Theory of Regulation. On November 21, 1986, The Wall Street Journal carried a short article titled "It'll Mean Another Two Semesters in the Red, But Who's Counting?" This article described efforts by the American Institute of Certified Public Accountants (AICPA) to require a fifth (graduate) year of study in accounting for joining the institute. The following is an excerpt from that article:
"Technical demands have become so great on accountants that they can't get five pounds of education in a four-pound bag." explains James MacNeil, director of the AICPA's education division. He says the extra year "would help graduates understand such new complexities as leveraged leases and buyouts and new types of securities being devised by Wall Street." (Hawaii, Utah and Florida already require five years of study before taking the CPA exam, and several other states are giving the matter independent consideration.)

Such arguments, however, have failed to sway many educators. "Most of the deans of the nation's 650 business schools oppose going to five years from four," says Charles Hickman, projects director for the American Assembly of Collegiate Schools of Business, based in St. Louis. "The big question raised by most deans is whether another roadblock should be raised to becoming a working accountant."

Some opponents point out that because Florida imposed its five-year rule in 1983, the number of applicants for the CPA exam there has declined sharply each year. The argue that the new education requirements reflect the regulators being "captured" by the CPA lobby.
Briefly explain:
A. The causes and consequences of regulation according to the "capture" theory of regulation.
B. How the preceding article supports this theory.

Question

Theory of Regulation. On November 21, 1986, The Wall Street Journal carried a short article titled "It'll Mean Another Two Semesters in the Red, But Who's Counting?" This article described efforts by the American Institute of Certified Public Accountants (AICPA) to require a fifth (graduate) year of study in accounting for joining the institute. The following is an excerpt from that article:
 "Technical demands have become so great on accountants that they can't get five pounds of education in a four-pound bag." explains James MacNeil, director of the AICPA's education division. He says the extra year "would help graduates understand such new complexities as leveraged leases and buyouts and new types of securities being devised by Wall Street." (Hawaii, Utah and Florida already require five years of study before taking the CPA exam, and several other states are giving the matter independent consideration.)
 
 Such arguments, however, have failed to sway many educators. "Most of the deans of the nation's 650 business schools oppose going to five years from four," says Charles Hickman, projects director for the American Assembly of Collegiate Schools of Business, based in St. Louis. "The big question raised by most deans is whether another roadblock should be raised to becoming a working accountant."
 
Some opponents point out that because Florida imposed its five-year rule in 1983, the number of applicants for the CPA exam there has declined sharply each year. The argue that the new education requirements reflect the regulators being "captured" by the CPA lobby.
Briefly explain:
A. The causes and consequences of regulation according to the "capture" theory of regulation.
B. How the preceding article supports this theory.

Quizplus · Accepted Answer

The Answer of Theory of Regulation. On November 21, 1986, The Wall Street Journal carried a short article titled "It'll Mean Another Two Semesters in the Red, But Who's Counting?" This article described efforts by the American Institute of Certified Public Accountants (AICPA) to require a fifth (graduate) year of study in accounting for joining the institute. The following is an excerpt from that article:
 "Technical demands have become so great on accountants that they can't get five pounds of education in a four-pound bag." explains James MacNeil, director of the AICPA's education division. He says the extra year "would help graduates understand such new complexities as leveraged leases and buyouts and new types of securities being devised by Wall Street." (Hawaii, Utah and Florida already require five years of study before taking the CPA exam, and several other states are giving the matter independent consideration.)
 
 Such arguments, however, have failed to sway many educators. "Most of the deans of the nation's 650 business schools oppose going to five years from four," says Charles Hickman, projects director for the American Assembly of Collegiate Schools of Business, based in St. Louis. "The big question raised by most deans is whether another roadblock should be raised to becoming a working accountant."
 
Some opponents point out that because Florida imposed its five-year rule in 1983, the number of applicants for the CPA exam there has declined sharply each year. The argue that the new education requirements reflect the regulators being "captured" by the CPA lobby.
Briefly explain:
A. The causes and consequences of regulation according to the "capture" theory of regulation.
B. How the preceding article supports this theory.