Putting auditing practices in context: deciphering the message in auditor responses to selected environmental cues

Abstract

Abstract This paper explores the contribution made by conventional audit research studies such as the one by Wright (“The Impact of Selected Environmental Cues on Audit Disclosure Judgements,” Critical Perspectives on Accounting , Vol. 3, 1992, pp. 240–273. It is suggested that the theoretical underpinnings and methodological tools employed in such studies are inappropriate vehicles for pursuing issues of audit practice. The Wright study is used to illustrate three areas which are treated inadequately: (i) the concept of the environment; Oil the relationship between audit practice and laboratory studies; and (iii) the relationship between audit practice and concepts. The paper concludes by reflecting upon the context (environment) of the recently publicized corporate collapse of the Bank of Credit and Commerce International. It is suggested that such cases illustrate the importance of a much wider set of environmental cues than could ever be accommodated in conventional models of the audit process. Making progress on understanding auditor disclosure judgements is argued to require a more adequate theorization of the institutional and social context of auditing.