“…Failed face‐work is not primarily a functional failure, although this is not outside of the realm of possibility, but rather a failure to reassure participants of the ritual (Collins ) and as such potentially a collective failure. Doubts among shareholders about the auditor's independence may spill over onto management and cause suspicion among shareholders about a backstage collusion, and in this way call the independence myth into question (Gendron and Spira ). From this perspective, an incident is a disruption to the ritual “whose effective symbolic implication disrupt[s] the interaction and threaten[s] face” (Goffman , 48); such failure is therefore related to not meeting the expectations that others have about the special self and is a collective concern:A person will also have feelings about the face sustained for the other participants, and while these feelings may differ in quantity and direction from those he has for his own, they constitute an involvement in the face of the others that is as immediate and spontaneous as the involvement he has in his own face.…”
Section: Theoretical Framing Of Auditors' Actions At the Agmmentioning
confidence: 99%
“…We foresee two contributions of general interest to field studies of audit. First, we meet calls for rich empirical studies of audit in action (Power ; Cooper and Robson ; Gendron and Spira ) as we document both the backstage nature of audit (Power ; Christensen and Skærbæk ) and the front stage when the audited report translates into the investor community (Pentland ; Barrett and Gendron ; Smith‐Lacroix et al. ).…”
This paper examines how auditors prepare for the annual general meeting (AGM) and how they report their work to the shareholders there. Prior literature has suggested—but not explicitly studied—that the endpoint of an audit is a state of comfort between the auditor and the management and audit committee members, but also is potentially fragile. The fragility can arise from a failure to relay trust to the investor community, which may initiate or increase doubts about the financial report and/or the auditor's independence. We build the case that an AGM is an event to study how the endpoint of an audit engagement is both a state of collective comfort and a fragile state. The analysis is based on ten interviews and three workshops with auditors as well as observations at 67 AGMs. To analyze the field material, the paper draws on Goffman's idea of face‐work, which requires backstage preparations, notably with management, and a front stage performance as an independent auditor to relay trust to the shareholders. The paper details how auditors at the AGM perform as independent verifiers of the management's financial report. Although we recorded that auditors were typically successful in preventing the backstage activities from becoming visible to the shareholders, we found incidents that challenged both the auditors' and the managements' face. In analyzing these incidents, we found that auditors reinforced their image as independent to regain both their own face and the management's face. The management did not take a similar collective responsibility for the auditor's face, which implies that auditors were asymmetrically committed to the management. As a take‐away, the paper discusses how governance mechanisms backstage are linked and can surface front stage at the AGM.
“…Failed face‐work is not primarily a functional failure, although this is not outside of the realm of possibility, but rather a failure to reassure participants of the ritual (Collins ) and as such potentially a collective failure. Doubts among shareholders about the auditor's independence may spill over onto management and cause suspicion among shareholders about a backstage collusion, and in this way call the independence myth into question (Gendron and Spira ). From this perspective, an incident is a disruption to the ritual “whose effective symbolic implication disrupt[s] the interaction and threaten[s] face” (Goffman , 48); such failure is therefore related to not meeting the expectations that others have about the special self and is a collective concern:A person will also have feelings about the face sustained for the other participants, and while these feelings may differ in quantity and direction from those he has for his own, they constitute an involvement in the face of the others that is as immediate and spontaneous as the involvement he has in his own face.…”
Section: Theoretical Framing Of Auditors' Actions At the Agmmentioning
confidence: 99%
“…We foresee two contributions of general interest to field studies of audit. First, we meet calls for rich empirical studies of audit in action (Power ; Cooper and Robson ; Gendron and Spira ) as we document both the backstage nature of audit (Power ; Christensen and Skærbæk ) and the front stage when the audited report translates into the investor community (Pentland ; Barrett and Gendron ; Smith‐Lacroix et al. ).…”
This paper examines how auditors prepare for the annual general meeting (AGM) and how they report their work to the shareholders there. Prior literature has suggested—but not explicitly studied—that the endpoint of an audit is a state of comfort between the auditor and the management and audit committee members, but also is potentially fragile. The fragility can arise from a failure to relay trust to the investor community, which may initiate or increase doubts about the financial report and/or the auditor's independence. We build the case that an AGM is an event to study how the endpoint of an audit engagement is both a state of collective comfort and a fragile state. The analysis is based on ten interviews and three workshops with auditors as well as observations at 67 AGMs. To analyze the field material, the paper draws on Goffman's idea of face‐work, which requires backstage preparations, notably with management, and a front stage performance as an independent auditor to relay trust to the shareholders. The paper details how auditors at the AGM perform as independent verifiers of the management's financial report. Although we recorded that auditors were typically successful in preventing the backstage activities from becoming visible to the shareholders, we found incidents that challenged both the auditors' and the managements' face. In analyzing these incidents, we found that auditors reinforced their image as independent to regain both their own face and the management's face. The management did not take a similar collective responsibility for the auditor's face, which implies that auditors were asymmetrically committed to the management. As a take‐away, the paper discusses how governance mechanisms backstage are linked and can surface front stage at the AGM.
“…The message communicated to audit seniors by audit partners (tone at the top) on the importance of cost and quality has been found to impact on ethical decision making (Sweeney et al ., 2010). Auditors may recognise the importance of behaving in accordance with the favoured logic of action for promotion (Gendron & Spira, 2009). Therefore, perceptions of audit seniors on the goals of the audit firm and audit partners are important and form the basis of the study.…”
Section: Literature Review and Research Objectivementioning
confidence: 99%
“…It would have been expected that the shock arising from the collapse of Arthur Andersen would have provided a constraint but this does not appear to have been the case. Gendron & Spira (2009) found different views on the ability of the organisation's control system and external regulation to displace the dominance of commercialism. In their study, a number of interviewees at lower levels in the hierarchy were sceptical of the ability of an audit firm's control system to contain the spread of commercialism and expressed more confidence in the ability of external regulation to do so; however, many interviewees who had reached partner level were more confident of the capability of the organisation's control system and less tolerant of external regulation.…”
Section: Implications and Conclusionmentioning
confidence: 99%
“…Hence, the setting of the study may have had a significant influence on the findings. However, research in other countries conducted post Enron (e.g., Gendron & Spira, 2009, 2010; Carnegie & Napier, 2010) suggests that the dominance of commercialism is a worldwide issue. The failure of auditors to alert the public to the impending banking crisis has been a concern worldwide and, for example, in the UK a House of Lords enquiry was established to examine the role of auditors and market concentration.…”
The complexity of audit firm goals and the potential conflict between commercial and professional goals have been documented in the literature. Previous research points to the growing dominance of commercial goals in audit firms from the mid-1960s onwards. Major corporate collapses such as Enron focused public attention on commercialism and this study examines audit seniors' perceptions of the goals of audit firms and audit partners in 2005. The study highlights a difference between the lived experiences of audit seniors and the impression they felt audit partners were giving of the audit working environment to audit clients and/or prospective employees. Consistent with existing literature on the increasing commercial focus of the auditing profession, profitability was perceived to be the dominant goal in action of both partners and audit firms in the majority of interviews; however, the main goals rhetorically espoused in the marketplace were perceived to be quality and client satisfaction, while the main goals of audit firms espoused to enrol current and prospective employees were perceived to be staff satisfaction and development. Implications of the findings and areas for future research are discussed in the paper.
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