Who gets all the PIE? Regulation of the statutory audit for private UK companies

Clacher, Iain; Ricquebourg, Alan Duboisée de; May, Amy Yeo Chu

doi:10.1108/aaaj-12-2015-2341

Cited by 14 publications

(12 citation statements)

References 55 publications

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“…Also, they generally propose the revision of some topics implemented under the EAR. In this sense, it is worth mentioning the research carried out by Clacher et al, (2019), who suggest that "the definition and scope of a PIE needs revisiting both within the UK and across all EU Member States", also identifying lobbying strategies. In turn, Gelter and Gurrea-Martínez (2020) mention the failure of all the mechanisms recently proposed to improve the auditor's independence.…”

Section: Discussionmentioning

confidence: 99%

The relevance of the European Audit Reform from the perspective of auditors

Nunes¹,

Albuquerque²,

Alves³

2021

SUMNEG

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Este artículo tiene como objetivo extraer conclusiones sobre el impacto de la reforma europea de auditoría (REA) sobre el papel y la independencia de los auditores externos desde la perspectiva de estos profesionales en Portugal. Las medidas implementadas por REA fueron seleccionadas para su análisis con el fin de aclarar y definir mejor el papel del auditor, reforzar la independencia profesional y el escepticismo del auditor y aumentar la supervisión de los auditores. Los datos fueron recolectados a partir de un cuestionario enviado a los auditores (ROC), resultando en una muestra de 89 profesionales. Los hallazgos apuntan a niveles en general superiores al desacuerdo para las diferentes medidas implementadas por la REA, que se amplían en cuanto a las respuestas de los auditores que consideraban fundamental la introducción de la REA. Además, los hallazgos muestran que el papel que desempeña la ROC en la sociedad se destaca, según ellos, como el tema más relevante relacionado con las REA.

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Section: Discussionmentioning

confidence: 99%

The relevance of the European Audit Reform from the perspective of auditors

Nunes¹,

Albuquerque²,

Alves³

2021

SUMNEG

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“…This point is in line with the suggestion raised by Van Liempd, Quick and, Warming-Rasmussen (2019) who indicate a need to expand the strict EU regulations from audits of PIEs into audits of large non-PIEs. Similarly, Clacher, de Ricquebourg, and May (2019) suggest that the definition of PIEs should be revisited in order to include economically important private companies. What is more, the EU regulators allowed derogation in terms of certain tax and valuation services which resulted in member states applying different approaches to the same rules.…”

Section: Discussionmentioning

confidence: 99%

The Audit Reform and Non-Audit Services in the Light of the Big-4 Transparency Reports – the EU Perspective

Indyk¹

2020

AEF

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The aim of this article is to compare and contrast three different approaches towards non-audit services (henceforth “NAS”) based on: 1) researchers’ views, 2) the EU regulation, and 3) the provision of NAS by the Big-4 firms operating in twenty-seven EU member states. Therefore, the article includes: (i) a literature review of various NAS aspects, (ii) an analysis of the EU reform in terms of NAS, and (iii) an empirical analysis of NAS fees which have been disclosed in the Big-4 transparency reports for the period 2017-2019.The literature review shows: a) lack of consensus between researchers about the potential consequences of the NAS provision in general, b) quite limited or little evidence of the consequences of the NAS restrictions as part of the EU audit reform, c) ambiguity in terms of the NAS definition itself which results mainly from insufficient NAS disclosures and lack of a detailed NAS split.The EU regulators addressed these concerns only in very narrow aspects, i.e., through: (1) the NAS black list, (2) the NAS cap, and (3) the strong emphasis on public-interest entities (henceforth “PIEs”). What is more, NAS disclosure requirements in the transparency reports are limited only to two categories.Finally, the results of the empirical study indicate the significant differences at the NAS fee level among the EU member states. The analysis shows a particular importance of NAS fees from other clients as a substantial revenue stream for the Big-4 firms. The results suggest also a significant increase in this category in 2018 when NAS fees from other clients increased by net EUR809 million (13%). However, this strong trend was not confirmed in the following year.All in all, the study underlines deficiency in proper NAS disclosure and reporting which might be observed also in the case of transparency reports. All findings of this study may be another argument for regulators to address the problem of NAS in more detail starting from their advice on a NAS taxonomy which might be used then as a point of reference. It would be also beneficial for researchers exploring the NAS aspect and, thus, may enhance data and results comparability between studies. Additional disclosure requirements like NAS provided to PIEs or a recurring or non-recurring character of NAS would also support the better understanding and evaluation of the consequences of the EU audit reform.

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“…Auditors’ reputation is understood as fundamental to the attest function's effectiveness (Defond and Zhang, 2014). While not proven, many see the profession's emergence as an aggressive and effective lobbying interest as damaging to that reputation (Baudot et al ., 2017; Jelinek, 2018; Clacher et al ., 2019). But the profession's increased presence in Washington was not a proactive campaign to protect accountants’ economic position or profit margins.…”

Section: Reputational Risk and Regulatory Intervention: Antitrust And...mentioning

confidence: 99%

Could Accounting Have Saved Itself from the Antitrust Laws?Revisiting the Antitrust Investigations into the US Accounting Profession 1966–1990

Doron¹

2023

Abacus

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While the role of lobbying in the US public accounting profession has been the subject of several studies, what has not been addressed is the profession's historic reluctance to lobby and the impact this may have had on the profession. This paper provides a case study of public accounting's interaction with government and the need for the profession to articulate the impact of government policies on the practice of accounting. It reviews and assesses the antitrust investigations by the US Justice Department and Federal Trade Commission that led to the repeal of the profession's anticompetitive ethics rules, rules that had governed American public accounting for most of the 20th century. These investigations are often blamed for an increased competitive atmosphere in public accounting that prioritized growth and profitability over quality in attest services. Using records obtained from Freedom of Information Act requests and archival sources, I attempt to reconstruct the US Government's motivations and the efforts of the American Institute of CPAs. I find a troubling lack of understanding of the audit profession by executive branch regulators and Congress and a reticence by the American Institute of Certified Public Accountants to advocate for the profession that led to what many observers see as a profound misapplication of the antitrust laws. While this study deals only with the US, similar regulatory changes took place in Canada, the UK, Australia, and New Zealand.

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Who gets all the PIE? Regulation of the statutory audit for private UK companies

Cited by 14 publications

References 55 publications

The relevance of the European Audit Reform from the perspective of auditors

The relevance of the European Audit Reform from the perspective of auditors

The Audit Reform and Non-Audit Services in the Light of the Big-4 Transparency Reports – the EU Perspective

Could Accounting Have Saved Itself from the Antitrust Laws?Revisiting the Antitrust Investigations into the US Accounting Profession 1966–1990

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