Discussionon“Oneteamortwoteams?Exploring
rela7onshipqualitybetweenauditorsandITspecialistsand
itsimplica7onsforacollec7veauditteamiden7tyandthe
auditprocess”
BertrandMalsch,Ph.D.,MBA
CARConference,16October2016,WaterlooUniversity
Openingaresearchagenda
•  Thepoli7csofinterprofessionalworking
•  Func7onalstupidityatauditors’work
•  Careandtrustintheauditprocess
Thepoli1csofinterprofessional
working
Thepoli1csofinterprofessionalworking
Professional
managethe
reproduc7onof
professionalcapital
Professionals
defineanew
uncontestedspace
Professionals
promulgatenew
rulesystemsthat
redefinethe
boundariesof
organiza7onal
fields
Professionals
populatethenew
spacewithnew
actors
Figure1
Powerframeworkofprofessionalism
SuddabyandViale(2011)
Thepoli1csofinterprofessionalworking
Historically,accountants/auditorshaveaWemptedtocapturespecificsets
ofprac7cesinnewauditarenassuchas:
•  environmentalaudit(Malsch,2014;Power1997,2003),
•  efficiencyaudit(Radcliffe1999)
•  e-commerceassurance(GendronandBarreW2004)
•  sustainabilityassurance(O’Dwyer,20110
Bymakingclaimsastotheirobjec7vityanduniversality,auditorshavetried
to produce and promote portable, context-free sets of ‘‘good’’ audit
prac7cesacceptedasdirectlyrelevanttothesenewarenas.
Thepoli1csofinterprofessionalworking
Consul7ng
firms
Fieldofpower
Law
firms
…
Accoun7ng
firms
Figure2
Powerframeworkofprofessionalservicefirms
MalschandGendron(2013)
Thepoli1csofinterprofessionalworking
•  Buildingin-house«mul7disciplinary»exper7se
Accoun7ngfirm
In-house
fieldofpower
Accountants/
Auditors
Consultants
Lawyers
Taxspecialists
ITspecialists
Valua7on
specialists
Etc...
Thepoli1csofinterprofessionalworking
•  Auditorsv.Valua7onspecialists
Fair value accoun7ng makes it increasingly harder for auditors to feel and
actuallybeincontroloftheirownexper7se.Thatis,auditors’systemofexper7se
is now considerably more reliant on a “secondary” – but perhaps in actual fact
primary – layer of exper7se revolving around market valua7on techniques and
principles. In so doing, the auditors’ job is profoundly transformed as they no
longercanbeconceivedofasautonomousexpertsincontrolofeveryaspectof
auditengagements.Insteadtheauditor’srolecanbelikenedtothatofanarbiter
standingbetweentheauditedpartyandtheassemblageofavarietyofcomplex
components.
DurocherandSmithLacroix,2014
Thepoli1csofinterprofessionalworking
•  Auditorsv.Consultants
By expanding service op7ons beyond its original jurisdic7on, the accoun7ng
establishment had to expand the scope of recruitment to include experts (in law, IT,
strategy, etc.) with different (and some7mes conflic7ng) social and professional
disposi7ons.AccordingtoDezalay(1992,p.187),thistranslatedinto‘tensionsbetween
thebehaviors,responsibili7es,remunera7onsanddemandsofconsultantsandofthe
auditexpertswhocon7nuetocontroltheconglomerates.
MalschandGendron,2013
Thepoli1csofinterprofessionalworking
•  Auditorsv.ITspecialists
Specialists have become vital members of the audit team due to the complex
systemsandtransac7onsinthemoderndayaudit,especiallywithrespecttothe
ITfunc7on(BrynjolfssonandMcAfee2011;EY2012;PwC2012).
BauerandEstep,2016
Thepoli1csofinterprofessionalworking
•  Theorizingintrafirm’sinterprofessionalstruggles
We enforce it, just like tax people, we’re iden7fied as specialists... but they
seeusasadifferentteam,andthey’renotthinkingofus,Imeanthereareorg
chartsfortheclientmee7ngandtheyshowusaspartoftheauditteam,but...
when you talk about who’s on the audit team, I think they’ll ra=le off the
namesofthepeopleinthecorefinancialandthenit’sjustthetaxteamand
theITauditteam.(IT3-P)
Organiza1onalcontrol
Thepoli1csofinterprofessionalworking
•  Theorizingintrafirm’sinterprofessionalstruggles
[Auditors]understandthefinancialsideof[applica7oncontrols],whattheyare
tryingtoprovebutoncewegetagraspofwhattheyaretryingtoprove,we’re
be=eratprovingit.(IT6-S)
Knowledgecontrol
Thepoli1csofinterprofessionalworking
•  Theorizingintrafirm’sinterprofessionalstruggles
It had always been a difficult engagement... the partner [viewed us as a]
necessary evil... the only thing IT could ever do for them was cause
problems...Ithinkhismissioninlifewastominimizetheamountof1mewe
spent.(IT3-P)
Poli1calcontrol
Thepoli1csofinterprofessionalworking
Areauditorsfunc1onallystupid?
Areauditorsfunc1onallystupid?
•  Theidealofsmartness
Consistent with the percep7on of increasing and omnipresent complexity,
there exists a broad consensus that modern economies have become
knowledge-intensive (Adler, 2001) and that a vital issue for successful
contemporary organiza7ons is their ability to mobilize intelligently their
members’cogni7vecapaci7esanddevelopjudiciousformsofexper7se(Allen,
Maguire,andMcKelvey,2011).
“An enormous body of wri7ng on knowledge, informa7on, competence,
wisdom, resources capabili7es, talent, and learning in organiza7ons has
emerged in recent decades in which there is a common assump7on of
smartness”(AlvessonandSpicer,2012,p.1195).
Areauditorsfunc1onallystupid?
•  Cogni7vecapaci7es(experts)againstscandals
Thecaseofcorporategovernance:
Boarddirectorshavebecomethe“usualsuspects”andtheprimarytarget
ofregulatoryini7a7vesaimedatgivingthemmoreteethbymakingthem
moreknowledgeable.Suchdevelopmentshavebeenpar7cularlyvisiblein
the atermath of the Sarbanes-Oxley Act of 2002, with US regulatory
authori7eshavingstronglyadvocatedforthegreaterpresenceoffinancial
experts on audit commiWees. The laWer have since become, at least in
appearance, “substan7ally more ac7ve, diligent, knowledgeable and
powerful”(Cohenetal.2010,p.752).
Areauditorsfunc1onallystupid?
•  Stupidityinac7on
Whentherela7onshipbetweenauditorsandITspecialistsisviewed
as good (difficult), the collec7ve audit team iden7ty is stronger
(weaker) and there is more (less) produc7ve coordina7on. (Bauer and
Estep,2016).
Itiskindofamazingthatwearen’tfurtheralongbecausewe’veseen
1me and 1me again how auditor’s successful stories of wins and
where we’re making a difference, all these situa1ons [where]
everyoneworkedtogether...we’reonebigteamandwe’reall[FirmX],
and so it’s frustra7ng that this doesn’t resonate with people... I think
we’llgetbeyondthesedifferencesandthesebarriersifwestartac7ng
likewe’reallonthesameteam.(IT4-SM)(BauerandEstep,2016).
Areauditorsfunc1onallystupid?
•  Func7onalstupidity
–  Defini7on:“Aninabilityand/orunwillingnesstousecogni7veandreflec7ve
capaci7esinanythingotherthannarrowandcircumspectways”(Alvessonand
Spicer,2012,p.1201).
–  Organiza7ons are frequently affected by func7onal stupidity, in that
organiza7onalprocessesandopera7ngac7vi7esareotencharacterizedbythe
unwillingness or inability to mobilize three key aspects of cogni7ve capacity:
reflexivity,meaningfuljus7fica7on,andsubstan7vereasoning.
Areauditorsfunc1onallystupid?
•  Lackofreflexivity
I think it’s always difficult when we start to say ineffec7ve/not
support,[it]createsalotofaddi7onalwork...sotheydidn’twant
tochange,theydidn’twantustochangetheconclusionthathad
beenthereforseveralyears.(IT8-SM)
Areauditorsfunc1onallystupid?
•  Lackofjus7fica7on
We’veactuallygonethroughinspec7ontwiceonthatclientandIthink
generally speaking the first ques7on is always “why [is] the financial
auditteam[tes7ngautomatedcontrols]?”butweclearlystateinour
memo they said they don’t want us doing it; they’ve never given us
anypar7cularreason.(IT14-SM)
Areauditorsfunc1onallystupid?
•  Lackofsubstan7vereasoning
I guess the biggest thing that I see is the engagement teams
overes7mate what [IT general controls] actually cover... I’ll see
commentslike“we’recomfortablewithspreadsheetsbecausewe
have IT specialists” [but] we didn’t test spreadsheets so I don’t
knowhowyou’recomfortablewiththem.(IT15-M)
Areauditorsfunc1onallystupid?
•  A rich body of work in organiza7on theory has acknowledged the
limits to ra7onality and smartness in organiza7ons through the
conceptsof…
– 
– 
– 
– 
– 
boundedra7onality(Simon,1972),
skilledincompetence(Argyris,1986),
foolishness(March,1996,2006)
ignorance(Ungar,2008)
Etc.
Areauditorsfunc1onallystupid?
•  Howfunc7onalstupidity/boundedra7onalityplaysoutindifferent
organiza7onalcontexts?
•  Doesauditors’func7onalstupidity/boundedra7onalityoperate
differentlyinsitua7onsinvolvingmanagementaccountants,external
auditorsorfinancialanalysts?
•  Howfunc7onalstupidity/boundedra7onalityincreases,fallsor
stabilizes,par7cularlyintheatermathofsomeprominentcorporate
governanceoraccoun7ngscandal?
Careandtrustintheauditprocess
Careandtrustintheauditprocess
“Theresultsofourinterviewsprovideevidencethatrela7onshipquality
betweenauditorsandITspecialistsisperceivedtoprimarilydependon
communica1onandmutualtrustandrespect”(BauerandEstep,2016).
“Theremainingresultsinthispaperprovidesupportforwhyfirmsand
prac77onersshouldaimtoimproverela1onshipquality”(BauerandEstep,
2016).
Careandtrustintheauditprocess
•  Organiza7onsas”emo7onalarenas”:
–  ‘[I]n the last 30 years, an ‘‘affec7ve revolu7on’’ has taken place, in which
academics and managers alike have begun to appreciate how an
organiza7onal lens that integrates employee affect provides a perspec7ve
missingfromearlierviews’.(BarsadeandGibson,2007)
•  Accoun7ngfirmsas“emo7onlessarenas”…
–  Oneofthemostwidespreadaccoun7ngstereotypess7lldepictstheauditor
as an actor who is almost en7rely de- void of feeling. because accoun7ng
work is interpersonal, the adop7on of an unemo7onal avtude is actually
partoftheworkandofcourse‘‘unemo7onal’’isamisnomerforapar7cular
emo7onal orienta7on, that of a professional-seeming coolness consistent
withtechnocracy’(Gill,2009,p.34).
Careandtrustintheauditprocess
“When rela7onship quality is beWer, auditors and IT specialists push beyond
thesegeneraltendencies;theytryhardertohelptheotherunderstandtheir
workandreduceknowledgegaps,andworktogethertoachieve7melieraudit
comple7on,eveninthefaceof7mepressure”.
We ask respondents: if cri7cisms of the other subgroup feel like
personal insults […] the extent to which they characterized the
rela7onshipastrus7ng,ratedonaseven-pointscalefrom“tenseand
mistruswul”to“amicableandtrus7ng”;
Thefollowingquoteshelpdemonstratethesen1mentthatITspecialistsmaynot
beappreciatedorvaluedinDifficult:«Ithadalwaysbeenadifficultengagement...
the partner [viewed us as a] necessary evil... the only thing IT could ever do for
themwascauseproblems...»(IT3-P)
Careandtrustintheauditprocess
ITspecialistssuggestkeyfactorstotheirgoodrela7onshipinclude“transparency
andhonesty”(IT16-SM)and“havingtogaintheirtrusttomakethemrealizethat
Idounderstandwhatthebigpictureis,Idounderstandwhatyourgoalsareand
I’mheretosupport”(IT4-SM)
Theyoperateinavacuum,they’reveryanaly7calpeople,they
takeoffenseatwhatwesay...toourchallenging;“we’retheIT
folkswhatdoweknow?”(IT2-S)
Whetherauditorsdonotwanttolisten,ITspecialistsdonotwanttotalk,oreither
groupfeelstheydonothavetheknowledgeor1metobotherwiththeother,our
respondentsclaimthisoccursmoreoteninDifficultandissuesthatarisearemore
likelytogounno7cedorbeinappropriatelyaddressed.
Careandtrustintheauditprocess
•  Researchonemo7onsuggestthatpeopleinposi7vemoodswillbe
moretrus7ng.Peopleinposi7vemoods…
–  haveaneasier7meaccessingmemorieswheretrus7ngbehaviorledtoaposi7ve
outcome.
–  taketheirposi7vemoodasinforma7onaboutthetrustworthinessofothers,and
aboutthepossibleconsequencesofengagingintrus7ngbehavior.
–  aremorealtruis7candmakemoreop7mis7cpredic7onsaboutfutureevents,
suchasthefutureac7onsofothers.
–  aremorecoopera7veinnego7a7ngsitua7ons.
Table 1
Behavioral Dimensions of Caregiving
Behaviors
Impact
Accessibility
Remain in other's vicinity, allowing time and space for contact and
connection,
Key Acts; welcome other; not allow external interruptions; stay
with other,
"You just have to be there for others."
"Make lots and lots of time, to talk and listen, to do things you
don't have time to do but are important."
Renders caregiver accessible to other, allowing caregiving
relationship to commence.
"When someone is just there for you, sits down and stays there,
you can start to trust them."
Inquiry
Ask for information necessary to provide for other's emotional,
physical, and cognitive needs; probe for other's experiences,
thoughts, and feelings.
Key Acts: ask questions; follow leads to further questions; stay
curious; maintain respectful tones.
"You find out what's going on with them, where they are. They
feel that someone cares enough to sit with them."
Locates and brings other into caregiving relationship, in order to
assess other's needs and enables other to feel acknowledged.
"I feel good when others are checking on me, concerned with
finding out what's going on with me. I get to say things out
loud that othenwise I might not even realize,"
Attention
Actively attend to other's experiences, ideas, self-expressions;
show comprehension with verbal and nonverbal gestures.
Key Acts: maintain eye contact; nod encouragingly; check by
rephrasing/interpreting other's words.
"You really hear what is said often between the lines, and
acknowledge the various stresses and strains they see."
Displays interest in other, who is able to feel heard, apprehended,
and understood.
"I feel that who I am and what I have to say matters when
someone really listens to me. They take me in, not just my
words."
Validation
Communicate positive regard, respect, and appreciation to other.
Key Acts: compliment other's acts, ideas, efforts; ask for and
incorporate other's help; show appreciation of other's
performance; defer to other's expertise.
"I find the positive in what they say and do, tell them they are
doing what they can do, and express my respect for them.
Communicates to other the sense of being valued and valuable,
worth caring for, and appreciated.
"If someone is showing me respect, appreciating my work and
not just ignoring me, then I feel like I have a voice and that it
makes a difference. I feel seen and heard."
Empathy
Imaginatively put self in other's place and identify with other's
experiences; verbally and nonverbally communicate experience
of other.
Key Acts: express own sense of what other feels, show
appropriate nonverbal and facial signs of understanding other's
emotions.
"You have to feel what they do and see the world through their
eyes. It means you have to stand in their shoes, at least a bit."
Enables caregivers to temporarily experience what other sees,
thinks, and feels. Other feels joined,
"When others can show me they really know what I'm feeling,
it's like they're really with me. I get the sense I'm not alone,
and it doesn't feel so bad to feel whatever I'm feeling right
then."
Support
Offer information (about salient issues/situations), feedback (about
other's strengths/weaknesses), insights (about caregiving
relationship), and protection (from distracting external forces).
Key Acts: provide data; help other reframe or analyze situation;
run interference for other.
"The key is to provide resources for people to go on their own
journeys."
"I try to empower others, to provide them tools so they can
develop skills or themselves and know they are good enough."
Provides resources enabling other to collaborate in own growth
and healing.
"I feel much more confident when I'm getting support. I know
others are there to help me out, which somehow helps me to
do it on my own with less fear."
Compassion
Show emotional presence by displaying warmth, affection, and
kindness.
Key Acts: speak warmly; smile, joke; show own caring emotions
toward other, express affection nonverbally.
"I let them see how much I care about them, how much I feel for
them. It's like I nurture them a bit."
Other feels cared about and cared for, held by and within
caregivers' affections, and loved.
"It's like I can take risks and maybe fail and still be taken in with
loving arms. There's a real warmth there,"
Consistency
Provide ongoing, steady stream of resources, compassion, and
physical/emotional/cognitive presence for other.
Key Acts: maintain support and compassion; continue eliciting
other's experiences, ideas, feeling; continue expressing
appreciation for other and their expertise, efforts, and task
performance.
"Just stay with them no matter what happens; what they do or
reveal; be there for them without question, without dropping
Other trusts that own needs will be met in steady, predictable
ways.
"It's knowing that there's a safety net, that no matter what
happens, no matter what you do or what you reveal, people will
be there for you."
Dimension
©2015
Kahn,2013
Careandtrustintheauditprocess
•  Iffirmsandprac77onersshouldaimtoimproverela1onshipquality,how
cantheyworkonimprovingauditors’senseof…
Concludingthoughts