Publication Details

Cooper, K. & Fargher, I. (2011). Accounting for corruption: Abuse of rank and privilege. Critical Perspectives on Accounting Conference (pp. 1-34). Flordia, USA: Elsevier.


Rank, privilege and responsibility should be inseparable. However, investigations ofcorporate scandals typically reveal rank, privilege and irresponsible behaviour gohand in hand. The publicity and recriminations surrounding corporate scandals tendto focus first on corporate executives implicated in poor management or otherinappropriate behaviour and then on the relevant regulators. Where financialmanipulation is revealed, the external auditor also comes under scrutiny. Thedeficiencies in corporate regulation including accounting and audit standards aresubject to less public inspection but are often the subject of enquiry by governmentappointedbodies. Recommendations for regulatory reform follow and the public isassured the risk of similar scandals is minimised or at least reduced. What receivesless scrutiny is the political manoeuvring resulting in loop holes and weaknesses inthe resulting legislative and regulatory initiatives leaving the door open for the nextscandal. Reforms following the Watergate scandal in the 1970s are typical of thistrend and demonstrate that rank, privilege and irresponsibility characterise the actionsof not only regulators and auditors but also the politicians and business interests thatshape regulatory measures.