Corporate Governance and Audit Process Post Sarbox

Arnie Wright, and accounting and international business professor at the College of Business Administration at Northeastern University, recently co-authored a paper entitled Corporate Governance and the Audit Process in the Post Sarbanes-Oxley Era: Do Auditors Perceive Substantive Changes? Below is the abstract of this paper:

Abstract: This study extends an earlier interview study by Cohen, Krishnamoorthy, and Wright (2002) by examining auditors’ experiences in working with corporate governance actors (e.g., audit committee, board, management, other committees) in the post-Sarbanes Oxley era. Thirty audit managers and partners from three of the Big 4 firms participated in the study. In line with regulatory reforms, auditors indicate that the corporate governance environment has significantly improved in recent years with audit committees that are substantially more active and diligent and possessing greater expertise and power to fulfill its responsibilities. In turn, auditors report relying to a greater extent on corporate governance information in planning and performing the engagement. Management continues to be seen as a major actor in the corporate governance mosaic. Of some concern, auditors indicate that management is seen as a key driver in determining auditor appointments and terminations. Similar to Gendron and Bédard (2006), results indicate that audit committees generally play a passive role in helping to resolve disputes with management with respondents indicating that the auditor and management often try to resolve issues before it comes to the attention of the audit committee. Finally, the requirements for CEO and CFO certification are reported to have a positive affect on the integrity of financial reporting.

Below is Prof. Wright’s bio. If you would like to receive a copy of this paper, or interview him about this, or other Sarbanes-Oxley related issues, please don’t hesitate to contact me.

Arnold Wright, Joseph M. Golemme Research Chair, Accounting Group and International Business and Strategy group. Professor Wright received his MBA and PhD degrees from the University of Southern California. He is a CPA who has worked in public accounting with Deloitte and in private industry as a chief accountant. Professor Wright’s research interests are in the judgment and decision-making area, primarily applied to the field of auditing. He has over 80 publications, which have appeared in a number of prestigious journals such as The Accounting Review, Journal of Accounting Research, Contemporary Accounting Research, Accounting Organizations & Society, Organizational Behavior and Human Decision Processes, and Auditing: A Journal of Practice & Theory. He has also served as a reviewer and on the editorial board of many journals. Most notably, he is the past editor for Auditing: A Journal of Practice & Theory, the premier research journal worldwide in auditing. Professor Wright has served the Auditing Section of the American Accounting Association in a number of capacities, including President and Historian. In 1998 he received the Joint AICPA/AAA Collaboration Award and in January 2003 the Auditing Section’s Notable Contribution to the Auditing Literature Award for his monograph (co-edited with Dr. Tim Bell) entitled “Auditing Practice, Research and Education: A Productive Collaboration”. He is currently the Vice President of Research for the American Accounting Association, the primary accounting academic organization in the U.S. with over 8,000 members. Prior to working at Northeastern, he held the Andersen Chair of Accounting at the Carroll School of Management, Boston College.