Field Research in Auditing Auditing Section Doctoral Consortium 2011 Jean Bédard, CA, Ph.d.
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Transcript of Field Research in Auditing Auditing Section Doctoral Consortium 2011 Jean Bédard, CA, Ph.d.
Field Research in Auditing
Auditing Section Doctoral Consortium 2011
Jean Bédard, CA, Ph.d
Definitions• Case Study
• ‘.. an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between the phenomenon and context are not clearly evident’ (Yin, 2003, 13)
• Field research studies• in-depth study of real-world phenomena through direct contact
with the organizational participants (Merchant & Van der Stede BAR 2006)
• Seek to provide deep and rich understanding of the social structure of auditing practices and attempts to locate these practices in their organizational, economics and social context (Ryan, Scapens and Thobald 2002)
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Methods and questions Research Question
Laboratory experiment
Survey Archival Analysis
Case Study
Who ü ü
What ü ü
Where ü ü
How many ü ü
How much ü ü
How ü ü Why ü ü
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Source: Yin (2003)
Exemples of questions (1)
• How new, proprietary audit technologies come to produce efficiencies in audit practice? (Fisher, AOS,1996)
• How auditors perform analytical procedures at the planning, substantive testing, and overall review stages of the audit (Hirst & Koonce, CAR 1996)
• How CFOs and auditors negotiate a substantive accounting issue (McCracken, Salterio & Gibbins, AOS, 2008)
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Exemples of questions (2)
• How the business risk audit model impacted an actual audit engagement? (Eilifsen, Knechel, & Wallage, AH 2001)
• How the Business Risk Audit (BRA)resulted in changes (if any) in auditing evidence techniques employed by practicing auditors? (Curtis & Turley, AOS 2007)
• Why was the Business Risk Audit (BRA) methodology developed and implemented by audit firms (Robson, Humphrey, Khalifa, & Jones, AOS 2007)
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Exemples of questions (3)
• What are the practices that audit committees members carry out in meetings? (Gendron, Bédard, & Gosselin, AJPT 2004)• How do individuals who attend ACs meetings
develop their belief about their audit committee effectiveness? (Gendron & Bédard, AOS, 2006)• How the workings of an audit committees affect
organizational outcomes? (Turley & Zaman, AAAJ, 2007)• Do audit committees appear to provide substantive
oversight of financial reporting, or do they appear to be primarily ceremonial bodies designed to create legitimacy? (Beasley, Carcello, Hermanson, & Neal, CAR, 2009)
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Field Research in Auditing
Merchant & Van der Stede (2006)• Review of all major English-language
accounting research journals in the1981-2004 time period
• 318 articles with a field studycomponent to them
• Only 27 (8 percent) were auditingarticles
• 261 (82 percent) were managementaccounting articles
• 20% of the were managementaccounting articles had a field study component
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When to use field research
• Complex and dynamic phenomenon where many variables (including variables that are not quantifiable) are involved (Cooper and Morgan, 2008)• Phenomenon in which the context is crucial
because the context affects the phenomena being studied (and where the phenomena may also interact with and influence its context) (Cooper and Morgan, 2008)• Phenomenon needs to be understood because
little research has been done (Creswell 2009)
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New Light
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SOURCE: Final report of the quality assurance for the higher education change agenda (QAHECA) project
Comparative advantages• Theories
• involves the study of auditing practices in their natural setting, which facilitates the generation of relevant theory
• effective for building theory, richer explanations of why or how certain phenomena occur, or explanations as to why outcomes will differ in a new setting that has never before been carefully studied.
• testing and refining existing theories
• Practice• Field studies provide rich descriptions of practice; they put rich data
sets, useful stories and examples, and teaching cases into the public domain (Merchant & Van der Stede 2006)
• Unique data set• Compared to archival data such as Compustat & Audit Analytics, the
data set is unique and only you have access to it!
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Type of research (Tradition)Positive Interpretative
Nature of reality Reality is objective and singular
Reality is subjective and multiple as constructed by participants in a study
Relationship of the researcher and researched
Researcher is independent from the being researched
Researcher interact with that being researched to influence one another
Role of value Inquiry is value-free, objective methodology employed
Inquiry is value-laden, it is influenced by inquirer, paradigm, theory, and context
Generalization Time and context-free generalization are possible
Only time- and context-bound working hypotheses are possible
Emphasis Cause and effect Process by which construction arise and change.
Role of theory Generalization, leading to prediction, explanation and understanding
Patterns, theory developed for understanding
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Adpated from Patton (1990, p. 37)
Role of theory in Field Research
1. Hypothesis to be “tested”2. Broad explanation for a phenomenon
use to study the phenomenon3. Orienting lens for the study
(question, analysis)4. End point – data may build, develop
or expand theory about a phenomenon
(Adapted from Creswell 2009)
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Hypotheses to be “tested”
Eilifsen, Knechel, & Wallage (2001)• Expectations about business-risk based audit:• Risk Assessment, • Audit evidence• Audit administration• Audit team structure• Value-Added Assurance• Expanded Service Opportunities
Beasley, Carcello, Hermanson, & Neal (2009)• [W]e expect the audit committee to be most heavily
focused on actual monitoring (agency theory) or on creating legitimacy by engaging in appropriate ceremony and ritual (institutional theory)
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Reseach Problem
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Orienting Lens
SOCIO
LOGY
ECONOM
ICS
PS
YC
HO
LO
GY
Broad explanation/orienting lens
Robson, Humphrey, Khalifa, & Jones (2007)• Neo-institutional theories of organizational legitimacy
(DiMaggio & Powell, 1991; Suchman, 1995)• Sociology of professions (Abbott, 1988; Freidson, 1986)• Sociology of translation (Latour, 1987).
• Turley & Zaman (2007)• Institutional theory (Scott, 2001) • Power theory (Clegg, 1989)
• Gendron & Bédard (2006)• Phenomenology ( Schutz, 1967)
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Reliability, validity and generalizibility
• Reliability• Case study protocol, procedural reliability (audit trail)
• Validity• Data triangulation : use of a variety of data sources in a study• Investigator triangulation : use of several different researchers• Theory triangulation : use of multiple perspectives to interpret
a single set of data (Patton 1990, p. 187)
• Generalizability (external validity)• Analytic generalization – generalize to theories
• elaborate on the empirical attributes of existing theoretical constructs
• illustrate the application of theory in an interesting practical setting• identify potential new linkages between constructs that are not yet
evident in extant theory (Lilis 2006)
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Researcher competencies
•Competencies• Interpersonal skills (interviewing)• Comfort with lack of specific rules and procedures for conducting research• High tolerance for ambiguity• Literacy writing skills
•Training• Qualitative research methods course• Practice
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ReferencesCooper, D. J., and W. Morgan. 2008. Case Study Research in Accounting. Accounting Horizons 22 (2):159-178.
Creswell, J. W. 2009. Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. Sage.
Lilis, A. M. 2006. Reliability and Validity in Field Study Research, in Methodological Issues in Accounting Research: Theories and Methods, Hoque ed. London: Spiramus Press.
Merchant, K. A., and W. A. V. d. Stede. 2006. Field-Based Research in Accounting: Accomplishments and Prospects. Behavioral Research In Accounting 18 (1):117-134.
Ryan, B, R. W. Scapens and M. Thobald. 2002. Research Method & methodology in Finance & Accounting. Thomson.
Yin, R. K. 2003 Case Study Research: Design and Methods, Third Edition, Applied Social Research Methods Series, Vol 5. Sage
Others
Lincoln Y. S. and E. G. Guba. 1985. Naturalistic Inquiry. Sage.
Rubin, H. J. and I. S. Rubin. 1995. Qualitative Interviewing: The Art of Hearing Data. Sage.
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