INTERPROFESSIONAL CONFLICT, ACCOMMODATION, AND THE FLOW OF CAPITAL - THE ASB VS THE SECURITIES INDUSTRY AND ITS LAWYERS

In an earlier paper, Martens and McEnroe (1991) found that the Auditin g Standards Board (ASB) substantially rewrote major sections of the ex posure draft (ED) of Statement on Auditing Standards (SAS) No. 54 to a ccommodate the wishes of a special interest group, the legal professio n. This study involves a similar examination of the development of SAS 72, from its status as an ED to its release as an official auditing p romulgation. Specifically, an analysis is made of the positions existi ng in the ED for SAS 72, the comments submitted to the ASB, and the ch anges made to the final SAS in light of those comments. The results in dicate that the ASB once again accommodated the desires of a special i nterest group; in this case, the securities industry and its lawyers. A reason for the accommodation is proposed in the context of certain s ociological theories of the professions. It is suggested that the ASB, acting as an agent of capital, was convinced that a less restrictive standard was necessary in order to facilitate the role that underwrite rs play in the how of investment capital. (C) 1998 Elsevier Science Lt d. All rights reserved.