Ritual and conflict in the audit profess

Critical

Perspectives

RITUAL

on Accounting

AND CONFLICT IN THE AUDIT
PROFESSION

SHERRY K.
*New Mexico

(1992) 3, 185-200

MILLS*

State University

AND MARK

and fBucknel/

S. BE-ITNER~
University,

Pennsylvania

Conflicts are not new to the auditing
profession,
but why do they continue
to persist? The purpose of this paper is to consider
the ritualistic
use of the
audit process
and its supporting
standards
to mask societal
conflicts
existing
in the auditing

environment.
We suggest that conflict persists, in
part, due to the ritualistic
nature of the audit process and its supporting
standards.
In addition,
we suggest that rituals are used to mask conflict in
order to maintain
social order and to legitimize
the Profession’s
actions.
This alternative
view provides
a new direction
for future auditing
research.

Introduction
The auditing
profession

(hereinafter,
the Profession)
has recently
undergone
a
period
of adverse transition
in its attempt
to strengthen
public
confidence
and
to redefine
its role in society
(Mednick,
1986; Armstrong
& Vincent,
1988; Zeff,
1987). During
this period,

the Profession
has had an opportunity
to identify
numerous
societal
conflicts
within
which
it has become
entangled.
Researchers
have established
that accounting
and auditing
are inextricably
bound
to conflicts
through
the influence
of social and political

power
(Cooper
& Sherer,
1984; Tinker,
1984; Loft, 1986; Lehman
& Tinker,
1987; Armstrong
&
Vincent,
1988; Kaplan,
1987; Humphery,
1990a,b; Humphery
& Moizer,
1990).
Indeed,
as an underlying
force behind
social change,
conflict
is often an unavoidable,

yet essential,
element
of evolutionary
development.
The purpose
of this paper is to consider
the ritualistic
characteristics
of the
audit process
and its supporting
standards
in masking
societal
conflicts
which
currently
exist in the auditing
environment.
We suggest

that ritual is used to
mask (cover-up)
certain
conflicts
in order
to maintain
social
order
and to
legitimize
the Profession’s
actions.
In doing
so, discourse
related
to the
Profession’s
evolving
role
in society

has
been
limited,
and
stagnation
characterized
by the lack of innovation
has resulted.
The remainder
of this paper is divided
into four sections.
In the first section
we examine
the nature
of the Profession,
the conflicts
it faces and solutions
to date that it has used to manage
these conflicts.
In the second

section
we
develop
the concept
of ritual and discuss
the ritualistic
properties
of the audit
process
which
enable
the Profession
to construct
socially
a reality
driven
by
legitimizing
powers.
In the third section

we address
the aspects
of ritual that
permit
the masking
of conflict
to persist,
and relate these aspects
to conflicts
Address
for correspondence:
Professor Sherry Mills, New Mexico State
of Accounting,
Las Cruces, New Mexico,
USA.
Received
23 February
1990; revised
20 June
1990, 21 April

1991; accepted

University,
27 June

Department
7991.

185

1045-2354/92/020185

+ 16 $03.00/O

0

1992

Academic

Press

Limited

186

S. K. Mills

and M. S. Bettner

facing the Profession.
In the fourth section we focus on the Profession
in
transition and the implications
of its continued
use of ritual to maintain social
order, preserve the status quo and legitimize
its actions. Several suggestions are made for a new direction in auditing research, as well.
The Nature

of the Profession

and its Conflicts

A primary service of many professions
is the application
of a systematic body
of knowledge
to issues considered
highly relevant to the central values of
society (Rueschemeyer,
1964). The quality of such service is often difficult for
third parties to measure (Reiff, 1974), thus making it difficult for third parties to
control or supervise a profession’s
activities.
Many professions
are committed
to an explicit set of values and norms and
maintain self-control
over technical proficiency
requirements
(Rueschemeyer,
1964). Like other professions,
the auditing
profession
has attempted
to
establish a predefined
set of accepted values and norms and has developed
its own competency
standards.
The degree of solidarity
of the Profession’s
value orientation
is reflected in the audit process, and is perceived by third
parties as the Profession’s image (Magill & Previts, 1990, p. 5). To the extent
that members
of society are unclear as to the meaning
of the Profession’s
values, ambiguity
and dissensus result. Therefore,
the Profession
must be
continually
aware of the potential conflicts it creates in communicating
what
its values and norms are.
Society has permitted
the Profession
to create accounting
and auditing
knowledge
by assigning it the power to maintain a “control
function within
the context of corporate capitalism”
(Portwood & Fielding, 1981, p. 749). The
power of the Profession is reflected in its control over: (1) technical knowledge (through the development
of new standards);
(2) self-regulation
of entry
and behaviour
(through
the uniform
CPA examination,
state licensing and
socialization
processes); (3) political actions used to protect its self interests;
and (4) its influence
in establishing,
maintaining
and changing
the moral
standards
and choices of society (Portwood
& Fielding, 1981, p. 758). To
maintain its position of power in corporate America, and to service the middle
and upper-class
clientele,
the Profession
must continue
to support
the
ideology of capitalism (Portwood
& Fielding, 1981, p. 767). In doing so, many
potential conflicts arise.
Prior to addressing
those issues concerning
the specific conflicts faced by
the Profession, we feel it important
to first discuss the general characteristics
of conflict and to stress its positive aspects.
The Beneficial Aspects of Conflict
Conflict is a multifaceted,
complex
phenomenon
that can be viewed in a
variety of contexts. Given the societal implications
of the audit process, we
have chosen to discuss conflict in a social-psychological
context. As such,
throughout
our paper conflict
is viewed
as a dynamic
social process,
characterized
by an environment
wherein members
subscribe and react to
incompatible
cognitions,
beliefs, values and goals (Eldridge,
1979). The

Ritual and conflict

187

manifestations
of such conflict are many, and its consequences
profoundly
influence power, authority and control in a society.
Conventional
perceptions
of conflict often regard it in the negative, as a
polarizing and destructive
force. When suppressed
or mismanaged,
conflict
most definitely
precipitates
feelings
of tension,
hostility,
acrimony
and
agression. However, conflict need not be viewed strictly as a dysfunctional
social phenomenon.
On the contrary, if conflict is to be managed effectively, it
is essential
that parties to the conflict
understand
its integral
role in
maintaining
and unifying social relationships
(Coser, 1956; Eldridge, 1979).
Many enduring,
synergistic
relationships
are characterized
by interaction
involving conflict. By facilitating discourse between parties, conflict provides a
mechanism for venting hostility, containing
dissention,
preventing
stagnation
and motivating
innovation
(Bercovitch,
1984). In this regard, Simmel (1955,
pp. 13-l 5) notes:
“Contradiction and conflict not only precede unity but are operative in it at
every moment of its existence . . . . Conflict is designed to resolve divergent
dualisms; it is a way of achieving unity [by resolving]
. . . the tension
between contrasts“.
Thus, the absence of conflict in a social relationship
(or perhaps the
masking of it) does not necessarily
imply the presence of harmony
and
congruence.
Rather, frequent
episodes
of conflict are often a necessary
ingredient
for retaining
stability
in unstable
environments.
Through
the
stimulus of conflict, collaborative
goals can be continuously
defined and
redefined as situational conditions change (Coser, 1956).
In the remainder
of the paper we will examine specific conflicts facing the
Profession and the role of ritual in masking these conflicts. We will argue that
the Profession masks its conflict in order to retain legitimacy and to maintain
social order. We will also argue that, through ritual, the Profession continues
to obscure its image and its values, thereby severely limiting its evolving role
in society.
Conflicts and Compromises

in the Profession

Dissensus exists among the Profession, individual members of the Profession
and society. Characteristically,
the values, myths and perceptions
of society
conflict with those of the Profession and, more specifically, CPA firms (Boland,
1982). Faced with environmental
dissonance,
the Profession
can either
promise reform, or decouple the elements, assume good faith and overlook
the conflicts caused by perceptual inconsistencies
(Meyer & Rowan, 1977, pp.
356-358).
Perceptions of the audit process vary depending
on the perspectives
and
the vested interests of a multitude of individuals and groups. For example, the
audit process and the audit report may be construed to mean: (1) the audited
company is financially healthy (investor’s and creditor’s perspectives);
(2) the
company has satisfied its regulatory
requirements
(the SEC’s, the auditor’s
and management’s
perspectives];
(3) the accounting
firm conducting
the
audit will have a profitable year (the audit partner’s perspective);
(4) the audit
team performing
the audit effectively and systematically
gathered evidence (a

S. K. Mills

and M. S. Bettner

Gap 1: expectations

Public/third
parties

Gap 2: scope of services

Client

CPA firm
Gap 3: intraprofessional
competition

Other CPA
fiMlS

Gap 4: role ambiguity

Fire

1. Perception

gaps: harbours

Professional
staff

for conflict.

new staff accountant’s
perspective);
(5) a service reflecting
integrity, objectivity, technical competence
and independence
was provided (the Profession’s
perspective);
and (6) the audited
company
has informed
the public of
activities that impact society (a societal perspective).
Because the Profession
is unable to control these and other perceptual
inconsistencies,
certain perceptual
gaps form between
the Profession
and
other parties. These gaps provide a harbour for ongoing
conflict due to
miscommunication
and/or
misinterpretation.
Four gaps are identified
in
Figure 1 (to facilitate this discussion, the Profession is viewed in the context
of CPA firms).

Gap 1
Gap 1, typically referred to in the literature as the expectations
gap, involves
perceptual differences between CPA firms and the public regarding the duties
and responsibilities
of CPAs (Commission
on Auditors’ Responsibilities,
1978;
Magill & Previts, 1990, p. 64). Gap 1 reflects three underlying
conflicts.
The first conflict involves the dilemma of supplying high-quality
services for
a reasonable price. A direct conflict exists between a CPA firm’s self interest
and society’s demand for objective, credible information
concerning
economic activity. The Profession is expected to possess a “degree of responsibility,
wisdom, and concern for the public welfare”
(Mautz, 19881, and a commitment to serve that exceeds the desire for personal gain (Olson, 1978). Central
to such commitment
is society’s expectation
that the Profession search out
and detect the fraudulent
activities of its clients (Commission
of Auditors’
Responsibilities,
1978).
Second, the Profession faces the conflict of satisfying the public’s growing
concern over social, political and environmental
issues. Although
corporate
reporting
has primarily
focused on financial events, society is continually
increasing its pressure to hold companies responsible for other issues as well.
the Profession is increasingly
Perceived by many as “corporate
watchdogs”,

Ritual and con&t

189

called upon to adjust its focus towards
social accountability
(Bloom &
Heymann,
1986; Filios, 1984, 1985a,b,
1986;
Freedman,
1986;
Ramanathan, 1976).
Finally, a third conflict exists concerning the degree to which the Profession
should regulate itself or be regulated
by society. Magill and Previts (1990)
suggest that some governmental
regulation
is necessary to provide minimal
control over the Profession’s activities. However, the effectiveness
of regulatory activity raises some interesting
questions.
Can regulatory
agencies
effectively protect the public interest without
being captured
by those they
seek to regulate? Would regulatory bodies exploit their legitimizing
powers to
perpetuate
their institutional
survival and future growth
(Magill & Privits,
1990, pp. 53-54)? Until questions such as these can be answered,
it is likely
that the profession will retain the burden of proof that its own legislation is
effective and adequate (Windal, 1990, p. 14).

Gap 2
Gap 2 is the scope of services gap. This gap refers to the Profession’s
attestation
responsibility
to third parties and the services it offers to promote
the client’s self interests (e.g. consulting
services, tax preparation
services,
compilations,
etc.). Conflict arises when a CPA firm’s need for independence
is offset by the client’s demand for “one-stop
shopping for information
related
professional
services” (Burton, 1980, p. 56). The wider and more diversified
the Profession’s
scope of service becomes with a client, the more difficult
maintaining
objectivity will be.

Gap 3
Gap 3 is the intraprofessional
competition
gap. This gap involves the conflicts
associated with competitive
behaviour
among CPA firms. Society has repeatedly voiced concern regarding the major accounting firm’s virtual monopoly over large, publicly held clients. Accusations that major firms inhibit free
and open competition
while realizing excessive profits are not uncommon
(Magill & Previts, 1990, p. 54). Indeed, a two-tiered
profession
appears to
exist, wherein each tier reflects different cultures and operating
structures.
The ability of the non-SEC firms to compete favourably for audit engagements
in such an environment
remains questionable.

Gap 4
Gap 4 is the role ambiguity gap. Within the profession, conflicts exist between
the values and norms that CPA firms perceive they project to their professional staff, and the professional
staff’s perceptions
of those values and
norms. For example, most CPA firms want their professional
staff to perceive
that commitment
to quality service is paramount.
However, the contradictory
message often received by individual staff members is that costs must be cut
in order to maximize profits. Underreporting
behaviour, job dissatisfaction
and
high turnover become the consequences
of communicating
mixed messages
(Senatra, 1980).

190

S. K. Mills and M. S. Bettner

The Profession has attempted
to narrow each of these gaps by formalizing
the standard
setting process, promulgating
new standards,
rewriting
the
Professional
Code of Ethics and by creating quality control standards,
peer
reviews, separate practice sections and oversight boards (Magill & Previts, p.
48,91,140).
Such actions represent promises of reform and increased specialization. Yet, certain inconsistencies
remain overlooked.
Conflicts and inconsistencies
faced by the profession
have been examined
by the academic community
in the context of economies
of scale, market
segmentation,
independence,
reputation,
technical competence
and competitive bidding (see Chow et al., 1988). However, to date, no critical analysis has
been offered regarding
the Profession’s
effectiveness
at narrowing
the gaps
we have discussed. In an attempt to fill this void in the literature, we have
chosen to examine the Profession’s conflicts in the context of its rituals. In the
following
sections we will develop the notion that, rather than confronting
its
conflict head-on, the Profession
continually
masks it by using ritual in its
construction
of audit reality.
Audit

rituals

In this section we: (1) briefly discuss the concept of ritual; (2) examine audit
processes as collections of rituals; and (3) point out several benefits of ritual
in an auditing context.
The Concept of Ritual
Comstock (1972) and Knittel (1974) note that virtually all rituals share the
following
common
attributes:
(1) ritualistic
form is often predictable
and
repetitious;
(2) the signs and symbols used in ritual may have both emotional
and practical
meanings
for those
participating
in ritualistic
activities;
(3) rituals provide a simultaneous
condensation
of complex
feelings
and
beliefs by modelling
abstractions
of reality through interconnected
analogies;
(4) rituals bring about social integration,
establish social roles and publicize
the benefits of harmoniously
working together;
(5) rituals focus energy upon
adaptive responses to social adversities over time; and (6) rituals function to
reduce anxiety and interactional
tensions by providing a forum for acting out
social conflicts in a safe and approved manner.
Many definitions
of ritual can be found in the sociology, anthropology
and
theology literatures. Based on the aforementioned
attributes of ritual, we offer
the following
definition
for application
in the context of our paper: “an act of
varying complexity,
whose underlying
implications
are far more important,
and have far more impact, than the ostensible properties of the act itself”.
Rituals can be beneficial in stabilizing a social system’s relationship
with the
chaotic environment
in which it operates. By maintaining
repetitive symbolic
activities, a social system is continuously
created and recreated (Cohen 1974).
Rituals are considered
the natural order of organizations
and society, providing a framework
for establishing
“social contracts
upon which order and
continuity
are based and upon which change swivels” (Rosen, 1985). To the
extent that this framework
is reaffirmed,
the underlying
meanings
are
legitimized (Rosen, 1985).

Ritual

191

and conflict

Rituals may also be considered
“action wrapped
in a web of symbolism”
(Ket-tzer, 1988). Thus, rituals are an important way of communicating
symbolic
understandings.
Through ritualized action, the “inner becomes the outer, and
the subjective world picture becomes social reality” (Nieburg,
1973, p. 30).
Symbolic
forms
may influence
individuals
more readily than utilitarian
calculations
(Kertzer, 1988). Hence, creating a symbol or identifying
oneself
with an important
symbol can be a potent way of gaining and keeping power.
“the hallmark
of power
is the
As Nieburg
(1973, p. 54) aptly notes:
construction
of reality” (emphasis added).
Rituals have a creative potential,
yet change slowly due to memories
of
older rituals. As such, rituals are not static:
“Rituals do change in form, in symbolic meaning, and in social effects; new
rituals arise and old rituals fade away . . . . Because people create and alter
rituals,

the rituals

become

powerful

tools”

(Kertzer,

1988, p. 12).

The slowness of ritual change provides individuals with a sense of continuity.
For members of society and organizations,
the “very fixity and timelessness
of ritual are reassuring parts of the attempt to tame time and define reality”
(Kertzer, 1988, p. 10, emphasis added). Thus, rituals foster a perception
of
balance and harmony where uncertainty
and conflict may actually exist.
The Audit

as a Ritual

We argue that the audit function has ritualistic characteristics
which are used
to create a reality in which financial statements
are perceived to be credible.
The perception
of credibility
renders a certain degree of comfort to those
relying on the statements
for decision-making
purposes.
Drawing from the
previous
discussion
of the concept
of ritual,
an examination
of the
Profession’s rituals and the symbolic meanings that drive them are presented
next. The audit process as a ritual will be illustrated using a scenario typical of
an audit engagement
and the delivery of the audit report.
The Audit Process: Scenario As with all audit engagements
performed
by
Alfred Mason, CPAs, the audit process associated with the Rebo Corporation
audit requires systematic planning, evidence gathering and reporting of audit
results.
For the past 3 years an audit team under the direction
of John
Rawlings has performed
the audit, most of which takes place at Rebo’s
corporate headquarters.
The firm carefully trained its audit team members to
behave professionally,
and to project images of technical competence,
service
awareness
and audit efficiency.
In doing so, the team members’
body
language and communication
style favourably
impress Rebo’s management.
In many respects the functions performed
by the audit team are analogous
to the ritualistic functions
of high priests. Priests and audit team members
both represent
a “source of authority
greater than that of the individuals
involved” (Harrison et al., 1973, p. 45). As with the rituals performed
by priests
(communion,
marriage ceremonies,
etc.), Rebo’s annual audit is predictable
and repetitious,
fostering trust and confidence
in the team, the process and
the resulting report. As with the participation
of priests in religious rituals, the
participation
of certified public accountants
in Rebo’s audit facilitates
the

192

S. K. Mills and M. S. Bettner

jegitimation
of the audit engagement.
In the same manner that the performance of religious ritual functions to legitimize the existence of priests, so too
does the performance
of audits (in compliance
with sanctioned
audit and
quality control standards)
function
to legitimize
the existence
of auditors
(Harrison et a/., 1973).
Rebo’s audit is completed
in a timely manner with few unusual issues to
resolve. The Board members,
Rebo’s management
and representatives
of
Alfred Mason, CPAs, are satisfied with the outcome
and the relationships
developed.
In mid-February,
members of Rebo’s Board of Directors and top
management
meet with John Rawlings, the Partner-in-charge
of the engagement. The purpose of the meeting is to deliver the audit report. In the meeting
Rawlings communicates
the overall results of the audit in his usual formal
manner: Rawlings assures Rebo’s representatives
that an unqualified
report
will accompany
the financial statements.
The Board’s President graciously
accepts Rawlings’ communication
and the meeting is adjourned.
Although
these events may vary in timing,
location,
membership
and
communication
style, they play a significant role in satisfying the expectations
of many diverse groups. On the surface, the audit process and the follow-up
meeting portray what seem to be mundane
aspects of the company/auditor
interface. However, the fundamental
reality of the auditing profession
is, in
many respects, created through the subtle, symbolic meanings
conveyed
in
these activities. As with religious ritual, the audit theatre involves dramatic
acts of varying complexity,
whose underlying
implications
are far more
important,
and have far more societal impact, than the ostensible
properties
of the acts themselves.
The symbols used by priests in religious rituals foster trust, legitimacy and
faith, while providing
valued services to those taking part in the ritual (e.g.
uniting couples in marriage, performing
baptisms, conducting
funerals, etc.).
Similarly, audit processes also foster legitimacy,
trust and confidence,
while
providing
practical functions which enable companies
to borrow funds, issue
securities and satisfy regulatory
and public interest requirements.
The creation and delivery of an audit report has potent symbolic meaning
which instigates social action and defines a sense of worth (Kertzer, 1988).
The audit report symbolizes
one or more of the characteristics
commonly
associated with the profession:
independence,
objectivity,
integrity, technical
competence,
professional
skepticism,
quality
and servants
of the public
interest (Magill & Previts, p. 6). These symbols are embodied
in the actions
of the audit team throughout
the audit process (e.g. planning,
evidence
gathering,
reporting,
etc.), and are explicitly or implicitly stated in numerous
sections of the Profession’s Code of Professional Conduct, Generally Accepted
Auditing Standards (GAAS), Statements
on Auditing Standards (SAS) and its
Quality Control Standards.
The application
of the Profession’s
self-created
standards
enables it to define the nature and extent of audit responsibility
and, by virtue of technical mystique,
create illusions which guide cognition
and legitimize acceptance throughout
the business community
(Gross er al.,
1958; Feltham & March, 1981; Pfeffer, 1981; Rappaport,
1971).
Audits attest to the fair presentation
of financial statements
which, themselves, represent a condensation
of a company’s
environment
and operating

Ritual

193

and conflict

activities.
An audited
company
has, in many
respects,
undergone
a ritualistic
rite of passage not unlike those
associated
with certain
religious
ceremonies.
For example,
following
the rite of confirmation
into a religious
faith, a priest
(or other
religious
figurehead)
attests
to the legitimacy
of the new church
member’s
heartfelt
convictions,
his or her role in the church
and his or her
willingness
to adapt
to a lifestyle
consistent
with
church
doctrine.
Upon
completion
of the confirmation
rite, the new member
is openly
accepted
into
the body of the church.
Likewise,
an auditor’s
attestation
adds credibility
and
legitimacy
to a company,
its role in society,
its adaptability
to change,
and,
ideally,
its resolution
of conflict
in a safe and approved
manner.
Upon
completion
of the audit
rite, the audited
company
is more
apt to be openly
accepted
by an economic
body
of investors,
creditors
and
regulatory
agencies.
Ritualistic
rites and ceremonies
symbolically
reaffirm
and legitimize
critical
values,
norms
and role behaviours
consistent
with the philosophies
of those
conducting
them.
Indeed,
they
represent
a socialization
process
wherein
hierarchical
boundaries
are established,
and the perceived
status
associated
with each hierarchical
level is protected
(Harrison
et al., 1973; Bird, 1980). So
too does the audit process
legitimize
the hierarchies
of the free market
system
by acting
as a secondary
socialization
process
(Berger
& Luckman,
1966, p.
138). The significance
of the audit’s
power
ritualistically
to sanctify
management
behaviour
and the behaviour
of free markets,
while
sustaining
the
boundaries
and
the
underlying
meanings
of accounting,
must
not
be
overlooked.
So, is the audit process
ritualistic?
To the extent
that it is predictable
and
repetitious,
we argue
that it is. To the extent
that, through
symbolism,
it
conveys
both emotional
and practical
meanings,
we argue that it is. To the
extent that it condenses
complex
beliefs
into abstractions
of reality,
we argue
that it is. And,
to the extent
that it stimulates,
legitimizes
and sanctions
common
desires
which
promote
social order,
we argue that it is.

Benefits of Auditing’s

Ritualistic

Nature

Society,
financial
markets
and the Profession
all benefit
from
the ritualistic
nature
of the audit
process
and the application
of its underlying
standards.
Audit
rituals
are beneficial
in stabilizing
society’s
financial
and economic
relationships
in a chaotic
environment.
They
provide
a sense
of certainty
regarding
the future
of financial
markets
and economic
systems.
Over time,
the continuous
creation
and recreation
of the audit
ritual
provides
a framework for order and continuity.
Bocock
(1974)
argues
that
ritual
provides
a maintenance
function
for
society’s
dissident
elements:
“It [ritual] is also a crucial area for the forwarding
of liberation,
for the
building
up of movements
of people to change society. In the area of ritual
action is to be found a key expression
of the struggle
of human liberation
Ritual can have importance
in rallying
people to act in order to protect
;hkir economic
interest, or their physical survival”
(p. 175).
Thus, one
emotions

might
while

contend
that
simultaneously

audit

rituals
providing

benefit
society
by “draining
channels
for reunification

hostile
and

194

S. K. Mills and M. S. Bettner

reconciliation”
(Burns
& Laughlin,
1979).
However,
we will later argue
that
audit
rituals
too
often
create
only
an
illusion
of
reunification
and
reconciliation.
By controlling
audit rituals,
the Profession
controls
social stability,
regulates
its distribution
of power
and defines
its interaction
with outside
constituents.
Without
question,
audit
rituals
can be “powerful
tools
for those
who create
and alter them”
(Kertzer,
1988).
In this regard,
Burns
and Laughlin
(1979,
p.
271) make the following
observation:
“Because
ritual serves as a social control
device structuring
action and
interaction,
individuals
or groups gaining
control over significant
ritual in a
society have the potential
means of controlling
to a greater or lesser extent
the evaluations
and actions of others in the society
. . [Thus,] ritual may be
used as a basis of sanctioning
power, as well as a resource for persuasive
power”.
By establishing
its own auditing
standards
rituals,
the Profession
is able to
control
performance,
socialize
its members,
communicate
specified
images
to
third parties
and legitimize
the overall
audit process.
Once in place, monitoring the effectiveness
of these
rituals
allows
the Profession
to maintain
or
create additional
standards
to legitimize
the audit process
further.
The creation
and maintenance
of its rituals
makes
it possible
for the
Profession
to influence
the supply
and demand
for its auditing
services.
In
essence,
the Profession
has the power
to “transform
a competitive
preference
structure
into one more conducive
to cooperation”
(Burns
& Laughlin,
1979, p.
260).
Further,
the nature
of the standards-setting
process
functions
as a
“metaprocess
influencing
collective
action
by defining
or institutionalizing
collective
decision
procedures”
(Burns
& Laughlin,
1979, p. 270). This gives
the Profession
tremendous
legitimizing
power
over the audit
ritual
and the
behaviour
of auditing
professionals.
In summary,
the ritualistic
nature
of the audit
process
creates
a reality
that
fosters
perceptions
of balance
and harmony
in an environment
plagued
with
uncertainty
and conflict.
The creation
of viable,
healthy
rituals
to bring
a fair
degree
of order out of chaos
is appropriate.
However,
the masking
of conflict
in order
to paint
a distorted
portrait
of what
is real may
have
negative
consequences.
Conflicts
under
these
circumstances
are permitted
to fester,
often resulting
in dysfunctional
behaviour.
Left unmasked,
the conflicts
may
become
destructive
and harmful.

Masking

Conflict

Through

Ritual

Perceptions
of the audit vary as the vested
interests
of numerous
individuals
and groups
vary. Hence,
perception
gaps
have been created.
To the extent
that audit
rituals
permit
a condensation
of symbols
and ideals,
the inherent
have
been
synthesized
to form
complexities
of the auditing
profession
auditing
reality.
We contend,
however,
that
conflicts
in the
Profession
continue
to persist
because
individuals
have condensed
auditing’s
symbolic
1988).
Further,
we argue
that the ritualistic
meanings
differently
(Kertzer,
characteristics
continue
to mask perception
gap conflicts,
thereby
inhibiting
their resolution.

Ritual

and conflict

195

Just as rituals
may blur “the
boundaries
between
that which
is work and
play, instrumental
and moral,
inside
and outside”,
so may rituals
blur that
which
is conflict
and harmony
(Rosen,
1988, p. 470). Rituals
are ambiguous
because
the symbols
and ideals
they convey
often have no precise
meaning
(Kertzer,
1988).
The fuzziness
or ambiguity
associated
with
ritual
has its
blessings
and its curses.
Rituals
permit
the condensation
of meaning.
They
facilitate
the attachment
of a variety
of different
meanings
to the same symbol
or idea, thereby
permitting
ambiguity
of meaning
and the masking
of conflict.
In situations
where
conflict
avoidance
is desired,
the complexity
and
uncertainty
of ritualistic
meaning
serves
as a powerful
tool
(Lewis,
1980).
However,
conflict
avoidance
is not necessarily
a healthy
approach
to the
management
of conflict
in the auditing
profession.
As previously
discussed,
by facilitating
discourse
between
parties,
conflict
provides
a mechanism
for
venting
hostility,
containing
dissention,
preventing
stagnation
and motivating
innovation
(Bercovitch,
1984).
In the absence
of group
consensus
regarding
the purpose
of the audit and
the role of the Profession
in our society,
the varying
interpretations
of
symbolic
meaning
projected
through
audit ritual have functioned
to create
an
illusion
of solidarity,
cohesion
and stability
(Munn,
1973;
Turner,
1967).
Historically,
the audit and its supporting
standards
have been able to satisfy a
variety
of needs
in absence
of a narrowly
defined
set of characteristics
and
expectations.
As such, conflicts
have been overlooked,
and a false sense of
harmony
and balance
has been achieved.
Recently,
however,
the cohesion,
unity and stability
of the Profession
have begun to erode (as evidenced
by the
perception
gaps
discussed
previously).
Unfortunately,
the ritualistic
characteristics
of the auditing
environment
have
made
the status
quo
of the
Profession
extremely
resistant
to change.
We argue that auditing’s
ambiguous
nature
has allowed
those in control
to
curtail
resistance
to established
structures
of power.
Here again,
the ritualistic
nature
of the audit
and its supporting
standards
has been
used
to mask
underlying
conflict.
Reflecting
on the nature
of power,
ritual
and conflict,
Grimes
(1982, p. 42) asserts:
“Power
of whatever
mic, [etc.]-is
always

kind-political,
ambiguous;

military,
legislative,
influential,
econoit is both a source of conflict and a means

of resolving
it. Whenever
a ritual
symbol
masks
ambiguity
or covers
social
contradiction-and
it often does-we
have to do with ceremoniousness
So it is easy
to see
how
the
symbolism
of power
presented
for
public
veneration
and draped
in such
a way
as to expose
only
the the righteous,
legitimate
qualities,
easily
becomes
the core
of a religio-political
system”.

In summary,
we contend
that conflicts
facing
the Profession
continue
to
persist
because
the ritualistic
nature
of the audit process
has, in part, created
ambiguities
which
underlie
various
perceptual
gaps. To avoid the impending
conflict
associated
with these gaps, the Profession
has used ritual
in order to
legitimize
its actions
and to maintain
the stability
of the status quo (see Figure
2). However,
we assert
that the masking
of its conflict
through
ritual-as
opposed
to resolving
it-threatens
the Profession’s
solidarity.
As the world
becomes
increasingly
complex,
we argue
that
frequent

196

S. K. Mills

Harboured

and M. S. Bettner

conflicts

Harboured

Masking
of conflict
through
ritual

Preservation
status

Examination
to unmask

Evolution
status

of the
quo

1

r---Solidarity,

/

2. The

Profession’s
conflict.

current

of ritual
conflict

of the
quo

J
-7

unity.
stability,
service.
and innovation

Illusion
of unity
and stability

Figure

conflicts

approach

to

Figure

3.

An

alternative

approach

to conflict.

episodes of conflict resolution will be necessary elements in the preservation
of the Profession’s stability and cohesion. Through the stimulus of conflict, we
believe that collective guidelines
can be continuously
defined and redefined
as the Profession
innovatively
evolves in response to society’s changing
expectations
(see Figure 3).
Future directions
Examining the audit process and its supporting
standards as rituals is useful
in understanding
the conflicts faced by the Profession. Through the symbolic
communication
of ritual, the Profession has historically managed its chaos.

Ritual

and conflict

197

We suggest
two general
courses
of action
to unmask
the conflicts
of the
Profession.
First, the Profession
needs
to re-examine
the importance
of
conflict
as a catalyst
in establishing
the norms
and values
it explicitly
and
implicitly
projects.
In this regard,
Coser (1956, p. 128) provides
insight
which
pertains
to the stimulating
aspects
of conflict
and the stifling
consequences
of
masking
it:
Conflict may initiate other types of interaction
between
antagonists,
even
acts as a stimulus
for
previously
unrelated
antagonists
. Conflict
establishing
new rules, norms, and institutions,
thus serving as an agent of
socialization
for both contending
parties.
Furthermore,
conflict
reaffirms
dormant
norms
and thus intensifies
participation
in social life. As a
stimulus
for the creation
and modification
of norms, conflict
makes the
readjustment
of relationships
to changed
conditions
possible”.
A commitment
to the understanding
of its rituals and conflicts
might
possibly
elevate
public
trust in the profession,
facilitate
professional
cooperation
and
reduce
ambiguities
regarding
the Profession’s
values
and norms.
Second,
the Profession
needs to unmask
harboured
conflict
by examining
(and perhaps
eliminating)
many
of the rituals
it has historically
used
in
legitimizing
its actions
and maintaining
its illusion
of control
and unity.
As
previously
mentioned,
properly
managed
conflict
plays
an integral
role in
maintaining
and
unifying
social
relationships.
The
discourse
of conflict
provides
a conduit
for expressing
animosity,
containing
dissention,
curtailing
apathy
and fostering
creativity.
In Figure
3 we depict
a structure
in which
the
unmasking
and resolution
of harboured
conflict
allows the Profession
to evolve
in a collaborative
arena
characterized
by solidarity,
stability
and responsive
service
innovation.
Of course,
we are not suggesting
a complete
elimination
of the current
audit
process
and its standards.
Yet, where
does one begin? As a starting
point, we
suggest
that the Profession
support
future
research
efforts which
thoroughly
examine
the
ritualistic
aspects
of the audit
process
and its supporting
standards.
If rituals
permit
the masking
or concealment
of conflict,
they may
also have the potential
to serve
in the mitigation
or resolution
of conflict.
Thus, as the Profession
copes with the burden
of transition
and the constant
onslaught
of societal
pressures,
a close examination
of its rituals
may reveal
new and creative
approaches
for rectifying
various
inconsistencies
in its
organization,
its structure,
its governance
and its mission.
Turner
(1974, p. 80)
stresses
the value of examining
social action
in the context
of the rituals:
I, . . if we are to begin to understand
how ritual makes people tick, it is not
enough
merely
to consider
the symbolic
molecules
of ritual as social
storage-units.
They are these and more, and in the “more”
we move into
the field of social dynamics
where
ritual both maintains
the traditional
forms of culture and becomes
at times of major crisis an instrument
for
adjusting
new norms and values to perennially
potent symbolic
forms and
discarding
old ones from the ideological
pole of crucial symbols”.
We believe
that social
realities
are not only reflected in ritual,
but that they
are, to a certain
extent,
defined by ritual. When viewed
as a metacommunicative form, we contend
that ritual inquiry
facilitates
an understanding
of social
dynamics
and ideological
perspectives.
As an understanding
develops,
new
and exciting
research
questions
and avenues
begin to emerge.

198

S. K. Mills

and M. S. Bettner

For instance, does the ritualism, mystique and authoritative
symbolism
of
the Profession’s standard setting and regulatory
activities construct a reality
that impedes its ability to identify and respond to important
social, political,
ethical and environmental
issues (gap 1, the expectations
gap)? Do the rituals,
metaphors
and myths of the attestation
function distort society’s expectations
and therefore hamper its ability to distinguish
between that which is positive
and that which is normative (gaps 1 and 2, the expectations
gap and the scope
of services gap) ? Do cultural and structural
rituals within the Profession
condition the perceptions
of the business community
and thereby inhibit free
and open competition
(gap 3, the intraprofessional
competition
gap)? Do
performance
evaluation
rituals performed
in CPA firms foster contradictions
and ambiguities
regarding
norms and values, causing
dysfunctional
behaviour and widespread
dissatisfaction
among the Profession’s
members
(gap 4, the role ambiguity
gap)? What is the relationship
between
audit
technology
and audit rituals? To what extent do rituals hamper the acceptance
of emerging
technologies?
Can expert systems be modelled
and integrated
into the audit process without
considering
the dynamic role ritual plays in
social interaction?
Etc.
Studies of ritual are certainly not new to the anthropology
and sociology
literatures.
Thus, those interested
in pursuing the ritualistic aspects of the
Profession have limitless resources at their disposal. However, as a primer,
we encourage
accounting
researchers
to refer to Grimes
(1982) for a
discussion pertaining
to the design of ritual studies. Grimes contends that
within
each social interaction
lies a framework,
or map, of ritual. His
approach
to mapping
ritual is beneficial
in that it: (1) enables complex
symbolism
of ritual to speak for itself more fully; (2) aids interpreters
in
discerning
continuities
and discontinuities
among
the multiple
symbols
conveyed through
ritual; (3) helps to generate
new theories of ritual; and
(4) precipitates a written account of the living qualities of ritual that surround
us (Grimes, 1982, p. 20).
Summary

The purpose of this paper was to consider the ritualistic characteristics
of the
audit process and its supporting
standards.
Ritual in a society can be very
beneficial,
and, to a large extent, is a necessary aspect of our existence.
However, ritual often functions to mask certain conflicts to ensure that social
order is maintained
and that controversial
actions are legitimized.
Such is the
case in the auditing profession’s
use of ritual.
In our discussion
we introduced
four perception
gaps which serve as
harbours for conflict in the Profession: (1) the expectations
gap; (2) the scope
of services gap; (3) the intraprofessional
competition
gap; and (4) the role
ambiguity
gap. We then developed
the concept of ritual, and discussed how
the ritualistic characteristics
of the audit process (e.g. abstract symbolism,
legitimizing
powers, etc.) result in the masking of the Profession’s conflicts.
In our paper we do not unequivocally
condemn
the Profession’s
use of
ritual. Indeed, audit rituals have been beneficial in stabilizing various aspects
In addition
to providing
financial
of a chaotic
economic
environment.

Ritual

and conflict

1YY

reporting
with a framework
for order and continuity,
audit rituals
enable
the
Profession
to control
its social
stability,
regulate
its distribution
of power,
define
its interaction
with
outside
constituents
and maintain
its legitimacy.
However,
because
individuals
condense
the symbolic
meaning
of audit rituals
differently,
we contend
that perceptual
gaps develop
wherein
conflicts
are
often overlooked
and a false sense of harmony
and balance
is achieved.
We conclude
our paper by suggesting
future
directions
for the Profession
and for auditing
research.
We encourage
accounting
researchers
to explore
the implications
of audit
ritualism,
and we encourage
the Profession
to be
supportive
and receptive
to their findings.
As the Profession
interfaces
with
economic
instability,
emerging
technologies,
increased
ethical
sensitivity
and
society’s
changing
values,
such inquiry
may provide
new insight
regarding
the effective
resolution
of inevitable
conflict.
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