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    A critique of the descriptive power of the private interest A critique of the descriptive power of the private interest Document Transcript

    • The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/researchregister http://www.emeraldinsight.com/0951-3574.htm A critique of the descriptive Professional accounting power of the private interest ethics model of professional accounting ethics Received June 2002 159 An examination over time in the Accepted October 2002 Irish context Mary Canning Accounting Group, Dublin City University, Dublin, Ireland, and Brendan O'Dwyer Michael Smurfit Graduate School of Business, University College Dublin, Dublin, Ireland Keywords Discipline, Procedures, Accountancy profession, Ethics, Ireland Abstract The primary aim of this study is to examine the descriptive power of the private interest model of professional accounting ethics developed by Parker in 1994. This examination is undertaken over an extended time period in the Irish context. It develops prior research which concluded that the operation of the professional ethics machinery of the Institute of Chartered Accountants in Ireland (ICAI) facilitated private interest motives on the part of the ICAI. The paper draws on evidence regarding three critical events occurring outside the disciplinary process of the ICAI but impacting directly on its operation as well as on perceptions from within the process. The discourse surrounding the disciplinary process from 1994 to 2001 is examined using media coverage and ICAI pronouncements. This is augmented with in-depth interviews held with members of the ICAI disciplinary committees. The analysis provides evidence of pockets of support for the descriptive power of Parker's model but also illustrates how the rigid and static nature of the separate roles depicted within the model can often fail to capture the complexity of the various changes occurring over the period examined. The study presents evidence which challenges the proposed interrelationships between the various private interest roles depicted in the model and makes some suggestions for the modification of the model, particularly the interrelationships depicted therein. Introduction Professional ethics reveal a dual and complex role in that both the public and private interests are pursued. While the public interest is readily declared, the powerful private interest often remains submerged. Hence, according to Parker (1994, p. 508) ``the role of ethics in protecting the private interest represents a vital component of the accounting profession's ongoing commitment to The authors are extremely grateful for the helpful comments of Clare Balfe, Yves Gendron, Lee Accounting, Auditing & Accountability Journal Parker, Ian Thomson and two anonymous reviewers on earlier drafts of this paper. We would Vol. 16 No. 2, 2003 also like to thank participants at the 2002 Critical Perspectives on Accounting conference in pp. 159-185 # MCB UP Limited New York and the 2002 Irish Accounting and Finance Association conference in Galway for 0951-3574 further helpful comments. DOI 10.1108/09513570310472049
    • AAAJ ensuring its own survival''. Parker (1994, p. 508) developed a private interest 16,2 model of professional accounting ethics which he envisaged would be subsequently refined and modified with respect to any unique aspects of particular national environments. This paper is responsive to this call given that prior research concluded that the operation of the professional ethics machinery of one professional body, the Institute of Chartered Accountants in 160 Ireland (ICAI) facilitates private interest motives on the part of the ICAI (Canning and O'Dwyer, 2001). More specifically, the paper subjects elements of the model to critical scrutiny given unique aspects of the Irish national environment. This research comes at a time when the disciplinary arrangements of professional accounting bodies in Ireland and the UK have been the subject of governmental scrutiny and much adverse press comment due to research and publicity alleging audit failures (Canning and O'Dwyer, 2001; Mitchell et al., 1994; Sikka and Willmott, 1995). The paper also represents a direct response to Sikka's (2001a, p. 759) call for research to be undertaken which ``scrutinize[s] the rhetoric and public interest claims of accountancy bodies''. Parker's aforementioned model is a comprehensive attempt to conceptualise the private interest role of professional accounting ethics in certain western contexts. Nevertheless, as with all models it is susceptible to examination and may require modification given the impact of changes over time in specific contexts. In this paper, we examine the descriptive power of the model in the Irish context over time by undertaking two main tasks. First, we trace changes in this context over an eight year period, from 1994 to 2001, directly impacting on the professional ethics machinery of the ICAI[1]. These changes are sketched by examining elements of the discourse surrounding three key external events impacting on the disciplinary process over this period. This initial examination focuses on viewing the model given events occurring ``outside'' the disciplinary process but impacting directly on its operation and calls into question aspects of the model's descriptive power. Second, we augment this investigation with evidence drawn from in-depth interviews with members of the ICAI disciplinary committees in order to gain an understanding of the operation of the process from the ``inside''. These interviews further enable us to scrutinise the model's descriptive power. We use this evidence to make some suggestions for the modification of the model, particularly the interrelationships depicted therein. The remainder of the paper is organised as follows: the next section comprises a discussion of the conflict between the public and private interests of the accounting profession and in particular the role played by their ethical codes and disciplinary processes within this conflict. The private interest model of professional accounting ethics developed by Parker (1994) is then presented. This is followed by a description of the methods adopted in the study. The findings emanating from our examination of the three critical events over the eight year period, in conjunction with the interview evidence, are then presented and deliberated on. These findings are used to examine the descriptive power of Parker's model. The final section
    • presents a reformulation of Parker's model as well as summarising and Professional concluding the study. accounting ethics Literature review Since their inception, most accounting bodies, like all established professions have been self-regulatory (Lee, 1995). Functional perspectives on professions identify self regulation as one of the privileges professions seek in exchange for 161 making their knowledge and skills available[2] (Willmott, 1986). As part of the self-regulatory process, some professions impose requirements on members as to their behaviour through the establishment of ethical codes. These requirements are enforced by way of disciplinary penalties. If a profession, and in particular a self regulated one like the accounting profession, wishes to achieve public recognition, then ethical codes together with rigorous, accountable and transparent disciplinary processes which enforce them, are essential (Maurice, 1996). Such disciplinary processes are seen by Sikka (2001a, p. 755) as ``always political in that they enable accountancy bodies (and their members) to advance their social claims for colonization and control of jurisdictions, markets and niches''. Through readily declaring the public interest, these ethical codes have been accused of facilitating the profession's claims to act in the public interest (Parker, 1994) thereby maintaining confidence in the profession among the public and the state bodies (Cohen and Pant, 1991; Preston et al., 1995). They are seen to act as a mechanism aimed at assuring the public and the state authorities that members are competent, have integrity and that the profession intends to maintain and enforce high standards (Ward et al., 1993). The credibility of the profession and its self-regulatory regime are therefore dependent on the enforcement of these codes being seen to be effective. By reporting selected misconduct by members, the profession is shielded from having public scrutiny of its ``broader professional values'' (Sikka, 2001a, p. 755). In other words, such enforcement will thereby ensure the respect of the community and the avoidance of the risk of losing the power and privilege of self regulation to the state. Ethical codes and disciplinary processes: the conflict between public and private interest roles Ethical codes are promoted by accounting bodies as serving a public interest role in that they ``protect the economic interests of professional members' clients and of third parties[3] who place reliance on the pronouncements and advice delivered by both the professional body and its members'' (Parker, 1994, p. 509). However, recent research directly questions this proclaimed public interest role of ethical codes and their disciplinary arrangements which are in place to enforce them, in particular in the Irish, UK and Australian contexts (Canning and O'Dwyer, 2001; Mitchell et al., 1994; Parker, 1994; Sikka, 2001b). This research suggests that, in effect, these codes and arrangements are part of a strategy involving the use of explicit professional signals in order to provide
    • AAAJ a public interest face to what is essentially a process driven by private 16,2 (economic) interests (Lee, 1995). Parker (1994) argues that ethical codes are often expressed in altruistic tones and that while encouraging a sense of social responsibility on the part of the professional member, they also assist in justifying professional self-interest. This, he argues, is contradictory in that while ethical codes apparently seek to 162 fight inequality in society, at the same time they preserve inequality through their defence of the professional privileges of wealth, status and power (Parker, 1994). Therefore, although the codes themselves readily declare the public interest, the private interest remains submerged yet powerful, as the demonstration of an effective and accountable disciplinary process may reduce the chances of a profession losing its self-regulatory status. Their disciplinary processes can also be recognised as part of the territorial battles which enable professional bodies to ward off challengers and retain their ascendancy (Dezalay, 1992), or, in other words, to view them as ``a proven mechanism for diffusing criticisms, restoring the aura of independence and professionalism and, in this way, protecting the profession's jurisdiction'' (Sikka and Willmott, 1995, p. 561). As already pointed out, disciplinary arrangements exist so as to promote adherence to ethical rules. Parker (1994) notes that while some have promoted them as a powerful stimulus towards adherence to ethical rules, others view distinct disciplinary processes and periodically observable disciplinary actions enforced as mere symbolic actions created to illustrate the profession's supposed ethical attitudes and assurances to outsiders. Parker (1994) describes this latter viewpoint as a form of disciplinary symbolism which, he argues, is aimed at projecting an image of the accounting professions' ethical attitudes, commitment and behaviour. Sikka (2001a, p. 756) suggests that ``it is as though the symbolism of disciplinary arrangements is considered to be sufficient to secure public confidence''. Parker (1994) claims that the disciplinary symbol lends support and reinforcement to the various dimensions of his private interest model of professional accounting ethics which we now proceed to discuss. Parker's private interest model of professional accounting ethics Parker (1994) developed, as depicted in Figure 1, a private interest model of professional ethics in an accounting context. The model conceptualises five interrelated roles that ethics codes fulfil in serving the private interest of the accounting profession. Professional insulation is identified as the primary private interest role served by the ethics code whereby the profession is insulated from inspection and assessment by outside parties through its creation of ``professional mystique'' which according to Burns and Haga (1977, p. 710) requires ``the work to be seen as esoteric, incomprehensible and consisting of doing things that ordinary mortals cannot do''. Such mystique hinders ``outsiders from scrutinising, understanding, or evaluating its [the profession's] activities'' (Parker, 1994, p. 514). An example of this is the exercise
    • Professional accounting ethics 163 Figure 1. Parker's private interest model of professional accounting ethics of restrictions on disciplinary cases disclosure (Parker, 1994). By creating this ``professional mystique'', the profession is allowed to operate with minimum outside interference[4] (interference minimisation) and is granted the freedom to control its own activities and members (self-control). The relationship depicted in the model is one where professional insulation is seen to facilitate both interference minimisation and self-control and not vice versa (see Figure 1). Interference minimisation and self-control are, however, seen to be interrelated in that self-control can only exist where interference by outside parties in the profession's activities is minimised and interference minimisation will only be granted where the profession can demonstrate the adequate operation of self- control. The ethics code's facilitation of the roles of professional insulation, interference minimisation and self-control are deemed to be targeted towards the maintenance of professional authority, which Parker defined in terms of the profession's ability to obtain professional autonomy and exclusivity over its technical knowledge base, and public trust and approbation with respect to its claimed service ideals. The roles of professional insulation, interference minimisation and self-control are therefore seen to be subordinate and contributory to professional authority. There is therefore a presumption that professional authority cannot be attained without the ethics codes successfully fulfilling these three former roles. The underlying intent of professional authority is its ability to preserve the profession's socio-economic status ``in terms of social legitimacy and perceived social standing of the profession and the level of economic rewards achievable by members'' (Parker, 1994, p. 515). Equally, however, socio-economic status preservation is seen to reinforce the public's perception of the authority of the profession. These latter two roles are identified as mutually reinforcing and ``together serve as the focal private interest roles'' of the ethics code of professional accounting bodies (Parker, 1994, p. 515). According to Parker (1994, p. 515), the model ``clearly sits within a wider social, political, institutional and economic context''. He claims that the complexity of this context is such that the model does not attempt to encapsulate it. While we accept this complexity, we examine how the model sits
    • AAAJ within a changing Irish context. Given the apparent static and absolute nature 16,2 of the five roles depicted within the model we illustrate how these roles, as depicted, struggle to incorporate fully the impact of change in this context over time. Research methods 164 The evidence in this study was collected using two methods. Firstly, a content analysis of media reporting and ICAI pronouncements regarding three events with public interest implications relating to the ICAI disciplinary process was undertaken. While these three events, which occurred between 1994 and 2001, happened ``outside'' the disciplinary process, they impacted directly on its operation. The analysis focuses on whether Parker's model adequately describes the operation of the ICAI disciplinary process over time in response to these external events. Secondly, semistructured in-depth personal interviews with eight individuals who had direct involvement with the ICAI disciplinary process were undertaken. The purpose of these interviews was to draw on perceptions from ``inside'' the process to inform the analysis of the descriptive power of Parker's model. Content analysis The content analysis (see Holsti, 1969; Krippendorff, 1980; Weber, 1985) involved a comprehensive review of media and ICAI pronouncements surrounding the three events examined: the Report of the Tribunal of Inquiry into the Beef Processing Industry; the Report of the Tribunal of Inquiry (Dunnes Payments); and the Parliamentary Inquiry into DIRT (Deposit Interest Retention Tax) by the Dail (Irish Parliament) Public Accounts Committee (PAC). A number of key words and categories were developed and agreed by the researchers in order to focus this analysis. Articles were identified using on- line search systems on newspaper, business magazine and academic journal web sites as well as general searches on library web sites[5]. Where on-line search facilities did not fully cover the period being examined, we examined individual newspapers' content in certain years (particularly, 1994, 1995 and 1996) for evidence of articles relating to these three events using microfiche facilities. We also collected and examined information on the ICAI web site for press releases and pronouncements in relation to the three events. The articles were organised according to the event they related to and were examined in detail in order to obtain some understanding of the core issues involved while, at the same time, reflecting on the evolution of the issues and how the ICAI response to them impacted on the descriptive power of Parker's model. Interview evidence The interviews were guided by a small number of broad open-ended questions[6] and ranged from 45 to 90 minutes in duration. Interviews were conducted with three ICAI members directly involved in the internal administration of the disciplinary procedures and who also acted as members
    • of the various committees within the ICAI's disciplinary apparatus. The other Professional five interviews were conducted with lay members[7] of the various committees. accounting Our core focus in these interviews was to examine perceptions of the openness ethics and transparency of the disciplinary process and its purported objective to act in the public interest. We initially wrote to the ICAI for contact details of these members as we wished to be open with the ICAI regarding the nature of our research. Before releasing any contact details, the ICAI insisted on liaising with 165 these members in order to ascertain their willingness to be interviewed. We were also asked to provide a detailed outline of our research objectives in which we guaranteed the confidentiality of the interviewees given the apparent sensitivity of our research. We acceded to this. When interviewees agreed to be interviewed the ICAI provided us with contact details and we proceeded to organise the interviews. Conducting the interviews Before commencing each interview, the nature of the research was again outlined to each interviewee. It was stressed that it was perceptions we were examining and that we were not looking for definitive, wholly defensible answers to questions. We were extremely conscious not to lead interviewees in any way and attempted to formulate an informed conversation (Patton, 1990; Smith, 1972). It should be noted that while we made extensive attempts to establish a relaxed atmosphere and establish a rapport, on two occasions we got the impression that interviewees were somewhat concerned about elaborating in too much depth about the inner nature of the ICAI disciplinary process. However, all other interviewees were extremely forthcoming and elaborative in their responses to questions. Evidence analysis All of the interviews were recorded by tape and subsequently transcribed (Jones, 1985; McKinnon, 1988). The evidence analysis constituted a pervasive process throughout the study's life. For example, throughout the interview collection phase, ongoing analysis was aided by: extensive notes taken during and immediately after interviews; recorded de-briefing sessions between the two researchers immediately after each interview; tape-recorded reflections on interviews recorded separately by both researchers as well as each interviewee recording an inner dialogue reflecting on the interviews in separate journals (see Baxter and Chua, 1998; Silverman, 2000). This, in effect, provided us with a provisional running record of analysis and interpretation (see Miles and Huberman, 1994; Tesch, 1990). Initial readings of early transcripts throughout the interview collection phase also meant that in subsequent interviews certain issues that appeared to be arising from these readings were probed more deeply. In conducting the post interview analysis, the broad areas addressed in the interview guide provided a framework/template from which a detailed analysis of transcripts could proceed (Coffey and Atkinson, 1996; Lillis, 1999; Miles, 1979). In total, the transcripts were read on five separate occasions by
    • AAAJ both researchers after data collection had ceased. The first and second in-depth 16,2 reading of each transcript was undertaken with the tape of the interview running in order to focus in on emphasis, mood, intonation and so on (Jones, 1985, p. 58). A number of key themes apparent in the evidence were then developed after much discussion and debate. Mind (cognitive) maps were prepared for each interview in order to support or, in some cases, challenge the 166 themes identified. These also helped in the search for any apparent contradictions in the initial themes derived from the transcript evidence (Huberman and Miles, 1994; Jones, 1985; Patton, 1990). The detailed field notes, mind maps, tape-recorded reflections, memos, interview summaries, and journals were then re-visited and analysed further. This led to the formulation of an initial ``thick description'' (Denzin, 1994, p. 505) of the interview findings using the interview guide questions as a loose framework (see King, 1999, 1998). This description was then examined using Parker's model as a lens in order to discover if the perceptions gained supported the model's descriptive power. This was a crucial part of our analysis and involved numerous sessions where we discussed and debated the themes identified with regard to Parker's model. Finally, a narrative was developed (Llewellyn, 2001) based on this analysis and this is primarily presented in the second section of the findings detailed below. Interrogating the descriptive power of Parker's individual private interest roles This section reports on the examination of the impact of three critical events of a public interest nature on the ICAI professional ethics machinery in the period from 1994 to 2001. These impacts are explored by analysing elements of the discourse surrounding these events using the content analysis of media coverage and ICAI pronouncements in conjunction with the interview evidence analysis. The examination focuses on whether Parker's model, particularly the individual roles depicted therein, adequately describes the operation of the ICAI disciplinary machinery over time in response to these three events. These events were chosen as they represent the three major events of a ``public interest'' nature which directly impacted on the ICAI's disciplinary apparatus from 1994 onwards. The decision to commence in 1994 is due to the seminal nature of the first event analysed which reached its conclusion in 1994 (Bougen et al., 1999). This event represented the commencement of a strong societal push for greater accountability and transparency in Irish public life which has led to greater questioning of powerful, well established professions such as law, medicine and accountancy in this context. Privacy and secrecy ± supporting the descriptive power of Parker's model Event 1 ± The Beef Tribunal. In 1994, revelations arising from the Report of the Tribunal of Inquiry into the Beef Processing Industry (hereafter the Beef Tribunal) (Beef Tribunal, 1994) into alleged tax evasion and other malpractices in the Irish beef processing industry implicated members of the ICAI in the
    • setting up of illegal tax avoidance schemes (O'Toole, 1995). A tribunal of this Professional nature was an extremely rare occurrence in the Irish context at this time accounting (Bougen et al., 1999) and the findings prompted private disciplinary inquiries ethics by the ICAI given their public interest implications. Consequently, we commence our examination of the descriptive power of Parker's model as applied to the operation of the professional accounting ethics machinery of the ICAI in 1994 around the time of the aforementioned report. 167 Despite the public furore regarding the Beef Tribunal findings (Bougen et al., 1999) and the questions raised about some of its members, the ICAI never reacted publicly to the report (Murdoch, 1997; 1998a,b). The absence of a public response combined with the private nature of the disciplinary hearings into possible breaches of its ethical code were representative of a body focused on insulating the process from public view (professional insulation) in order to minimise interference in its internal workings (interference minimisation). For example, despite disciplining one member, neither the name of that individual nor any indication of the outcome of the internal inquiry was published (Murdoch, 1997). This successfully created a sense of mystique around the process undertaken, further strengthening professional insulation. In fact, the profession was so focused on professional insulation in order to minimise interference in what it perceived as its internal affairs and was so resistant to any external threats to its professional authority that it actually stifled public debate on the issues involved. For instance, it was widely reported that a former president of the ICAI considered the issues raised to be so serious that he tried to raise the matter, and other related issues, in a letter to the ICAI members' journal Accountancy Ireland in 1996. The journal, however, refused to publish the letter lest it ``pre- judge the disciplinary process that was underway'' given ``the sensitivities of some of the issues'' (Murdoch, 1997; 1998a)[8]. This stance seems to have been aimed at maintaining a perception that the body exercised sufficient self- control over its members through procedures held behind closed doors. The ICAI was, in effect, asserting its self-perceived professional authority by ensuring that its ethics code (and the disciplinary process surrounding it) successfully fulfilled the roles of professional insulation, interference minimisation and self-control thereby operating in the ICAI's private interest. Its concern for the socio-economic status preservation of its members was illustrated by its refusal to publicly name the member disciplined or the outcome of the process (Murdoch, 1998a). A number of interviewees were highly critical of the ICAI's reluctance to publicly name the member disciplined: I never agreed with the reluctance of the Institute (ICAI) to publish names of members ... It seemed there had been a customary practice not to do so unless somebody had done something absolutely gross . . . [There was] a misguided sense of justice and I disagreed with that . . . The process [wa]s flawed [and] I believe [publishing names] would have given more confidence in the process to members [and the public] . . . [Even now] it is far too tentative in the way it does publish things (M1)[9].
    • AAAJ We d[id] take people to task, but [under the old system] . . . nobody knew about the end result . . . (M2). 16,2 In summary, at this time, it was apparent that the ICAI did not consider its internal procedures to be the domain of the wider public despite the public interest implications of the Beef Tribunal findings. From the outside looking in, there was a sense that the ICAI considered itself to be immune from public 168 scrutiny by virtue of the professional authority it felt it possessed. Therefore, the private operation of the ICAI disciplinary process combined with its lack of a public response to findings regarding its members' actions which had a public interest dimension suggests that Parker's model adequately describes the operation of the ICAI professional accounting ethics machinery in its own (private) interest at this time in this (Irish) context. The ICAI effectively depended on its professional authority supported by professional insulation, interference minimisation and perceptions of self-control in order to preserve the socio-economic status of its members. However, the ensuing years brought two further critical external threats to Parker's depiction of the individual roles and their interrelationships within his model. The following sections examine these threats and the ICAI response to them. In doing so, despite illustrating some further support for the model's descriptive power, they overwhelmingly indicate a number of threats to this power. From privacy and secrecy to ostensible openness and transparency ± support for and challenges to the descriptive power of Parker's model Event 2 ± The McCracken Tribunal. In August 1997, the Report of the Tribunal of Inquiry (Dunnes Payments) (hereafter the McCracken Tribunal) (McCracken, 1997) into, inter alia, claims of payments to politicians named a number of prominent ICAI members thought to have been involved in the process[10]. As part of its disciplinary apparatus, the ICAI set up a committee to investigate these members. By establishing this committee, the ICAI, under the disciplinary rules existing at this time, effectively acknowledged the public interest nature of this case. This investigation would have proceeded along similar lines to the Beef Tribunal (i.e. in a completely private manner) but for severe external pressure imposed on the ICAI, initially emanating through the print media. For example, when the operation of this committee was threatened by outside interference with the media calling for public hearings, the ICAI adopted an extremely defensive stance and insisted that its investigation be held in private, as was normally the case heretofore. The ICAI made this clear in a public statement declaring that it ``wishes it to be known that its procedures and affairs are private, and that the (investigation) committee has not issued or authorised the issue of any comments or reports on its activities'' (Murdoch, 1998a). Effectively, the body was asserting its professional authority and was unwilling to permit this to be undermined by allowing any interference in its disciplinary procedures as it was well capable (in its own view) of exerting self-control over its members. This statement further illustrates the insular nature of the ICAI disciplinary proceedings at this time. It
    • also indicates the ICAI's desire to preserve professional insulation in order to Professional sustain interference minimisation and self-control over its members. This was accounting ultimately perceived as upholding its professional authority. Hence, the nature ethics of this response further indicates how Parker's model adequately reflects the operation of the ICAI professional ethics machinery in its own (private) interest at this time. 169 The unravelling of professional insulation Given the public interest nature of the McCracken tribunal findings, the defensive approach outlined above was widely criticised in the media for its lack of openness and transparency and continued concerns were expressed as to why the disciplinary hearings were not held in public (Murdoch, 1998a). The well established mystique (professional insulation) surrounding the ICAI disciplinary process was directly challenged as the ICAI's internal processes became subject to greater assessment from outside parties. Consequently, the strength of the foundation stone of Parker's model (professional insulation) came under threat. The power of professional insulation, interference minimisation and hence, professional authority came under further direct external threat when the Tanaiste[11], Mary Harney, publicly called for the ICAI to act in a more open and transparent manner. She met with the ICAI and insisted that an observer be allowed to sit in on their disciplinary hearings. The ICAI initially refused categorically (Creaton, 1998), once more apparently fearing that this potential erosion of professional insulation would lead to increased outside interference in their internal affairs (reduced interference minimisation) and a consequent threat to professional authority (in line with the indicated role relationships in Parker's model). However, Harney persisted and issued a thinly veiled threat indicating she would reconsider the delegated self-regulatory status of the ICAI if they did not accede to her request. In a speech to a rival accountancy body, Harney highlighted the huge privileges accountants enjoyed in society and warned that, as a result of these, they must be prepared to give something back to society and punish any wrongdoings among their members (Suiter, 1997). This pressure eventually prevailed and the ICAI relented and allowed a government observer to attend the ICAI hearings. The ICAI also appointed a former Supreme Court judge, Mr Justice Blayney, to chair the inquiry and made a commitment to making public the inquiry's final report (ICAI, 1997)[12]. This represented further evidence of a shift in the operation of the ICAI disciplinary procedures from a focus on mystique and insulation to a form of acceptance (in public at least) of the need for more openness and transparency, thereby eroding entrenched professional insulation. Reducing professional insulation in order to maintain interference minimisation In an apparent response to the concerns raised as a result of the above two tribunals, the Council of the ICAI approved proposals to make its disciplinary
    • AAAJ process more open and transparent in May 1998[13]. Under the new proposals, 16,2 certain inquiries would now be held in public, the procedures for dealing with complaints were to be speeded up, a greater representation of non-accountants (lay members) was allowed on the disciplinary committees and sanctions imposed by the process were to be publicised more extensively (ICAI, 1999a). Furthermore, the level of fines was to be increased (ICAI, 1999a). These 170 changes represented an about-turn from the body who greeted the Beef Tribunal findings with silence and a degree of annoyance that any external body or person should question, or indeed intervene in, the private operation of their disciplinary proceedings. Pierce Kent, the newly elected president encapsulated this volte-face when stating ``we now recognise that open justice is far more convincing than private discipline. The changes approved by the Council will help reassure the public'' (O' Sullivan, 1998). A former president hailed the new procedures as reflecting a new ``open institution'' challenging perceptions of the body as a ``self protective organisation (given) the private nature of current disciplinary hearings'' (The Irish Times, 1998). The proposed changes were overwhelmingly supported by ICAI members[14]. The ICAI's gradual acceptance of an erosion in professional insulation suggests a perception of reduced professional insulation facilitating the maintenance of interference minimisation. For example, many interviewees argued that by making their disciplinary procedures more transparent and open in order to show that they were regulating themselves adequately (in effect, reducing professional insulation) the ICAI minimised the possibility of outside interference (maintaining interference minimisation). They perceived the nature of the relationship between professional insulation and interference minimisation as hindering rather than facilitating in nature. This tends to indicate, as depicted in Figure 2, some form of perceived tension or negative relationship (represented by (±)) between professional insulation and interference minimisation, a tension Parker's model does not consider. Instead, Parker's model suggests the opposite, that decreased professional insulation contributes to decreased interference minimisation, i.e. an absence of tension or a positive relationship. Lee (1995, p. 64) has argued that one of the results of the accountancy profession's public response to criticism is the ``gradual exposure of the Figure 2. Tension between professional insulation and interference minimisation
    • accounting body of knowledge'' and the removal of ``some of the mystique of Professional accountancy'' which has ``made it easier for non-accountants to criticise accounting practice'' (through reduced professional insulation). Our analysis suggests that ethics some erosion of this mystique was embraced as it was ultimately perceived as ensuring that external criticism eventually abated and failed to evolve into interference in the ICAI's internal operation of its disciplinary process. It was perceived that the nature of the external pressures ensured that interference 171 minimisation was not served by attempting to enhance the mystique surrounding the ICAI (increased professional insulation). In essence, professional insulation was traded off against interference minimisation. In summary, our evidence suggests that at the commencement of its investigation into the McCracken Tribunal findings the ICAI had hoped to conduct its disciplinary procedures in a completely private manner, along similar lines to its actions around the time of the Beef Tribunal. However, severe external pressure for more open and transparent procedures was imposed on the ICAI and led to the setting up of the Blayney Inquiry. The ICAI response to these external pressures in conjunction with the interview evidence suggests a perception of reduced professional insulation facilitating the maintenance of interference minimisation. This tends to indicate some form of tension or negative relationship between professional insulation and interference minimisation in the Irish context, which Parker's model fails to identify. Instead, Parker's model suggests a positive relationship, i.e. that decreased (increased) professional insulation contributes to decreased (increased) interference minimisation. We therefore argue that this analysis challenges the descriptive power of elements of Parker's model in the Irish context at this time. We will now consider the third external threat to the ICAI professional accounting ethics machinery and its implications for the descriptive power of Parker's model. Event 3: The DIRT Inquiry. The Tanaiste initially stated that she would await the outcome of the Blayney Inquiry before making any decisions regarding the delegated self-regulatory status of the accounting profession (Keena, 1998). However, subsequent events overtook the Blayney Inquiry and led to an earlier appraisal of the appropriateness of delegated self-regulation. Revelations regarding the widespread non-payment of deposit interest retention tax (DIRT) on bank deposit accounts led to the setting up of a Parliamentary Inquiry into DIRT by the Dail (Irish Parliament) Public Accounts Committee (PAC) (hereafter the DIRT Inquiry) which was televised live. Auditors came in for severe criticism given their failure to uncover the wide-scale use of bogus non-resident bank accounts and their failure to signal potentially large DIRT liabilities which could have affected the solvency of some banks in the 1980s and 1990s[15]. Serious question marks over the delegated self-regulatory status of the accounting profession and, in particular, concerns as to the effectiveness of the disciplinary process of the ICAI, were raised and publicly debated. This represented yet another intrusion into a process that a mere six years earlier operated in a completely private manner (thereby threatening professional insulation and interference minimisation).
    • AAAJ Supporting the descriptive power of Parker's model 16,2 On foot of a recommendation by the PAC, a review group on auditing (RGA) was formed to investigate, inter alia, the operation of delegated self-regulation within the accounting profession. A key recommendation included therein was the setting up of an independent statutory oversight board (IAASA)[16] to supervise the regulation of accountants by the various accountancy bodies 172 (RGA, 2000). It was to be independent of both the profession and government with the power to impose sanctions where supervisory failures occurred, including a e127,000 fine. The most controversial element of the suggested amendments to the disciplinary process involved the right of the proposed oversight board to intervene in misconduct cases (thereby severely reducing interference minimisation). This potential role in ``operational'' issues was objected to by the ICAI as not being consistent with a supervisory function and they claimed that it would totally undermine the ability of the accountancy bodies to effectively regulate members (thereby threatening self-control). David Simpson, the then ICAI president, warned that the ICAI would not tolerate this board undermining its own disciplinary work and questioned whether ``this oversight board would have the expertise to effectively regulate the whole accountancy profession in Ireland?'' (Creaton, 2000). This initial ICAI response to the RGA report was surprisingly negative given the apparent weight of public opinion behind the report (Harding, 2000). The ICAI president spoke of the RGA proposals creating the ``toughest regulatory regime in the world'' and potentially increasing business costs (Canniffe, 2000; Smyth, 2000). The RGA chairman responded indignantly, claiming that this ``sort of ponderous reaction by accountancy bodies is exactly the kind of thing that has contributed to their problems. They should grab the opportunity to tidy up their public image'' (Creaton, 2000). One interviewee was adamant that this ``aggressive and defensive'' (M1) stance was indicative of a body still out of touch with public opinion. The ICAI's aggressive resistance to interference by the IAASA in their internal decision making processes is reflective of the perceived private interest nature of their procedures as reflected in Parker's model. For example, the formation of the IAASA indicates an imposed erosion of professional insulation. From the preceding analysis, the ICAI seemed well disposed to some erosion in professional insulation as it was perceived that this might lead to less direct interference in their affairs (maintaining interference minimisation). However, in this instance the reduction in professional insulation was accompanied by further interference (reduced interference minimisation) via the proposed interventionary role of the IAASA in overriding disciplinary decisions. Hence, the robust public displeasure expressed by the ICAI. As Parker's model indicates, in this instance a reduction in professional insulation contributes to a reduction in interference minimisation and a threat to the ICAI's self control over its members. The erosion of these three private interest roles was viewed as diminishing the professional authority of the ICAI given the IAASA's proposed powerful oversight role.
    • The static nature of the private interest roles Professional While the ICAI's initial negative reaction to the role of the IAASA in accounting disciplinary affairs tends to reflect the interrelationships between the different ethics private interest roles depicted in Parker's model, it also provides evidence questioning the apparent static nature of the roles depicted therein. Despite the ICAI's willingness to allow some erosion of professional insulation (by ostensibly making its disciplinary proceedings more open and transparent) 173 with the aim of maintaining interference minimisation, the RGA report indicated that interference minimisation would be threatened regardless, especially given the proposed intervention role of the oversight board. Consequently, despite the ICAI reducing professional insulation, this failed to maintain interference minimisation. While, as outlined above, this conforms to the relationship proposed in the Parker model (reduced professional insulation leading to reduced interference minimisation), it may be that the RGA perceived the level of the reduction in professional insulation as being too small, and therefore interference minimisation was further threatened. For instance, while many interviewees agreed that the ICAI attempted to make its disciplinary process more transparent and open (thereby reducing professional insulation), they maintained that the extent of this reduction needed to increase substantially. Otherwise, the ICAI would fail to achieve what they perceived as its ultimate goal: the maintenance of delegated self-regulation, in essence, the avoidance of outside interference (the maintenance or enhancement of interference minimisation): I actually think it [ICAI] needs to go further [reduce professional insulation further] because otherwise the internal review will be taken from the Institute [ICAI] and there will be another review system imposed by the state authorities [thereby reducing interference minimisation] (L1). It is this notion, as depicted in Figure 3, of differing levels/degrees of professional insulation, interference minimisation, self control, professional authority and socio-economic status preservation that Parker's model does not explicitly consider. In fact, the ICAI eventually calmed its resistance to the RGA's proposals, thereby accepting some erosion of interference minimisation. Their President ultimately indicated that the profession was fully aware of the need to restore public confidence (by accepting a lower level of interference minimisation) in order to reaffirm its professional authority. Figure 3. Varying levels[1] of individual roles
    • AAAJ To summarise, this section disputes the descriptive power of certain aspects of 16,2 the Parker model by examining three key events with public interest implications within an eight-year time period in the Irish context. The model adequately describes the operation of the ICAI disciplinary procedures in its own private interest in 1994 (around the time of the Beef Tribunal findings). Our analysis of the consequences of two further critical events impacting on these 174 procedures also indicates some support for the model. However, it also presents evidence indicating that there are occasions where the model is unable to encapsulate adequately the ICAI response to these events in its own private interest. First, the failure of the model to consider explicitly varying levels of professional insulation, interference minimisation etc. hinders its descriptive power. Second, aspects of the interrelationships between the various roles within the model (namely, professional insulation and interference minimisation) are queried. For example, the findings of the McCracken Tribunal and the DIRT Inquiry (DIRT, 2001) led to reduced professional insulation which was aimed at maintaining (or even increasing) interference minimisation. If we accept that interference minimisation contributes to professional authority, self-control and (indirectly) to socio-economic status preservation (as depicted in Parker's model), this reduction in professional insulation was also focused on maintaining or increasing these three other private interest roles. Our examination suggests, however, that there may on occasion be some tension between the foundation role of professional insulation and the various other roles in the model (in particular, interference minimisation). We explore this apparent tension further, as well as identifying an additional tension, in the forthcoming section which draws primarily on our analysis of the interview evidence. In doing so, we outline two more key threats to the descriptive power of Parker's model. Perceptions of the ICAI professional accounting ethics machinery Exploring further challenges to the descriptive power of Parker's model The previous section focused primarily on viewing the model's descriptive power given events occurring outside the disciplinary process but impacting directly on its operation. This section draws on perceptions from within the process to further inform the analysis. Here, we subject the descriptive power of the model to additional scrutiny by examining the interrelationships between the various roles in greater depth using the evidence gained from the in-depth interviews with participants involved in the disciplinary process. However, while this section draws primarily on our interview evidence, our analysis is also informed by the contextual issues examined above. In developing his model, Parker identifies the potential of the individual roles to facilitate or contribute to one another but ignores the possibility of roles hindering or threatening one another. We have already identified one instance in which a threatening relationship, and therefore a tension between roles, could arise: the relationship between professional insulation and interference minimisation. A second role relationship we consider is that between self- control and interference minimisation. Parker's model indicates these roles
    • facilitate or contribute to one another but our forthcoming evidence suggests a Professional potentially threatening (negative) relationship. Further, we also argue that the accounting relationship between professional insulation and professional authority may ethics sometimes be a reciprocal contributory relationship (i.e. both contribute to each other) whereas Parker's model indicates that it is professional insulation which contributes to professional authority and not vice versa. 175 The relationship between self-control and interference minimisation In Parker's model, the relationship between self-control and interference minimisation is one of interdependency in that increased interference minimisation facilitates increased self-control and vice versa. Our examination of the ICAI response to external events in conjunction with the interview evidence suggests that self-control, particularly of larger, more powerful members, has come under threat. Furthermore, the evidence also indicates that in order to improve self-control, the ICAI must allow a reduction in interference minimisation, something it would appear, from our analysis above, reluctant to do. Consequently, contrary to the proposed existence of a reciprocal contributory relationship between self-control and interference minimisation, our analysis suggests that a tension exists in that an increase in self-control may require a reduction in interference minimisation. This evidence, as illustrated below, would therefore suggest that the relationship between these two roles is more complex than depicted within Parker's model. A perceived absence of self-control A number of interviewees drew a distinction between the control the ICAI exerted over its smaller and its larger ``well financed members'' (M1). They believed that the ICAI was unable to control the latter as they possessed the power and resources to forestall disciplinary proceedings: . . . say we looked at the people who have had sanctions against them for a breach of the disciplinary process, it was often members in a smaller firm where maybe the bigger fish were able to forestall the action or arising out of their allegations against them there may have been some other legal processes going on (M1). What we are dealing with mainly is the small guys . . . I ask myself what's happening in the rest of the accountancy world . . . [and] . . . I want to get round to probing it to satisfy myself (L5). . . . there might be a motivation behind some [Big 5] practices to delay the outcome about a finding for as long as possible [against which the ICAI is helpless] so if a particular case against a person in a firm is found to be adverse and brought shame to the profession, they can say after 5 to 6 years, this was outrageous, this was terrible, the person has now left the firm and we have nothing to do with them (M2). Prior research has shown that such delaying tactics by the bigger firms are not unusual (Arnold and Sikka, 2001; Mitchell et al., 2000; Sikka, 2001a). Referring to the Blayney Inquiry one interviewee claimed it gave the ``appearance of having power rather than `real' power'' and referred to the whole process of delegated self-regulation as ``only a regulatory arrangement by consent'' (M1).
    • AAAJ He claimed that ``if you are a member of the Institute (ICAI) willing to submit 16,2 yourself to those powers that's fine, but if you're saying `look, to hell with you, your powers are limited and I'm not willing to do so' [then] it's very difficult for the Institute (ICAI) to withstand that'' (M1)[18]. Given that the larger firms were ``big contributors to the ICAI payroll'' (L5), another interviewee questioned whether ``the ICAI [was] the proper body to 176 investigate serious, almost criminal actions'' by these firms. He felt strongly that ``this is an area where the ICAI might be conflicted'' (L5). This concern was shared by other interviewees: . . . there is a perception among our members that the [small] guy would be beaten around a room and blindfolded, [and that] the big boys control the Institute [ICAI] and won't have their reputations damaged . . . [However], I think we are going to see some changes very soon (M2). We had the Beef Tribunal which produced serious questions about major accountancy firms . . . you know there was fear and horror at the extent of this and when you consider one or two of the firms that were involved, they were major accounting firms . . . then there was almost a balance of power in these type of things . . . with so few firms controlling so many chartered accountants the size of the firm might well exceed the resources of the ICAI and things like that . . . so I could see it as a problem and it was a problem for them (L3). This provides evidence of an apparent absence of self-control in that the ICAI is perceived as being unable to control some of its larger members because such members are perceived as having the power and resources to resort to legalistic measures to obstruct disciplinary proceedings. Previous studies have also raised considerable doubts as to the ability of accounting bodies to effectively regulate major firms (Cousins et al., 2000; Mitchell et al., 1994; Sikka and Willmott, 1995). Addressing the absence of self-control ± reducing interference minimisation The interview evidence and ICAI pronouncements (ICAI, 2000a; ICAI, 2000b) suggest that in order to address the absence of perceived self-control, the ICAI may require some form of statutory backing for its disciplinary process (thereby reducing interference minimisation): One of our biggest shortcomings was the inability or the lack of power to compel witnesses to attend and it was always easy for, say, one of the larger firms . . . to put up all kinds of legal objections and stalling tactics which could go on for years (M1). We didn't have the clout, or the authority, the powers of the Institute [ICAI] were much more limited (M2). In fact, despite evidence of its core focus on the maintenance of interference minimisation outlined earlier, one interviewee claimed that the ICAI was open to some reduction in interference minimisation in order to improve self-control. He bemoaned the ICAI's lack of ``appropriate'' powers and indicated that, as far as he was aware, ``these issues (surrounding the provision of appropriate powers) have been brought to Mary Harney (the Tanaiste) and she has said she is sympathetic to our cause . . . so there are means afoot to try and give us powers to compel witnesses and discover documents'' (M2). In other words, in
    • order to protect the operation of its disciplinary process in the private interest Professional of its members, it was contended that the ICAI had encouraged some state accounting interference (some reduction in interference minimisation). ethics The analysis above suggests that focusing on maintaining or enhancing interference minimisation may actually work against self-control. In essence, there is a perceived lack of control over larger members which the ICAI has attempted to address by, on occasion, seeking reduced interference 177 minimisation through increased state intervention in the form of statutory backing for its disciplinary process. Hence, it would seem that, on occasion, the ICAI is perceived as being open to its disciplinary process sustaining some loss in interference minimisation in order to improve self-control. This indicates, as shown in Figure 4, the existence of a tension or negative relationship between these two private interest roles (represented by (±)). The implications for Parker's model are that the relationship between self- control and interference minimisation may sometimes be competitive as opposed to contributory. This apparent willingness to allow some reduction in interference minimisation (in order to enhance self-control) contrasts with evidence presented earlier suggesting a core focus on maintaining interference minimisation by the ICAI. We cannot ascertain how committed the ICAI actually are to any reduction in interference minimisation necessary to improve self-control, but what we can conclude is that there is a clear perception that a reduction in interference minimisation is required to improve self-control. Whether the ICAI is totally committed to this reduction is debatable given our earlier evidence suggesting a core focus on maintaining or enhancing interference minimisation. Reciprocal contributory relationships (RCR) In his model Parker identifies two relationships where reciprocal facilitation occurs (interference minimisation and self-control; professional authority and socio-economic status preservation). While the previous discussion questions the operation of a reciprocal contributory relationship between self-control and interference minimisation in the Irish context, evidence presented here would suggest one further reciprocal contributory relationship, between professional authority and professional insulation. Figure 4. Tension between interference minimisation and self-control
    • AAAJ While we accept that professional insulation facilitates professional authority 16,2 given that professional authority may not exist without professional insulation, we contend that once some level of professional authority is established, this, in itself, can contribute to further or enhanced professional insulation. Hence, we suggest a reciprocal contributory relationship between professional authority and professional insulation. We illustrate this using 178 perceptions of the complainants' role in the disciplinary process. These perceptions suggest that once professional authority is established, this, in itself, can further enhance mystique (and therefore professional insulation) thereby discouraging outside (or lay person) scrutiny of the disciplinary process. Consequently, while professional insulation may facilitate professional authority, once established, professional authority also facilitates professional insulation. RCR: Professional authority and its facilitation of professional insulation The role that the complainant plays in the disciplinary process could be seen as the profession's strategy of creating a ``mystique'' and thereby insulating itself further from outside scrutiny (professional insulation). For instance, many interviewees contended that making it difficult for complainants to initiate a complaint, discouraging them from making oral representations and not promoting the fact that there is a process in existence in the first place all serve to encourage a sense of ``professional mystique'': You've got to write out a formal complaint . . . quoting all the Bylaws for a particular situation . . . so for the average person that is difficult (L2). It would not be a customer friendly room to bring someone into [disciplinary hearing room at ICAI headquarters]. A lot of people could become a bit over-awed by their presence there and I think they would tend to get a bit emotional and it would be difficult to extract fact from emotion (L1). However, it could be argued that the more authority the profession commands (greater professional authority) (be it from professional insulation, interference minimisation, self-control or socio-economic status preservation) the more likely it is that outside scrutiny will be minimised by, for example, deterring potential complainants, thereby enhancing professional insulation. One interviewee clearly saw the current promotion of the disciplinary system and how it operates from the potential complainant's perspective as enhancing the sense of mystique surrounding the process. For example, the professional authority afforded to the profession is used to facilitate the operation of a system which, instead of encouraging complainants and facilitating them, acts to shroud the process. This creates a sense of mystique around the process which could not have been established unless professional authority already existed: I think the Institute [ICAI] has had a culture of being seen not to be very proactive and being seen not to be particularly helpful to complainants [although] I think that might be more of a perception than a reality (M1).
    • The average person that deals with a firm of accountants would not know that there is a Professional process available through the Institute [ICAI] for them to remedy some mistake that may be made against them (L1). accounting ethics I think that the complainant should have somebody articulate the thing ... A lot of people would have complaints and they wouldn't be in a position to articulate them and they might get put off because they couldn't do that (L3). There is much evidence here of a perception of a system that, while existing, by 179 virtue of how it operates it tends to exclude potential complainants through a lack of information or an inability to deter perceptions of an austere self protective establishment body. You've still got this image of trying to take on the establishment . . . and that there [are] protection systems around them, that they control the systems and that trying to knock this down is like trying to shift the walls of Jericho, you're just not going to do this (L1). One interviewee also spoke of a sense of ``tired resignation among the public regarding how professions (not just the ICAI) were regulated'' (L5) which he felt further deterred complainants. In summary, while professional insulation is deemed to facilitate professional authority in Parker's model (but not vice versa), when considering the role of the complainant in the disciplinary process, many interviewees viewed established professional authority as actually contributing to professional insulation thereby suggesting a reciprocal facilitation between professional insulation and professional authority. Discussion and conclusions The primary aim of this study was to examine the descriptive power of the private interest model of professional accounting ethics developed by Parker (1994) over a certain time period in the Irish context. The paper draws on evidence regarding three critical events occurring outside the disciplinary process but impacting directly on its operation and on perceptions from within the process. This encompassed examining the discourse surrounding the disciplinary process from 1994 to 2001 using media coverage and ICAI pronouncements and augmenting this examination with in-depth interviews held with members of the ICAI disciplinary committees. This investigation therefore allowed us to scrutinise the model's descriptive power. The paper is responsive to Parker's call for research to attempt to modify and refine his model with respect to unique aspects of particular national environments. It also extends prior research which concluded that the operation of the professional ethics machinery of the ICAI facilitated private interest motives on the part of the ICAI (Canning and O'Dwyer, 2001). Furthermore, the paper represents a direct response to Sikka's (2001a, p. 759) call for the instigation of research which ``scrutinize[s] the rhetoric and public interest claims of accountancy bodies'' and comes at a time when the disciplinary arrangements of professional accounting bodies in Ireland and the UK have been the subject of governmental scrutiny and much adverse press comment due to research
    • AAAJ and publicity alleging audit failures (Canning and O'Dwyer, 2001; Sikka and 16,2 Willmott, 1995; Mitchell et al., 1994). Our analysis provides evidence of some support for the descriptive power of the Parker model in the Irish context. However, the investigation of subsequent changes in this context over the eight year period in conjunction with the interview evidence also serves to highlight a number of challenges to this 180 descriptive power. These revolve primarily around the absence of any depiction of differing levels/degrees of professional insulation, interference minimisation, etc. within the model and the proposed interrelationships between the individual roles within the model. Therefore, we propose, in Figure 5, a reconceptualisation of the model, to take into account this evidence. Around the time of the Beef Tribunal, the ICAI did not consider its internal procedures to be the domain of the wider public despite the public interest implications of the findings. The ICAI effectively depended on its established professional authority supported by professional insulation, interference minimisation and self-control in order to ensure the socio-economic status of its members thereby suggesting that Parker's model adequately reflected the operation of the ICAI professional ethics machinery at this point in time. In Figure 5 below, we illustrate the initial positive/contributory relationship between the separate private interest roles, as initially depicted by Parker, using (+) beside the relevant arrow linking roles to one another. However, two further critical events, which occurred in the ensuing years, challenged elements of the descriptive power of Parker's model. These events reflected the inability of his model to encapsulate changes in the Irish context over time which our model, as reflected in Figure 5, attempts to redress. Firstly, the evidence presented challenged the Parker model by illustrating the rigid and static nature of the separate roles depicted within the model. For instance, the discourse surrounding the McCracken Tribunal and DIRT Inquiry demonstrated that the Parker model appears to ignore the level/degree of interference (degrees of interference minimisation) that may need to be allowed in certain contexts as it fails to consider different levels of professional insulation and interference minimisation. Because all of the roles are considered in absolute terms, Parker's model appears overly static and therefore cannot encapsulate potential trade-offs between individual roles or any degree of latitude within each separate role. We have attempted to incorporate levels/ Figure 5. Private interest model of professional accounting ethics in Ireland
    • degrees of the various private interest roles in our model using multiple rather Professional than single depictions of these roles. accounting A further challenge to Parker's model relates to the interrelationships ethics between the various private interest roles depicted therein. Three such relationships (professional insulation and interference minimisation; interference minimisation and self-control; and professional insulation and professional authority) as depicted within Parker's model were challenged by 181 our evidence. Firstly, Parker identifies the relationship between professional insulation and interference minimisation as being one of facilitation, whereas our evidence suggests an apparent tension in this relationship. For example, the ICAI response to the McCracken Tribunal and DIRT Inquiry in conjunction with the interview evidence suggest that reduced professional insulation is perceived as facilitating the maintenance of interference minimisation. Consequently, this suggests that increased professional insulation may not, in this specific context at least, contribute to interference minimisation. This tends to indicate the need for the recognition, as in Figure 5, of some form of tension (denoted (±)) between professional insulation and interference minimisation in Parker's model. Secondly, while Parker considers the relationship between interference minimisation and self-control as contributory, our evidence suggests that interference minimisation may actually work against self-control. In essence, there is a perceived lack of control over larger ICAI members which, according to the interviewees, the ICAI needs to address by allowing a reduction in interference minimisation through increased state intervention in the form of statutory backing for its disciplinary process. By focusing primarily on maintaining interference minimisation in its disciplinary process, the ICAI appears to have traded-off self-control over its members. Hence, it would seem that the ICAI may recognise the need to sustain some loss in interference minimisation in order to improve self-control and reduce the possibility of greater interference (further reduced interference minimisation). This suggests the need for Parker's model to recognise a tension (denoted (-)) between these two private interest roles as illustrated in Figure 5. The third interrelationship challenged relates to professional insulation and professional authority. While we accept that professional insulation facilitates professional authority given that professional authority may not exist without professional insulation, our evidence suggests that once some level of professional authority is established, this in itself can contribute to further or enhanced professional insulation. Support for this emanates from an analysis of interviewee perspectives regarding the role of complainant's within the ICAI disciplinary process. Hence, using this evidence we suggest, as reflected by the additional arrow emanating from professional authority to professional insulation in Figure 5, a reciprocal contributory relationship between professional authority and professional insulation. We fully accept that expecting Parker's model to encapsulate all possible situations pertaining to the professional ethics machinery of different accountancy bodies in different contexts is both unrealistic and foolhardy.
    • AAAJ However, our examination has shown that in one context over a certain time 16,2 period, given prior evidence that the professional accounting ethics machinery studied works in the private interest (Canning and O' Dwyer, 2001), the model needs to evolve somewhat to encapsulate changing circumstances. Therefore, our suggested modifications to Parker's model may more accurately describe the operation of the ICAI's professional accounting ethics machinery in the 182 private interest. We suggest that future research should consider the model's descriptive power in other contexts over time in order to provide some comparison with the evidence presented here. Notes 1. As observed by one of the anonymous reviewers, we should point out that the analysis is only loosely over time: the 1994 to 2001 time period is, to quote the reviewer, merely ``a grain of sand in the continuum of time''. 2. This perspective views professions as ``integrated communities whose members undertake highly skilled tasks that are crucial for the integration and smooth operation of society'' (Willmott, 1986, p. 557). Within this perspective, distinguishing characteristics of a professional such as the custody of specific knowledge, independence, altruism and self discipline are highlighted but remain largely unquestioned (Willmott, 1986). 3. Parker (1994) notes that these third parties may encompass corporate shareholders (or intending shareholders), borrowers and lenders, regulators, government, social interest groups, or any other members of the public. 4. Interference primarily from the Government and its agencies. 5. As well as academic papers, the search covered newspapers and periodicals such as, The Irish Times, The Irish Independent, The Examiner, The Sunday Business Post, The Financial Times, Business and Finance, Accountancy Ireland and Accountancy Age. 6. The five broad areas that our questions spanned included perceptions as to: the transparency of the disciplinary process and reporting mechanisms; the difficulties/ pressures imposed on the disciplinary procedures; the fairness and equity of the punishments meted; the accountability to complainants in the public interest; and the impact of recent amendments to the procedures. 7. Lay members are invited on to these committees in order to provide some non-accountant (quasi-independent) influence to the disciplinary proceedings. 8. This was despite the letter having been vetted by senior legal counsel. 9. M1 to M3 refers to interviewees directly involved in the internal administration of the ICAI disciplinary procedures and who also sat on various disciplinary committees. L1 to L5 refers to the five lay members of the various committees interviewed. 10. The ICAI members mentioned in the report included former Taoiseach (Prime Minister) Charles Haughey; Dunnes Stores (a major privately held retail chain) trustee, Noel Fox, and Dublin accountancy firms, Oliver Freaney and Co. and Deloitte and Touche as joint auditors of Dunnes Stores. 11. Tanaiste is a Gaelic term meaning ``deputy Prime Minister'' in the English language. 12. While the inquiry was set up in September 1997, it is still ongoing due to a combination of further tribunals that may impact on its findings and delaying tactics adopted by some of the parties being investigated (Keena, 1999). It also faced difficulties gaining access to certain files because of concerns in various accountancy firms about client confidentiality. An interim report in April 1999 revealed that some parties had been informed that a prima facie case had been established by the committee. While the report was completed in June
    • 2000, it is currently (June 2002) being appealed and ICAI regulations as well as legal advice Professional received by the ICAI prohibit publication of the report until the appeals have been determined or abandoned. accounting 13. These changes were implemented in December 1999. ethics 14. A postal ballot of members resulted in 91.24 per cent supporting the changes (ICAI, 1999b). 15. As part of its response to the PAC findings the ICAI appointed a special investigator, Professor Ian Percy to conduct internal inquiries. Such an inquiry is in keeping with the new procedures introduced in December 1999. According to the ICAI, this new approach 183 allows complex complaints and cases involving the public interest to be investigated more efficiently and in a very focused manner. The ``Percy Report'' was issued in December 2001 and found no evidence of any wrongdoing on the part of the auditing firms involved (Percy, 2001). 16. In April 2001, the Tanaiste established the body, entitled The Irish Auditing and Accounting Supervisory Authority (IAASA), on an interim basis pending new legislation. 17. While only three levels are reflected in Figure 3, we are trying to illustrate the notion of levels here as opposed to being restricted to a particular number. 18. This is evidenced in the stalling process adopted by many of those members being investigated by the Blayney Inquiry, which, despite having commenced in September 1997, has still to issue its report publicly. References Arnold, P. and Sikka, P. (2001), ```Globalization' and the state-profession relationship: the case of the Bank of Credit and Commerce International'', Accounting, Organizations and Society, Vol. 26 No. 4, pp. 475-99. Baxter, J.A. and Chua, W.F. (1998), ``Doing field research: practice and meta-theory in counterpoint'', Journal of Management Accounting Research, Vol. 10, pp. 69-87. Beef Tribunal (1994), Report of the Tribunal of Inquiry into the Beef Processing Industry, The Stationery Office, Dublin. Bougen, P.D., Young, J.J. and Cahill, E. (1999), ``Accountants and the everyday: or what the papers said about the Irish accountant and tax evasion'', European Accounting Review, Vol. 8 No. 3, pp. 443-61. Burns, D.C. and Haga, W.J. (1977), ``Much ado about professionalism: a second look at accounting'', Accounting Review, pp. 705-15. Canniffe, M. (2000), ``Accountants still unhappy with review group's plans'', The Irish Times, 9 October. Canning, M. and O'Dwyer, B. (2001), ``Professional accounting bodies' disciplinary procedures: accountable, transparent and in the public interest?'', European Accounting Review, Vol. 10 No. 4, pp. 725-49. Coffey, A. and Atkinson, P. (1996), Making Sense of Qualitative Data: Complementary Research Strategies, Sage, Thousand Oaks, CA. Cohen, J.R. and Pant, L.W. (1991), ``Beyond bean counting: establishing high ethical standards in the public accounting profession'', Journal of Business Ethics, Vol. 10, pp. 45-6. Cousins, J., Mitchell, A., Sikka, P., Cooper, C. and Arnold, P. (2000), Insolvent Abuse: Regulating the Insolvency Industry, Association for Accounting and Business Affairs, Basildon. Creaton, S. (1998), ``Firm believer in true test of accountancy'', The Irish Times, 3 April. Creaton, S. (2000), ``Accountants put brave face on report'', The Irish Times, 14 July. Denzin, N.K. (1994), ``The art and politics of interpretation'', in Denzin, N.K. and Lincoln, Y.S. (Eds), Handbook of Qualitative Research, Sage, Thousand Oaks, CA.
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