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The self-regulating profession: An analysis of the political monopoly tendencies of the audit profession

1991; Elsevier BV; Volume: 2; Issue: 4 Linguagem: Inglês

10.1016/1045-2354(91)90006-y

1095-9955

J. Ralph Byington, Steve G. Sutton,

Corporate Finance and Governance

Litigation, congressional hearings and external criticisms have prompted the accounting profession to address their performance as a self-regulating monopoly. This research presents the basic characteristics of a self-regulating monopoly and models the issuance of accounting and auditing standards based on the occurrence of certain paramount events in the history of the accounting profession. These events, the 1938 issuance of Accounting Series Release (ASR) 4 by the SEC, the 1971 passage of the congressional act on accounting for investment tax credits, the 1978 introduction of the Moss Bill based on the Moss and Metcalf hearings, and the 1985 Dingell committee hearings, are found to support the self-regulating monopoly hypotheses. This study questions the profession's response of new standards and statements unless these standards and statements close the expectation gap and have a strong conceptual base.