Auditing Stories about Discomfort: Becoming Comfortable with Comfort Theory

Abstract

The sociological strand of auditing research has pointed to some difficulties of the American Accounting Association's (AAA) (and mainstream) definition asserting that auditing is about ‘objectively obtaining and evaluating evidence regarding assertions about economic actions’ (AAA, The Accounting Review, Suppl., 1972, p. 18). Instead, auditing has been described as rituals of verification that produce comfort. In this paper we seek to widen the understanding of the production of comfort by investigating the processes that end up as an audit. The processes are investigated by addressing the research question: how do auditors perceive the production of comfort? Twenty seniors were interviewed on the subject of identified discomforts in the audit process. The interviews were designed to identify the main allies and foes in the processes that make up an audit. In the presentation of the interviews, comfort theory is employed as a device to interpret the seniors' statements in terms of comfort as state, comfort as relief and comfort as renewal. Our conclusion is that the state of comfort that is demanded to become comfortable with an audit changes in relation to which actors get involved in the comfort production. Attaining a state of comfort involves a decision that sufficient discomforts have been relieved. In addition, as the definition of what it means to attain a state of comfort changes, more or less comfort as relief is required, and the audit, understood as becoming comfortable, is renewed. Suggested by comfort theory, the paper in this way develops the idea of auditing as a comfort-producing activity by examining three dimensions of audit comfort.

Acknowledgements

This study is part of the Reactor Research Program ‘The Role of Accounting on the Capital Market’ funded by the Swedish Academy of Auditing, The Bank of Sweden Tercentenary Foundation and Handelsbanken.x

Notes

¹The word uncomfort is used to distinguish non-comfort in the state sense from non-comfort in the relief sense. Too many discomforts and a person is in a state of uncomfort. With sufficient (but not necessarily complete) relief from these discomforts the person can attain a state of comfort, that is, transcend from being uncomfortable to being comfortable.

²Miller (1991) and Robson (1991, 1992) pioneered the inclusion of non-humans into the accounting discourse (for other examples of papers that assume an ANT ontology within the accounting discourse see Chua (1995), Catasús (2000), Lowe (2000, 2001), Briers and Chua (2001), Mouritsen et al. (2001), Jeacle (2003), Gendron and Barret (2004) and McNamara et al. (2004)).

³This is a working definition that does not have to (but in most cases does) correspond to a Senior at Deloitte, a Senior at Ernst & Young, a Senior Associate at PWC and an Assistant Manager at KPMG.

⁴In small and medium-sized companies, the seniors most often meet with the CFOs, whereas in larger organizations the chief accountant represented the client. Here, however, we will refer to them all as CFOs.

⁵It has for instance been noted that greater time budget pressure can result in more underreporting of time (Rhode, 1978; Kelley and Seiler, 1982; Lightner et al., 1982), that is, auditors spend more time on a task than they report. One reason might be that auditors believe that adherence to the time budget, even if underreporting is necessary to meet the budget, results in better performance evaluations (Lightner et al., 1983). Underreporting of time can however affect the quality of future audits, as there is evidence that suggests that previous year's recorded time is a major influence in the current year's budget (Fleming, 1980; Kermis and Mahapatra, 1985). Time pressure can thus be negative for audit quality (The Treadway Commission, 1987). It has even been claimed that too much time pressure could lead to audit failure (AICPA, 1978). It was hence alarming that Rhode (1978) found that 50% of the 1,526 AICPA members in the late 1970s admitted in a survey to sign off on audit steps not covered and without noting the omission. Pressure to meet time budgets was the primary reason noted. This finding has since then been repeated numerously (Alderman and Deitrick, 1982; Kelley and Seiler, 1982; Lightner et al., 1982, 1983; Kelley and Margheim, 1987; Raghunathan, 1991). However, Fusaro et al. (1984, quoted in Otley and Pierce, 1996a, p. 79) suggest that time pressure implies that ‘the seniors do feel stress in managing and completing their assignments, but this factor is not critical to the majority. In the best of worlds, they would be given more time and lighter workload. But they clearly have adapted to the reality of day-to-day public accounting.’ In an attempt to nuance how time pressure affects auditor performance Otley and Pierce (1996a) found that perceived attainability of time budgets had a significant influence on ‘dysfunctional’ behavior, while the perceived amount of emphasis on meeting budgets did not. Anyway, underreporting seems to be more common among lower level auditors (i.e. seniors and staff auditors) (Kelley and Seiler, 1982).

⁶See Power (1999) for an examination of the intricate relationship between (different layers of) trust and auditing.