ABSTRACT
This study tests the hypothesis that political action committee (PAC) contributions paid by the accounting profession are indirectly associated with the speech performance of congressional committee members debating issues related to auditor independence during the 107th Congress (2001–2002). The hypothesis is based on the assumption that PAC contributions represent payments for access to lobby legislators and a theory of lobbying as legislative subsidy that predicts legislators who are granted legislative subsidies will increase their participation and effort. Legislative effort is measured as the qualitatively coded speech counts of 126 individual committee members during 17 hearings related to financial auditing held over 21 days by 6 committees of the U.S. House of Representatives. The results indicate a positive association between aggregate PAC contributions paid by the Big 5 and the American Institute of Certified Public Accountants (AICPA) and anti-regulatory speech counts of House committee members. No association was found for aggregate contributions and pro-regulatory speech counts. Results are mixed when PAC contributions are disaggregated by funding source indicating heterogeneity among firms in their contribution patterns.
