Financial auditors and environmental matters: drivers of change to current practices

Christina Chiang and Deryl Northcott

Journal of Accounting & Organizational Change, 2012, vol. 8, issue 3, 340-363

Abstract: Purpose - The purpose of this paper is to examine how New Zealand financial auditors could be motivated to improve current practices in regards to auditing the effects of environmental matters in financial reports. Design/methodology/approach - This is a qualitative study. The views of 27 New Zealand private and public sector auditors were solicited via semi‐structured interviews. Concepts from new institutional theory, and in particular institutional isomorphism, are used to interpret the research findings. Findings - The interview evidence indicates that a combination of normative, coercive and mimetic forces would be necessary to advance current practices in auditing environmental matters. A crucial driver of change would be a mindset shift within the profession about the importance of environmental accountability, reporting and auditing – i.e. increased normative pressures for change. Coercive forces of negative media publicity, the “fear factor” and government intervention can serve to reinforce the audit profession's normative obligations. Since public sector auditors have already developed effective audit practices around environmental matters, emulating their approach within the private sector would drive improvements in practice. Practical implications - By identifying the potential drivers for improving auditors' practices, this paper can inform the discussions and strategies of professional bodies, regulators and government on improving the audit of environmental matters in financial reports. Originality/value - Few prior studies have solicited financial auditors' views on the factors they perceive as motivating change in their professional practice, and none have done so in regard to the important and emerging area of environmental matters. This New Zealand study offers a timely contribution, as well as geographical diversity, to the international literature on audit theory and practice.

Keywords: Financial audit; Environmental matters; Drivers of change; Institutional isomorphism; Auditing; Financial reporting; New Zealand (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:18325911211258335

DOI: 10.1108/18325911211258335

Access Statistics for this article

Journal of Accounting & Organizational Change is currently edited by Prof Zahirul Hoque

More articles in Journal of Accounting & Organizational Change from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().