Critical Perspectives on Accounting (1992) 3, 185-200

RITUAL AND CONFLICT IN THE AUDIT

PROFESSION
SHERRY K. MILLS* AND MARK S. BE-ITNER~
*New Mexico State University and fBucknel/ 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 un-
avoidable, 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 University, Department
of Accounting, Las Cruces, New Mexico, USA.
Received 23 February 1990; revised 20 June 1990, 21 April 1991; accepted 27 June 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 sugges-
tions 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 knowl-
edge (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 Professional

staff

Fire 1. Perception gaps: harbours for conflict.

new staff accountant’s perspective); (5) a service reflecting integrity, objec-

tivity, 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 econo-
mic activity. The Profession is expected to possess a “degree of responsibility,
wisdom, and concern for the public welfare” (Mautz, 19881, and a commit-
ment 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.
Perceived by many as “corporate watchdogs”, the Profession is increasingly
 Ritual and con&t 189

called upon to adjust its focus towards social accountability (Bloom &
Heymann, 1986; Filios, 1984, 1985a,b, 1986; Freedman, 1986; Rama-
nathan, 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 regula-
tory 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 re-
peatedly voiced concern regarding the major accounting firm’s virtual monop-
oly 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 profes-
sional 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 special-
ization. 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 competi-
tive 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, provid-
ing 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 and conflict 191

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.
As Nieburg (1973, p. 54) aptly notes: “the hallmark of power is the
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 perfor-
mance 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 engage-
ment. 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, them-
selves, represent a condensation of a company’s environment and operating
 Ritual and conflict 193

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 manage-
ment 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 frame-
work 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 might contend that audit rituals benefit society by “draining hostile
emotions while simultaneously providing channels for reunification 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, monitor-
ing 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
complexities of the auditing profession have been synthesized to form
auditing reality. We contend, however, that conflicts in the Profession
continue to persist because individuals have condensed auditing’s symbolic
meanings differently (Kertzer, 1988). Further, we argue that the ritualistic
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 charac-
teristics 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 kind-political, military, legislative, influential, econo-

mic, [etc.]-is always ambiguous; it 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 and M. S. Bettner

Harboured conflicts Harboured conflicts

Masking of conflict Examination of ritual

through ritual to unmask conflict

Preservation of the Evolution of the

status quo status quo

1
/
Illusion of unity
and stability
r----
Solidarity,
stability,
J -7
unity.
service.
and innovation

Figure 2. The Profession’s current approach to Figure 3. An alternative approach to conflict.

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
previously unrelated antagonists . Conflict acts as a stimulus for
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 metacommunica-
tive 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 be-
haviour 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
of a chaotic economic environment. In addition to providing financial
 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.

References
Armstrong P. & Vincent, J. I., “Public Accounting: A Profession at a Crossroads”, Accounting
Horizons, March, 1988, pp. 94-98.
Bercovitch, J., Social Conflicts and Third Parties (Westview Press: Boulder, Colorado, 1984).
Berger, P 81 Luckmann, T., The Social Construction of Reality (Garden City. New York: Anchor,
1966).
Bird, R., “The Contemporary Ritual Milieu”, in R. B. Brown ted), Ritual and Ceremonies in Popular
Culture (Ohio: Bowling Green University Press, 1980).
Bloom, R. & H. Heymann, “The Concept of ‘Social Accountability’ in Accounting Literature”,
Journal of Accounting Literature, Vol. 5, 1986, pp. 167-182.
Bocock, R., Ritual in lndusrrial Society (London: George Allen and Unwin, Ltd, 1974).
Boland, R. J., Jr., “Myth and Technology in the American Accounting Profession”, Journal of
Management Studies, Vol. 19, No. 1, 1982, pp. 109-127.
Burns, T. & C. D. Laughlin, “Ritual and Social Power”, in E. G. D’Aquilli and C. D. Laughlin, Jr.
(eds), The Spectrum of Ritual: A Biogenetic Strucrural Analysis (New York: Columbia University
Press, 1979).
Burton, J. C., “A Critical Look at Professionalism and Scope of Services”, The Journal of
Accountancy, April, 1980, p. 56.
Chow, C. W., Kramer, L. & W. A. Wallace, “The Environment of Auditing”, in Abdel-khalik and I.
Solomon (eds), Research Opportunities in Auditing: The Second Decade, pp. 155-183
(Sarasota, Florida: American Accounting Association, Auditing Section, 1988).
Coehn, A., Two-Dimensional Man (Berkely, California: University of California Press, 1974)
Commission of Auditors’ Responsibilities, Report, Conclusions, and Recommendarions (New
York: Commission of Auditor’s Responsibilities, 1978).
Comstock, W. R., The Study of Religion and Primitive Religions (New York: Harper and Row,
1972).
Cooper, D. J. & Sherer, M. J., “The Value of Corporate Accounting Reports: Arguments for a
Political Economy of Accounting”, Accounting, Organizations and Society, Vol. 9, 1984, pp.
207-232.
Coser, L., The functions of Social Conflict (New York: The Free Press, 1956).
Eldridge, A. F., images of Conflict (New York: St Martins’ Press, 1979).
Feltham, G. A. 81 March, J. G., “Information as Signal and Symbol”, Administrative Science
Quarterly, Vol. 26, 1981, pp. 171-186.
Filios, V. P.. “Corporate Social Responsibility and Public Accountability”, Journal of Business
Ethics, Vol. 3, 1984, pp. 305-214.
Filios, V. P., “Social Process Auditing A Survey and Some Suggestions”, Journal of Business
Ethics, Vol. 4. 1985a, pp. 477-485.
Filios, V. P., “Assessment of Attitudes Toward Corporate Social Accountability in Britain”, Journal
of Business Ethics, Vol. 4, 1985b, pp. 155-173.
Filios, V. P., “Review and Analysis of the Empirical Research in Corporate Social Accounting”,
Journal of Business Ethics, Vol. 5, 1986, pp. 291-306.
Freedman, M., “Social Accounting”, in G. Siegel and H. Ramanauskas-Marconi (eds.) Behavioral
Accounting (Cincinatti, Ohio: South-Western Publishing, 1989), pp. 499-517.
Grimes, R. L., Beginnings in Ritual Studies (New York: University Press of America, 1982).
200 S. K. Mills and M. S. Bettner
Gross, N., Mason, W. & McEachern, A., Explorations in Role Analysis (New York: John Wiley and
Sons, 1958).
Harrison, M., Belasco, J. & Alutto, J., “The Role of Ceremonials in Organizational Behavior”,
industrial and Labor Relations Review, Vol. 12, 1973, pp. 40-51.
Humphrey, C. G., “Audit Expectations”, in W. S. Turley, & M. J. Sherer (eds), Current issues in
Auditing, 2nd Edition (Paul Publishing, forthcoming, 1990a). Presented at the Critical Perspec-
tives in Auditing Symposium, April, 1990, New York.
Humphrey, C. G., “From Techniques to Ideologies: An Alternative Perspective on the Audit
Function”, an unpublished working paper, University of Manchester, 1990b.
Humphrey, C. G. & Moizer, P., “From Techniques to Ideologies: An Alternative Perspective on the
Audit Function”, an unpublished working paper, University of Manchester, 1990.
Kaplan, R. L., “Accountants’ Liability and Audit Failures: When the Umpire Strikes Out”, Journal
of Accounting and Public Policy, Vol. 6, 1987, pp. l-8.
Kertzer, D. I., Rituals, Politics, and Power (Yale University Press, New Haven and London, 1988).
Knittel, R. E., “Essential and Nonessential Ritual in Programs of Planned Change”, Human
Organization, Vol. 33, 1974, pp. 268-279.
Lehman, C. 81 T. Tinker, “The ‘Real’ Cultural Significance of Accounts”, Accounting Organizations
and Society, Vol. 12, No. 5, 1987, pp. 503-522.
Lewis, G., Day of Shining Red: An Essay on Understanding Ritual (Cambridge: Cambridge
University Press, 1980).
Lindblom, C. E., “The Accountability of Private Enterprise: Private-No. Enterprise-Yes.“, in T.
Tinker (ed.), Social Accounting for Corporations, pp. 13-36 (New York: Markus Wiener
Publishing, 1984).
Loft, A., “Toward a Critical Understanding of Accounting: The Case of Cost Accounting in the
U.K., 1914-1925”, Accounting, Organizations and Societv, Vol. Il. No. 2, 1986. oo. 137-169.
Magill, H. T. & Previts, G. j., &A Professional Resdonsibilities: Ai /n&&&ion (Dallas:
South-Western Publishing, 1990).
Mautz, R. K., “Public Accounting: Which Kind of Professionalism?“, Accounting Horizons,
September, 1988.
Mednick, R., “The Auditor’s Role in Society”, Journal of Accountancy, February, 1986, pp. 670-74.
Meyer, J. W. & B. Rowan, “Institutionalized Organizations: Formal Structure as Myth and
Ceremony”, American Journal of Sociology, Vol. 83, 1987, pp.340-363.
Munn, N. D., “Symbolism in Ritual Context: Aspects of Symbolic Action”, in J. J. Honigmann
\\$tj.Handbook of Social and Cultural Anthropology, pp. 579-612 (Chicago: Rand McNally,

Nieburg, H. L.. Culture Storm: Politics and the Ritual Order (New York: St. Martin’s Press, 1973).
Olson, W. E., “Is Professionalism Dead?“, The Journal of Accountancy, July, 1978, pp. 78-82.
Pfeffer, J., “Management as Symbolic Action: The Creation and Maintenance of Organization
Paradigms”, in L. L. Cummings and B. M. Staw (eds), Research in Organizational Behavior,
Vol. 3 (Greenwich, Connecticut: JAI Press, 1981).
Portwood, D. & Fielding, A., “Privilege and the Professions”, Sociological Review, Vol. 29, No. 4,
1981, pp. 749-773.
Ramanathan, K. V., “Toward a Theory of Corporate Social Accounting”, The Accounting Review,
Vol. 51, No. 3 July, 1976.
Rappaport, R. A., “Ritual Sanctity and Cybernetics”, American Anthropologist, Vol. 73, No. 1,
1971, pp. 56-76.
Reiff, R., “The Control of Knowledge: The Power of the Helping Professions”, Journal of Applied
Behavioral Sciences, Vol. 10, No. 3, 1974, pp. 451-461.
Rosen, M., “Breakfast at Spiro’s: Dramaturgy and Dominance”, Journal of Management, Vol. 11,
No. 2, 1985, pp. 31-48.
Rosen, M., “You Asked for It: Christmas at the Bosses’ Expense”, Journal of Management
Studies, Vol. 25, No. 5, September, 1988, pp. 463-479.
Rueschemeyer, D., “Doctors and Lawyers: A Comment on the Theory of the Professions”,
Canadian Review of Sociology and Anthropology, 1964, pp. 17-30.
Senatra, P. T., “Role Conflict, Role Ambiguity, and Organizational Climate in Public Accounting
Firms”, Accounting Review, October, 1980, pp. 594-603.
Simmel, G., Conflict, Translated by Kurt H. Wolff, (Glenco, Illinois: The Free Press, 1955).
Tinker, A. M., “Accounting for Unequal Exchange: Wealth Accumulation versus Wealth
Appropriation”, in T. Tinker (ed.), Social Accounting for Corporations: Private Enterprise versus
the Public Interest, pp. 137-203 (New York: Markus Wiener, 1984).
Turner, V. W., The Forest of Symbols (Ithaca: Cornell University Press, 1967).
Turner, V. M., Dramas, Fields, and Metaphors (Ithaca, NY: Cornell University Press, 1974).
Windal, F. W. Ethics and the Accountant: Text and Cases (Englewood Cliffs: Prentice Hall, 1990).
Zeff, S. A., “Does the CPA Belong to a Profession?“, Accounting Horizons, June, 1987, pp. 65-68.