The research uses sociological theories of professionalism to help understand the implications of the Sarbanes-Oxley legislation for the accounting profession and for the public interest. It explains why professional self-regulation is important for retaining valuable economic franchises. It also explains why the public interest orientation of the profession is important and how government take-over of auditing standards potentially erodes the public accounting profession’s commitment to the public interest.
According to the article, self-control over professional work, a key characteristic of professional status, is pre-empted by the newly created government oversight body PCAOB. With government takeover of oversight of auditing practice, claims to professional status are weakened and professional commitment to, and involvement with, vital work standards may suffer. In addition, the profession may no longer have incentives to promote the public interest or to innovate and change in response to changing conditions.
The authors trace events leading up to Sarbanes-Oxley legislation and conclude that underlying problems arising from internal work differentiation as consulting work became more profitable and glamorous, and development of a commercially-oriented work culture may continue to threaten the profession in the future.
They speculate that the greatest costs may be opportunity costs as the profession no longer has the incentives or ability to innovate and embrace new forms of accountability. Learn more by reading the research article “Sarbanes-Oxley and the Accounting Profession: Public Interest Implications” by Sara Ann Reiter (1Binghamton University, Binghamton, USA) and Paul F. Williams (North Carolina State University, Raleigh, USA) in Open Journal of Accounting, 2013, Vol. 2, pages 8-15.
