Professional Accounting Associations Research Articles

Taking responsibility: the early demand for institutional action to define an auditor's duties

SUMMARY Membership of a professional body was intendedto demonstrate not only the competence but alsothe honour of an individual practitioner. Thepotential conflict between public and privateinterests in the audit function dates back to theearly days of the organized profession. One role ofa professional accounting association is to protecttheir own and their members’ interests by issuingsome form of official pronouncements to guideboth suppliers and customers of auditing services.In modern times there is a need to provideevidence that the profession has standards whichreflect the public interest, whereas in earlierperiods this may have been taken for grantedgiven the personal qualities and standing of theprofession’s members. The paper examines thenineteenth century literature for signs of a demandfrom practitioners and others for some form ofinstitutional action on the question of the extentand conduct of an audit. The confusion about thepurpose of the audit and auditors’ responsibilitiespointed to a need for some authoritative definition.Litigation against auditors added a further spur forsome official statement of the duties of auditors.However, for a variety of reasons the accountingbodies during the nineteenth century were reluc-

Reporting on the entity′s control structure:

Professional accounting associations in various countries and governmental and other quasi‐official bodies have played an important role not only in the evolution of internal control reporting on a global scale, but also in educating management, investors, financial institutions, accountants, auditors, and other interested parties highlighting the pervasiveness of the effects of a sound internal control structure in corporate reporting as well as other aspects of an organization′s success. These associations include the Institute of Internal Auditors (IIA), the American Institute of Certified Public Accountants (AICPA), the General Accounting Office (GAO), the Securities and Exchange Commission (SEC), the Cadbury Committee, the Institute of Chartered Accountants of England and Wales (ICAEW), the Scottish Institute of Chartered Accountants (SICA), the Canadian Institute of Chartered Accountants (CICA), and others. Business failures, management fraud, corporate misconduct, international bribery, and notorious business scandals in all sectors of business have prompted the US government to take drastic action on internal control reporting to safeguard public interest. Several professional and government committees were formed to study this precarious situation: the Treadway Commission, the Committee of Sponsoring Organizations (COSO) of the Treadway Commission, the Packard Commission, the Cohen Commission, the Adams Commission in Canada, the Cadbury Committee in the UK, and others. The principal motivation for the changing dynamics has been growing public pressure for greater corporate accountability. The government′s pressure on the accounting profession and management of public corporations has been pivotal in spearheading internal control reporting. Examines the role of professional associations, governmental agencies, and others in promulgating standards for internal control reporting, and the impact of legislation on this aspect of internal auditing in the USA and worldwide.

Environmental auditing: Approaches of the U.S. and Canadian professions

The global focus on environmental issues has resulted in numerous initiatives by professional accounting associations worldwide. The CICA in Canada and the AICPA in the United States illustrate disparate approaches in defining the emerging role of the accounting profession in the area of environmental auditing. Although there are differing legal and political influences at work in the United States and Canada that have impacted (and will continue to impact) the accounting profession's involvement in environmental matters, economic globalization and public demands for information are likely to draw accountants into the area.

The attempt to establish the Russian accounting profession 1875–1931

In the last quarter of the nineteenth century the rising tempo of industrialization in Russia was accompanied by the establishment of the first accounting firms. Throughout the period proposals were advanced for the formation of a professional accounting association. These efforts were unsuccessful although accounting societies were established during the last decade of the Tsarist autocracy. Following upon revolution and civil war the New Economic Policy introduced a mixed economy and a period of stability. A professional association, inspired by the example of the Institute of Chartered Accountants in England and Wales (ICAEW), was formed but suppressed with the consolidation of the Stalinist autocracy.