In pursuit of a more socially relevant audit in the context of international standardisation

This chapter aims to enhance our understanding of the implications international standardisation have for audit innovation at the national level. The study analyses the ways in which transnational regulation effectuates institutional constraints on audit innovation in Sweden as a setting to discuss the capacity for the audit profession to innovate and make audits more socially relevant. Based on document analysis, two standard setting initiatives which the Swedish professional association, FAR was involved are reviewed: Standard for audits of small entities; and Standard on assurance of sustainability reports. While audit is conceived to be transforming to meet contemporary societal challenges, findings reveal that audit innovation has been constrained by normative, cognitive and regulative forces interacting to reinforce international audit standardisation, thereby limiting the development of the role and conceptual foundations of audit. This chapter stresses the importance of critically reflecting on the conditions under which national professional associations engage in audit innovation. Based on our analysis of the audit innovation context, we offer ways forward to encourage policymakers, regulators, the audit profession and academia to explore the possibilities to re-think and re-conceptualise audit differently in pursuit of a more socially relevant audit.