Seeking Audit Quality
Authors:   , Groot Wendy 
Published: December 2024

The audit profession operates within a complex institutional framework, balancing the competing demands of professionalism and commercialism. In the Netherlands, this balance has been further challenged by significant social, political, and regulatory scrutiny over the past decade, prompted by high-profile incidents raising concerns about the quality of audit services. This dissertation investigates how a Dutch audit firm responds to such pressures, focusing on the everyday practices of its employees. Through qualitative research methods, including ethnography, interviews, and a case study, the dissertation examines three key areas: the implementation of a root cause analysis (RCA) practice, the construction of findings during an inspection process, and the dynamics of organizational change in daily operations.

The first study draws on ethnographic data from an eight-month study to explore how an RCA team navigates the challenges of introducing RCA practices within the firm. RCA is designed to identify the underlying causes of adverse events, such as inspection findings, to promote organizational learning. However, the RCA team faced resistance from both leadership and audit practitioners. They engaged in extensive legitimacy work to adapt the practice to the audit context, where errors are often viewed as unacceptable rather than opportunities for learning. This study presents a process model revealing how the RCA practice was internally legitimized and adapted, highlighting the complexity of embedding such tools in the audit environment. The findings challenge the assumption that auditors respond only symbolically to external pressures.

The second study examines the dynamics of an audit inspection process and investigate how a good-enough audit is constructed in the oversight body-audit firm interactions. Through a case study of an audit engagement subjected to both internal and external reviews with differing outcomes, the study explores how professional ambiguity shapes the determination of a good-enough audit. This ambiguity stems from various understandings of the audit, varying interpretations of audit standards, and differing perspectives on findings, and creates discursive space. The interactions are shaped by the auditors’ collective memory of stringent oversight. The study challenges the notion of clear-cut determinations of audit quality and rejects the notion that auditors are passive actors with little agency.

The third study investigates how an audit firm approaches organizational change by employing social-symbolic work—activities that shape the meaning of social-symbolic objects like key performance indicators or team structures. Through interviews, the study reveals that change is a continuous process, driven by auditors who take on the role of change agents. These agents strive to make change initiatives auditable, that is, making them measurable and actionable, aligned with the firm’s practice. Change manifests in the form of new social-symbolic objects. The study argues that as it is initially unclear which change initiatives materialize in daily practice, signaling a willingness to change is crucial in the firm's effort to embrace progress.