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The Rise Of Regulatory Capitalism And The Decline Of Auditor Independence: A Critical And Experimental Examination Of Auditors’ Conflicts Of Interest, Carolyn A. Windsor, Bent Warming-Rasmussen

Carolyn Windsor

This study investigates the decline of auditor independence coinciding with the rise of regulatory capitalism. A critical analysis supported by experimental evidence reveals regulatory capitalism's influence on auditor independence. Regulatory capitalism began in the United States during the 1970s when state enforced neo-liberal free-market doctrines of competition and deregulation commercialized the profession. Since then, regulatory capitalism's economic neo-liberal agenda has transformed the auditing profession and the employer firms into a transnational network of professional services firms that now promote and diffuse regulatory capitalism worldwide. Regulatory capitalism is further facilitated by the Sarbanes-Oxley Act and the PCAOB that provide interconnections of …