The Audit Society: Rituals of Verification

The Audit Society: Rituals of Verification

The Audit Society: Rituals of Verification

The Audit Society: Rituals of Verification

Synopsis

Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value for money audits, environmental audits, quality audits, teaching audits, and many others. Why has this happened? What does it mean when a society invests so heavily in an industry of checking and when more and more individuals find themselves subject to formal scrutiny? The Audit Society argues that the rise of auditing has its roots in political demands for accountability and control. At the heart of a new administrative style internal control systems have begun to play an important public role and individual and organizational performance has been increasingly formalized and made auditable. Michael Power argues that the new demands and expectations of audits live uneasily with their operational capabilities. Not only is the manner in which they produce assurance and accountability open to question but also, by imposing their own values, audits often have unintended and dysfunctional consequences for the audited organization.

Excerpt

Books on auditing are generally intended to help the reader either to conduct an audit or to pass a professional examination on the subject (the two tasks are only loosely related). This means that auditing texts tend to be technical and that the field as a whole is distinctly unglamorous. When I mention that I am interested in auditing, academic colleagues smile politely and wonder how it could be intellectually engaging.This image of auditing as a dull field of work scarcely worthy of research is often reinforced by audit practitioners themselves. In the large firms, financial auditing has for many years functioned as a training ground in which the brightest and most ambitious are quick to move on to other things. Indeed, to be a pure audit enthusiast in a firm of accountants is to be viewed with some suspicion, if not ridicule. And yet one should not take this inferiority complex at face value. The French thinker Michel Foucault reminds us that the most boring practices often play an unacknowleged but fundamental role in social life. This book shows how this is undoubtedly true of auditing.

I enjoyed my four years in financial auditing. At times it was great fun. I met many interesting people and gained valuable experience about how businesses work. I learned many things, not least skills in eliciting information from reluctant and suspicious client staff. This has been helpful for the conduct of subsequent research. However, if the experience was positive, there were two big problems. First, I never really knew what auditing was for, other than a means of training people like myself. To be told by senior colleagues that the whole thing was common sense did not really help. Whose sense and how common was it? Second, I always found financial auditing puzzling in terms of the knowledge it delivered; the techniques seemed crude and often messy, sampling practices rarely corresponded to the text book and the production of working papers seemed at least, if not more, important than the production of credible proof. As auditors we would huddle on winter evenings in the worst part of the client premises producing . . . what?

The official story, on which I was periodically examined, stated that the financial audit was for the benefit of shareholders. But I never met one of these people and I doubt if they ever saw what I was doing on their behalf, which was probably just as well for everyone. Before I eventually left public practice, I began to see a side of audit which had little to do with my epistemological concerns: a growing emphasis on time management and client servicing with a view to creating further fee earning opportunities. What happened to knowledge?

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