Legislative, regulatory and juridical dilemmas in environmental auditing

Lang, Josephine Chinying

doi:10.1002/(sici)1099-0925(199909)6:3<101::aid-ema105>3.0.co;2-u

Cited by 6 publications

(5 citation statements)

References 2 publications

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“…Firms' external stakeholders intervene in internal operational processes to maintain the consistency between internal operations and external expectations, for example, through regulatory inspection and by auditing suppliers and customers (Lang, ; Shimshack, ). Regulatory inspection is taken as a prevalent tactic in both transitional and developed countries (Dhanorkar, Siemsen, & Linderman, ; He, Yang, & Choi, S.‐j., ; Mani & Muthulingam ).…”

Section: Introductionmentioning

confidence: 99%

Governmental inspection and green innovation: Examining the role of environmental capability and institutional development

Zou

Xie

2020

Corp Soc Responsibility Env

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As an important method for normalizing firms' environmental behaviors, regulatory inspection has received much attention in both practice and research. However, a consistent conclusion regarding whether and under what conditions regulatory inspection leads to green innovation is lacking. Drawing on the attention‐based view, we argue that the threats or opportunities that top managers perceive from environmental inspection affect the attention they pay to the strategy of green innovation as a response. We hypothesize that firms lacking the capability of regulatory compliance are less likely to invest in green innovation and that the development of promarket institutions diverts managers' attention from reacting to governmental inspection. Using survey data on Chinese industrial firms, we confirm these hypotheses, the theoretical and practical implications of which are discussed.

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Section: Introductionmentioning

confidence: 99%

Governmental inspection and green innovation: Examining the role of environmental capability and institutional development

Zou

Xie

2020

Corp Soc Responsibility Env

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“…However, these alleged benefits are based on the assumption that the process of certification represents a credible and reliable indicator of the implementation of the ISO 14001 standard and, therefore, of the organization's commitment to environmental responsibility and sustainability. In particular, the credibility of the certification is founded largely on the claim of auditor independence, based on the presumption that auditors conduct impartial audits of the practices of organizations seeking certification (Lang, 1999).…”

Section: Introductionmentioning

confidence: 99%

ISO auditing and the construction of trust in auditor independence

Dogui

Boiral

Gendron

2013

Accounting, Auditing &Amp; Accountability Journal

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Purpose -This paper aims to examine, through a qualitative study, how auditor independence is socially constructed within the network of individuals involved in the realization of ISO 14001 audit engagements -ISO auditors, consultants, and managers of certified companies. The paper analysis focuses on the sense-making strategies used by actors within the network to develop and sustain trust (or doubt) in professional independence.Design/methodology/approach -This study is predicated on a theoretical perspective centered on sense-making processes and the construction of inter-subjective meanings around claims to expertise. Interviews were conducted with 36 Canadian practitioners -including ISO auditors, managers of certification bodies, accreditation inspectors, consultants, and corporate environmental managers -to better understand how confidence into auditor independence is constituted in the flow of daily life within the small group of people involved in the surroundings of ISO 14001 audit engagements.Findings -Practitioners use a range of sense-making strategies to construct and maintain the belief that IS0 14001 audits meet the professional requirements of auditor independence. As such, the constitution of confidence involves stereotyping, distancing, storytelling and procedural mechanisms that are collectively mobilized in the production of a culture of comfort surrounding the concept of auditor independence.Originality/value -Through interviews with a range of actors involved in the achievement of ISO 14001 audits, the study provides insight into the production of meaning related to one of the chief claims surrounding auditing expertise, that of professional independence. This paper also points to a lack of self-criticism in the ISO auditing community since practitioners seem disinclined to adopt a reflective attitude of professional skepticism towards the claim of auditor independence.

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“…This remuneration mode can undermine the independence of the audit, as ‘auditors and assessors, certification bodies and accreditation bodies, all depend economically on the entities that they supervise’ (Mil‐Homens, , p. 152). Although the principle of auditor independence is of paramount importance for the credibility and legitimacy of the certification audit (Flint, ; Power, 1997b; Lang, ; ISO, ), very few studies have been conducted on this issue in the context of ISO 14001 certification.…”

Section: Iso 14001 Certification and Auditor Independencementioning

confidence: 99%

“…In general terms, independence implies the absence of external pressures or personal relationships that may compromise the objectivity and integrity of auditors exercising their responsibilities (Flint, ; Mahony, ; Lang, ; Independence Standards Board, ). In the context of ISO 14001 audits, Lang (, p. 112) defines independence as ‘the objective and unobstructed inquiry by an independent environmental auditing function to avoid potential conflicts of interest and the marring of objectivity by personal relationships’. Therefore, auditor independence presupposes the existence of a personal and professional distance between the auditor and the audited client as well as an impartiality of judgement, that is to say the lack of any bias or a conflict of interest.…”

Section: Iso 14001 Certification and Auditor Independencementioning

confidence: 99%

“…However, in practice, the financial and business aspects of the ISO 14001 certification process seem to somewhat disrupt the ideal of auditor independence. Indeed, by establishing a contractual relationship between clients and auditors, the organizational framework of the ISO seems to undermine the logic of dissociation, which is necessary to prevent conflicts of interest (Lang, ). As emphasized in the ISO 17021 standard on the requirements for bodies providing audit and certification of management systems:

Being impartial, and being perceived to be impartial, is necessary for a certification body to deliver certification that provides confidence.…”

Section: Iso 14001 Certification and Auditor Independencementioning

confidence: 99%

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Audit Fees and Auditor Independence: The Case of ISO 14001 Certification

2013

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This study analyses the effects of audit fees and the clients' financial power on the independence of ISO 14001 auditors on the basis of a qualitative analysis of interviews with 36 professionals involved in the certification process. The results of the study demonstrate that most respondents support the legitimacy of the current remuneration system based on the user-pays principle, despite its business and financial ramifications, claiming that the independence of auditors is in fact ensured by the imposition of contractual duty, the observance of ethical codes, distancing the auditor from negotiations with the client, and dissociating the fee charged for the audit from the granting of the ISO 14001 certificate. However, the study demonstrates that auditors often adapt their behaviour to the client's economic context and the company size, which may call into question the prevailing opinion on the independence and impartiality of the certification process. This paper, on the one hand, discusses the manner in which auditors legitimize the current remuneration system and, on the other, describes the potential threat that it represents for their independence. The paper also highlights the similarities in this regard between the conflicts of interest in the field of environmental audits and in that of financial audits. Finally, the paper analyses a number of possible solutions to reduce the financial dependence of auditors on the audited companies.

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Legislative, regulatory and juridical dilemmas in environmental auditing

Cited by 6 publications

References 2 publications

Governmental inspection and green innovation: Examining the role of environmental capability and institutional development

Governmental inspection and green innovation: Examining the role of environmental capability and institutional development

ISO auditing and the construction of trust in auditor independence

Audit Fees and Auditor Independence: The Case of ISO 14001 Certification

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