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    Transplanting Anglo-American Accounting Oversight Boards to...
    research summary posted July 23, 2015 by Jennifer M Mueller-Phillips, tagged 13.0 Governance, 13.05 Board/Audit Committee Oversight, 15.0 International Matters 
    Transplanting Anglo-American Accounting Oversight Boards to a Diverse Institutional Context.
    Practical Implications:

    This study is of relevance to several other countries that exhibit, albeit to varying degrees, a tradition of party patronage, clientelism, institutional weaknesses and state ineffectiveness. The findings have implications for various actors and stakeholders in financial reporting. For example, global regulators should realize that independence from the profession, while simultaneously ignoring local institutional impediments, by no means guarantees the operation of effective national OBs across the globe. Furthermore, in the absence of effective oversight, particularly amid a severe financial crisis, there is a real risk that the quality of auditing will fall and audit fees will plunge, conditions that may bring about a major legitimation crisis for the profession.


    Caramanis, C., Dedoulis, E., & Leventis, S. 2015. Transplanting Anglo-American accounting oversight boards to a diverse institutional context. Accounting, Organizations & Society (42):12-31.

    accounting legislation, auditing oversight boards, diverse institutional context, international accounting
    Purpose of the Study:

    Accounting and auditing oversight boards (OBs) serve as a basic mechanism for tackling perennial problems in corporate financial reporting and auditing, within the broader complex and hierarchical global regulatory system. The introduction of accounting and auditing oversight boards (OBs) has been promoted on a global scale as a key component of the international financial architecture that has emerged over the past two decades. Such institutions, modeled on the Anglo-American tradition, are domestically organized and embedded within distinctively diverse institutional contexts. Their role is to ease agency problems, improve the quality of financial reporting, and help provide stability in the global financial system.

    The authors employ an institutional approach, located within the broader political economy framework of global capitalism, to examine the establishment and operation of the new regulatory regime in Greece. The authors place emphasis on the interaction between global structural elements, institutions, influences and pressures, and on local socio-political characteristics that may condition the establishment and effective operation of OBs at the local (state) level. The focus on Greece offers a clear vantage point for examining the issue at hand for two main reasons. First, the country is known for its clientelistic political system and well-documented reform (in)capacity problems. Second, Greece has been in a deep, multifaceted crisis since 2008, illustrating the importance of each nation to the stability of the new, complex, and interdependent international financial system.

    Design/Method/ Approach:

    This study follows a case study research design and its empirical part, which spans the period 20032014, is based on a mix of data sources and triangulation research methodology. The data sources include publically-available archival material. The written evidence is supplemented with 10 focused, semi-structured, face-to-face interviews. The interviews covered, depending on the interviewee’s personal knowledge, a series of issues related to the establishment and performance of ELTE (the Accounting and Audit Committee).

    • The findings show that deeply-ingrained domestic socio-political characteristics of a delegative nature have indeed inhibited the development and operation of the local Greek OB. The newly-established OB has been affected by the all-pervasive clientelistic political system, the weaknesses of state apparatus, and the country’s reform (in)capacity problems.
    • The appointment of ELTE’s elite has been decided by successive governments, mainly on the basis of clientelism and political patronage.
    • The Greek OB has remained in a dormant state since its inception. It still lacks appropriate infrastructure and sufficient administrative personnel and has not been granted permission by the government to appoint its own audit quality inspectors. As a consequence, the performance of audit quality inspections has been, at best, erratic.
    • ELTE, as an institution, has failed to become a significant decisional point in the flow of influence, power and policy in the realm of accounting, which is so important for effecting progress.
    • The analysis shows that ELTE’s decade-long failure is related to the country’s delegative characteristics. The Ministry of Economy has failed to take effective corrective action and there is evidence of distrust or distaste toward truly independent authorities that would act as mechanisms of horizontal control.
    Governance, International Matters
    Board/Audit Committee Oversight