Audit and the Pursuit of Dynamic Repair

Abstract

Is audit capable of evolving into something that is more consistently valued and socially purposeful? We address this fundamental question, utilizing Sennett's (2008). The Craftsman. New Haven: Yale University Press) notion of 'dynamic repair' to present four key ways of thinking differently about the statutory financial audit and its core conceptual foundations. First, we highlight the capacity for audit to be regarded as a first-order function of value in its own right rather than a second-order function inherently dependent on corporate financial statements. Second, we call for a change in the assumed relationship between audit and assurance, arguing that assurance should be treated as a sub-set of audit rather than the other way round. Third, we consider the scope for audit standard setting to provide a space for 'product' innovation. Finally, we advocate moving beyond presumptions that the current statutory financial audit serves 'the public interest' to asking deeper questions about the type of society we want to inhabit and whether audit has a more direct and valued contribution to make. Collectively, such re-conceptualizations offer a broader canvas for audit innovation and can help to sustain the promise of current audit reform initiatives proposed by the Brydon Report and others.

The Big 4 Audit Firms and the Public Interest: Public Oversight & Audit Firm Governance

“…It has been discerned that the repetitive cycles never really question the concept of audit itself (Humphrey et al 2021). Findings from this study provide further support for and nuances to the argument that continuous cycles of audit failures and more of the same systemic power ensure that the 'same old audit' (Humphrey et al 2021) is conducted in accordance with regulation.…”

“…It has been discerned that the repetitive cycles never really question the concept of audit itself (Humphrey et al 2021). Findings from this study provide further support for and nuances to the argument that continuous cycles of audit failures and more of the same systemic power ensure that the 'same old audit' (Humphrey et al 2021) is conducted in accordance with regulation. One root cause of this appears to be that we do not measure, and we do not know, when an audit is good regardless of whether this means effective in terms of identifying and reporting misstatements or whether it in other ways satisfies the public interest.…”

“…Hence, the construction of a calculable space in auditing, and in public oversight of auditing, has been focused on proxies for the ambiguous term "audit quality". Audits are linked to financial statements (Humphrey et al 2021) and is limited in its ability to communicate the direct societal contribution of auditing, leaving it vulnerable to counter criticism and convincingly proportionate the significance of audit failures in the context of the societal contribution of auditors. This recognition is fundamental to the understanding and interpretation of how actors should respond to audit failures.…”

Technological innovation and the co-production of accounting services in small accounting firms

“…, 2010). At the same time, technology may also result in overly standardized professional services that can end up poorly aligned with clients' contextual specificities and hinder adjustment to political and business contexts (Humphrey et al. , 2021).…”

Are the Government’s Internal Auditors Ready to Face the Challenges of Changes After the Covid-19 Pandemic?

“…Innovation audits need to be considered. To be able to carry out accounting and accountability technology reforms, the audit profession must also follow these developments in order to provide added value and social value, not only for organizations but most importantly for society [40]. [41] Internal auditors ,just like external auditors, need to apply self-assessment to assess the quality of the audit-seeking process to prioritize stakeholders.…”