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    Auditing Without Borders.
    research summary posted October 19, 2015 by Jennifer M Mueller-Phillips, tagged 15.0 International Matters 
    Auditing Without Borders.
    Practical Implications:

    There are two points of this essay. First, the auditing community can benefit from a more expansive view of auditing without borders, one that considers the commonalities of financial statement audits with other certification practices. Auditors and academics can both learn from and potentially contribute to other research literatures. At the same time, context is also important. That is, the community also needs to examine closely the specific contexts in which auditing and other certification practices take place. In particular the author conjectures that a major cause of the variation in audit quality (and perhaps the quality of other 3rd party certifications as well) is the specific institutional and cultural setting of a particular certification practice, and the effects that these have on the incentives and behavior of certification experts. Very little is known about these contextual effects, even for financial statement audits.


    Francis, J. R. 2011. Auditing Without Borders. Accounting, Organizations & Society 36 (4/5): 318-323.

    audit, auditing, global markets
    Purpose of the Study:

    The studies by Jamal and Sunder (2011), Jeacle and Carter (2011), and Downer (2011) raise two interesting questions for accounting scholars: what is an audit, and what is auditing research? As illustrated by these papers, there are widespread certification activities in modern societies and the first theme of this essay is that accounting scholars can both learn from and contribute to a much broader research literature on certification and verification activities. While there are some exceptions, for the most part the accounting literature on “auditing” is quite narrow in scope, focusing almost exclusively on professional accountants, financial statement audits by licensed auditors and the related regulatory regimes. Thus the essay’s title “Auditing without Borders” is an appeal to expand the thinking about auditing as a more generalizable activity, and a way of enriching understanding of financial statement audits while at the same time contributing to a broader scholarship on certification and verification processes. Even though auditing can be conceptualized as part of a more generalizable activity, the second theme the author takes up at the end of the essay is that context also matters and is very important in understanding specific certification practices. The author defines “auditing” very broadly as any 3rd party certification by an expert, or more simply certification, and begins with a brief excursion into the wider world of certification activities.

    Design/Method/ Approach:

    This article is an editorial.


    One way of thinking broadly about different types of certification activities is based on who does the certification. The first type is state-run certification programs in which governmental organizations conduct certifications. The second broad type of certification is state-sponsored certification programs in which the state authorizes and regulates certification activities, but the actual certifications are undertaken in the private sector with state monitoring and oversight. This is where public-company financial statement auditing is located (and also private company audits in those countries where they are mandated by law). The state licenses accountants as experts, requires that these experts certify financial statements, and the state monitors the behavior and performance of the accounting experts.

    Even for the global accounting firms, each country constitutes a unique practice and audit market. Context not only matters, it may well be critical to assessing audits. What the author suggests is the need for comparative or cross-country audit research in order to learn how the particular institutions and culture of a country affect auditing practices. When one investigates auditing a single country, be it an experiment, archival study, field study, or a discursive analysis, in essence it represents a sample of “one” in terms of national culture and institutions. To more deeply understand the role of country-specific characteristics that shape auditing practices one must directly compare two or more countries.

    International Matters