Abstract. Regulators have recently cited concerns about the extent and quality of
accounting consultation within accounting firms on difficult client accounting policy
issues. In this paper we report the results of research that examines the role of accounting
consultation units in public accounting firms. We describe the five largest accounting
consultation units in Canada. The accounting consultation units are then examined
through the lens of organizational memory theory. We find differences among the
accounting consultation units in their ability to act as a source of organizational memory
for their firms. These differences include the following: the amount of resources
devoted to the consultation function, the structure of the units, the mandate received by
the unit from the firm, and the availability and amount of documentation about previous
consultations. These differences suggest that firms' accounting consultation units differ
in their ability to provide technical accounting advice. This variability may affect the
actual or perceived quality of such advice to both clients and extemal regulators. In
addition, this paper introduces organizational memory theory to the accounting literature.
This theoretical approach may be useful in expanding the bounds of behavioral
auditing research beyond the current emphasis on the individual auditor.