What Went Wrong? The Downfall of Arthur Andersen and the Construction of Controllability Boundaries Surrounding Financial Auditing

• 成果类型: Article
• 署名作者: Gendron, Yves; Spira, Laura F.
• 署名单位: Laval University; Oxford Brookes University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1506/car.26.4.1
• 发表日期: 2009
• 页码: 987-+
• 关键词: management; PROFESSIONALIZATION; TRANSFORMATION; technologies; IDENTITY

摘要

This paper aims to improve understanding of the construction of controllability boundaries surrounding the financial audit function through a set of interviews with former members of Arthur Andersen reflecting on the collapse of their firm. Our focus is how members, in light of their firm's downfall, assess the abilities of public accounting firms to control financial audit work and auditor behavior (i.e., organizational controllability), and the abilities of outside, nonaccounting bodies to regulate financial auditing (i.e., regulatory controllability). The investigation is predicated on interviews with 25 former partners and employees of Arthur Andersen, mostly in Canada and the United Kingdom. Our qualitative analysis indicates that a majority of interviewees adheres to the view that financial auditing can best be controlled by means of a network of bureaucratic and clan controls established within accounting firm organizations, without any direct involvement on the part of regulators. A number of interviewees consider that reinforcing outside regulation is necessary to discipline financial auditors. In spite of these differences, the vast majority of interviewees consider that financial auditing is controllable (by organizational or regulatory control), which is of interest, given their spatial and emotional proximity to the controversial collapse of their firm. Also, most participants do not see the professional association as a useful or relevant party in helping the professional accounting community maneuvering in times of turmoil. Important governance issues, ensuing from our analysis, are discussed.