IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v142y2017i2d10.1007_s10551-016-3156-0.html
   My bibliography  Save this article

Does the Accounting Profession Discipline Its Members Differently After Public Scrutiny?

Author

Listed:
  • Devan Mescall

    (University of Saskatchewan)

  • Fred Phillips

    (University of Saskatchewan)

  • Regan N. Schmidt

    (University of Saskatchewan)

Abstract

This study examines how the accounting profession disciplines its members for professional misconduct in periods of increased public scrutiny. We conjecture and find that increased public scrutiny of the Canadian accounting profession, marked by the establishment of the Canadian Public Accountability Board in 2003, is positively associated with the severity of punitive sanctions administered by the profession’s disciplinary committees. We find that disciplinary committees are more likely to also demand rehabilitation outcomes and greater future monitoring for offenders. Finally, reporting of discipline outcomes has increased in outlets internal to the accounting profession, but not in publications targeted outside to the public. This latter finding is consistent with the private interest theoretical model of professional ethics developed by Parker (Acc Organ Soc 19:507–525, 1994) as evidence of a latent motivation of the profession to protect its professional private interests. Exploratory analyses indicate that punishment, rehabilitation, and reporting in external publications significantly influence whether offenders return to good standing.

Suggested Citation

  • Devan Mescall & Fred Phillips & Regan N. Schmidt, 2017. "Does the Accounting Profession Discipline Its Members Differently After Public Scrutiny?," Journal of Business Ethics, Springer, vol. 142(2), pages 285-309, May.
    • Handle: RePEc:kap:jbuset:v:142:y:2017:i:2:d:10.1007_s10551-016-3156-0
    DOI: 10.1007/s10551-016-3156-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-016-3156-0
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-016-3156-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lennox, Clive & Pittman, Jeffrey, 2010. "Auditing the auditors: Evidence on the recent reforms to the external monitoring of audit firms," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 84-103, February.
    2. Gilles Hilary & Clive Lennox, 2005. "The Credibility of Self-Regulation: Evidence from the Accounting Profession's Peer Review," Post-Print hal-00482306, HAL.
    3. DeFond, Mark L., 2010. "How should the auditors be audited? Comparing the PCAOB Inspections with the AICPA Peer Reviews," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 104-108, February.
    4. Hilary, Gilles & Lennox, Clive, 2005. "The credibility of self-regulation: Evidence from the accounting profession's peer review program," Journal of Accounting and Economics, Elsevier, vol. 40(1-3), pages 211-229, December.
    5. Brendan O'Dwyer & Mary Canning, 2008. "On professional accounting body complaints procedures," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(5), pages 645-670, June.
    6. Preston, Alistair M. & Cooper, David J. & Scarbrough, D. Paul & Chilton, Robert 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, Elsevier, vol. 20(6), pages 507-546, August.
    7. Ugrin, Joseph C. & Odom, Marcus D., 2010. "Exploring Sarbanes-Oxley's effect on attitudes, perceptions of norms, and intentions to commit financial statement fraud from a general deterrence perspective," Journal of Accounting and Public Policy, Elsevier, vol. 29(5), pages 439-458, September.
    8. Anantharaman, Divya, 2012. "Comparing self-regulation and statutory regulation: Evidence from the accounting profession," Accounting, Organizations and Society, Elsevier, vol. 37(2), pages 55-77.
    9. Mary Canning & Brendan O'Dwyer, 2001. "Professional accounting bodies' disciplinary procedures: accountable, transparent and in the public interest?," European Accounting Review, Taylor & Francis Journals, vol. 10(4), pages 725-749.
    10. C. Richard Baker & Jean Bédard & Christian Prat dit Hauret, 2014. "The regulation of statutory auditing: an institutional theory approach," Managerial Auditing Journal, Emerald Group Publishing, vol. 29(5), pages 371-394, May.
    11. Quick, Reiner & Warming-Rasmussen, B., 2002. "Disciplinary Observance and Sanctions on German and Danish Auditors," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 67740, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    12. Schaefer, James & Welker, Robert B., 1994. "Distinguishing characteristics of certified public accountants disciplined for unprofessional behavior," Journal of Accounting and Public Policy, Elsevier, vol. 13(2), pages 97-119.
    13. Parker, Lee D., 1994. "Professional accounting body ethics: In search of the private interest," Accounting, Organizations and Society, Elsevier, vol. 19(6), pages 507-525, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carolyn Mactavish & Susan McCracken & Regan N. Schmidt, 2018. "External Auditors' Judgment and Decision Making: An Audit Process Task Analysis," Accounting Perspectives, John Wiley & Sons, vol. 17(3), pages 387-426, September.
    2. Cynthia L. Krom, 2019. "Disciplinary Actions by State Professional Licensing Boards: Are They Fair?," Journal of Business Ethics, Springer, vol. 158(2), pages 567-583, August.
    3. Lois J. Surgenor & Kate Diesfeld & Marta Rychert, 2023. "Practitioner Rehabilitation following Professional Misconduct: A Common Practice Now in Need of a Theory?," Laws, MDPI, vol. 12(3), pages 1-14, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cristina Fuentes & Manuel Illueca & Maria Pucheta-Martinez, 2015. "External investigations and disciplinary sanctions against auditors: the impact on audit quality," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(3), pages 313-347, August.
    2. Abernathy, John L. & Barnes, Michael & Stefaniak, Chad, 2013. "A summary of 10 years of PCAOB research: What have we learned?," Journal of Accounting Literature, Elsevier, vol. 32(1), pages 30-60.
    3. Löhlein, Lukas, 2016. "From peer review to PCAOB inspections: Regulating for audit quality in the U.S," Journal of Accounting Literature, Elsevier, vol. 36(C), pages 28-47.
    4. Löhlein, Lukas, 2016. "From peer review to PCAOB inspections: regulating for audit quality in the U.S," LSE Research Online Documents on Economics 67147, London School of Economics and Political Science, LSE Library.
    5. Dellaportas, Steven & Davenport, Laura, 2008. "Reflections on the public interest in accounting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 19(7), pages 1080-1098.
    6. repec:mth:ijafr8:v:8:y:2018:i:4:p:384-398 is not listed on IDEAS
    7. Paisey, Catriona & Paisey, Nicholas J., 2012. "Whose rights? Professional discipline and the incorporation of a (human) rights framework: The case of ICAS," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 23(1), pages 17-35.
    8. Keith A. Houghton & Michael Kend & Christine Jubb, 2013. "The CLERP 9 Audit Reforms: Benefits and Costs Through the Eyes of Regulators, Standard Setters and Audit Service Suppliers," Abacus, Accounting Foundation, University of Sydney, vol. 49(2), pages 139-160, June.
    9. J. Gregory Jenkins & Velina Popova & Mark D. Sheldon, 2018. "In Support of Public or Private Interests? An Examination of Sanctions Imposed Under the AICPA Code of Professional Conduct," Journal of Business Ethics, Springer, vol. 152(2), pages 523-549, October.
    10. Beattie, Vivien & Fearnley, Stella & Hines, Tony, 2010. "Factors Affecting Audit Quality in the 2007 UK Regulatory Environment: Perceptions of Chief Financial Officers, Audit Committee Chairs and Audit Engagement Partners," SIRE Discussion Papers 2012-29, Scottish Institute for Research in Economics (SIRE).
    11. DeFond, Mark & Zhang, Jieying, 2014. "A review of archival auditing research," Journal of Accounting and Economics, Elsevier, vol. 58(2), pages 275-326.
    12. Carlin Dowling & W. Robert Knechel & Robyn Moroney, 2018. "Public Oversight of Audit Firms: The Slippery Slope of Enforcing Regulation," Abacus, Accounting Foundation, University of Sydney, vol. 54(3), pages 353-380, September.
    13. Loréa Baïada-Hirèche & Ghislaine Garmilis, 2016. "Accounting Professionals’ Ethical Judgment and the Institutional Disciplinary Context: A French–US Comparison," Journal of Business Ethics, Springer, vol. 139(4), pages 639-659, December.
    14. Stefan Sundgren & Tobias Svanström, 2013. "Audit office size, audit quality and audit pricing: evidence from small- and medium-sized enterprises," Accounting and Business Research, Taylor & Francis Journals, vol. 43(1), pages 31-55, February.
    15. Aobdia, Daniel & Shroff, Nemit, 2017. "Regulatory oversight and auditor market share," Journal of Accounting and Economics, Elsevier, vol. 63(2), pages 262-287.
    16. Ege, Matthew & Knechel, W. Robert & Lamoreaux, Phillip T. & Maksymov, Eldar, 2020. "A multi-method analysis of the PCAOB’s relationship with the audit profession," Accounting, Organizations and Society, Elsevier, vol. 84(C).
    17. Carrington, Thomas, 2010. "An analysis of the demands on a sufficient audit: Professional appearance is what counts!," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 21(8), pages 669-682.
    18. Anantharaman, Divya, 2012. "Comparing self-regulation and statutory regulation: Evidence from the accounting profession," Accounting, Organizations and Society, Elsevier, vol. 37(2), pages 55-77.
    19. Jeff Everett & Constance Friesen & Dean Neu & Abu Shiraz Rahaman, 2018. "We Have Never Been Secular: Religious Identities, Duties, and Ethics in Audit Practice," Journal of Business Ethics, Springer, vol. 153(4), pages 1121-1142, December.
    20. Carcello, Joseph V. & Hollingsworth, Carl & Mastrolia, Stacy A., 2011. "The effect of PCAOB inspections on Big 4 audit quality," Research in Accounting Regulation, Elsevier, vol. 23(2), pages 85-96.
    21. Hanlon, Michelle & Shroff, Nemit, 2022. "Insights into auditor public oversight boards: Whether, how, and why they “work”," Journal of Accounting and Economics, Elsevier, vol. 74(1).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:142:y:2017:i:2:d:10.1007_s10551-016-3156-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.