Rethinking the Structure of Accounting and Auditing
Yale University - School of Management
Yale ICF Working Paper No. 03-17
Failures in corporate governance of many major US corporations in 2002 suggest that it may be useful to fundamentally rethink the structure of institutions of accounting, auditing, corporate governance and executive compensation. Replacement of the system of authoritative standards by a competitive, common law approach to accounting principles and rules may help shift the focus of financial reporting from form to substance. Following some key Supreme Court rulings, the quality of auditing declined under the governmental push to increase competition in that industry beginning with the late seventies, pushing audit firms to peddle consulting services to their clients for economic survival. Restoring the high quality of audit may require radical reorganization of the audit function, such as bundling it with insurance. The protection of minority interest by the board of directors and the control of runaway executive compensation are two other problems whose solution may require structural, not just procedural, changes.
Number of Pages in PDF File: 32
Keywords: Accounting, Auditing, Regulation, Institutional Reform
JEL Classification: G28, L44, L51, L84, M41working papers series
Date posted: June 13, 2003
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo8 in 0.437 seconds