Management Accounting Section Midyear Meeting

Managing Quality Control Systems: How Audit Firms Experience and Navigate Conflicting Institutional Demands

• In Event: Tasks and Talent Management

Abstract

Quality control (QC) systems are critical to audit quality. While QC systems are evolving quickly, an understanding of how firms manage QC systems is lacking. We interview 27 QC system leaders to examine QC changes firms are currently making and would ideally make. The gap between current and ideal led us to investigate the challenges firms face in managing QC systems and how they are addressed. We find that many challenges—including obtaining buy-in, evaluating costs and benefits, and advancing proactive over reactive changes—are caused by conflicting demands. Consistent with institutional theory, our data reveal that firms engage in seeking partial conformity (e.g., negotiating between stakeholders) or altering the framing of the demands (e.g., scientizing changes) in response to the conflicting demands. Our study sheds light into how QC systems are managed and informs practitioners, regulators, and academics of the forces that shape the evolution of QC systems.

Authors

• Christie Hayne, University of Illinois at Urbana-Champaign

• Mark Peecher, University of Illinois at Urbana-Champaign

• Jeffrey Scott Pickerd, The University of Mississippi

• Dan Zhou, University of Illinois at Urbana-Champaign