Between a Rock and a Hard Place: Conflict Minerals and Professional Integrity
Publisher: Business Horizons
Author(s): Kate Jelinek
Date: 2015
Topics: Extractive Resources, Governance
Countries: Congo (DRC)
Against the backdrop of integrity as put forth in the American Institute of CPAs’ (AICPA) Code of Conduct, this article takes a close look at a section of the 2010 Wall Street Consumer Protection Act, commonly known as Dodd-Frank. Interestingly, Section 1502 of the Act contains a provision that puts forth new reporting and disclosure requirements for publicly traded companies that manufacture products consisting of ‘conflict minerals’ derived from the violence-ridden Congo region. Though the provision is unlikely to stop the violence, the cost of disclosure for publicly traded companies is frighteningly high. This article examines the Big 4 accounting firms’ lobbying efforts that preceded passage of the Act and asks whether it is coincidental that Big 4 firms stand to gain from the Act's passage, as Section 1502 provides a new revenue stream that could potentially reach into the billions. This article also includes an examination of the origins of auditing, a very brief history of auditing in the U.S., and a look at the accounting industry's lobbying efforts in recent years. The article concludes with suggestions for the profession, firms, and individual auditors.