Open Journal of Accounting, 2013, 2, 8-15 Published Online January 2013 (
Sarbanes-Oxley and the Accounting Profession: Public
Interest Implications
Sara Ann Reiter1, Paul F. Williams2
1Binghamton University, Binghamton, USA
2North Carolina State University , Rale i gh, USA
Received October 31, 2012; revised December 1, 2012; accepted December 12, 2012
The US accounting profession was caught up in, and some say responsible for, the whirlwind of accounting and busi-
ness scandals that rocked the US markets in 2002. To restore investor confidence in financial information, the Sar-
banes-Oxley Act created a new Public Company Accounting Oversight Board with the authority to set standards for
auditors of publicly traded companies, thus ending a century of professional regulation of auditing. In this analysis we
employ sociological theories of professionalism [1-4] to help understand the implications of the Sarbanes-Oxley legisla-
tion for the accounting profession and for the public interest. We explain why professional self-regulation is important
for retaining valuable econ omic franchises. We also explain why the public interest orientation of the prof ession is im-
portant and how government take-over of auditing standards potentially erodes the public accounting profession’s
commitment to the public interest. Self-control over professional work, a key characteristic of professional status, is
pre-empted b y the newly cr eated gov ernment ov ersight body PCAO B. With go vernment tak eover of ov ersight o f aud it-
ing practice, claims to professional status are weakened and professional commitment to and involvement with vital
work standards may suffer. In addition, the profession may no longer have incentives to promote the public interest or
to innovate and ch ange in response to changing conditio ns. We also trace events leading up to Sarbanes-Oxley legisla-
tion and conclude that underlying problems arising from internal work differentiation as consulting work became more
profitable and glamorous and development of a commercially oriented work culture may continue to threaten the pro-
fession in the future. Finally, we speculate that the greatest costs may be opportunity costs as the profession no longer
has the incentives or ability to innovate and embrace new forms of accountability.
Keywords: Accounting Profession; Sarbanes-Oxley; Public Interest
1. Introduction
The US accounting profession was caught up in, and
some say responsible for, the whirlwind of accounting
and business scandals that rocked the US markets in
2002. To restore investor confidence in financial infor-
mation, the Sarbanes-Oxley Act created a new Public
Company Accounting Oversight Board with the au thority
to set standards for auditors of publicly traded co mpanies,
thus ending a century of professional regulation of audit-
We conclude that this change results in a significant
decrease in the professional status of auditors which also
affects other groups in the broader accounting profession.
The professional status of auditors is important in retain-
ing the monopoly over audit work that is at the economic
core of the prof ession. Control of professional work, lost
to government regulators under Sarbanes-Oxley, is nec-
essary for development and adaptation of the profess-
sional skills upon which the government monopoly relies.
In addition, the decline of professional control over au-
diting work has potential negative effects on the public
interest because it undercuts the profession’s need to
maintain a public interest ideo logy.
The first section of the paper provides the basis for
these conclusions. In the second section of the paper, we
examine factors leading to the crisis of confidence re-
sulting in the Sarbanes-Oxley legislation and conclude
the many of these problems, such as internal differentia-
tion and loss of professional character, remain unre-
2. Sarbanes-Oxley and the Accounting
First we need to establish why professional status is im-
portant to accountants and why a decline in professional
status should be a concern. We rely on critical sociologi-
cal theory [1-4] in our analysis of the meaning of pro-
fesssional status. Willmott [5] distinguishes critical so-
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ciological theory from its predecessor functionalist and
interactionist forms by noting that “the functionalist per-
spective usefully highlights the significance of traits of
professionalism in relationship to the reproduction of
complex social systems”, while the “interactionist per-
spective helpfully recalls the socially constructed nature
of these traits, setting them in the context of a negotiated
interaction over the symbolic meaning and value of ‘pro-
fessional’ expertise. Finally, the critical approach deep-
ens the insights of the interactionist approach by placing
them in the wider economic and political context” [5, p.
Some critical theorists view the professional project in
essentially economic terms. Larson contends that “Pro-
fessionalism is thus an attempt to translate one order of
scarce resources—special knowledge and skills—into
another—social and economic rewards” [6, p. 17]. Other
theorists, like Freidson [1-3] contend that there is more to
the professional project than attaining economic mo-
nopolies, asserting that the “institutions of profession-
alism are grounded not only in an economy but also in a
social enterprise of learning, advancing, and practicing a
body of specialized knowledge and skill” [3, p. 198]. In
other words, he believes that professionals provide es-
sential services and part of the analysis of the profes-
sional project has to take the potential public interest
served into account. Finally, ideology is of great impor-
tance to the professional project [3,4]. A professional
ideology reinforcing an importan t pub lic interest fu n ction
is critical to maintain internal cohesion and to maintain
the important public perception that the profession is
vital to the public interest, a perception that results in th e
government awarding service monopolies to the profes-
In summary, professions are seen in terms of their
economic monopolies, their professional work and skills,
and their ideologies. Following these three lines of
thought, we trace the potential economic effects of a de-
cline in professional status, the potential effects of loss of
pro fessi onal control over auditing practices and standards,
and the likely public interest effects from changes in
professional ideology. The work of two particular socio-
logical theorists forms the framework for this analysis.
Abbott [4] theorizes professions as groups with jurisdic-
tion over professional tasks—a jurisdiction that is based
in economics, negotiated with other groups, and in a
constant state of change. Freidson [1-3] bases his analy-
ses on the characteristics of an ideal profession with em-
phasis on understanding the key interactions between
those characteristics. The characteristics are seen not so
much as traits but as functional building blocks for pro-
fessions. For example, professional control over practi-
tioner qualification s is important for maintaining profess-
sional control of work.
2.1. What Is the Accounting Profession?
While some see the public accounting (auditing) profes-
sion as distinct from other accounting professions, such
as education, private enterprise, not-for-profit and gov-
ernmental [7], we define the accounting profession more
broadly and see the various segments as internal differ-
entiation within a profession. Histories of the early days
of the accounting profession in various countries detail
struggles to define which occupational groups would and
would not be included in the profession associations
[5,8,9]. In the U.S. the premier event leading to profes-
sional status for accountants was the franchise given to
public accountants by the securities legislation of the
1930s [10]. This leg islation both requires publicly traded
companies to purchase independent audits of their finan-
cial statements and defines public accountants as the sole
providers of such audits. The professional status of ac-
counting is therefo re dependent on the public wing of th e
profession, however even the American Institute of Cer-
tified Public Accountants has only a minority of its
members currently in public practice. Both in the UK and
the US the profession is fragmentary with many sub-
specializations. Roslender [11] notes that aside from au-
diting, the accounting profession is not exclusive and
does not depend on a government supported monopoly.
One does not have to be a CPA to provide tax ation, state-
ment preparation, and other services.
Abbott [4] and Fr eidson [3] explain that once a profes-
sion has achieved professional status, they then begin to
bring various related functions under the umbrella of that
professional distinction. So, for example, accountants in
the US have provided taxation and information services
as an adjunct to audit practice and these activities are
clothed in the ideological mantle of the profession for a
marketing advantage when supplied by CPAs—although
both services can be bought as well from non-account-
ants. This is precisely the type of situation theorized by
Abbott [4] where a number of related functions rely on
the professional status of the co re fun ction in co mpetition
for professional jurisdiction or work. This type of inter-
nal differentiation can result in considerable tensions
with the profession, as explained in the second section of
this paper.
Our analysis of the effects of Sarbanes-Oxley legisla-
tion on the accounting profession focuses on the core
activity of public accounting or auditing. Other segments
of the accounting profession not involved in auditing
publicly traded companies are affected indirectly by Sar-
banes-Oxley legistation, but all of the segments of the
profession will suffer some decline if the core of the
profession, pubic accounting , is threatened.
2.2. Sarbanes-Oxley Legislation
In 2001 and 2002, a series of accounting scandals were
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uncovered at major corporations. At the same time, the
market bubble burst sending stock prices and investor
confidence plummeting. The role of auditors in these
scandals led to a deepening concern with the effective-
ness of professional self-regulation.
High-profile business failures culminating in a media
fixation of Enron called into question the effectiveness of
the profession’s self-regulatory process as well as the
effectiveness of the audit to upho ld the public trust in th e
capital markets. Legislation to address shortcomings in
financial reporting was progressing in Congress and the
sudden revelation and collapse of WorldCom guaranteed
swift congressional action. President Bush on July 30
signed into law the Sarbanes-Oxley Act of 2002, the
most significant legislation affecting the accounting pro-
fession since 1933 [12].
Provisions of the new law affecting auditor independ-
ence include the creation of a Public Company Account-
ing Oversight Board to set auditing and quality control
standards, including independence, for auditors of public
companies. In addition, the act calls for rotation and re-
view of lead audit partners and restricts consulting work
that auditors can p erform for publicly traded audit clien ts
[12]. Carmichael explains that the new regulatory body,
the PCAOB, is an independent private sector body over-
seen by the SEC which has powers to register public ac-
counting firms, conduct inspections of auditing practices,
enforce compliance with professional standards and se-
curities laws, discipline firms or persons, and establish
audit, ethics and independence standards [13, pp. 127-
128]. Carmichael notes that the Sarbanes-Oxley Act
“removed from auditors the ability to exclusively inter-
pret their role in society” [13, p. 130]. In fact, when the
PCAOB adopted the auditing and professional standards
that had been developed for many years by the AICPA,
and that decision was approved by the SEC, the auditing
standards became federal law rather than a set of profes-
sional prac tices.
2.3. Key Aspects of Professionalism
Public accountancy, is generally viewed as a profession
both by academics and the public. Freidson [3] notes five
interdependent elements of t he ideal type professi onali sm:
1) Specialized work in the officially recognized econ-
omy that is believed to be grounded in a body of theo-
retically based, discretionary knowledge and skill and
that is according given special status in the labor force;
2) Exclusive jurisdiction in a particular division of la-
bor created and controlled by occupational negotiation;
3) A sheltered position in both external and internal
labor markets that is based on qualifying credentials cre-
ated by the occupation;
4) A formal training program lying outside the labor
market that produces qualifying credentials, which is
controlled by the occupation and associated with higher
education; and
5) An ideology that asserts greater commitment to do-
ing good work than to economic gain and to the quality
rather than the economic efficiency of the work [3, p.
These elements are interdependent—for example, pro-
fessions maintain exclusive jurisdiction, in part, by pro-
moting their ability to perfor m specialized work.
The three key elements of professions are the exis-
tence of a “labor market shelter” by which the profession
is shielded from competition, retention of professional
control (as opposed to client or state control) over judg-
ing and evaluating professional work, and maintenance
of a public interest ideolog y [3].
A labor market shelter represents “occupational con-
trol over supply and the substance of demand” for par-
ticular work and effective formally negotiated labor
market shelters are always based on some public claim of
specialized training and skill that secures a state sanction
for an exclusive right to supply certain kinds of labor [2,
pp. 82-83]. As Freidson [2, p. 173] explains, “an occu-
pation can fend off control by individual or corporate
consumers of their work only by having power delegated
to it by the state.” He explains that “Ideal-typical profes-
sionalism is always dependent on the direct support of
the state and some degree of tolerance of its position by
both consumers and managers” [3, p. 122]. The statu-
tory requirement for audits by certified public account-
ants for publicly listed firms is an example of a state
supported labor market shelter. If the state did not require
audits for publicly traded corporations and did not re-
quire that audits be performed by a certain set of people
as defined by the public accounting profession, it would
be very difficult for the auditing profession to maintain
their market share in face of true competition. However,
this requires the profession to convince the State that
only they have the skills, training, and commitment to
provide these essential services, and that they accept an
obligation to act in the underlying public interest even
while pursuing their own profit motives.
Another key characteristic of professionals is that they
have technical autonomy and some degree of discretion
in performing work that must be conducted in accor-
dance with a personal, schooled judgment [1, p. 141].
Even though pr ofessional work is often employed within
bureaucratic setting and control, supervision of the pro-
fessional work and judgment o f its quality is the purv iew
of skilled professionals. For example, in accounting it is
the peer review process, not the opinion of the client, that
determines the quality of an audit. Freedom from the
authority of others over their work is one of the defining
characteristics of professions [2, p. 115] and one that has
been lost by the US auditing profession with the current
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change to government regulation of audit standards and
Finally, professionals have a motivation to present a
public interest ideology. The ideology is important for
getting and maintaining a public perception of the skills
and commitment of the prof ession that results in eventual
State sponsorship of a labor market shelter [3,4]. It is
important to note that neither Abbott nor Freidson take
the ideological commitment of the profession at face
value. It is important for the profession to convince key
constituencies of its ideological commitment and the
importance of that commitment to a meaningful public
goal. It is important to maintain that b elief at some level.
This does not imply that the profession or its members
actually adhere strongly to, or behave according to, the
ideology. This is why scandals, which reveal the gap
between the ideology and reality, can be potentially so
damaging to the profession.
2.4. Implications of Sarbanes-Oxley
Why is this decline in the professional con trol of audito rs
over their “labor market shelter” and over the judgment
of professional work a problem for the profession, and
why might it result in a decline in the profession’s public
interest ideology? The changes resulting from the Sar-
banes-Oxley act subject the auditing profession to in-
creased government oversight through the PCAOB take-
over of setting audit standards, conducting peer reviews,
and disciplining professional practice associated with
public securities offerings. This represents a serious
threat to the professional status of auditors because free-
dom from the authority of others over their work is one
of the defining characteristics of professions [2, p. 115].
This control is central to the su staining belief that profes-
sional actions are valuable and form the basis for a labor
market shelter or government sponsored service monop-
oly. If outsiders can understand the nuances of profes-
sional judgment well enough to design work controls or
to evaluate professional actions, then what special claims
does the profession have to the work, and why should the
profession receive valuable state support for its monop-
oly status? Why not have government auditors rather
than private sector auditors under government control?
There are other implications of bureaucratic control of
auditing for the public interest. There is a strong public
interest in the integrity of the auditing profession. As
former SEC Chief Accountant Lynn Turner reiterates,
“the enduring confidence of the investing public in our
capital markets is vital… [and] public trust begins, and
ends, with the integ rity of the numbers the pub lic uses to
form the basis for making investment decisions” [14].
Accountant’s key position as “gatekeepers” to the public
securities markets has been supported by the SEC, and
“Congress, in creating a system in which investors and
the Commission must rely on the accounting profession,
granted the accounting profession an important public
trust” [15]. SEC Commissioner Isaac Hunt goes on to
note that Congress had other alternatives to relying on
the integrity and self-governing ability of the accounting
profession in setting up the system of the US public se-
curities markets. The implication is that the accounting
profession should be mindful of its obligation to serve
the public interest in order to protect the franchise which
forms the core of its professional status. As Lynn Turner
[16] notes in his last speech as Chief Accountant:
A recent commentary in Business Week stated that
auditor’s reports today have about as much cred ibil-
ity as analysts’ reports. I take great exception to that
statement. But what I think and what you think
doesn’t really matter in the court of public opinion.
What matters are what the public thinks, and its
confidence in the credibility of our work.
Yet the level of restatements, massive financial
frauds, and concerns with the quality of th e numbers
being reported in the press will erode that confi-
dence if allowed to continue. Even people in the
profession are asking why are we more focused on
branding a consulting image such as XYZ or Cog-
nitor rather than the in tern ationa lly recogn ized n ame
of CPA?
What direction should be taken, however, if th e public
ceases to believe in CPAs? In other words, is it in the
public interest to have professions serving important
public interest functions or should they be served by
government regulation or by market forces? The profes-
sion’s claims that market forces supply the motive to
maintain effective self regulation and independence cur-
rently ring a bit hollow [17-19]. However, is government
regulation a good alternative?
For one thing, even though government regulators may
have the means and will to enforce changes resisted by
public accounting in the wake of a massive set of scan-
dals, this ability and will may not persist over time. We
can observe the great power of industry lobbying to af-
fect government’s will to regulate in the events leading to
the resignation of SEC Chair Harvey Pitt and the water-
ing down of SEC regulations affecting the audit profes-
sion [20]. In the absence of pressure from immediate
scandals, government cannot be trusted to uphold stan-
dards. In an ideal world, the professions should demon-
strate their public interest commitments and organize
effective self-regulation mechanisms because they have
the most effective and sustained motivation to do so.
Even in a less than ideal world, it is not clear that gov-
ernment or bureaucratic regulation is a good long-term
alternative when market or economic regulation appear
to fall short.
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While the government backed PCAOB may currently
be serving to strengthen the hands of auditors in their
negotiations with corporate clients, history suggests that
lobbying efforts have often been effective in blunting the
powers of government regulators. Meanwhile, the ac-
counting profession is always looking for advantage and
a recent meeting of the American Assembly [21] found
ways to potentially turn PCAOB regulation to the advan-
tage of the profession. They saw, for example, an oppor-
tunity to educate the public about the inexactitude of fi-
nancial statement numbers and match attestation opin-
ions to the nature of information the auditor is expected
to attest. They hypothesized that the PCAOB might be
able to examine audit processes and provide some sorts
of safe harbor for application of principles requiring
judgment and for auditin g the results of high risk clients.
This seems to be a continuation of the decades long ex-
pectations gap where the response of the profession to
the public’s high expectations from auditing financial
statements is that the public should be re-educated to
have greatly reduced expectations. The position of Doug-
las Carmichael [13], Chief Auditor of the PCAOB, that
the standards for audits need to be set precisely to meet
the expectations of users is in direct conflict with the
profession’s desire to limit responsibility.
As for the ideological commitment of the accounting
profession, a number of au thor s detail its erosio n over th e
latter half of the 20th century in favor of a commercial
orientation (see for example, Bailey [22] and Wyatt [23]).
The passage of the Sarbanes-Oxley legislation signals a
significant loss of confidence by the state in the public
interest commitment of the accounting profession. An-
other possible result of the PCAOB takeover of oversight
of auditing standards and practice is that the profession
might withdraw from concern with maintaining a public
interest commitment. Zeff [24,25 ] reports declining audit
firm involvement with accounting standards after stan-
dard-setting shifted to the private sector FASB. Freid-
son’s concerns with the importance of professional self-
regulation relate to the necessity for continued profes-
sional commitment to and involvement with their own
specialized body of knowledge and skills. If auditors
come to disagree with or resist the standards imposed
upon them, presumably professional practice will suffer,
and professional ideology will decline.
3. Underlying Issues in the Accounting
While the Sarbanes-Oxley legislation was a response to a
particular set of market scandals, a number of unresolved
issues had been developing surrounding public account-
tancy for years. If these underlying problems remain un-
resolved, they will continue to affect the ability and will-
ingness of the accounting profession to meets its public
interest obligations.
3.1. A Brief History
Several recent accounts trace the factors that led to the
failure of profession to retain its full professional status.
Zeff [24] places the pinnacle of status of the US ac-
counting profession in the 1940s to mid 1960s. However,
the subsequent movement of the profession into informa-
tion-based services triggered an internal differentiation
that would ultimately erode the public interest ideology
of the profession [23]. As the markets gained increased
prominence and importance in the 1960s, activities sur-
rounding the markets became more visible. The late
1960s ushered in an era of “scandals, lawsuits, and criti-
cism of the profession” [24, p. 196]. In the 1970s ac-
counting standard settin g passed from the profession to a
private standard-setting body and Zeff notes a decline in
interest by the profession in taking public positions on
accounting standards. Congressional hearings in the late
1970s resulted in the first of a series of reforms in the
self-regulation process of the profession. In addition,
growth of controversial management advisory services
continued despite the concern of regulators. Zeff [25]
notes a deterioration of professional values and profes-
sional climate in the 1980s on due to increases in the
competitive environment. Econo mic pressures in turn led
to an increasing move into provision of consulting ser-
vices and changes in expectations of partners from deliv-
ering high quality audit services to bringing in revenue
The profession responded weakly to the Savings and
Loan crisis, other scandals and additional congressional
hearings. Pressure from clients for favorable accounting
treatments that showed continual growth also escalated in
the 1980s and 1990s. While the SEC and others increase
Zeff [25] concludes that the auditors themselves became
even less involved with professional issues or identifica-
tion, focusing more on growth of their consulting busi-
nesses. Zeff notes that the concerns of regulators were
opposed or ignored by audit firms and the work climate
and business model of accounting practice became even
more oriented toward consulting work.
3.2. Economic Differentiation
Wyatt [23] provides in insider’s view of the change from
a professional and firm culture based on ethics to the
primacy of consulting practice and business concerns.
Factors identified with the decrease in professionalism
include an increased tendency to hire non-accounting
graduates such as information specialists, the pressure
created by the success of consulting practice for in-
creased profitability in the audit practice, and the rise of
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internal firm cultures based on growing revenues and
In sociological theories of professions [3,4,6], eco-
nomic interests are at the core of the professional proj ect.
When the perceived economic value of a peripheral ac-
tivity, such as information technology consulting, begins
to surpass the perceived economic value of the profes-
sion’s core monopoly activity (auditing), problems are
bound to result. The motivation of the profession to pro-
tect the value of its core product is diminished. In the
case of auditing there are further problems because pur-
suit of the peripheral activity arguably has implications
for the ability of the audito r to maintain a vestigal degree
of independence from the client. If the business model is
such that required audits are seen as platforms to com-
pete effectively for lucrative consulting business, then
auditors may not be in a position to interpret accounting
and auditing standards in a fair and objective. There was
considerable debate about whether there was empirical
evidence that independence had been impaired by client
pressure, however ther e can be no doubt th at the business
model of using audit work as a platform for selling other
services embodied serious conflicts of interest.
The “fall of the accounting profession” can be seen as
a situation where perverse economic incentives associ-
ated with the consulting culture overwhelmed positive
economic incentives to preserve the integrity of audits [6]
or as a situation where intern al differentiation of the pro-
fession resulting from the precipitous rise of information
services/consulting played havoc with the ability of the
profession to remain committed to its core business of
auditing [4]. For either of these two explanations, the
solution is to revitalize the economic incentives associ-
ated with auditing—and ironically the internal control
certification requirements associated with Section 404 of
the Sarbanes-Oxley act appear to have just that effect.
Douglas Carmichael, Chief Auditor of the PCAOB, pre-
sents the goal of the auditing profession in economic
terms. He relies on the theory of inspired confidence, an
economic theory wherein the goal of auditing is to meet
society’s needs and states that auditing standards will be
set with a goal to “perform enough work to meet the ex-
pectations the auditor has aroused in society” [13, p.
In the short term Sarbanes-Oxley provisions, particu-
larly in relation to internal control requirements, may
have the effect of revitalizing the economic value of au-
dit practice. Furthermore, Sarbanes-Oxley legislation
severely restricts the ability of firms to provide consult-
ing services to audit clients, therefore changing the busi-
ness model that has dominated accounting practice.
However, in the long term, economic conflicts between
the value of auditing and consulting are bound to re-ap-
pear. The internal differentiation of the profession will
continue to pose problems for the profession. While the
public accounting profession, particularly the large firm
segment engaged in audits of publicly traded companies,
is directly affected by Sarbanes-Oxley, other segments of
the accounting profession are affected as well. Abbott [4]
explains that the different segments of professions and
the other work groups with whom they compete are all
inter-related. Abbott’s “system of professions” is always
in flux, with different work groups competing for juris-
3.3. Professional Character
Zeff [24,25] and Wyatt [23] ascribe the decline of the
accounting profession to a turning away from the central
ethical commitment of professionalism. This situation is
not unique to accounting. Wolfe [26] asserts that there
has been a change in the moral sensibility of American
society from reifying moral or character-based traits to
admiring economic traits. Reiter and Williams [27] ex-
plain how the narratives of legitimation of the profession
have changed over the years from emphasis on the pro-
fessional character on accountants to emphasis on the
judicial neutrality of accountants to promotion of ac-
countants as economic characters upholding audit inde-
pendence because it serves their self-interest.
While the SEC and the government seek to restore
public confidence in CPAs and audited financial state-
ments by taking over regulation of auditin g standards and
practices and enhancing the role of corporate governance,
particularly audit committees, in overseeing the actions
of management, the accounting profession is seeking to
re-establish trust in CPAs. Melancon [28] calls for a re-
turn to a culture built “upon the profession’s traditional
va l ues”. PWC [29] exhorts auditors to rebuild trust through
rededication to core values such as integrity, re-activation of
professional judgment, and adoption of clear codes of
conduct and corporate cultures emphasizing integrity.
Likewise Wyatt [23] sees the redemption of CPAs in the
reestablishment of professional character.
However, sociological theory would prompt us to ask
whether professionalism is really about character, or al-
ways about economic interests. Freidson [2, p. 124] ex-
plains that “the notions of dedication to service and of
craftsmanship are more usefully treated as elements of an
ideology than as empirical characteristics of individual
and collective professional behavior”. Also, one should
expect that economic interests and professional ideology
will always be in conflict. As Larson [6] notes, “…at th e
core of the professional project, we find the fusion of
antithetical ideological structures and a potential for per-
manent tension between ‘civilizing function’ and market
orientation, between the ‘protection of society’ and the
serving of a market…” (p. 63). Therefore, recent profes-
sional commitments to re-establish the character of pub-
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lic accountants may have more to do with strengthening
others’ beliefs in the ideology of the accounting profes-
sion than with a profound change in the underlying eco-
nomic values of the profession.
Furthermore, the profession may find it difficult to
develop or change character. Character is based on ac-
tions and the internal culture of the profession is formed
through actions. If the criteria for reward and promotion
for years have been based on salesmanship or commer-
cial values, how easy is it to switch to a cultu re based on
ethical values?
4. Conclusions
The interactionist theories of sociologists Abbott [4] and
Freidson [3] provide a framework for speculating about
th e pub lic interest implicatio ns of the Sarbanes-Oxley act,
particularly for the public accounting segment of the ac-
counting profession. The loss of control over profes-
sional work has serious implications for the maintenance
of the profession’s economic monopoly and for the pro-
fession’s motivation to promote a professional ideology.
Problems arising from the changing economic incentives
to compete for the various forms of professional work
will continue to haunt the profession as long as consult-
ing services are perceived as more lucrative than auditing.
It may not be easy to change the culture of the profession
from a commercial culture back to a culture based on
professional ideology.
However, some of the most damaging implications
may come from missed opportunity costs. Sarbanes-Ox-
ley legislation has the potential to freeze public account-
ants into a certain role, that of policing corporations.
Auditors are to be the internal eyes and ears for persons
outside the corporation to be able to hold these massive
entities accountable. But for what, and in what ways
should corporations be accountable to the public and how
can the public accounting profession adapt to changing
roles and expectations when its regulatory functions have
been co-opted by government bureaucracy?
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