Main Themes of Papers
Francis:
Francis mostly focuses on auditors and if he believes that they have virtue of auditor honesty which equates to independence. However, he argues that the auditing practice in itself has anti-independence factors that may suggest otherwise. These include: the appearance of financial independence, client confidentiality, and emphasis of service. The point is that all three of these can combine in such a way as to create a commercial relationship that subordinates the auditor to the needs and demands of the client. Another theme is that he argues the selectiveness of the accounting firms are becoming minimal due to many mergers of the big players in this market. Is it really a "firm?" Or just a bunch of small offices working together for a main purpose which they share the same goal of profitability and retaining clients. The institution becomes more concerned with its own power and reproduction than actually facilitating the practices and internal goods of its members. The practice pits accounting firms against each other in which we compete for clients business and will do nearly anything to retain that client - especially if they pay us lots of money. Our worship of money may lead to this professions downfall and we need to focus on the virtue of accounting and our obligation to serve the public instead of pure greed and economic incentive.
Gowthorpe:
Gowthorpe states that preparers of financial statements are in a position to manipulate the view of economic reality presented in those statements to interested parties. This can be achieved by two principal categories of manipulative behaviors. The first term, 'macro-manipulation' is used to describe the lobbying of regulators to persuade them to produce regulation that is more favorable to the interests of preparers. The second term, "Micro-manipulation" describes the management of accounting figures to produce a biased view at the entity level. Both categories of manipulation can be viewed as attempts at creativity by financial statement preparers. The next theme is that the author mentions the accounting regulators and how it effects the economic mindset such as profitability. The change in rules may influence management to make questionable (creative accounting) decisions as the repercussions of law changes and their results may be unpredictable and are relatively new. The preparers will also work to influence decision makers as mentioned with the macro-manipulation term. Gowthorpe states that from an ethical perspective these manipulations can be regarded as morally reprehensible. They are not fair to users, they involve an unjust exercise of power, and they tend to weaken the authority of the regulators. I believe that if management is able to undermine the regulation setters, then it is possible they are not in as much control as they believe. The creation of FASB was necessary to restore confidence in the profession but is it possible that management are the ones that are truly influencing the decisions of the regulatory boards? Accounting regulators, as we have seen, intend that financial statements should be useful to a wide range of users. The preparers of those financial statements act as intermediaries between the regulators and the users of the statements. They hold a very powerful position.