Public company auditing around the securities exchange act: historical lessons for ESG assurance

Bourveau, Thomas, Breuer, Matthias, Koenraadt, Jeroen ORCID: 0000-0001-9908-2250 and Stoumbos, Robert (2025) Public company auditing around the securities exchange act: historical lessons for ESG assurance. Accounting Review. ISSN 0001-4826 (In Press)

Text (ssrn-3837593) - Accepted Version Pending embargo until 1 January 2100. Download (2MB)

Abstract

We describe the development of public company auditing in the U.S. in the early 20th century to gain perspective on current developments in ESG assurance. Using a broad sample of historical annual reports spanning four decades, we document three facts: First, the spread of public company auditing occurred steadily over the span of several decades. Second, audit services were initially heterogeneous but became standardized through the audit profession’s efforts and interactions with other private and public sector actors. Third, the role of regulation in those early developments was seemingly limited to codifying existing practices, as the first federal audit regulation was introduced only late in the development of the profession and did not significantly impact capital markets. Our historical evidence on the early development of public company auditing helps us understand how we arrived at today’s widely accepted and highly regulated financial audits. It uncovers parallels to and offers lessons for current developments in ESG assurance.

Item Type:	Article
Additional Information:	© 2025
Divisions:	Accounting
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance M - Business Administration and Business Economics; Marketing; Accounting > M4 - Accounting and Auditing > M42 - Auditing
Date Deposited:	17 Jan 2025 12:54
Last Modified:	17 Jan 2025 12:54
URI:	http://eprints.lse.ac.uk/id/eprint/126913

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