Rethinking the Structure of Accounting and Auditing
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.
|Date of creation:||13 Jun 2003|
|Date of revision:|
|Contact details of provider:|| Web page: http://icf.som.yale.edu/|
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- Shyam NMI Sunder & Ronald A. Dye, 2001. "Why Not Allow the FASB and IASB Standards to Compete in the U.S.?," Yale School of Management Working Papers ysm192, Yale School of Management.
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"Regulatory Competition Among Accounting Standards Within and Across International Boundaries,"
Yale School of Management Working Papers
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- Sunder, Shyam, 2002.
"Regulatory competition for low cost-of-capital accounting rules,"
Journal of Accounting and Public Policy,
Elsevier, vol. 21(2), pages 147-149.
- Shyam NMI Sunder, 2002. "Regulatory Competition for Low Cost-of-capital Accounting Rules," Yale School of Management Working Papers ysm305, Yale School of Management.
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