CPAs' Perceptions of the Emerging Multidisciplinary Accounting/Legal Practice

Abstract

This paper reports the results of a survey of 219 American Institute of Certified Public Accountant members about legal services their public accounting firms currently offer and plan to offer in the future, and how they would organize their firm to deliver these services to clients. The survey is motivated by the legal profession's current investigation of whether to allow nonattorneys to share fees and become partners with nonattorneys and by the American Bar Association's call for evidence on the current existence of multidisciplinary practice (MDP). Forty-four states established MDP committees to recommend whether legal ethics rules should be relaxed to allow MDP. Relaxed ethics rules allow public accounting firms to employ attorneys to offer a full array of legal services to their clients. We find that public accounting firms already offer a number of legal services to their clients and are interested in increasing the offering of these services if allowed. The results also indicate that the size of the public accounting firm is likely to influence the types of legal services offered and the arrangements used to deliver the legal services to clients. The findings are important because they highlight the need for the legal and accounting professions to formulate rules regarding MDP.

The influence of the types of NAS provisions and gifts hospitality on auditor independence

“…Comparisons from these two groups could reveal whether any expectation gap may exist. The results will fill a gap in the literature on auditor independence and should assist in devising policy and auditing guidelines to manage this contentious issue (Beattie et al , 1999; Frank et al , 2001; Iyer and Reckers, 2007). As no previous enquiry has been conducted in Hong Kong using this methodology, this study not only is the first to examine the types of NAS provisions and gift hospitality in respect of the independence problem, but the results would also add new contributions to the auditing literature in the Asia Pacific Region.…”

“…There was no matching of an individual's name with their organization. If the response rate were to be unsatisfactory, a follow up procedure was planned – a second request, approximately three weeks after the initial mailing to the entire sample (Frank et al , 2001).…”

External accountants’ business advice and SME performance

“…The ongoing acquisition of distinct knowledge and expertise has long been the basis of an external accountant's competitive advantage (Power, 1997). Despite early reluctance by smaller accounting practices to broaden their service base (Fogarty et al, 2006), some small-and medium-sized accounting practices (SMPs) appear to be emulating their Big N counterparts by merging into larger business consulting practices focussed on niche industries or services to accommodate the broader information needs of their clients (Blackburn and Jarvis, 2010;Frank et al, 2001;Farrell, 1998). One explanation as to why SMPs are focussing more on business advisory services is that the market for traditional compliance services is diminishing because of a reduction in statutory lodgement and audit requirements amongst SMEs (Kitching et al, 2011;Blackburn and Jarvis, 2010).…”

Auditors as Underwriters: An Alternative Framework

“…With rapid changes in technology and the capital markets, the business of auditing is itself in a state of flux. Among other things, auditors are embracing multidisciplinary practices that include legal practice (Frank et al , 2001), providing assurance on subject matters other than financial statements (e.g., ASB, 2001). These transformations will continue to put additional pressures on the traditional attestation function such that the value of the audit may itself be called into question (Levitt, 2000).…”