Rethinking the Structure of Accounting and Auditing
AbstractFailures 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.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm382.
Date of creation: 13 Jun 2003
Date of revision:
Accounting; Auditing; Regulation; Institutional Reform;
Other versions of this item:
- Shyam Sunder, 2003. "Rethinking the Structure of Accounting and Auditing," Yale School of Management Working Papers ysm392, Yale School of Management.
- L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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- Sunder, Shyam, 2002.
"Regulatory competition for low cost-of-capital accounting rules,"
Journal of Accounting and Public Policy,
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Yale School of Management Working Papers
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- Sunder, Shyam, 2002. "Regulatory competition among accounting standards within and across international boundaries," Journal of Accounting and Public Policy, Elsevier, vol. 21(3), pages 219-234.
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