An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Diane J. Janvrin
Iowa State University

Dennis Caplan
Oregon State University

James Kurtenbach
Iowa State University

Abstract: This paper examines the accounting profession’s self-regulation pertaining to the question of whether public accountants compromise their independence when they provide internal audit services to attest clients. Internal audit outsourcing was a factor in the negative publicity incurred by Arthur Andersen since Arthur Andersen provided internal auditing to Enron. The Sarbanes-Oxley Act resolves this issue for public companies: the Act specifically prohibits public accountants from providing most internal audit services to their public company external audit clients. Our purpose is to conduct a post-mortem examination of self-regulation by the accounting profession. By doing so, we contribute to ongoing discussions about the nature and efficacy of self-regulation in the accounting profession with regard to areas that were not brought under the jurisdiction of the Public Company Accounting Oversight Board, such as private company audits and financial reporting standards.

Back to Session Listing

AAA Home Page