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Abstract

The system by which auditing standards are promulgated has resided in the private sector since 1939. The members of the Auditing Standards Boards (ASB), unlike the Financial Accounting Standards Board (FASB), retain formal affiliations with their parent organizations during their tenure on the ASB. As a result, this process has been criticized by the late Senator Metcalf and others. One of Metcalf s allegations was that large accounting firms dominate the audit standard-setting process through their employees that serve on the ASB. Accordingly, this study examines certain voting behavior of the ASB in an effort to determine if the board members are acting as agents of their parent organizations or, rather, as independent rule makers. The results do support the proposition that in casting certain votes, the board members are acting in an agency capacity.

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An Examination of Voting Behavior of the ASB

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