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The self-reproduction and counterfactuality of auditing: The trial of HQ Bank
Stockholm University, Faculty of Social Sciences, Stockholm Business School, Accounting.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This study follows a lawsuit against the managers, some board members and the auditor of a collapsed Swedish bank. While the managers and board members were prosecuted because they did not comply with accounting rules (IAS/ IFRS) and misrepresented the bank’s accounting numbers, the auditor was accused of not honouring his audit promise to provide assurances about the accuracy of accounting numbers. The analysis of the defence of the bank’s auditing against this prosecution draws upon Dupuy’s (2014) theory that explains the role of time in self-reproduction and shows how auditors respond to a claimed audit failure and rehabilitate their role by exploiting a certain dissonance in terms of time; that is, the time that ensued between [the regulatory spaces of] accounting and auditing after the adoption of the principle of fair value. The present study provides two main contributions to the audit literature: 1) it highlights the opportunity this ‘time gap’ offers to auditors to defend themselves in a self-reproductive fashion when auditing is deprived of [some of] its essentials (i.e. the expectation gap and the ‘obscure’ audit process), 2) it proposes a theorisation that makes possible reconciliation of the verifiability and auditability theses by representing auditing as an enactable potentiality conditioned by the faith of the other (i.e. the auditee) in the judgement of the auditors.

Keywords [en]
Auditing, Audit failures, Counterfactuality, Self-reproduction, Time
National Category
Business Administration
Research subject
Business Administration
Identifiers
URN: urn:nbn:se:su:diva-203591OAI: oai:DiVA.org:su-203591DiVA, id: diva2:1649855
Available from: 2022-04-05 Created: 2022-04-05 Last updated: 2022-04-05
In thesis
1. Before Audit: Essays on the necessity of imagination
Open this publication in new window or tab >>Before Audit: Essays on the necessity of imagination
2022 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The audit society idea has radically influenced our conception of auditing with its critique of the functionalist view that sees auditing as an objective verification of steady facts. The audit society thesis argues that auditing is a ‘technology of representation’ and auditors are involved in the construction of facts they are supposed to verify. In this constructivist thesis, auditing is an undefinable ‘powerful vague idea’ that takes different forms depending on contexts. The present dissertation criticises this relativisation of the concept of auditing but agrees with the audit society idea about the representational ability of auditing. Adopting mimesis as a conceptual framework and drawing on the works of Aristotle, Derrida, Girard and Dupuy, the present dissertation advances a thesis that supplements the audit society idea by arguing that before being a ‘technology of representation’, auditing or rather the auditors’ role is to generate imaginary spaces for representation. The papers that constitute the dissertation show how these imaginary spaces are generated indicatively, counterfactually and heuristically through auditors’ enactment of a mediating and supplementary role in relation to the capital market and accounting representation. In the present dissertation, auditors verify a reality that is impossible to represent in the physical space by recontextualising it to generated imaginary worlds that can take the form of (i) an ‘existential’ space that allows for the neutralisation of [the struggles of] politics, and for social actors to find meaning for their subjectivity, (ii) a space for the stabilisation of a realisable vision that links the future with its past, and (iii) a space for making the practice of certification of accounting representation possible. By highlighting the imaginary, which can be conceived as a world of possibilities that are in effect real conditions for fact construction, the present thesis makes possible a reconciliation between the opposing functionalist and constructive perspectives on auditing.

Place, publisher, year, edition, pages
Stockholm: Stockholm Business School, Stockholm University, 2022. p. 50
Keywords
Auditing, Mimesis, Possibilities, The Audit Society, Imagination, Ontology, Verification
National Category
Business Administration
Research subject
Business Administration
Identifiers
urn:nbn:se:su:diva-203596 (URN)978-91-7911-848-8 (ISBN)978-91-7911-849-5 (ISBN)
Public defence
2022-05-25, Bergsmannen, Aula Magna, Frescativägen 6 and online via Zoom, public link is available at the department website, Stockholm, 14:00 (English)
Opponent
Supervisors
Available from: 2022-05-02 Created: 2022-04-05 Last updated: 2022-04-21Bibliographically approved

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CiteExportLink to record
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Citation style
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