Audit committees: practices, practitioners and praxis of governance

Niamh Brennan () and Collette E. Kirwan

Accounting, Auditing & Accountability Journal, 2015, vol. 28, issue 4, 466-493

Abstract: Purpose - – The purpose of this paper is to review and critique prior research on audit committees using a practice-theory lens. Research on audit committees has followed the same trajectory as early research on boards of directors, which has been criticised for its singular theoretical perspectives and methodologies that do not capture the complexity of real-world experiences/behaviours. Design/methodology/approach - – The authors devise an analytical framework based on practice theory to conduct the review. The authors examine what audit committees should do (i.e. best practice) vs what audit committees actually do (i.e. actual activities in practice – praxis). Attributes of audit committee members, and the relationship dynamics relevant to their role execution (i.e. practitioners), are considered. Findings - – Research on boards has found that over-emphasis on agency theory’s monitoring role negatively impacts boards’ effectiveness. The authors invoke other theories in examining what audit committees do in practice. The authors characterise the role of audit committees as oversight not monitoring. The authors question whether, similar to auditing, audit committees are blamist tools or are genuinely orientated towards supporting improvements in organisational management systems. The authors unpack the ritualistic ceremonial behaviours and symbolic endeavours vs substantive engagement by audit committees. The analytical framework also considers the “guardianship circle” around audit committees in the form of the key practitioners and their relationships: audit committee members, auditors and managers. Originality/value - – Drawing on the analytical framework, the authors provide directions for further opportunities for research of audit committees.

Keywords: Corporate governance; Audit committees; Practice theory; Guardianship circle (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Working Paper: Audit committees: practices, practitioners and praxis of governance (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:aaajpp:v:28:y:2015:i:4:p:466-493

DOI: 10.1108/AAAJ-01-2015-1925

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