Insights into current practices in auditing environmental matters

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to investigate insights into current practices in auditing "environmental matters" in accordance with Audit Guidance Statement 1010: The Consideration of Environmental Matters in the Audit of Financial Reports, which was introduced by the New Zealand Institute of Chartered Accountants in 2001. Design/methodology/approach -The approach to gathering evidence for this study is qualitative semi-structured in-depth personal interviews with 27 auditors: 18 financial auditors (FAs) in chartered accounting practice and nine public sector auditors (PSAs) from the office of the Auditor-General. Findings -The interview findings confirmed that the auditors respond to isomorphic pressures that affect them, either by employing acquiesce or compromise strategies and that institutional theory fits best as an appropriate theory to frame the research. Environmental matters are only considered in the planning of a company audit when it is significant and relevant to financial reporting. However, evidence showed that FAs are influenced by mimetic isomorphism by adopting the perspective of company management. On the other hand, PSAs are driven by the legislative mandate imposed by the Local Government Act 2002 to search out and verify the validity, accuracy and completeness of information on environmental matters. FAs auditing both companies in the private sector and public sector organisations are able to maintain two dissimilar approaches and attitudes, depending on the type of entities they are auditing. Research limitations/implications -As with all qualitative interviews, there are some limitations associated with individuals' responses to the semi-structured open-ended interview questions. Practical implications -To prioritise the consideration of environmental matters in the audit practices of FAs for company audits will require both coercive and normative pressures in their organizational sphere. Originality/value -This study assists in understanding an audit phenomenon not widely known. It would also add a geographical variation to existing literature.

The Impact of Coercive Pressures on Sustainability Practices of Small Businesses in South Africa

“…The institutional theory espouses that organisations of all classes modify configurations consistent with the presence and setup of organisations in their proximity and location [28]. Under institutional isomorphism [29], a firm primarily experiences coercive pressures wielded by other firms which it is subjective to for its continual existence [30,31]. Coercive isomorphism emanates from compelling pressures that are either formal or informal [28].…”

Normative Environmental Configuration of SMEs within the Sustainable Development Discourse in South Africa: An Empirical Study

“…Consequently, this influences the behaviour of firms belonging to a particular industry or society. Under normative isomorphism, moral values determine legitimacy, and these should be found in the codes of conduct, licensing and certification requirements [27].…”

Bridging the gap between academia and standard setters

“…Chiang (2010) found auditors were reluctant to consider non-financial impacts in a financial statement audit.…”

“…Further awareness-raising examples are Chiang (2010) and Chiang & Northcott (2010) (IAASB, 1998). Chiang (2010) found auditors were reluctant to consider non-financial impacts in a financial statement audit.…”

“…Secondly, academic research assesses the impact of standards on accounting and auditing practice (e.g. Gold, Gronewold & Pott, 2012;Chiang, 2010;Chiang & Northcott, 2010;Asare & Wright, 2012;Aversano & Christiaens, 2014) and teaching (e.g. Cordery, 2013).…”