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The Transition from Self-Regulation to Public Oversight in the Independent Audit: An Investigation of Developments by Accounting Sub-Culture

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Ethics and Sustainability in Accounting and Finance, Volume III

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Abstract

Although the independent audit environment has changed from time to time, it has increased its importance in the capitalist economic system day by day. The patronage of the audit activity, which occasionally had significant criticism, was carried out by professional organizations with a recent self-regulation approach. At the beginning of the current century, the scandals that took place led to partial abandoning of self-regulation and led to the establishment of autonomous public oversight institutions authorized to oversee independent auditing. Public oversight institutions, which have been implemented in many countries, have followed different trends among countries. In this research, the various characteristics of the public oversight institutions of some selected countries were examined. Moreover, the similarities and differences between the countries were discussed in terms of subcultural dimensions. As a result of the descriptive research carried out, it is observed that public oversight institutions have been implemented in Anglo-Saxon culture before other countries. More similar approaches were seen in Anglo-Saxon and Northern European countries. In European countries with Mediterranean culture and Asian countries, the more different positions are observed.

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Notes

  1. 1.

    Independent audit is accepted as a profession today, but it has aspects that differ from other professions in terms of its social role. Because of the research scope, the independent audit has not been examined in terms of the profession's theoretical structure. This issue can be examined in other researches because the concept of the profession has been handled together with the concept of ethics since ancient times. With respect to the theoretical and ideological parts of the professions, Max Weber's Protestant Ethics and the Spirit of Capitalism (1905) and Immanuel Kant’s Metaphysics of Moral (1922) can be examined.

  2. 2.

    The difference between profession and business is summarized by Arthur Andersen’s former chief executive Kullberg (1985): “The purpose of a business should be to make a profit, and incidentally, render a service. The purpose of a profession should be to render a service and incidentally, make a profit” (Hooks 1992).

  3. 3.

    The self-regulation concept is generally used in educational sciences and associated with learning.

  4. 4.

    It is possible to give dozens of examples to these studies, such as: Humphrey et al. (1992), Tinker (1985), Willmott (1986), Booth and Cocks (1990), Humphrey and Moizer (1990), Hopwood (1990).

  5. 5.

    There are many examples in this regard. The news from the newspaper LA can be examined: www.latimes.com/archives/la-xpm-1992-05-20-fi-280-story.html.

Abbreviations

AICPA:

American Institute of Certified Public Accountants

AOC:

Germany—Auditor Oversight Commission

ASR:

U.S. Accounting Series Release

BDDK:

Turkish Banking Regulation and Supervision of Agency

CPA:

Certified Public Accountant

EPDK:

Turkish Energy Market Regulatory Board

FASB:

U.S. Financial Accounting Standards Board

IFAC:

International Federation of Accountants

KGK:

Turkish Public Oversight Accounting and Auditing Standards Authority

PCAOB:

Public Company Accounting Oversight Board

POB:

U.S. Public Oversight Authority

SASs:

U.S. Statement of Auditing Standards

SEC:

The U.S. Securities and Exchange Commission

SECPS:

The U.S. Securities and Exchange Commission Practice Section (SECPS)

SOX:

Sarbanes–Oxley Act of 2002

SPK:

Turkish Security and Xechange Commission

TMUD:

Expert Accountants Association of Turkey

TMUDESK:

Turkey Accounting and Auditing Standards Board

TÜDESK:

Turkish Turkey Auditing Standards Board

TÜRMOB:

Union of Chambers of Certified Public Accountants Turkey

TTK:

Turkish Trade Code

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  1. Department of Accounting and Tax, Muratli Vocational School, Tekirdag Namik Kemal University, Tekirdag, Turkey

    Özkan Sarisoy

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    Kıymet Tunca Çalıyurt

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Sarisoy, Ö. (2021). The Transition from Self-Regulation to Public Oversight in the Independent Audit: An Investigation of Developments by Accounting Sub-Culture. In: Çalıyurt, K.T. (eds) Ethics and Sustainability in Accounting and Finance, Volume III. Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application. Springer, Singapore. https://doi.org/10.1007/978-981-33-6636-7_3

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