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06:08
Icelandic auditors skating on a thin ice
Karlsson, Bjarni Frimann
University of Iceland, School of Business, Reykjavik, Iceland
The paper will give a brief overview of the auditing market
in Iceland before and after the collapse of all the major banks
in October 2008 and the financial crisis that followed. In
Iceland there are 370 persons who hold a state authorization
as auditors (CPA), whereof only 230 are occupied in the audit
business. Last two decades have shown a strong trend towards
oligopoly in auditing. Of those 230 CPAs there are nearly 60%
working in the BigThree audit firms, who earn almost 70%
of the turnover in this business. The paper will discuss the
consequences of this trend - possible threats and opportunities
– and in this context the controversial audit rotation rule.
After the banks’ collapse in October 2008 Althingi established
a special investigation commission (SIC) to investigate and
analyze the processes leading to the collapse of the three main
banks in Iceland. SIC delivered its report in April 2010. One
of its conclusions were that the auditors did not perform their
duties adequately when auditing the financial statements of the
banks for 2007 and their semiannual statements for 2008.
The paper will take this assertion further and look at the
auditing of the financial statements of the biggest 60 companies
in Iceland for the period 2004-08, i.e. until the financial
breakdown. All these companies were audited by the BigThree.
It is remarkable that of these roughly 300 financial statements
there are only two with qualified auditor’s opinion. This seems
very strange with respect to that already in the 4Q of 2006
there were clear indications of problems in financing these
companies. Another astonishing finding of the research is that
some certain auditors signed the auditor’s report for several of
these companies at the same time. This raises a question about
those auditors’ independence. In addition to all this there are
examples of a close relationship between auditors and CEOs
of certain companies. It is clear that today the audit profession
in Iceland as a whole suffers from these flaws. The paper will
conclude with a discussion of what can be done to secure
the independence of auditors. The legalization of audit firm
rotation is proposed as an effective solution of this problem.
06:09
Intangible performance in a theater: Directing the audience of
reports
Sundström, Andreas
Stockholm University School of Business, Stockholm, Sweden
In an organization where performance is perceived to be
difficult to measure, the paper studies how the performance
information producer relates to the measurement dilemma in
reporting by numbers to information users at different levels of
distance. The paper is a case study of measurement practices,
from the perspective of the information producer, focusing on
the top management level in a publicly funded theater. The
qualitative research design incorporated interviews, participant
observations and document analysis. The analysis draws
mainly from literature in measurement and intangibles. In
the study, an anxious use of numbers in reporting to distant
information users illustrates how the confidence in reporting
numbers regarding intangibles is related to the (dis)trust in
external users’ second-order measurement practices, and the
(lack of) control of users’ framing of measurement. The case
reveals efforts made for controlling external users’ framing of
reported numbers, implicating how accountability relations
and long-distance control by numbers may work bi-directional.
Key words: Intangibles, Measurement, Use of Information,
Distance, Arts and Culture Organizations
80
06:10
Performance measurement - A framing process
Svärdsten, Fredrik
Stockholm University School of Business, Stockholm, Sweden
During the last decades, performance measurement in the
public sector, or public performance measurement (PPM),
has been one of the most researched topics in public sector
accounting literature. Social studies of accounting and auditing
have shown that these central technologies of PPM not just
reflect realities; rather they have the ability to create realities. In
this matter the calculative practices of accounting and auditing
and their ability to shape social reality have been emphasized
in several accounting and auditing studies. However, within the
PPM research field the formative role of calculative practices,
i.e. the measurement of public performance, has not gained
much attention. Drawing on Goffman’s (1974) frame analysis
and his concept of keying, this paper provides an empirical
account of the use and functioning of the calculative practices
of accounting in a Swedish Central Agency. Since 2009 the
agencies in the Swedish Central Government have obtained
new regulations and instructions for their annual reports.
Previously the agencies received detailed report requirements
in annual regulation letters. Now the agencies are given the
authority and responsibility to decide how to account for their
performance themselves. The empirical evidence has been
obtained through a longitudinal case study of the framing of
performance in the Swedish Energy Agency. What is of interest
in this paper is what the rim of the frame consists of, i.e. which
conditions need to be fulfilled for everyday activity to be
transformed into performance by the calculative practices of
accounting? How is the line drawn between everyday activity
and performance? Thus, by empirical evidence, the aim of this
paper is to extend our knowledge of PPM by emphasizing the
constructive role of the calculative practices involved in the
PPM process. The present study shows that the calculative
practices of PPM are not merely technical aspects surrounded
by social processes; rather that they are social processes in
themselves and that calculative practices influence social reality
through their specific qualities. When the calculative practices
of PPM transform everyday activity in public organizations
into performance, their associated framing of performance give
rise to both limitations and possibilities in PPM and affects
how we perceive public performance.
06:11
Reporting methods in management accounting field research
Kihn, Lili-Anne; Ihantola, Eeva-Mari
University of Tampere, School of Management, Tampere,
Finland
One of the most notable developments in management
accounting research has been the growing use of various forms
of field research methods, such as single and multiple case
studies and cross-sectional field studies. As research problems,
theory and data have been designed and brought together in
new ways, the studies have provided novel ways of thinking
about problems and solutions. In doing so, field research has
not only become an important tool of accounting research, but
may have helped practitioners to become aware of, and resolve,
their problems. The question as to how to report the use of
qualitative research methods has, however, been identified as
a problematic issue; yet, relatively few academic studies have
examined the issue in management accounting research.
The objective of this study was to explore the ways in which
field research methods are reported in qualitative case and field
studies. Systematic analysis of this question sheds light on how
management accounting researchers convince readers about the
scientific nature and trustworthiness of research. The results