Rethinking the Role of the Auditor: Resolving the Audit/Tax Services Debate
Bibliographic record
Abstract
Expectations of the role of the audit professional in Canada and the United States have significantly changed in recent years. In the wake of Enron's collapse and the advent of the Sarbanes-Oxley Act in the U.S., there has been a new focus on the independence of the audit function. American legislative and regulatory reforms in 2002 and 2003 did much to clarify the independence issues surrounding auditors. However, whether auditing firms should be permitted to provide tax services to their audit clients remains unresolved. While the approach in the United States has been to permit the dual provision of audit and tax services, Canadian regulators continue to consider their response. This paper reviews the legislative history of Sarbanes-Oxley and the history of tax services themselves. The author concludes that the U.S. Congress never intended to prevent auditors from providing non-audit services. This conclusion is substantiated by the final rule adopted in April 2006, which allows auditors to provide some tax services. The author finds merit in the U.S. response, because auditors have provided tax services for many years without any evidence of impaired independence and because the safeguards imposed by the new rule limit the possibility for abuse. However, because Canada uses a more principles-based approach to auditing and audit standards, the author concludes only that some of the U.S. rules are appropriate or necessary in the Canadian context. The tax services debate illustrates the challenges in resolving issues of auditor independence. The five-year history of the debate reveals many of the considerations behind the need to balance efficient capital markets and investor protection. It also reveals the expectations gap between the reality of audit service provision and market conceptions of an auditor's role, which make it more difficult to find the appropriate balance. The author concludes that the U.S. result strikes an appropriate balance which enhances regulatory scrutiny yet maintains freedom in corporate choice of professional service providers.
Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.
How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.059 | 0.053 |
| Meta-epidemiology (narrow) | 0.000 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.005 | 0.005 |
| Science and technology studies | 0.034 | 0.092 |
| Scholarly communication | 0.042 | 0.018 |
| Open science | 0.004 | 0.008 |
| Research integrity | 0.026 | 0.035 |
| Insufficient payload (model declined to judge) | 0.003 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".