: The Continual Quest for Legitimation.” Accounting, Organizations and Society 20(6): 507–46.Google Scholar
PricewaterhouseCoopers. 2003. Stand and Be Counted (PWC).Google Scholar
Reiter, S. A. 1994. “Beyond Economic Man: Lessons for Behavioral Research in Accounting.” Behavioral Research in Accounting 6 Supplement: 163–85.Google Scholar
Reiter, S. A.. 1997. “The Ethics of Care and New Paradigms for Accounting Practice.” Accounting, Auditing & Accountability Journal 10(3): 299–324.Google Scholar
Reiter, S. A., and Flynn, L.. 1999. “Moral Imagination and Accounting Ethics.” Research on Accounting Ethics (5): 217–40.Google Scholar
Reiter, S. A., and Williams, P. F.. 2002. “The Structure and Progressivity of Accounting Research: The Crisis in the Academy Revisited.” Accounting, Organisations and Society.Google Scholar
Robertson, L. R. 1996 “‘Debating Markets’: A Rhetorical Analysis of Economic Discourse.” Feminist Economics 2(1): 98–113.Google Scholar
Rodgers, J., and Williams, P. F.. 1996. “Patterns of Research Productivity and Knowledge Production at The Accounting Review.” The Accounting Historians Journal (June): 51–88.Google Scholar
Saul, R. S. 1996. “What Ails the Accounting Profession?” Accounting Horizons 10(2): 131–7.Google Scholar
Securities and Exchange Commission. 2000. “The Commission’s Proposal to Modernize the Rules Governing the Independence of the Accounting Profession” (June 27).Google Scholar
Securities and Exchange Commission. 2003. “Commission Adopts Rules Strengthening Auditor Independence” (January 22).Google Scholar
Seigel, A., and McGrath, S.. 2003 “Recognizing and Addressing Conflicts of Interest.” The CPA Journal 73(4): 6, 8–11.Google Scholar
Simons, H. W. 1976. Persuasion: Understanding, Practice, and Analysis (Reading, Mass.: Addison-Wesley Publishing Company).Google Scholar
Special Committee on Terminology of the AIA. 1922. Journal of Accountancy 33: 467–70.Google Scholar
Sterrett, J. E. 1907. “Professional Ethics.” Journal of Accountancy 4: 407–31.Google Scholar
Sterrett, J. E.. 1909. “Progress of the Accounting Profession.” Journal of Accountancy 9: 11–6.Google Scholar
Sutton, M. H. 1997. “Auditor Independence: The Challenge of Fact and Appearance.” Accounting Horizons 11(1): 86–91.Google Scholar
Tronto, J. C. 1993. Moral Boundaries (New York: Routledge).Google Scholar
Turner, L. E. 2001. “Independence: A Covenant for the Ages.” Speech by SEC Staff http://www.sec.gov/news/speech/spch504.htm (June 28).Google Scholar
Voynich, S. 2003a. “Integrity in Action.” Inaugural speech http://www.aicpa.org/news/leadershipspeeches.asp (October 21).Google Scholar
Voynich, S.. 2003b. “Driving Change: A Matter of Integrity.” http://www.aicpa.org/news/leadershipspeeches.asp (December 10).Google Scholar
Walker, R. H. 1999. “In Quotes: Auditor Independence: The Issues.” The CPA Journal 69(5): 44–6, 48, 50.Google Scholar
Wall Street Journal. 1909. “Independent Audits.” Wall Street Journal (August 7), reprinted in Journal of Accountancy 8: 382.Google Scholar
Wallmann, S. 1995. “The Future of Accounting and Disclosure in an Evolving World: The Need for Dramatic Change.” Accounting Horizons 9(3): 81–91.Google Scholar
Wallmann, S.. 1996. “The Future of Accounting, Part III: Reliability and Auditor Independence.” Accounting Horizons 10(4): 76–97.Google Scholar
Williams, P. F. 1992. “Prediction and Control in Accounting ‘Science.’” Critical Perspectives On Accounting 3(1): 99–107.Google Scholar
Wolfe, A. 1989. Whose Keeper? (Berkeley: University of California Press).Google Scholar