A “New Deal” for the profession: Regulatory initiatives, changing knowledge conceptions and the Committee on Accounting Procedure

Research output: Contribution to journalArticle

Abstract

Purpose: The purpose of this paper is to analyze how “New Deal” regulatory initiatives, primarily the Securities Acts and the Securities and Exchange Commission (SEC), changed US auditors’ professional knowledge conception, culminating in the 1938 expansion of the Committee on Accounting Procedure (CAP), the first US body to set accounting principles. Design/methodology/approach: The paper combines Halliday’s (1985) knowledge mandates with Hancher and Moran’s (1989) regulatory space to attain a theory-based understanding of auditors’ changing knowledge conceptions amid regulatory pressure. It draws on a range of primary and secondary sources to examine the period from 1929 to 1938. Findings: Following the stock market crash, the newly created SEC aimed to engage auditors as a means to regulate companies’ accounting practices based on a set of codified principles. While entailing increased status, this new role conflicted with the auditors’ knowledge conception, which was based on professional judgment and personal integrity. Pressure from the SEC and academics eventually made auditors agree to a codification of their professional knowledge and create the CAP as a cooperative regulatory solution. Originality/value: The paper explores the role of auditors’ knowledge conceptions in the emergence of today’s standard setting. It is suggested that auditors’ incomplete control of their professional knowledge made standard setting a form of co-regulation, located between the actors occupying the regulatory space of accounting.

LanguageEnglish
Pages970-992
Number of pages23
JournalAccounting, Auditing & Accountability Journal
Volume31
Issue number3
DOIs
StatePublished - Jan 2018

Fingerprint

Accounting procedures
Conception
Auditors
Securities and Exchange Commission
Professional knowledge
Accounting principles
Design methodology
Mandate
Codification
Accounting practices
Integrity
Stock market crash
Professional judgment

Keywords

  • Accounting profession
  • Committee on Accounting Procedure
  • Knowledge mandates
  • Regulatory space
  • Standard setting

Cite this

@article{004fabf3353646b28c3d74d37afcdfd7,
title = "A “New Deal” for the profession: Regulatory initiatives, changing knowledge conceptions and the Committee on Accounting Procedure",
abstract = "Purpose: The purpose of this paper is to analyze how “New Deal” regulatory initiatives, primarily the Securities Acts and the Securities and Exchange Commission (SEC), changed US auditors’ professional knowledge conception, culminating in the 1938 expansion of the Committee on Accounting Procedure (CAP), the first US body to set accounting principles. Design/methodology/approach: The paper combines Halliday’s (1985) knowledge mandates with Hancher and Moran’s (1989) regulatory space to attain a theory-based understanding of auditors’ changing knowledge conceptions amid regulatory pressure. It draws on a range of primary and secondary sources to examine the period from 1929 to 1938. Findings: Following the stock market crash, the newly created SEC aimed to engage auditors as a means to regulate companies’ accounting practices based on a set of codified principles. While entailing increased status, this new role conflicted with the auditors’ knowledge conception, which was based on professional judgment and personal integrity. Pressure from the SEC and academics eventually made auditors agree to a codification of their professional knowledge and create the CAP as a cooperative regulatory solution. Originality/value: The paper explores the role of auditors’ knowledge conceptions in the emergence of today’s standard setting. It is suggested that auditors’ incomplete control of their professional knowledge made standard setting a form of co-regulation, located between the actors occupying the regulatory space of accounting.",
keywords = "Accounting profession, Committee on Accounting Procedure, Knowledge mandates, Regulatory space, Standard setting",
author = "Dominic Detzen",
year = "2018",
month = "1",
doi = "10.1108/AAAJ-06-2016-2584",
language = "English",
volume = "31",
pages = "970--992",
journal = "Accounting, Auditing & Accountability Journal",
issn = "0951-3574",
publisher = "Emerald Group Publishing Ltd.",
number = "3",

}

TY - JOUR

T1 - A “New Deal” for the profession

T2 - Accounting, Auditing & Accountability Journal

AU - Detzen,Dominic

PY - 2018/1

Y1 - 2018/1

N2 - Purpose: The purpose of this paper is to analyze how “New Deal” regulatory initiatives, primarily the Securities Acts and the Securities and Exchange Commission (SEC), changed US auditors’ professional knowledge conception, culminating in the 1938 expansion of the Committee on Accounting Procedure (CAP), the first US body to set accounting principles. Design/methodology/approach: The paper combines Halliday’s (1985) knowledge mandates with Hancher and Moran’s (1989) regulatory space to attain a theory-based understanding of auditors’ changing knowledge conceptions amid regulatory pressure. It draws on a range of primary and secondary sources to examine the period from 1929 to 1938. Findings: Following the stock market crash, the newly created SEC aimed to engage auditors as a means to regulate companies’ accounting practices based on a set of codified principles. While entailing increased status, this new role conflicted with the auditors’ knowledge conception, which was based on professional judgment and personal integrity. Pressure from the SEC and academics eventually made auditors agree to a codification of their professional knowledge and create the CAP as a cooperative regulatory solution. Originality/value: The paper explores the role of auditors’ knowledge conceptions in the emergence of today’s standard setting. It is suggested that auditors’ incomplete control of their professional knowledge made standard setting a form of co-regulation, located between the actors occupying the regulatory space of accounting.

AB - Purpose: The purpose of this paper is to analyze how “New Deal” regulatory initiatives, primarily the Securities Acts and the Securities and Exchange Commission (SEC), changed US auditors’ professional knowledge conception, culminating in the 1938 expansion of the Committee on Accounting Procedure (CAP), the first US body to set accounting principles. Design/methodology/approach: The paper combines Halliday’s (1985) knowledge mandates with Hancher and Moran’s (1989) regulatory space to attain a theory-based understanding of auditors’ changing knowledge conceptions amid regulatory pressure. It draws on a range of primary and secondary sources to examine the period from 1929 to 1938. Findings: Following the stock market crash, the newly created SEC aimed to engage auditors as a means to regulate companies’ accounting practices based on a set of codified principles. While entailing increased status, this new role conflicted with the auditors’ knowledge conception, which was based on professional judgment and personal integrity. Pressure from the SEC and academics eventually made auditors agree to a codification of their professional knowledge and create the CAP as a cooperative regulatory solution. Originality/value: The paper explores the role of auditors’ knowledge conceptions in the emergence of today’s standard setting. It is suggested that auditors’ incomplete control of their professional knowledge made standard setting a form of co-regulation, located between the actors occupying the regulatory space of accounting.

KW - Accounting profession

KW - Committee on Accounting Procedure

KW - Knowledge mandates

KW - Regulatory space

KW - Standard setting

UR - http://www.scopus.com/inward/record.url?scp=85044314677&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85044314677&partnerID=8YFLogxK

U2 - 10.1108/AAAJ-06-2016-2584

DO - 10.1108/AAAJ-06-2016-2584

M3 - Article

VL - 31

SP - 970

EP - 992

JO - Accounting, Auditing & Accountability Journal

JF - Accounting, Auditing & Accountability Journal

SN - 0951-3574

IS - 3

ER -