Reconceptualizing the Management–Auditor Relationship by Appling the General Partnership Contract to Challenge Independence:
Ideals versus Reality
The audit function in a corporate model can be a defective tool in monitoring executive management. Arguably, the Sarbanes-–Oxley Act (SOX) inadvertently has placed auditors in unwanted positions while increasing their independence. Auditors’ reliance on their clients for collecting information, financial dependence, and self-bias in processing information restrain them from neutrally and objectively judging corporate reporting. Mandated rules can never substitute integrity and the desired objectivity by shareholders. By reconceptualizing the result of the relationship as a general partnership where trust plays a critical role, this study considers the relationship between management and their auditors, offers an explanation about the audit firms’ behavior, and offers reasons for the failure of some audit for committing unethical actions. The analysis leads to testable empirical and policy implications. Accounting theorists should be on board critiquing and retheorizing positively but not normatively. A corporation with the absence of an objective party that shareholder count to attest corporate reporting impartially.
العمران،.محمد بن فهد،. تحية وتقدير إلى المحاسب القانوني لشركة بيشة الزراعية . جريدة الاقتصادية الاثنين هـ. الموافق 11 يونيو 2007 العدد 4991 http://www.aleqt.com/2007/06/11/article_95833.html
Ahmed, A. S., McAnally, M. L., Rasmussen, S., & Weaver, C. D. (2010). How costly is the Sarbanes Oxley Act? Evidence on the effects of the Act on corporate profitability. Journal of Corporate Finance, 16(3), 352-369.
Adelopo, I. (2012). Auditor Independence: Auditing, Corporate Governance, and Market Confidence, Landan, UK: Gower Publishing Limited.
Al-Adeem, K. (2015). "Sustaining Mutual and Market Interests in the Auditor and Corporate Client Relationship". A Refereed Proceeding. American Accounting Association Mid-Atlantic Region Meeting. April 23–25, . Cherry Hill, NJ. < Retrieved October 23, 2020, from http://aaahq.org/Portals/0/documents/misc/Mid-Atlantic%202015%20Proceedings%20up%20to%20p217.pdf >
Al-Adeem, K.R. (2017). A need to theorize corporations: An accounting perspective. International Journal of Accounting Research, 5(166). http://dx.doi.org/10.4172/2472-114X.1000166.
Al-Hazzani, M. Al-Adeem, K.R (2020). Do Corporations’ Annual Reports Address Shareholders as Proprietors? Evidence from Saudi Arabia. International Journal of Auditing and Accounting Studies. 2(2), 175-192.
Alleyne, P. A., Devonish, D., & Alleyne, P. (2006). Perceptions of auditor independence in Barbados. Managerial Auditing Journal. 21(6), 621-645.
Alexander, D. and Jermakowicz, E. (2006). A true and fair view of the principles/rules debate. Abacus. 42(2): 132-164.
Al-Hogail, A. A. and Previts, G. J. (2001). Raymond J. Chambers' contributions to the development of accounting thought. Accounting Historians Journal. 28(2): 1-30.
Amer, S., & Sajjad, M. A. M. (2014). Mudarabah—A new paradigm for corporate governance. European Journal of Business and Management, 6(6), 98-102.
American Institute for Certified Public Accountants (AICPA). AS 1010: Training and Proficiency of the Independent Auditor. Retrieved: https://pcaobus.org/Standards/Auditing/Pages/AS1010.aspx < last visit 11/16/2020>
American Institute for Certified Public Accountants (AICPA). (1969). Final Report of Ad Hoc Committee on Independence. Journal of Accountancy. 128 (6): 51. Members of the Ad hoc committee: Devore, Malcolm M., William T. Barnes, Charles C. Crumley, and Samuel L. Ready..
American Institute for Certified Public Accountants (AICPA). (1978). Report, conclusions, and recommendations. Commission on Auditors' Responsibilities.
American Institute for Certified Public Accountants (AICPA). (2020). The AICPA Plain English Guide to Independence. September. Retrieved: https://www.aicpa.org/content/dam/aicpa/interestareas/professionalethics/resources/tools/downloadabledocuments/plain-english-guide.pdf Last visit 11/27/2020
American Institute for Certified Public Accountants (AICPA). (unknown publication date). Developing a personal relationship with a client: It’s all about trust. Retrieved: https://www.aicpa.org/interestareas/youngcpanetwork/resources/leadership/developingrelationshipswithclients.html last visit 11/21/2020
American Institute of Certified Public Accountants. SEC Practice Section. Public Oversight Board. (1979). Scope of services by CPA firms: Public Oversight Board report. Association Sections, Divisions, Boards, Teams. 307.
Anandarajan, A , Kleinman, G and Palmon,D. (2008). Auditor independence revisited: The effects of SOX on auditor independence. International Journal of Disclosure and Governance; 5(2), 112-125.
Antle, R. (1982). An agency model of auditing. Journal of Accounting Research, 20 (Autumn), 503-527.
Antle, R. (1984). Auditor independence. Journal of Accounting Research, Spring. 22(1): 1-20.
Antle, R., & Nalebuff, B. (1991). Conservatism and auditor-client negotiations. Journal of Accounting Research, 29, 31-54.
Arya, A., & Glover, J. (2014). Auditor independence revisited. Journal of Accounting, Auditing & Finance, 29(2), 188-198.
Arruñada, B. (1999). The provision of non-audit services by auditors: Let the market evolve and decide. International Review of Law and Economics, 19(4), 513-31.
Ashbaugh, H. (2004). Ethical issues related to the provision of audit and non-audit services: Evidence from academic research. Journal of Business Ethics, 52(2), 143-148.
Aveh, F. K., Awunyo-Vitor, D., & Afriyie, R. O. (2016). Independence, objectivity and integrity compliance by public sector internal auditors in Ghana: evidence from Ashanti Region. International Journal of Critical Accounting, 8(5-6), 444-462.
Bagley, C. E. (2002). Managers and the Legal Environment: Strategies for the 21st Century (4th). Cincinnati, Oh: West Legal Studies in Business.
Baldacchino, P. J. (1992). The Auditor–Management Relationship in a Microstate Perspective. Master of Philosophy (MPhil) dissertation written for the Loughborough University.
Ballwieser W. (1987) Auditing in an Agency Setting. In: Bamberg G., Spremann K. (eds) Agency Theory, Information, and Incentives. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-75060-1_17
Bame-Aldred, C. W., & Kida, T. (2007). A comparison of auditor and client initial negotiation positions and tactics. Accounting, Organizations and Society, 32(6), 497-511.
Barton, M. T. (2002). Analysis of the Mandatory Auditor Rotation Debate. University of Tennessee Honors Thesis Projects.
Bayou, M. E. and Reinstein, A.(2001). “A Systemic View of Fraud Explaining its strategies, anatomy and process.” Critical Perspectives on Accounting. 12 (4): 1-22.
Bazerman, M.H., Morgan, K., & Loewenstein, G.F. (1997). The Impossibility of Auditor Independence. Sloan Management Review, Summer, 1997.
Bazerman, M.H., Loewenstein, G, & Moore, D.A. (2002). Why Good Accountants Do Bad Audits. Harvard Business Review, November,.
Bazerman, M. H. & Moore, D. A. (2011). Is it Time for Auditor Independence Yet? Accounting, Organizations and Society, 36, (4-5), 310-312.
Belkaoui, A. (1989). The Coming Crisis in Accounting (1st). Westport, Connecticut: Quorum Books.
Belkaoui, A. R. The New Context of the Accounting Profession (September 15, 2017). Available at SSRN: https://ssrn.com/abstract=3037598 or http://dx.doi.org/10.2139/ssrn.3037598
Benston, G. J. Bromwich, and Wagenhofer, A. (2006). Principles- versus rules-based accounting standards: The FASB’s standard setting strategy. Abacus. 42(2):165-188.
Brehmer, Thomas. (2013). Sarbanes-Oxley Fails on Auditor Independence. AccountingToday. 01/01/2013. Available at: Accessed 6/11/2020 https://www.researchgate.net/publication/327835966_An_Analysis_of_the_Relationship_between_Audit_Fees_and_Non-audit_Fees_thlyl_allaqt_byn_atab_almrajt_watab_alkhdmat_alastsharyt_alakhry>
Bily v. Arthur Young & Co. (1992). Online. < http://www.gruber-donnet.com/id77.htm also available http://scholar.google.com/scholar_case?case=9192174975894500903&q=Bily+v.+Arthur+Young+%26+Co.+(1992)&hl=en&as_sdt=2006&as_vis=1 last visit 8/30/2014>.
Bogle, J. C. (2002).“Review/books: take of the street.” The Wall Street Journal (Eastern edition). NY: Oct 4. Vol. 240. Iss. 68. pg.W1.
Bost, T. G. (2003). The Sarbanes-Oxley Act of 2002: A Summary. 7, (4). D.C, Washington: National Legal Center for The Public Interest.
Broberg, P., Umans, T., & Gerlofstig, C. (2013). Balance between auditing and marketing: An explorative study. Journal of International Accounting, Auditing and Taxation, 22(1), 57-70.
Businessworld.(2000). “The north: the price of the truth.” Manila. Jan 18. p. 1.
Byrnes, T. W. (1953). Where Are You Going, CPA?. The Accounting Review, 28(2), 177.
Carey, J. (2008). The independence concept revised. Research in Accounting Regulation. 20, 295-3-2.
Carmichael, D.R. (1975). Accounting and Auditing. Journal of Accountancy, Nov, 76-79.
Cheney, G. (2002). “USA come in the from cold.” Australian CPA. Melbourne: December. 72 (11), 30.
Cheng, J., Weiss, M. A., & Lin, T. (2019). The provision of audit and non-auditing services (NAS): The case of U.S. property-casualty insurers. Journal of Insurance Issues, 42(2), 39-79
Chi, W., Douthett Jr, E. B., & Lisic, L. L. (2012). Client importance and audit partner independence. Journal of Accounting and Public Policy, 31(3), 320-336.
Chung, H., & Kallapur, S. (2003). Client importance, nonaudit services, and abnormal accruals. The Accounting Review, 78(4), 931-955.
Comunale, C.L., Sexton, T.R. and Gara, S.C. (2003), "The auditors’ client inquiry process", Managerial Auditing Journal, 18 (2), 128-133. https://doi.org/10.1108/02686900310455119
Cooper, R. (1989).”Big mergers will cause some areas shake-up.” Business First. Louisville: Aug 7. 6 (1). pg.1
Cottell, P. G and Perlin, T. M. (1990). Accounting Ethics (1st ed.). Connecticut NY: Quorum Books.
Craswell, A. T. (1999). Does the provision of non‐audit services impair auditor independence?. International Journal of Auditing, 3(1), 29-40.
Craswell, A., Stokes, D. J., & Laughton, J. (2002). Auditor independence and fee dependence. Journal of Accounting and Economics, 33(2), 253-275.
Cunningham, L. A. (2006). Too big to fail: Moral hazard in auditing and the need to restructure the industry before it unravels. Columbia Law Review. 106 (7), 1698- 1748
Cullinan, C. (2004). Enron as a symptom of audit process breakdown: can the Sarbanes-Oxley Act cure the disease?. Critical perspectives on Accounting, 15(6-7), 853-864.
Dah, M. A., Frye, M. B., & Hurst, M. (2014). Board changes and CEO turnover: The unanticipated effects of the Sarbanes–Oxley Act. Journal of Banking & Finance, 41, 97-108.
Daniels, B. W., & Booker, Q. (2011). The effects of audit firm rotation on perceived auditor independence and audit quality. Research in Accounting Regulation, 23(1), 78-82.
Daston, L., & Galison, P. (1992). The image of objectivity. Representations, 40, Autumn, 81-128.
Davis, J.P. (1897). The Nature of Corporations. Political Science Quarterly, 12(2), 273–294.
Davis, M. S. (1971). “That is interesting! Toward a phenomenology of society and sociology of phenomenology” Philosophy of Social Science. 1, (4): 309-344
Daugherty, B. E., & Tervo, W. A. (2008). Auditor changes and audit satisfaction: Client perceptions in the Sarbanes-Oxley era of legislative restrictions and involuntary auditor change. Critical perspectives on accounting, 19(7): 931-951.
DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183-199.
DeFond, M. L., & Francis, J. R. (2005). Audit research after Sarbanes‐Oxley. Auditing: A Journal of Practice & Theory, 24(s-1), 5-30.
DeFond, M. L., Wong, T. J. and Li, S. (2000). The impact of improved auditor independence on audit market concentration in China. Journal of Accounting and Economics. 28: 269-305.
DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2-3), 275-326.
Devine, C. T. (1999). Carl Thomas Devine: Essays in Accounting Theory: A Capstone. Harvey S. Hensrickson (ed.). Essay 7: 155-176.
DeZoort, F. T., & Taylor, M. H. (2015). Commentary- Public interest view of Auditor independence: Moving toward auditor reliability when considering and promoting audit quality. Accounting and the Public Interest, 15(1), 53-63.
DeZoort, F. T., Holt, T., & Taylor, M. H. (2012). A test of the auditor reliability framework using lenders’ judgments. Accounting, Organizations and Society, 37(8), 519-533.
Edwards, J. D. (1987). American Institute of Certified Public Accountants: A century of progress and commitment to the accountancy profession, Accounting Historians Journal. 14 (1): 1-11.
Eichenseher, J. W., Hagigi, M., & Shields, D. (1989). Market reaction to auditor changes by OTC companies. Auditing-A Journal of Practice & Theory, 9(1), 29-40.
Elliott, R. K., & Jacobson, P. D. (1998). Audit independence concepts. The CPA Journal, 68(12), 30-34.
Firth, M. A., Rui, O. M., & Wu, X. (2012). Rotate back or not after mandatory audit partner rotation? Journal of Accounting and Public Policy, 31(4), 356-373.
Fisher, L. (2003). Special Report: FTSE 100 auditor fees surveys-Companies cut back buying consultancy from auditors. Accountancy. London: Sep. Vol.132. Iss. 1321, pg.30.
Fogarty, T.J. (2003). “Circle ‘round the wagons: Sarbanes Oxley and impression management. The American Accounting Association (AAA) Annual Meetings, Honolulu, August.
Fogarty, T.J. (2010). Advertising and the death of accounting professionalism at the turn of the 21st. Fifteenth Ethics and Professionalism Conference, San Francisco, August.
Fontaine, R. (2010). An Empirical Study of Canadian Companies to Determine the Client’s Perspective on Their Preferred Relational Approach with Their Financial Auditor. (Unpublished Ph. D. dissertation). Université du Québec, Montréal, Canada.
Fontaine, R. and Pilote, C. (2012). Practical Summary: Clients’ Preferred Relationship Approach with their Financial Statement Auditor. Current Issues in Auditing, 6, (1), P1-P6.
Fornelli. C. (2012). Written Statement of Cindy Fornelli, PCAOB Public Meeting on Auditor Independence and Audit Firm Rotation, Washington, D.C. Thursday, March 22, 2012. Retrieved at https://www.thecaq.org/news/written-statement-cindy-fornelli-pcaob-public-meeting-auditor-independence-and-audit-firm-rotation-2/ last visit 1/24/2021>
Francis, J. R. (2006). Are auditors compromised by nonaudit services? Assessing the evidence. Contemporary Accounting Research, 23(3), 747-760.
Francis, J. R. (2011). Auditing without borders. Accounting, Organizations and Society. 36, 318-323.
Fried, D., and Schiff, A. (1981). CPA Switches and Associated Market Reactions. The Accounting Review, 56, 326-341.
George, G.1992, Who can rely on auditors attestations. Victoria University School of Management Working Paper Series, Melbourne, pp. 1-18.
Gibbin, M., Salterio, S. and Webb, S. (2001). Evidence About auditor–client management negotiation concerning client’s financial reporting. Journal of Accounting Research. 39 (3), 535-563.
Gibbins, M., McCracken, S., & Salterio, S. E. (2010). The auditor’s strategy selection for negotiation with management: Flexibility of initial accounting position and nature of the relationship. Accounting, Organizations and Society, 35(6), 579-595.
Gietzmann, M. B., & Sen, P. K. (2002). Improving auditor independence through selective mandatory rotation. International Journal of Auditing, 6(2), 183-210.
Gioia, D. A. and Pitre, E. (1990). Multiparadigm perspectives on theory building.
Academy of Management Review, Vol.15. No. 4, pg.584-602.
Green, D. A. (2008). Whither and whether auditor independence. Gonzaga Law Review, 44 (3): 365-410.
Healy, P. M., & Wahlen, J. M. (1999). A review of the earnings management literature and its implications for standard setting. Accounting Horizons, 13(4), 365-383.
Hemraj, M. B. (2002). The utility of independence in preventing audit failure. Journal of Money Laundering Control. 6(1): 88-93.
Herrbach, O. (2001). Audit quality, auditor behaviour and the psychological contract. European Accounting Review, 10(4), 787-802.
Hamilton, J. and Trautmann, T. (2002). Sarbanes-Oxley Act of 2002: Law and Explanation (1st ed.). Chicago, IL: CCH Incorporation.
Harris, S. B. (2016). Auditor Independence and the Role of the PCAOB in Investor Protection. Speech delivered at the International Corporate Governance Network (ICGN) Annual Conference. San Francisco, USA. Retrieved: https://pcaobus.org/news-events/speeches/speech-detail/auditor-independence-and-the-role-of-the-pcaob-in-investor-protection_616 last visit 11/23/2020
Hassan, M., Luehlfing, M., & Wilkie, M. (2003). Major Sources Of Challenges Facing The CPA Profession And Suggested Recommendations. Journal of Business & Economics Research), 1(3), 93-102
Hinings, C. R., Brown, J. L. and Greenwood, R. (1991) “Changes in an autonomous professional organization.” The Journal Management Studies. July. Vol. 28. Iss.4. pg.375.
Hines, R. D. (1988). Financial accounting: in communicating reality, we construct reality. Accounting, Organizations and Society, 13(3), 251-261.
Holland, K., & Lane, J. (2012). Perceived auditor independence and audit firm fees. Accounting and Business Research, 42(2), 115-141.
Hooper, Keith and Wang, Jing, "Ethics and auditing: setting the bar too low" (2015). Faculty of Business - Papers (Archive). 1690. Retrieved: < https://ro.uow.edu.au/buspapers/1690 last visit 1/2/2020>
Hussey, R. (1999). The familiarity threat and auditor independence. Corporate Governance: An International Review, 7(2), 190-197.
Ijiri, Y. (1975). Theory of Accounting Measurement (No. 10). Sarasota, FL: American Accounting Association
International Federation of Accountants (IFA), (2018). Client Relationship Management. Retrieved: https://www.ifac.org/system/files/publications/files/Module-6.pdf last visit 11/27/2020
Ittonen, K. (2010). A theoretical examination of the role of auditing and the relevance of audit reports. Proceedings of the University of Vaasa. Teaching Aid Series VAASA YLIOPISTO
Jamal, K., & Sunder, S. (2011). Is mandated independence necessary for audit quality?. Accounting, Organizations and Society, 36(4-5), 284-292.
Jenkins, J. G. (1999). A declaration of independence. Journal of Accountancy, May. 187(5), 31-33.
Jensen, M and Meckling, W. (1976). “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics. 3. pg. 305-360.
Jeter, D. and Chaney, P. (2001). Advanced Accounting (1st ).” New York, NY: John Wiley & Sons, Inc.
Johnstone, K. M. (2000). Client‐Acceptance Decisions: Simultaneous Effects of Client Business Risk, Audit Risk, Auditor Business Risk, and Risk Adaptation. Auditing: A Journal of Practice & Theory: 19 (1), 1-25.
Johnstone. K. M. and Bedard. J.C. (2003). Risk Management in Client Acceptance Decisions. The Accounting Review: 78 (4), 1003-1025.
Kamath, R., Huang, T. C., & Moroney, R. A. (2018). Auditor Rotation and Perceived Competence and Independence: The Effect of Fees and Industry Specialization. Journal of International Accounting Research, 17(3), 153-175.
Kao, J. L., Li, Y., & Zhang, W. (2013). Has SOX enhanced Non–Big 4 auditors' ability to deal with client pressure? Accounting Perspectives, 12(2), 141-164.
Kao, J. L., Li, Y., & Zhang, W. (2014). Did SOX influence the association between fee dependence and auditors' propensity to issue going-concern opinions?. Auditing: A Journal of Practice & Theory, 33(2), 165-185.
Keyser, J. D. (forthcoming ). A historical assessment of a key auditor independence policy: Auditing your own work. Accounting Historians Journal.
Khurana, I. K., & Raman, K. K. (2006). Do investors care about the auditor's economic dependence on the client?. Contemporary Accounting Research, 23(4), 977-1016.
Kiger, J. E. and Scheiner, J. H. (1997). “ Auditing (2nd edition).” Boston, MA: Houghton Mifflin Company.
Kleinman, G., & Palmon, D. (2000). A negotiation-oriented model of auditor-client relationships. Group Decision and Negotiation, 9(1), 17-45.
Kleinman, G. and Palmon, D. (2001).”Understanding Auditor-Client Relationships: A Multi-Faceted Analysis.” Princeton: NJ: Markus Wiener Publishers.
Kleinman, G., Anandarajan, A., & Palmon, D. (2012). Who's to judge: Understanding issues of auditor independence versus judicial independence. Accounting, Economics and Law: A Convivium. 2(1): Article 4, 1-50.
Klock, M. (1994). The stock market reaction to a change in certifying accountant. Journal of Accounting, Auditing & Finance. 9 (2): 339-349.
Knechel, W. R. (forthcoming). The future of assurance in capital markets: Reclaiming the economic imperative of the auditing profession. Accounting Horizons.
Knechel, W. R., & Sharma, D. S. (2012a). Auditor-provided nonaudit services and audit effectiveness and efficiency: Evidence from pre-and post-SOX audit report lags. Auditing: A Journal of Practice & Theory, 31(4), 85-114.
Knechel, W. R., Sharma, D. S., & Sharma, V. D. (2012b). Non‐audit services and knowledge spillovers: Evidence from New Zealand. Journal of Business Finance & Accounting, 39(1‐2), 60-81.
Koch, C. & Salterio, S.E. (2015). Effects of Client Pressure and Audit Firm Management Control Systems on Auditor Judgments (February 27). Available at SSRN: https://ssrn.com/abstract=2572486 or http://dx.doi.org/10.2139/ssrn.2572486
Kornhauser, L.A. (1989). Nexus of contracts approach to corporations: A comment on Easterbrook and Fischel. Columbia Law Review, 89(7), 1449–1460. http://dx.doi.org/10.2307/1122808.
Kranacher, M-J. (2012). Promoting auditor independence: overcoming conflict of interest. Editorial. The CPA Journal. May, 80.
Kuhn, T. S. (1996). “The Structure of Science Revolution.” Chicago, IL: The University of Chicago Press.
Leuz, C. (2007). Was the Sarbanes–Oxley Act of 2002 really this costly? A discussion of evidence from event returns and going-private decisions. Journal of Accounting and Economics, 44(1-2), 146-165.
Kwon, S. Y. and Yi, H. S. (2018) Do Social Ties between CEOs and Engagement Audit Partners Affect Audit Quality and Audit Fees? Auditing: A Journal of Practice & Theory. 37 (2), 139-161.
Lee, H. Y., Mande, V., & Son, M. (2009). Do lengthy auditor tenure and the provision of non‐audit services by the external auditor reduce audit report lags?. International Journal of Auditing, 13(2), 87-104.
Lennox, C., & Pittman, J. (2010). Auditing the auditors: Evidence on the recent reforms to the external monitoring of audit firms. Journal of Accounting and Economics, 49(1-2), 84-103.
Levinthal, D. and Fichman, M. (1988). “Dynamics of interorganization attachments: audit/client relation.” Administrative Science Quarterly. September. Vol. 33. Iss.3.pg.345-396.
Li, C. (2009). Does client importance affect auditor independence at the office level? Empirical evidence from going‐concern opinions. Contemporary Accounting Research, 26(1), 201-230.
Litvak, K. (2007). The effect of the Sarbanes-Oxley Act on non-US companies cross-listed in the US. Journal of Corporate Finance, 13(2-3), 195-228.
Levitt, A. (2000a). Remark by Chairman Arthur Levitt Open Meeting on Proposals to Modernize Auditor Independence Rules. Securities and Exchange Commission. June 27. Retrieved < https://www.sec.gov/news/extra/audalvt.htm last visit 1/2/2020>
Levitt, A. (2000b). Renewing the covenant with investors. Remarks delivered at NYU Center for Law and Business, New York, NY, May, 10.
Livne, Gilad. (2013). Threats to auditor independence and possible remedies. Q-Finance: 1-13.
Loewenstein, G., D. A. Moore, and M. H. Bazerman. "Enron failures show U.S. auditing system is in dire need of big change." Pittsburgh Post-Gazette (January 15, 2002), p. 11–C.
Lowe, J., & Pany, K. (1994). Auditor independence: The performance of consulting engagements with audit clients. Journal of Applied Business Research, 10(1), 6-13.
MacLullich, K. K., & Sucher, P. (2004). A comparative analysis of auditor independence in economies in transition. Institute of Chartered Accountants of Scotland. Retrieved:
Mann, R. A. and Roberts, B. S. (2000). Smith & Ronerson’s Business Law (11th). Cincinnati, Oh: West Legal Studies in Business.
Mano, R. M., Mouritsen, M. and Pace, R. (2006). “ Principles-based accounting.” The CPA Journal. Feb. 76 (2): 60-63.
Manry, D. L., Mock, T. J., & Turner, J. L. (2008). Does increased audit partner tenure reduce audit quality?. Journal of Accounting, Auditing & Finance, 23(4), 553-572.
Mautz, R. K. (1972). Auditing looks ahead: Proceedings of the Touche Ross/University of Kansas Symposium on Auditing Problems, pp. 085-095. Retrieved:
Mautz, R. K. Sharaf, H. (1961/2006). The Philosophy of Auditing. Sarasota, FL: American Accounting Association
Mayhew, B. W., & Pike, J. E. (2004). Does investor selection of auditors enhance auditor independence? The Accounting Review, 79(3), 797-822.
McKenna, F. (2013). Five auditor independence issues PCAOB SAG not yet addressed. Re: The Auditors. November 11th. Retrieved < http://retheauditors.com/2013/11/11/five-auditor-independence-issues-pcaob-sag-not-yet-addressing/ last visit 1/3/2020>
Mechanic, D. (1962). Sources of power of lower participants in complex organizations. Administrative Science Quarterly. Dec. Vol. 7. No.3. pg.349.
Mednick, R., & Previts, G. J. (1987). The Scope of CPA Services: A View of the Future from the Perspective of a Century of Progress. Journal of Accountancy. 163 (May), 220.
Mohan, N. J., & Chen, C. R. (2007). The impact of the Sarbanes–Oxley Act on firms going private. Research in Accounting Regulation, 19, 119-134.
Moehrle, S. R., Previts, G. J., & Reynolds-Moerhle, J. A. (2006). CPA Profession: Opportunities, Responsibilities, and Services. American Institute of Certified Public Accountants, Inc: New York, NY
Montagna, P. (1986). Accounting rationality and financial legitimation. Theory and Society, 15(1/2) Special Double Issue: Structure of Capital, 103-138.
Morgan, G. (1988). Accounting as reality construction: towards a new epistemology for accounting practice. Accounting, Organizations and Society, 13(5), 477-485.
Murnighan, J. K., & Bazerman, M. H. (1990). A perspective on negotiation research in accounting and auditing. The Accounting Review, 65(3), 642-657.
Myers, J. N., Myers, L. A., & Omer, T. C. (2003). Exploring the term of the auditor‐client relationship and the quality of earnings: A case for mandatory auditor rotation?. The accounting review, 78(3), 779-799.
Nahapiet, J. (1988). The rhetoric and reality of an accounting change: A study of resource allocation. Accounting, Organizations and Society, 13(4), 333-358.
Nelson, M.W., Elliott, J.A. and Tarpley, R.L. (2002). Evidence from Auditors about Managers’ and Auditors’ Earning Management Decisions. The Accounting Review, 77, supplement, 175-202.
Neu, D., Davis, M. and Wright, M. (1991). “Price is not enough: The influence of the ‘social’ in auditor/client relation.” Presented at the Critical Perspectives on Accounting Conference, New York.
Nouri, H., & Lombardi, D. (2009). Auditors' independence: An analysis of Montgomery's auditing textbooks in the 20th century. Accounting Historians Journal, 36(1), 81-112.
Norris, F. (3). Big accounting firms assail SEC’s proposed restrictions. The New York Times C, 9. Retrieved: https://www.nytimes.com/2000/07/27/business/3-big-accounting-firms-assail-sec-s-proposed-restrictions.html last visit November 6th 2020.
Noland, T. G. (2003). “Why “auditing is a dirty world.” The Journal of Corporate Accounting & Finance. May/June. 14(4): 3
Numan, W., & Willekens, M. (2012). An empirical test of spatial competition in the audit market. Journal of Accounting and Economics, 53(1-2), 450-465.
O'Connor, S. M., (2002), The inevitability of Enron and the impossibility of 'auditor independence' under the current audit system (March 1). Available at SSRN: https://ssrn.com/abstract=303181 or http://dx.doi.org/10.2139/ssrn.303181
Palmrose, Z. V. (1991). Trials of legal disputes involving independent auditors: Some empirical evidence. Journal of Accounting Research, 29, 149-185.
Power, M. (1996). Making things auditable. Accounting, Organizations and Society, 21(2-3), 289-315.
Plaats, E. V. D. (2000). Regulating auditor independence. European Accounting Review, 9(4), 625-638.
Public Company Accounting Reform and Investor Protection Act (Sarbanes-Oxley Act). 2002. Public Law 107–204; 107th Congress. Untired States Government
Previts, G. J. (1985). The Scope of CPA Services a Study of the Development of the Concept of Independence and the Profession's Role in Society. Ronald Press
Rahmina, L. Y., & Agoes, S. (2014). Influence of auditor independence, audit tenure, and audit fee on audit quality of members of capital market accountant forum in Indonesia. Procedia-Social and Behavioral Sciences, 164, 324-331.
Read, W. J., & Tomczyk, S. (1992). An Examination of Changes in Scope of Services Performed by. Accounting Horizons, 6(3), 42.
Reinstein, A., & McMillan, J. J. (2004). The Enron debacle: More than a perfect storm. Critical Perspectives on Accounting, 15(6-7), 955-970.
Reiter, S. A., & Williams, P. F. (2004). The philosophy and rhetoric of auditor independence concepts. Business Ethics Quarterly, 14(3): 355-376.
Roberts, M. L. (2010). Independence, impartiality, and advocacy in client conflicts. Research in Accounting Regulation, 22(1), 29-39.
Ronen, J. (2006). A proposed corporate governance reform: Financial statements insurance. Journal of Engineering and Technology Management, 23(1-2), 130-146.
Ronen, J. (2010). Corporate audits and how to fix them. Journal of Economic Perspectives, 24(2), 189-210.
Ronen, J., & Sagat, K. A. (2007). The public auditor as an explicit insurer of client restatements: A proposal to promote market efficiency. Journal of Accounting, Auditing & Finance, 22(3), 511-526.
Rupley, K., Almer, E., & Philbrick, D. (2011). Audit committee effectiveness: Perceptions of public company audit committee members post-SOX. Research in Accounting Regulation, 23(2), 138-144.
Sahnoun, M. H., & Zarai, M. A. (2009). Auditor‐Auditee negotiation outcome: Effects of auditee business risk, audit risk, and auditor business risk in Tunisian context. Corporate Governance: An International Review, 17(5), 559-572.
Sahnoun, M. H., & Zarai, M. A. (2011). Auditor-auditee negotiation: effects of auditor independence and expertise in Tunisian context. International Journal of Critical Accounting, 3(1), 91-106.
Sanchev, A. (2002). Accounting students learn more about fraud detecting, investigating business fraud. Knight Ridder Tribune Business News, October 2. p. 1.
Sanchez, M. H., Agoglia, C. P., & Hatfield, R. C. (2007). The effect of auditors' use of a reciprocity‐based strategy on auditor‐client negotiations. The Accounting Review, 82(1), 241-263.
Securities and Exchange Commission (SEC). 1972. Accounting Series Release No. 126. July 5th.
Schroeder, R. G., Clark, M. W and Cathey, J. M. (2010). "Financial Accounting Theory and Analysis (7th)." John Wiley & Sons, Inc: New York.
Schneider, A., Church, B. K., & Ely, K. M. (2006). Non-audit services and auditor independence: A review of the literature. Journal of Accounting Literature, 25, 169.
Schwartz, K. B. and Menon, K. (1985). Auditor Switches by failing firms. The Accounting Review. 60 (2): 248-261.
Sharma, D. S. (2014). Non-audit services and auditor independence. in D. Hay, W. R; Knechel; and M. Willekens (eds.) pp.67-88. Routledge Companion to Auditing. New York, NY.
Sherwood, M.; Nagy, A and Zimmerman, A. (2020) forthcoming). Offices with more non-CPA staff boast higher quality audits. Accounting Horizons. 34 (3): 169–191.
Shockley, R.A. (1981). Perceptions of Auditors’ Independence: An Empirical Analysis. The Accounting Review, LVI, (4), 785-800.
Smith, D. B., and Nichols, D. R. (1982). A market test of investor reaction to disagreements. Journal of Accounting and Economics, 4(2), 109-120.
Simunic, D. A. (1984). Auditing, consulting, and auditor independence. Journal of Accounting Research, 679-702.
Siregar, S. V., Amarullah, F., Wibowo, A., & Anggraita, V. (2012). Audit tenure, auditor rotation, and audit quality: the case of Indonesia. Asian Journal of Business and Accounting, 5(1), 55-74.
Soderberg v. McKinney (1996). Online. < http://www.gruber-donnet.com/id76.htm also available http://scholar.google.com/scholar_case?case=5746851118190530337&q=Soderberg+v.+McKinney+%5B1996%5D&hl=en&as_sdt=2006&as_vis=1 last visit 8/30/2014>
Squires, S. E., Smith, C. J., McDougall, L and Yeack, W. R. (2003). Inside Arthur Anderson: Shifting Values, Unexpected Consequences. New York, NY: Prentice Hall, Financial Times.
Suojanen, W.W. (1954). Accounting Theory and the Large Corporation. The Accounting Review, 29(3), 391–398.
Svanström, T. (2013). Non-audit services and audit Q=quality: Evidence from private firms. European Accounting Review, 22 (2), 337-366, DOI: 10.1080/09638180.2012.706398
Svanström, T., & Sundgren, S. (2012). The Demand for Non‐Audit Services and Auditor‐Client Relationships: Evidence from Swedish Small and Medium‐Sized Enterprises. International Journal of Auditing, 16(1), 54-78.
Tanlu, L, Moore, D. A., Bazerman, M. H. (2003). The failure of auditor independence: Cognitive. Structural, legislative, and political causes. Working paper. Draft 3/26/2004. 03-115.
Tepalagul, N., & Lin, L. (2015). Auditor independence and audit quality: A literature review. Journal of Accounting, Auditing & Finance, 30(1), 101-121.
Taylor, M. H., DeZoort, F. T., Munn, E., & Thomas, M. W. (2003). A proposed framework emphasizing auditor reliability over auditor independence. Accounting Horizons, 17(3), 257-266.
The Economist. (2004). Keeping auditors independent. November 6th, 2020.
The New York Times (2005). Sorry auditor said, but we want a divorce. February 6th. < https://www.nytimes.com/2005/02/06/business/yourmoney/sorry-the-auditor-said-but-we-want-a-divorce.html last visit>
Thompson, G. (1991). Is accounting rhetorical? Methodology, Luca Pacioli and printing. Accounting, Organizations and Society, 16(5-6), 572-599.
Tinker, A.M., Merino, B.D. and Neimark, M.D. (1982). The Normative Origins of Positive Theories: Ideology and Accounting Thought. Accounting, Organizations and Society, 7, (2), 167-200.
Tinker, A., & Sy, A. (2017). Politicisation of the professions. International Journal of Economics and Accounting, 8(1), 61-66.
Turnbull, S. (2006). How can auditors lie about being independent? Keeping Good Companies, 58(10), 584.
Turley, J. S., (2002), “How accounting can get back its good name.” Wall Street Journal, February 4. pg.A16
Tysiac, K. (2020). SEC aims to reduce unnecessary auditor independence red flags. Journal of Accountancy. October 16. Retrieved: https://www.journalofaccountancy.com/news/2020/oct/sec-aims-to-reduce-unnecessary-auditor-independence-red-flags.html last visit November 12 2020
U. S. Congress, (1976). The Establishment of Accounting: A Staff Study Prepared by The Subcommittee on Reports, Accounting and Management of The Committee of Government Operations. December. Washington DC.
United States General Accounting Office. (2003). Accounting firm consolidation: Mandatory Study on Consolidation and Competition. July.
Ugrin, J. C., & Odom, M. D. (2010). Exploring Sarbanes–Oxley’s effect on attitudes, perceptions of norms, and intentions to commit financial statement fraud from a general deterrence perspective. Journal of Accounting and Public Policy, 29(5), 439-458.
Vakkur, N. V., McAfee, R. P., & Kipperman, F. (2010). The unintended effects of the Sarbanes–Oxley Act of 2002. Research in Accounting Regulation, 22(1), 18-28.
Wang, K. J., & Tuttle, B. M. (2009). The impact of auditor rotation on auditor–client negotiation. Accounting, Organizations and Society, 34(2), 222-243.
Watts, R. L. and Zimmerman, J. L. (1978). “Positive accounting theory for the determination of accounting.” The Accounting Review. January.53(1):112-134.
Watts, R., & Zimmerman, J. L. (1981). The markets for independence and independent auditors. Working Paper. Retrieved: file:///C:/Users/User/Downloads/Watts_Zimmerman_MarketsIndp%20(3).pdf last access 11/25/2020.
Watts, R., & Zimmerman, J. L. (1982). Auditors and the Determination of Accounting Standards. Working Paper. Retrieved: file:///C:/Users/User/Downloads/Watts_Zimmerman_Audit&Account.pdf last access 11/25/2020.
Watts, R. L., & Zimmerman, J. L. (1983). Agency problems, auditing, and the theory of the firm: Some evidence. The Journal of Law and Economics, 26(3), 613-633.
Watts, R. L. and Zimmerman, J. L. (1986). “Positive Accounting Theory.” New Jersey: Printice-Hall.
West, B. P. (2003). “Professionalism and Accounting Rules.” New York, NY: Routledge.
Windmöller, R. (2000). The auditor market and auditor independence. European Accounting Review, 9(4), 639-642.
Wolk, H. I. Dodd, J. L. and Tearney, M. G. (2004). “Accounting Theory: Conceptual Issues in A Political and Economic Environment. (6th ed.)” Mason, OH: Thomson South-Western.
Xu, Y. & Wang, K. J. (2004). “Whither the public accounting as a profession: auditor independence and non-audit services.” Presented at the 10th World Congress and the AAA annual meeting both in August.
Young, J. J. (1997). Defining auditors responsibilities. The Accounting Historians Journal, 24(2): 25-63.
Young, J. J. (2003). Constructing, persuading and silencing: the rhetoric of accounting standards. Accounting, Organizations and Society, 28(6), 621-638.
Yu, H. C. (2011). Legal systems and auditor independence. Review of Accounting Studies, 16(2), 377-411
Zimmerman, J. L. & Forrester, D. (2020).The Forensics of the American Mafia (January 5). Available at SSRN: https://ssrn.com/abstract=3514247 or http://dx.doi.org/10.2139/ssrn.3514247
Zhang, I. X. (2007). Economic consequences of the Sarbanes–Oxley Act of 2002. Journal of Accounting and Economics, 44(1-2), 74-115.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.