Batten down the hatches! U.S. accounting scandals and lessons for Australia

Abstract

This paper warns the Australian accounting profession about the threat of fallout similar to that experienced in the US following major accounting scandals. This US fallout has included a significant loss of public faith in the accounting profession, reduced autonomy for auditors with the formation of the Public Companies Accounting Oversight Board, and the stringent Sarbanes-Oxley Act. The Australian accounting profession must maintain high-quality auditing and corporate financial reporting or risk greater regulatory intrusions and additional threats to its relatively high levels of autonomy.