Critical Perspectives on Accounring f 199 1) 2, 109- 12 1

THE AUDITING GAME: A QUESTION OF

OWNERSHIP AND CONTROL
HUGH WILLMOTT
Manchester School of Management, UMIST, UK

This paper situates the regulation of auditing in its social and historical
context. It argues that efforts to appreciate the “politics” of regulation as a
“game” played between representatives of “society” and “the profession”
must be extended and deepened to grasp (i) its constitution within a
historically specific field of politico-economic relations; (ii) the disunity of
each “player”; and (iii) the inescapable involvement of academics in the
regulation game. The paper concludes by discussing recent developments
in the UK arena.

Introduction
In “The Expectations Game”, James Gaa presents a framework for model-
ling the structure and dynamics of auditing regulation in the United States. His
analysis forms part of a developing body of knowledge in which the
discourses and practices of accounting and auditing are treated as social
phenomena. Gaa’s focus upon auditing is timely since, in comparison with
accounting regulation, its study has been seriously neglected and
marginalized,’ even as evidence of “failures” mounts and doubts about the
independence of auditors grow. With reference to the US, UK, Canada and
Australia at least, Hines has observed how “the audit function has become
increasingly problematical” (Hines, 1989, p. 83). In relation to projected
developments within the UK, especially the requirements of the eighth EC
Directive on Company Law, Davison (1987, p. 11, a former chief executive and
senior partner of Arthur Anderson, has noted how “the position and functions
of auditors and their Institute are being permanently and irreversibly altered
. . . State regulation of the practice of accounting is inexorably overtaking
self-regulation”.
Expressions of concern about the regulation of auditing are aroused
whenever “public” expectations about the role and responsibilities of the
auditor are perceived to be unfulfilled by those in a position to voice and
amplify their concerns. The voices include those of academics and prac-
titioners as well as politicians, journalists and company executives. For
example, in the UK, recent months have seen a number of highly publicized
financial scandals and collapses, stimulating doubts about the “independ-
ence” of auditors and the effectiveness of their regulation. In such cir-
cumstances, the gap, or contradiction, of expectations concerning the inde-
pendence and reliability of audits can become over-determined by additional
pressures. As a consequence, a shift in the ownership and control of the
means of regulation may be contemplated. In addition to the requirements of
Received 22 August 7990; revised 27 September 7990, 72 October 1990, 79 November 1990;
accepted 7 January 7997.
109
1045-2354/91/010109 + 13 $03.00/O @ 1991 Academic Press Limited
 110 M. Willmloti
the eighth EC directive, current pressures include: the publication of an
independent report on “Takeovers and Short-tsrmism in the UK”, which
recommends that the Department of Trade and Industry take on direct
responsibility for the regulation of accounting and auditing; the tabling of
many questions about auditing regulation in the House of Commons;
exceptionally strong criticisms of the effectiveness of regulatory processes in
the editorials of the financial press (especially the Financial Times and
Accountancy Age during October 1990); and the intensification of competition
in audit markets. According to a deputy senior partner of Peat Marwich
Mclintock, such pressure “has resulted in an expectation gap which is I fear
on the edge of becoming unbridgeable” (Accountancy Age, 25 October, 1990,
p. 3).
As Gaa notes, the practical dynamics of the regulation process involve
“institutional processes of enormous and still uncharted complexity” (Bur-
chell et a/., 1980, p. 12, quoted in Gaa, 1991). What is more debatable,
however, is whether his proposed model of regulation supplies a “simple
theoretical explanation” of how “the social role of auditors is determined”; or
that it “provides a theoretical framework within which the actual historical
details may be analysed”. These claims will be challenged in three key
respects. First, it is argued that insufficient attention is paid to how the
“expectations game” has been constructed historically. There is little con-
sideration of how the rules of the “the regulation game” have taken shape
within an historically specific field of politico-economic relations. Gaa argues
that the regulation game revolves around a contest between representatives
of society and representatives of the accountancy profession. Overlooked is
the taken for granted privileging by both groups of the concerns of investors
and creditors, to the neglect of other groups in society who are affected by the
activities of corporations-such as employees, consumers and citizens. Sec-
ond, and relatedly, the interests of the two players are assumed to be
transparent and unified. This conceals the presence of considerable tensions
within the constituencies of each player in the game. Third, Gaa’s model takes
for granted the privileged position of the academic whose modelling activity
appears to be pursued independently of the game which s/he studies. The
inescapable dependence of academics upon the resources of practical reason-
ing forged by dominant groups in society is disregarded, as is academics’
contribution to the legitimation or disturbance of commonsense understand-
ings. Following this critical commentary upon Gaa’s analysis, some reflections
upon current developments in the “regulation game” in the UK are presented.
First, though, it may be helpful to provide a brief resume of Gaa’s analysis.

Gaa’s Argument
Central to Gaa’s argument is the contention that the process through which
professional rights and responsibilities are defined and enacted can be
adequately modelled as “a political game (played) between two contending
parties”: the representatives of society and the representatives of the
accountancy profession. The two players are understood to be engaged in a
“political debate” through which they seek to secure their respective inter-
ests; and they do this by making rational choices between the options
available to them.
 The auditing game 111

According to Gaa, representatives of society make choices about the level of

government regulation, their interest being to secure effective regulation at
minimal cost to the public. Despite commanding the formal powers necessary
to regulate auditing directly, representatives of society-the Securities and
Exchange Commission (SEC) in the US-are understood to favour a strategy
of putting pressure on the accountancy bodies to increase their respon-
sibilities for the regulation of auditing practice. The threat of intervening to
remove self-regulation is similarly understood to be deployed in order to
shape and discipline the process of self-regulation. Representatives of the
accountancy bodies, in contrast, are understood to make choices about the
level of (self-)regulation to be imposed upon their members. According to
Gaa, they are supportive of an expansion of the autonomy and privileges
conferred by self-regulation, but are resistant to pressures for increased
regulation in any form. At the same time, they are also anxious to affirm their
capacity to act responsibly so as to minimize external regulation.
In pursuit of their respective interests, Gaa’s players formulate strategies
and demands in relation to the anticipated moves of the other player. The
likely costs and benefits associated with alternative moves and counter moves
are weighed before making the next move in the “regulation game”. For
example, despite a strong preference for less regulation of any kind, Gaa
argues that the profession rarely articulates such a preference. This is because
it anticipates that such a move would stimulate pressures for increased
self-regulation or even precipitate its loss. In this way, the perceived threat of
increased regulation is said to promote greater willingness by the profession
to tighten its self-regulation. However, the extent of this willingness to
regulate its affairs is also understood to be tempered by a belief that the
strong preference of society, in the guise of the SEC, is for self-regulation
rather than independent regulation. The threat to strip the professional body
of some or all of the rights and privileges associated with self-regulation is
weakened by the profession’s belief that the representatives of society are
unwilling to incur the costs associated with such a move.
Having identified the structural dynamics of the regulation game, Gaa
assesses the status of the regulator in terms of three ideal-typical possibilities:
the “captured”, “less captured” and “watchdog”-a differentiation which
seeks to disclose the degree of independence of the regulator from the
profession. Gaa concludes that the regulator-the SEC-is not an effective
watchdog. Though not entirely without teeth or bite, its game-play reveals it
to be more and less captured by the profession: more captured in the sense
that it appears incapable of carrying out its threat to regulate the profession;
but also less captured since it has induced the profession to tighten its
self-regulation.

An Evaluation
Gaa’s modelling of auditing regulation as a political game is an advance upon
studies which abstract the technical specifications and requirements of
auditing standards from the social context in which they are developed and
enforced. “Power and influence (rather than, say superior skills at analysing
the merits of competing conceptions of the social good)“, Gaa argues, “are
more important in determining the outcome” of auditing standards. This
 112 It%.Wmmstt

game-theoretic approach usefully draws attention to the degree of mutual

dependence between the regulators and members of the profession (see Gaa,
Note 9). Gaa’s players are not “interest dopes’13 who mindlessly identify and
pursue their preferences without regard for the relational nature of their
power. That is to say, they are understood to monitor their situation
continuously and to review their position in the game rather than be driven
on remorselessly by impersonal forces or pre-determined interests. However,
against these positive aspects of Gaa’s game-theoretic framework must be
weighed a number of limitations associated with his use of the game
metaphor.4 I will highlight three, related aspects of its shortcomings. First, the
failure to consider the historical development of the rules; second, the
portrayal of the players as unified and representative, and so there is an
associated neglect of how the “interests” of the players are constituted in the
process of playing the game; third, the underlying assumption that, when
accounting for the regulation game, accounting academics can and should
detach themselves from the regulation game.

Making the Rules

By concentrating upon the players, attention is distracted from the historical
origins and wider social significance of the game. The “power and influence”
attributed to representatives, of society and of the profession, appear to
originate in their current access to resources, without regard for how these
resources have been accumulated historically (Tinker et a/., 1982; Merino &
Neimark, 1982). There is little sense of what the game is about in terms of the
emergence of the role of auditors in adjudicating between different groups in
society-such as investors, creditors, employees and consumers.
It is as if, to use the analogy of a game of chess, the power of the pieces,
and the moves which they make, derive from the positions which they
presently occupy vis B vis other pieces, and not from the rules of the bigger
politico-economic game, which is a condition of their existence, and which
simultaneously enables and constrains their movements, both past and
present (cf Clegg, 1975, p. 49).5 Lost is an appreciation of the wider, historical
and institutional context in which auditing, as a discourse and a practice, is
established and regulated (Gilmore & Willmott, 1991). Although “interests”
can be attributed to different “representatives”, it is necessary to grasp how
the discourses and practices through which such “interests” are defined and
organized form an integral part of a much wider process of power/knowledge
relations (Foucault, 1980).
This argument can be elaborated briefly by a critical borrowing from
Agency Theory. In broad outline, the basis and legitimacy of auditing
discourse and practice resides in the problematical relationship between
“principals” and “agents”. Because “agents” (i.e., the managers) do not also
own corporations, the “principals” (i.e., the shareholders and creditors)
sanction the development of a range of mechanisms, including the audit, for
monitoring the performance of “agents”. And because the revenue and
stability of the state depend upon the economic performance of corpora-
tions, its functionaries are inclined to formalize (and monitor) this monitoring
process. The discourses and practices which comprise the audit are thus a
 The auditing game 1w

product of the contradiction between socialized production, requiring the

employment of “agents” and private appropriation by “principals”. Additional
complexities and contradictions arise since there are differences both within
and between “principals”, “agents” and auditors with regard to the role and
significance of the audit and in their support for direct state regulation.
“Agents” hire the auditors who are supposed to act on behalf of the
“principals” but in accordance with a legal framework enacted in the UK by
Members of Parliament (lobbied and advised by accountants!), and translated
into standards and practices by the occupational associations whose com-
mittees are dominated by members of the big audit firms. The outcome is a
situation in which the structure of the legal framework privileges the concerns
of investors, to the neglect of others who, as employees, consumers and
citizens are affected in a variety of ways by corporate activity. Within this
framework, the standards are developed and applied by members of the
accountancy profession who are under commercial pressure from their
clients, the “agents”, to allow maximum flexibility in constructing a favour-
able picture of corporate performance to actual and potential “principals”
while striving to preserve the illusion that company accounts present a “true
and fair” representation of economic reality.
In order to appreciate how “the social role of auditors is determined”, it is
necessary to situate the interaction between “society” and the “profession”
within a much bigger “game”, or social contest. In such a contest the actions
of the regulators of politico-economic activity within nation-states are shaped
within the variety of cross-cutting discourses and practices-for example,
discourses which are preoccupied with the world competitiveness of their
industry which is vulnerable to a lack of confidence induced by audit scandals
as well as the constraints and costs associated with tighter regulation (Cooper
et a/., 1988). It is these conditions which have both shaped and institutional-
ized the rules of the game of auditing regulation. In effect, the concern of
“principals” to monitor the activity of their “agents”, coupled with the
dependence of the state upon corporations for its own stability and growth,
have fostered the conditions of possibility for the emergence and develop-
ment of a game-a game in which there have been increased pressures from
investors and creditors upon the state to reduce the scope for other
parties-“agents and auditors” -to influence the content and operation of
auditing standards. However, rather than taking over direct responsibility for
the regulation of auditors, which would render the state directly liable for
“audit failures”, its functionaries have favoured the development of quasi-
independent bodies, such as the SEC or the Securities and Investments Board
in the UK, upon which responsibility for the effectiveness of regulatory
processes is devolved.
Making the Players
ln Gas’s analysis, the process of auditing regulation is reduced to the rational
choices of two, unified players who seek to maximize their pre-determined
interests, albeit in a way which strives to take account of the strategy and
power of the other player. Absent from this framework is any appreciation
of auditors and regulators as diverse historical actors whose interests
and associated strategies are continuously defined, organized and aligned,
 114 H. WiMmott

rather than given either to themselves or to the other party. As Robson

(1990) has shown in a detailed examination of the development of a revised
R & D standard in the UK, the production of regulations, such as those
which govern auditing practice, is accomplished through the medium of
complex social processes in which the “interests” of the respective parties are
socially defined rather than given as “basic forces”, which drive their moves
in a game (cf. Knights & Willmott, 1982; Hindess, 1986). As Robson (ibid, p.
28) puts it.
“‘Interests’ are, at best, merely a shorthand, attributional term for the forms
of assessment, themselves subject to change, used by individuals, and at
the same time constitutive of groups, within specific social contexts, to
formulate their plans, strategies and objectives. And it is these specific
conditions, which in the R & D case include falling national R & D
expenditures, non-interventionist industrial policies, managerial ideologies,
which require historical investigation and elaboration in the pursuit of
explaining accounting events and policy developments. ‘Interests’ and
‘self-interests’, in this formulation, are not prior to the analysis.”

By referring to the players in the regulation game as representatives of

“society” and “profession”, Gaa assumes the existence of a consensus
amongst their respective constituencies. Or, at least, he fails to reflect critically
upon the question of the representativeness of the representatives. Each
claims to speak on behalf of a constituency whose existence and interests it
defines and organizes. But how credible are such claims when examined in
the light of major divisions and fractions within their respective con-
stituencies? Gaa attempts to get off this particular hook by arguing that his
analysis of “the profession-society game” does not depend upon any
assumption that the “elected representatives” of society and profession
accurately reflect and advance the interests of their respective constituencies.
Or, as he puts it, “the conduct and the outcome of the actual controversies
does not require that the representatives of the interested parties are
completely successful even in determining what these preferences are, much
less that they act in accordance with them”. But, if this is so, why does he
continue to refer to these parties as representatives? For, in doing so, he uses
language which directly colludes in their claims (see below). Moreover, if, as
he concedes, “substantial uncertainty exists about the preferences of the
players”, how can he then continue to attribute interests to them in a way
which suggests that there is very little uncertainty about their preferences?
instead of taking the preferences of the players as given, it is necessary to
appreciate how they have been, and continue to be, constituted by historical
conditions which their actions serve to reproduce or transform (Giddens,
1984). More specifically, as argued earlier, it is relevant to locate their play
within the context of the formation and maintenance of the regulatory
practices of modern states (Tinker, 1984; Puxty et a/., 1987; Miller, 1987). For it
is largely through the media of these practices-which, in the UK context,
include regular contacts between officials of the Department of Trade and
Industry and officers of the major accountancy bodies, and the tabling of
questions by Members of Parliament to the Minister responsible for oversee-
ing the process of self-regulation -that the regulation game is enacted and
sustained.
 The auditimg game 115

The Academic in the Game

In Gaa’s theoretical framework, the academic is positioned as a spectator,

rather than an participant, in the process of auditing regulation. The academic
stands outside of the game and does his/her best to model it-in much the
same way, it may be suggested, as accountants are supposed to represent
economic reality. The contention that “power and influence” are more
important than technical skill in determining the sequence of play implies that
Gaa would be sceptical of accounting claims to provide a “true and fair”
picture of economic activity.6 But when it comes to the role of the academic,
Gaa’s choice and presentation of his favoured analytical framework suggests
little awareness of how he/we, as academics, are engaged in the game, and
are not external to it. Inevitably, we draw upon available understandings for
making sense of auditing as a “game” involving “expectations” and
“failures”. As academics we are involved in elaborating, refining and trans-
mitting such discourses (e.g., through research and teaching) and even
proposing practices that, potentially, are engaged by players in the game-in
order to understand and legitimate their current play and/or as a means of
“raising” their game.
Gaa’s analysis exemplifies a professionalist discourse of academia in which
the researcher constructs the position of independent expert who prepares an
objective account, or audit, of other people’s games which can be used to
confirm, challenge or correct prevalent understandings of their activity. A
significant “truth effect”, albeit unintended, of his analysis is to confirm the
plausibility of a particular form of mundane reasoning that is blind to, or at
least unreflective about, its own historical conditions and political conse-
quences (Pollner, 1987). This form of reasoning appears to disclose the
politics of regulation. But, in doing so, it reduces the political significance of
regulation to an exchange between the societal regulator and the profession,
each of whom are presented as more or less sovereign bodies whose
decision-making reflects, above all, the underlying stability and equilibrium of
their relationship.
Academics, in common with other human beings, are capable of producing
novel, critical discourses that do not merely confirm or apologize for the
performance of particular players. However, it is mistaken and misleading to
assume or imply that because commentaries upon accounting practice and
discourse by academics are perhaps less vulnerable to the criticism of being
self-serving than those of practitioners, they more closely approximate to
neutrality or objectivity. There are two reasons for this. First, and to repeat,
the academic does not possess a stock of knowledge or form of reasoning
developed outside of history and society. In Gaa’s case, the availability and
adoption of a game model for interpreting auditing regulation is not
unconnected with the contemporary tendency to debunk professional claims
as well as the emergence of discourses in which business in general, and
auditing in particular, is typified as a “game”. Second, although academics
are considered to reside in ivory towers remote from society, if not external to
it, this positioning underestimates (to say the least) their importance in
generating the discourses through which social identity (e.g. professional) and
 116 M. wiimoti

self-understanding are routinely accomplished (Foucault, 1973). Accounting

for accounting by using game-theoretic discourse does not simply reflect or
communicate the reality of auditing regulation. For it actively constructs it as a
game, and thereby reinforces -and legitimizes commonsense understandings
(cf. Hines, 1988; Hopper, Storey & Willmott, 1986). Whilst appearing to
provide an informed, politically sensitive alternative to technicist accounts of
auditing regulation, Gaa’s choice and application of the game-theoretic
framework stifles reflection upon the historical and political significance of
the players’ interactions. Gaa confines analysis to the immediate concerns
and expectations of two, seemingly unified players whose actions are
analysed in a way which is unreflective about the unavoidable participation of
academics in constructing the reality of the regulation game. An alternative to
examine at first hand the process of regulation by participating more directly
and explicitly within it.

The State of Play in the UK

The rules of the regulation game in the UK are at once firmly entrenched and
currently subject to mounting pressures for change-the most significant
recent pressure being the requirements of the eighth EC Directive. In such
situations, the established role for the academic is to act as an advisor or
consultant to the profession or, more rarely, the government. It is more
unusual for academics to court criticism and/or withdrawal of financial
support (e.g., for research and accounting chairs) by raising awkward
questions about the adequacy of regulation in a way that is potentially
damaging to the reputation of the profession and/or of the big audit firms.’
However, there are historical precedents for such interventions, notably that
by Professor Stamp in the late 1960s (Stamp & Marley, 1970).
Academics have a legitimate role in undertaking and disseminating scholar-
ship and research which allows probing questions to be asked about the
operation and adequacy of existing regulatory arrangements (Sikka et a/.,
1990; Willmott, 1985). This can be done by drawing attention to their
shortcomings, both in terms of what they claim to deliver and the credibility
of their conception of “the public interest” (Willmott, 1990). Through the
media of Parliament and the press, it is possible to expose the regulatory
process to critical public scrutiny (e.g. Sikka & Willmott, 1989; Willmott et a/.,
1990). By raising the profile of accounting and auditing regulation in this
way, more influential voices-of politicians and journalists-may
then take up and amplify these concerns, and members of the profession and
Ministers are obliged to make responses which, in turn, provide fuel for
further questions and comments (Sikka, 1990).
Recently, it has proved possible to interest, or enroll (Callon, 1986), a
number of opposition Members of Parliament in using the vehicle of
parliamentary questions to raise questions about the adequacy of existing
regulatory arrangements. Debates on the Companies Bill and Single European
Market have provided a relevant platform. This activity has been extended to
preparing background papers and drafting speeches and articles delivered or
published by these MPs. Additionally, the profile of regulation has been raised
by submitting to the Privy Council detailed evidence of activities which raise
 The ~~~it~~~ game 117

doubts about the performance of the profession’s standard setting bodies in

relation to the obligations to serve the “public interest” attached to their
Chartered status.
In response to the stream of parliamentary questions, the Minister has
voiced his confidence in self-regulation and his reluctance to introduce any
major reforms whilst, at the same time, stressing the need for the profession
to tighten its mode of self-regulation. However, there are also signs of
movement in his position. The defence of self-regulation is becoming more
qualified and backbench support for the profession appears to be declining. In
the last airing of the issue, introduced during a debate on Financial Services
and the Single European Market, there was a conspicuous lack of support
from backbench Conservative MPs in response to a series of attacks launched
by members of the Opposition, which concluded with the following observa-
tion from a Conservative MP to the Minister: “Does my hon. Friend agree that
one of the greatest problems facing the financial services sector is the quality
of auditing? Professional regulation does not seem adequate to stop auditors
from signing rather duff dockets” (Hansard, 15 October, 1990, p. 1022). To this
the Minister replied by saying:

“I should not wish to associate myself with the attacks made by the
Opposition members on standards of auditing and the way in which the
profession is conducted because much of the work that it does is first class
and should be recognized as such” (ibid).

However, the Minister followed this supportive statement by stressing his

“wish to strengthen” self-regulation because “we need rather more com-
pliance and detection work and rather less rule-making”. It is possible to
interpret such comments as a strong signal of the seriousness of his intent in
requiring effective monitoring and control of the quality of audit work-
something which the profession has neither been required, nor elected to do,
prior to the appearance of the eighth Directive and the translation of its
requirements for auditor independence into the relevant clauses of the 1989
Companies Act.
In order to comply with this Act, professional bodies are now obliged to
seek recognition from the Department of Trade and Industry as an agency fit
to monitor all (10000) firms which undertake audits. The proposal of the
professional bodies, which is currently being evaluated by the DTI, is to
appoint no more than 40 inspectors (18 of whom already exist to monitor
financial services offered by auditing firms) to visit once every five years the
250 firms which audit most of Britain’s listed companies; and to visit a
random sample of 150 of the remaining firms each year. The derisive
treatment of this proposal in the leading article of the Financial Times of 19
October 1990 is indicative of the degree to which the credibility of the
accountancy profession in general, and its commitment to self-regulation in
particular, is currently a target of press comment:

“This is not the kind of discipline that will make the barons of the big
accounting firms lose much sleep. Nor does it seem well designed to satisfy
a government that chose to introduce a monitoring requirement that went
far beyond the European Community’s Eighth Directive” (Financial Times,
19 October, 1990, p. 18).
 If this were not enough, the leader goes on to observe that, in any case, the
proposed process of monitoring fails to address the “central question” (raised
by the eighth Directive). Namely, that the independence of the auditor is in
doubt so long as the directors who have formal responsibility for preparing
accounts “appoint their own watchdogs, the auditors, and fix their remunera-
tion” (ibid). The position of the auditor is characterized as “invidious”
because, as things stand, there is a fundamental “conflict of interest” between
making unwelcome judgements and securing lucrative tax and consultancy
business. This conflict, the leader suggests, “helps to explain the countless
questionable judgements made by auditors over the past two decades”, and
concludes that the time has come to shift the emphasis of the debate from
more detailed rule-making to “prising the auditor away from the managerial
camp” (ibid).
Here the Financial Times goes well beyond an echoing of the Minister’s call
for “more compliance”. The very capacity of auditors to provide independent
judgement is understood to be compromised so long as they are hosts of the
“managerial camp”. The leader implies that the conflict of interest will not be
resolved without a major structural change in the way auditing is regulated-a
change which, it is suggested, will require “the big investment institutions to
play a part in the debate commensurate with their responsibility” (ibid).
However, this argument is itself based upon the questionable premis that the
purpose of the audit is to serve the interests of shareholders-interests which,
it is anticipated, will be “more directly served” by prising the auditors away
from their dependence upon management. In this way, the leader seeks to
re-affirm the widely held understanding, that the sole purpose of the audit is
to serve and protect the interests of shareholders whereas, arguably, its role is
also to facilitate the secure and efficient husbandry and allocation of economic
resources, and these two roles are not necessary compatible, as debates
about short-termism make transparent.
When reference is made to the “the management camp” it is implied that
managers seek to distort what would otherwise be an independent, accurate
representation of economic reality. Or, as it was expressed in an earlier
leader, “Accounting is supposed to provide a neutral representation of
economic reality” (“Accounting Under Scrutiny”, The Financial Times, 4
October, 1990). The problem with such a thesis is that it ignores the socially
constructed nature of standards and reporting processes. In doing so, it
also assumes that the issue of how, for all practical purposes, accounts of
economic reality are opened and closed, should be resolved by shareholders
and, more specifically, by the big investment institutions. Seemingly, ac-
countability for the scope and content of these standards and reporting
processes is the exclusive preserve of shareholders; and that when Members
of Parliament are enacting Companies legislation, they should act on behalf of
shareholders without regard for other parties who are affected by corporate
activity.
It is in challenging such assumptions- both about the ontological status of
accounts and the wider politics of ownership and control of the means of
regulation-that academics have a legitimate role to play (Sikka et a/., 1989a).
For it is both possible and responsible to cast doubt upon the self-serving
illusion of objectivity or impartiality which shrouds accounting practices. Their
 The sudithg game 119

objectivity, it can be argued, is taken for granted only so long as those in a

position to raise questions about their status are satisfied that their own
priorities are well served, rather than challenged or unsettled, by the
construction of reality presented in accounts. The more that the politics of
accounting regulation is exposed to public scrutiny, the more difficult it is to
sustain the claim of objectivity upon which the authority and exchange value
of the audit has come to depend.

Conclusion
The theoretical framework proposed by Gaa draws attention to the social
organization of auditing regulation. However, his model is of limited value for
understanding the positioning of players engaged in the regulation game and
the historical constitution of the “interests” which they are said to account for
their strategic conduct. A more adequate form of analysis must take account
of both the power/knowledge relations through which the discourses and
practices of regulation are enacted as well as the involvement of the analyst in
constituting the phenomena-such as the interests and practical reasoning
attributed to key players-when accounting for the regulatory process.
This should include a deconstruction of the conventional wisdom that “the
expections game”, and its associated “gap”, is between (representatives of)
the profession and “the public”. In dominant discourses about auditing
regulation, in which many accounting academics unself-consciously collude,
the concept of the “public” serves to equate the sectional interest of those
who depend upon their shareholdings to sustain their (class) position in
society with the multifaceted identity of “the public”. Of course, many
members of “the public” are direct, indirect or potential shareholders.
However, for the vast majority, their position and quality of life is much more
dependent upon other factors, all of which are affected by the activities of
corporations-such as the nature of employment opportunities, the safety and
durability of goods and services and the quality of the environment. Through
self-conscious engagement in struggles over the question of who owns and
controls the means of regulating the scope, content and effectiveness of
company audits, academics can raise the visibility of corporate accountability
as a matter of public concern.

Acknowledgement
My thanks to Prem Sikka for his comments on an earlier draft.

Notes
1. If the Interdisciplinary Perspectives on Accounting Conferences held in 1985 and 1988 (see
Accounting, Organisations and Society, 1986; 1987; Accounting, Auditing and Accountability
Journal, 1989; Cooper 81 Hopper, 1990) are taken as a barometer of interest in auditing by those
with an orientation to accounting as a social phenomenon, then the neglect is quite glaring!
Auditing-centred articles are also thin on the ground in the four major journals with a “social”
orientation-Accounting, Organisations and Society; Accounting, Auditing and Accountability
Journal; Critical Perspectives on Accounting; and Advances in Public Interest Accounting.
With rather few exceptions (e.g. Sikka et al., 19891, those with this interest are obliged to rely
upon mavericks and moralists within the mainstream of accounting research, such as Briloff
(1390) and Chatov (1986).
 120 M. Wihott

2. All unattributed citations are to Gaa (1991).

3. The phrase is adapted from Garfinkel (1967) who is critical of cultural analysis in which human
behaviour is viewed as the standardized product of subjectively unmediated norms and values.
4. It is relevant to note that the game metaphor has been adopted within alternative conceptual
frameworks. The most obvious, recent example is that of Marxism where Elster (1982) and
Offe and Wiesenthal (1980) have made important contributions. For a review and positive
critique of the use of game theory which incorporates a broader historical and political
perspective, see Lash and Urry (1984).
5. The power invested in a piece by the rules does not mean that a centre of power cannot be
taken or (temporarily) neutralized through the strategic use of less powerful pieces. There is also
the possibility that a shift in political ideology away from regulation and towards the promotion of
the accounting industry will enhance the possibility of such capture-for example of the regulator
by the profession (cf. Cooper et al., 1988). Yet here too life is unlike a game of chess since the
routine effect of institutionalized patterns of behaviour is to reproduce the modern structure of
power relations in a way which buffers centres of power from direct assault (Giddens, 1985).
6. It is, of course, also possible that he would be engaged by a discourse, in which the content of
standards is divided from their means of regulation.
7. There is some justification for this. The activities described below have not endeared members
of the profession to their academic critics. Whether imagined or real, other academics who have
been approached to support this effort fear that their ability to attract funds for research and
appointments would be seriously damaged if they were seen to be openly criticising the
profession. Whether intended or not, it would appear that the dependence of University
accounting academics upon the major Institutes and audit firms has the effect of silencing those
who, privately, are critical of accounting and auditing regulation. An anecdote suggests
that there may be some basis for this fear. Those who have been involved in challenging the
adequacy of the regulation have experienced pressures from colleagues not to “rock the boat”
and have received the clear impression of being black-balled by the journal of the major UK
accountancy body. However, at an interview called by the Minister at which the academics had an
opportunity to present a more detailed account of their criticisms, and to challenge defences of
the status quo made by the Minister and his senior civil servants, the issue of black-balling was
also raised. Coincidentally, shortly after this interview, an invitation was received to give at
seminar for the body’s senior staff which provided a further opportunity to raise questions and
challenge defences.

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