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Translating audit materiality in disclosure: Competing logics and different outcomes in Australia and New Zealand

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  • Kend, Michael
  • Nguyen, Lan Anh

Abstract

Within the accounting profession, PwC has introduced innovative practices related to audit materiality disclosures, and subsequently, some other auditors have accepted and followed PwC’s voluntary disclosure policy in audit reports, whereas others have rejected it. In this study we report on why external auditors in Australia and New Zealand have developed different audit materiality disclosure practices. As such, we explore the interplay between competing institutional logics, to shed light on the ways in which audit disclosure practices differ. Our findings indicate that, in New Zealand, both Deloitte and KPMG have been influenced by stakeholders pressuring them to accept and then follow the new voluntary disclosure practice introduced by PwC. In Australia, however, there has been resistance towards voluntary audit materiality disclosures. We examine claims about the various risks surrounding these audit disclosure practices. The study conveys how the circulation of ideas in the audit domain is influenced by a quest for tangibility (of claims), as mediated by the interplay between institutional logics, which has led to differences between audit disclosure practices in Australia and New Zealand.

Suggested Citation

  • Kend, Michael & Nguyen, Lan Anh, 2023. "Translating audit materiality in disclosure: Competing logics and different outcomes in Australia and New Zealand," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:crpeac:v:95:y:2023:i:c:s1045235422000879
    DOI: 10.1016/j.cpa.2022.102502
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    References listed on IDEAS

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    1. Fogarty, Timothy J., 1992. "Organizational socialization in accounting firms: A theoretical framework and agenda for future research," Accounting, Organizations and Society, Elsevier, vol. 17(2), pages 129-149, February.
    2. Lounsbury, Michael, 2008. "Institutional rationality and practice variation: New directions in the institutional analysis of practice," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 349-361.
    3. Gendron, Yves & Cooper, David J. & Townley, Barbara, 2007. "The construction of auditing expertise in measuring government performance," Accounting, Organizations and Society, Elsevier, vol. 32(1-2), pages 101-129.
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    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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