What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

This paper reviews empirical research over the past 25 years, mainly from the United States, in order to assess what we currently know about audit quality with respect to publicly listed companies. The evidence indicates that outright audit failure rates are infrequent, far less than 1% annually, and audit fees are quite small, less than 0.1% of aggregate client sales. This suggests there may be an acceptable level of audit quality at a relatively low cost. There is also evidence of voluntary differential audit quality (above the legal minimum) along a number of dimensions such as firm size, industry specialization, office characteristics, and cross-country differences in legal systems and auditor liability exposure. The evidence is very positive although there is some indication that audit quality may have declined in the 1990s, in which case there could be merit in recent reforms such as the Sarbanes-Oxley Act of 2002 in the US. However, we do not know from research the optimal level of audit quality and therefore whether we currently have ‘too little’ or ‘too much’ auditing? Despite this lacuna we are entering an era of more mandated auditing in response to high-profile corporate governance failures including the Enron–Andersen affair. Finally, while recent reforms have scaled back the scope of non-audit services due to independence concerns, a case can be made that audit quality will always be somewhat suspect if other services are provided that are perceived to potentially compromise the auditor's objectivity and skepticism. For this reason public confidence in audit quality may be increased by proscribing all non-audit services for audit clients. Recommendations are also proposed with respect to legal liability reform and changes in partner compensation arrangements.

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What do we know about audit quality

Author Ray Pawson presents a devastating critique of the dominant approach to systematic review namely the 'meta-analytic' approach as sponsored by the Cochrane and Campbell collaborations. In its place is commended an approach that he terms 'realist synthesis'. On this vision, the real purpose of systematic review is better to understand program theory, so that policies Author Ray Pawson presents a devastating critique of the dominant approach to systematic review namely the 'meta-analytic' approach as sponsored by the Cochrane and Campbell collaborations. In its place is commended an approach that he terms 'realist synthesis'. On this vision, the real purpose of systematic review is better to understand program theory, so that policies can be properly targeted and developed to counter an ever-changing landscape of social problems. The book will be essential reading for all those who loved (or loathed) the arguments developed in Realistic Evaluation (Sage, 1997). It offers a complete blueprint for research synthesis, supported by detailed illustrations and worked examples from across the policy waterfront.

Evidence-based Policy: A Realist Perspective

https://isiarticles.com/bundles/Article/pre/pdf/18.pdf

A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes

This review paper argues that the institutions and sites of professionalization projects and regulatory processes matter. The institutions and locations where regulation takes place affect both the outcome of the regulatory process and the legitimacy of the rules and practices produced. Changes in regulatory processes affect opportunities for democratic control and legitimacy. A common position in the accounting literature is to examine both the process of professionalization and accounting and audit regulation within and around professional associations and related organizations, such as standard setting bodies and regulatory agencies. We argue that professional firms are increasingly important in professionalization and regulatory processes and have not received the attention that they warrant: an examination of the multi-national professional service firms (currently known as the Big 4) can enhance an understanding of professionalization and professional regulation. We suggest that these are important sites where accounting practices are themselves standardized and regulated, where accounting rules and standards are translated into practice, where professional identities are mediated, formed and transformed, and where important conceptions of personal, professional and corporate governance and management are transmitted.

Accounting, professions and regulation: Locating the sites of professionalization

This paper explores the importance of audit firm characteristics and the factors motivating auditor change based on questionnaire responses from 210 listed UK companies (a response rate of 70%). Twenty-nine potentially desirable auditor characteristics are identified from the extant literature and their importance elicited. Exploratory factor analysis reduces these variables to eight uncorrelated underlying dimensions: reputation/quality; acceptability to third parties: value for money: ability to provide non-audit services: small audit firm: specialist industry knowledge; non-Big Six large audit firm: and geographical proximity. Insights into the nature of ‘the Big Six factor’ emerge. Two thirds of companies had recently considered changing auditors; the main reasons cited being audit Ice level, dissatisfaction with audit quality and changes in top management. Of those companies that considered change. 73% did not actually do so. the main reasons cited being fee reduction by the incumbent and av...

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The Importance of Audit Firm Characteristics and the Drivers of Auditor Change in UK Listed Companies

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Perceptions of auditor independence: U.K. evidence

This paper presents direct evidence concerning the extent, nature, and outcome of interactions between the two primary parties in the auditor-client relationship — finance directors (FDs) and audit engagement partners (AEPs). A questionnaire instrument is used to elicit the frequency with which, over a three year period, an extensive set of 46 audit and audit-related issues is discussed, is negotiated, and results in a change to either the accounting numbers or disclosures. Three hundred FDs and 307 AEPs of listed UK companies are surveyed, with response rates of 51% and 80%, respectively. Principal findings are that: (i) compliance issues dominate discussions, while accounting and fee issues dominate negotiations; (ii) audit committees generally reduce the level of negotiation and increase the level of discussion, suggesting that the overall degree of confrontation declines; and (iii) in the majority of cases (57%), negotiation results in a change to the financial statements, providing evidence of the auditor's influence on the financial statements.

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Behind the Audit Report: A Descriptive Study of Discussions and Negotiations Between Auditors and Directors

PART I Introduction and Regulatory Framework The Auditor-Client Relationship Questionnaire Stage of Study PART II Introduction to the Case Studies 'In the Top Five of the Highest Risk Clients': Nick and Simon (NS plc) 'You Can't Eat an Elephant': Thomas and James (TJ plc) 'Paul's Job is Not to Win Friends, it's to Protect Our Shareholders, and That's My Job as Well': Michael and Paul (MP plc) 'Cushions and Pillows': Colin, Richard and Andrew (CRA plc) 'They Don't Challenge Me Enough': Robert and Charles (RC plc) 'They're Almost Part of the Management Team': Dennis and Alan (DA plc) PART III The Grounded Theory Process Cross-case Analysis and Theory Development Conclusions

Stella Fearnley

Papers

A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes

The Importance of Audit Firm Characteristics and the Drivers of Auditor Change in UK Listed Companies

Perceptions of auditor independence: U.K. evidence

Behind the Audit Report: A Descriptive Study of Discussions and Negotiations Between Auditors and Directors

Behind Closed Doors: What Company Audit is Really About