Intended for healthcare professionals

Rapid response to:

Editor's Choice

Turning the tide on conflicts of interest

BMJ 2011; 343 doi: https://doi.org/10.1136/bmj.d5147 (Published 10 August 2011) Cite this as: BMJ 2011;343:d5147

Rapid Response:

Lessons from Wall Street

Should physicians with financial conflicts of interest be prevented
from writing editorials? How best to manage commercial COI ? Public
disclosure of a commercial COI is the current governance order. Is it
effective? Here insights from other sectors of the market place might be
useful.

The issue about how to effectively combat commercial COI has been
addressed in other governance circles. This is especially the case in the
accounting profession. The issue debated is whether accounting firms'
consulting contracts with corporate clients could bias audits of their
financial statements. The issue was heightened by tainted auditors
judgments during Eron era scandals that favored corporate consulting
clients. Transparency of auditors conflicted commercial relations was
the governance tool of choice on Wall Street in response to scandals.

Using transparency as a governance tool to manage bias prevented
disrupting close working relations between auditors and corporate clients
who continue to have the power to hire or fire the former. Analysts note
that this preserved the status quo. (1)There was a call for leadership
to end commercial COI to ensure auditor independence in light of wall
street scandals. And it was reinforced by psychological, institutional
and behavioural research and case studies that highlight the unconscious
character of bias and the failure of disclosure to effectively combat
commercial COI. (2) But the call to eliminate commercial COI fell on
deaf political ears. And this was due in part by effective lobbying from
powerful economic interests on wall street that included the accounting
profession. (3) The call continues to resonate in light of the 2008
global financial crisis where commercial COI has again played a
contributing role and the issue of auditor independence is back in the
spotlight. Auditors with consulting contracts with the banks signed off
clean opinions on overstated bank balance sheets and fictitious earnings
statements. (4) The evidence based lesson furnished from market scandals
is that transparency alone is not only ineffective in combatting bias
but that the case to eliminate commercial COI can not be made stronger.
Leadership on turning the tide on the issue is indeed much needed

(1) Bazerman D, Watkins M. Predictable Surprises, Boston: Harvard
Business School Press; 2004

(2) Moore, D.A., Tetlock, P.E., & Tanlu, L.? Re Bazerman, M.
Reports of solving the conflicts of interest in auditing are highly
exaggerated. Academy of Management Review 2006; 31(1): 43-9

(3)Dwyer P, Roberts R. Known by the company they keep: a study of
political campaign contributions made by the United States public
accounting profession. Critical Perspectives on Accounting, 2004;15(6-7):
865-883

(4). Sikka, P. Financial crisis and the silence of the auditors.
Accounting, Organizations and Society 2009; 344,(6-7): 868-873

Competing interests: No competing interests

23 August 2011
Wilson
Director of Medical Ethics
Health Research Associates, Ottawa, ON, k2b 6j4