Understanding the concept of audit: Aristotelian philosophy as a methodological 

tool 

  

©, Mélanie Roussy 

February 2011 

 

 

Mélanie Roussy, CA, MBA, Ph.D candidate at HEC Montreal Assistant professor School of Accountancy Faculty of Administration Sciences, Université Laval 2325 rue de la Terrasse Pavillon Palasis-Prince, bureau 4244 Québec (Québec) G1V 0A6 Telephone: 418-656-2131 extension 3829 Email: melanie.roussy@fsa.ulaval.ca Acknowledgements: The comments and suggestions of my thesis supervisor Danielle Morin and from my collegues Paul-Victor Paré, Yves Gendron and Michelle Rodrigue are gratefully acknowledged, as are comments from Rachel Papirakis and Marc Hasbani. I also appreciated helpful comments and suggestions received from participants of the Toronto, 12th Alternative Accounts Conference and Workshop.  Finally, special thanks to Yvan Pelletier, Ph.D, professor with the Faculty of Philosophy at Université Laval and specialist in Aristotelian philosophy, for his generosity, time and suggestions.

 

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Understanding audit: Aristotelian philosophy as a methodological tool

Abstract Power (1997) argues that a veil of essential obscurity covers the audit concept, which

creates an expectation gap that coincides with the explosion of the audit practice.

Therefore, the objective of this article is to develop a conceptual model that serves as

a methodological tool to understand different types of audit. We have turned to

philosophy rather than economics, psychology and sociology to produce this

methodological tool. Philosophy was selected because it analyzes the nature of

concepts and expresses its foundations (Mautz and Sharaf, 1964). Specifically, two

Aristotelian treatises were applied to audit: Categories and On Interpretation. These

treatises were selected because they are tools Aristotle developed to facilitate the

understanding of concepts (Pelletier, 2009). The Aristotelian concept of phronesis is

also discussed. The first part of the article traces the development of a model that

depicts audit as a process of interpretation performed simultaneously by the auditor

and the auditee, which affects the auditee. Its objective is to judge the truthfulness of a

precise assertion or a set of prior assertions. Once made, this judgment becomes a

qualifying term of the assertion. Moreover, Aristotle considers examples powerful: it

is impossible to exhibit phronesis without embedding the concept studied in its

particular context. Consequently, the second part of the article demonstrates how to

use this model as a methodological tool to better understand a specific case of audit.

  

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Introduction Since the late 1980s, there has been an explosion of audit practice, translated by the

appearance of new forms of audit (Power 1997). Environmental audit and

performance audit (or value for money audit) are two examples (Power 1997). Audit

is now perceived as representing a universal solution to the problem of control

induced notably by the decentralization of management. Submission to an audit has

thus become a source of legitimacy for the auditee. Conversely, refusal to be audited

is perceived as an attempt to hide a secret, or worse, misappropriation (Power 1994,

39). Each new crisis has accentuated the demand for audit, whose presence has

intensified and spread into new areas of interest. There was thus an explosion of audit

(Power 1994, 39). Consequently, research on audit must explore broader horizons

than simple economics.

Power contends that to ensure the legitimacy of accountability in organizations, the

fact that audit takes place seems to outweigh knowing how and how rigorously the

audit was carried out. He attributes this to the fact that people ignore precisely what

audit is (Power 1994, 39). Power also affirms that the lack of performance criteria

makes it difficult to assess the quality of an audit in order to establish its success or

failure. He argues that this problem stems from the fact that what audit produces, i.e.

its objective, is unknown (Power 1997, 30). In other words, people do not know what

audit is, in what it consists, or its ultimate goal. This ignorance covers audit in a veil

of “essential obscurity” (Power 1997, 30). Power asserts that the “essential obscurity

of audit” (Power 1997, 30) is compensated by codes, rules and procedures that

constitute generally recognized audit standards (Preston et al. 1995; cited in Power

1997, 30).

  

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In parallel, Francis (1994) argues that the appearance of codes, rules and procedures

in audit practice are a direct consequence of the domination of objective thought and

technocratic rationality to the detriment of the hermeneutic intellectual process that

characterizes a “good” audit. According to Francis, the reign of pseudo-scientific and

scientific discourse on audit, which began in the 1960s, has relegated the subjectivity

inherent in the auditor’s professional judgment to secondary status. Historically, this

judgment is considered to issue from a hermeneutical exercise (of interpretation)

(Francis 1994, 236). Consequently, Francis maintains that “the way auditing is

understood affects the way it is practised, which in turn affects the actions of the

auditor” (Francis 1994, 236).

In line with Francis (1994), who considers that the way one understands the world

influences practice, Chua (1986, 602) contends that research is influenced by the

researcher’s concept of the world. In accounting research, the dominant paradigm is

structuralism, as defined in the typology of Burrell and Morgan (1979) (Chua 1986,

603). This paradigm is characterized by a set of philosophical assumptions that guide

researchers toward a vision of the world that emphasizes technical control,

quantitative research methods and hypothetico-deductive reasoning (Chua 1986, 601;

611). The theories put forth and the resulting conceptual framework are also directly

influenced by the paradigm that the researcher embraces.

Thus, although the interpretive and critical paradigms that (Chua 1986, 626) describes

as alternative have become important since the 1980s, audit research continues to be

dominated by structuralist researchers largely inspired by economic and psychological

theory. In contrast, interpretative or critical researchers appropriate theories

originating mostly in sociology. This openness to sociological questioning has led to

the understanding of audit other than through economics. For instance, researchers

  

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have investigated the empirical world in the field using qualitative research methods.

These so-called alternative studies founded in sociological theory are commendable

because they contribute to the quest for ways to study audit that depart from dominant

or recognized streams of thought. It is important to “generate new perspectives, and

always to serve as eyes and ears in our ongoing efforts at understanding the present

and deliberating about the future. We may, in sort, arrive at a social science that

matters.”(Flyvbjerg 2009, 166).

That being said, considering the explosion of audit practice since the 1980s (Power

1994), the essential (or ontological) obscurity of audit (Power 1997) and the

abandonment of hermeneutics in favour of technocratic audit procedures that emerged

in the 1960s (Francis 1994) because of the way audit is understood through research,

we may ask: how can we study audit in order to understand it in a different way? This

article proposes an explanation upstream of economics, psychology and sociology, by

adopting a philosophical1 perspective, because, as Mautz and Sharaf (1964, 8)

contend, philosophy is the search for knowledge and general understanding of

phenomena by analyzing fundamental beliefs that forge a particular domain such as

audit. Philosophy thus facilitates the systematic organization of knowledge by

adopting a holistic point of view.

This article therefore develops a conceptual framework for the understanding of audit

based on philosophy rather than sociology, psychology or economics. To this effect,

two of Aristotle’s philosophical treatises entitled Categories and On Interpretation

                                                            1 In this paper, philosophy is defined as: “a discipline comprising as its core logic, aesthetics, ethics, metaphysics, and epistemology; 2 a: pursuit of wisdom b: a search for a general understanding of values and reality by chiefly speculative rather than observational means c: an analysis of the grounds of and concepts expressing fundamental beliefs” (Merriam-Webster online dictionary, consulted June 9, 2009).

  

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(Aristotle, Organon I and II) and the Aristotelian concept of phronesis2 are applied to

audit.

These two treatises were chosen mainly because Categories explains how to define

concepts while On Interpretation provides the tools to judge the truthfulness of the

propositions established based on the concepts categorized. This judgment authorizes

logical reasoning and should be anchored in a specific context with phronesis to be

“good.” Aristotle thus provides a tool that can be used to understand one or more

concepts. This philosophical tool is pertinent to the understanding of audit. Second,

the philosophical anchors of the two opposed viewpoints as to what audit is, one

based on objectivity (Mautz and Sharaf 1964) and the other on subjectivity (Francis

1994), lead directly to Aristotle. More specifically, they both pertain to the treatises

Categories and On Interpretation (Aristotle, Organon I and II), in which the

philosopher states his thoughts on logical reasoning. For Mautz and Sharaf, audit is

grounded in logic, which they define as “the science of proof” (1964, 15).

Accordingly, logic determines how to establish facts, draw conclusions and infer a

judgment of validity or invalidity based on these purportedly objective facts (Mautz

and Sharaf 1964, 15). This emphasis on objectivity and the “scientific character” is

representative of the structuralist paradigm (Burrell and Morgan 1979). The approach

of Mautz and Sharaf implies judgment based on logical reasoning; an Aristotelian

concept. In contrast, Francis (1994, 235) views audit as a hermeneutical practice, a

process of interpretation. Hermeneutics necessarily imply subjectivity, whereas

Burrell and Morgan (1979) associate subjectivity with the interpretative paradigm.

Francis (1994) was inspired mainly by Hans-Georg Gadamer (Francis 1994, 237), for

                                                            2 The term phronesis can be understood as the individual’s capacity to grasp the nuances of a given situation (Bodéüs 1995) or by “the capacity for practical reasoning – the ethical know-how to answer the question of what action goodness requires of me in my particular situation” (Francis 1994, 242).

  

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whom hermeneutics equalled “the theory of interpretation” (Gadamer 1990, 52). This

conception of hermeneutics has anchors in Aristotelian philosophy, with the concept

of interpretation.

The rest of the article is divided into two main parts. In the following two sections, the

Aristotelian treatises Categories and On Interpretation are applied to audit. A holistic

conceptual model of audit, anchored in Aristotelian philosophy, is developed. The

second part follows with the application of the model to a concrete example to

illustrate its applicability. Lastly, the conclusion describes the contributions and limits

of the model proposed.

1 Audit according to the Aristotelian doctrine of categories  In Organon, Aristotle develops a theory of judgment based on categories (Philonenko

2002). For Aristotle, categories are notions that reveal a being or its specific

characteristics and underlie the production of logic. (Philonenko 2002). Categories

explains how to define concepts, from which propositions can be formed. On

Interpretation provides the tools to judge the truthfulness of these propositions. This

judgment, in complementarity with Categories, authorizes the logical reasoning

discussed in the Prior Analytics, the third treatise of Organon. Aristotle observed and

analysed the way his peers understood the world and acquired knowledge. In doing

so, he deduced that people understand the world by distinguishing elements (or

concepts) of their reality by going from the general to the specific and by making

links with what they already know. The ten categories stated in chapter 4 of Organon

can theoretically explain the entire world. In short, Aristotle asserts that it is possible

to know the world by interpreting reality, in keeping with these categories. Aristotle

  

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thus supplies a tool for anyone seeking to understand a concept (Pelletier 2009, 13).

By implication, this theory of judgment necessarily allows one to understand audit.

Below, the two treatises of Aristotle are applied to audit, beginning with Categories.

The term “catégorie” (category) is the French equivalent of the Greek word Katègoria

in Aristotle’s work. The translation of Katègorien varies between translations. It is

translated by “accuse” or “declare” if the author assumes Aristotle is being hostile.

However, one can also intuit the meaning without this hostility, in which case the

word is translated by “make visible,” “ascribe” or “affirm something from something

else” (Pellegrin and Crubellier 2007, 70-71). The second translation, which conveys

the general idea that affirming a thing belongs to a category entails “sorting” it, to

better understand it, is retained. This is the way an object is categorized. Hence the

generally accepted translation of Katègoria is category4. According to Aristotle,

categorizing a concept entails associating a new concept with another concept that is

already known, to better understand it. The particular, previously unknown, is thus

identified and better understood in light of general criteria.

To take the example of accounting, when accountants seek the nature of a newly

acquired good to recognize it, they ask whether it is an asset, a liability or an element

of equity. They want to determine the category of the accounting equation in which

the new good, which is unknown to them, belongs. Accountants use their knowledge,

which is necessarily more general, of assets, liabilities or equity to properly categorize

a specific unknown good. The good is then categorized according to its belonging to

a broader category. In this way, accountants can recognize the good because they

                                                            3 Available online at http://www.aristotle-aquinas.org/textes-dyvan-pelletier/ (2009-06-03; 5:06 p.m.). 4 Pelletier (2009) asserts that translating Katègoria by “Attributions” expresses Aristotelian thought better than the term “Categories” does.

  

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know it better. This is a direct application of the Aristotelian doctrine of categories if

their interpretation process of categories is based notably on phronesis.

Evidently, the categories stated by Aristotle are more general than the elements of the

accounting equation. Aristotle defines ten categories in Organon. These categories

fall into two types, substance (or essence) and relatives. Substance refers to what is,

whereas relatives refer to specific characteristics that necessarily refer to a substance

or another relative. The nine relatives are: quantity, quality, relation (to something),

place, time, position, state, action, or affection (Aristotle, Organon I, ch. 4, 111).5 The

categories will be examined below in the order presented by Aristotle, and a

conceptual model of audit will be developed, to ascertain whether audit corresponds

to these categories.

1.1 Substance  “Substance, in the truest and primary and most definite sense of the word, is that

which is neither predicable of a subject nor present in a subject” (Aristotle, Organon I,

ch.5, 113). The word “substance” is the usual English translation of the Greek ousia,

but the term is also sometimes translated by the term “essence” (Philonenko, 2002). A

substance is what describes the nature of a subject (what it is) most generally and

intrinsically, for example “such a person” or “such an animal.” For Aristotle, the

substance is indivisible and is present in nature, e.g. animals and plants. Substance

refers to the essence of a particular individual. One cannot divide (modify) an object

without misrepresenting it, without changing its substance. For example, if one

wishes to describe a human being, one will say that he is “such a man,” included in

                                                            5 Three of the nine relatives are not treated in this paper because they do not lend themselves to discussion of the nature of audit. These categories are: place (reference to a geographic place), position (reference to a position of a person’s body such as “standing” or “lying down”), and state (referring to the fact of possessing an object independent of oneself). Interested readers can consult chapters 9 and 15 of the Organon for more information.

  

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the species of humans. This species is in turn included in the genus animal. Following

this reasoning, the person described is known by his belonging to the human species

and the animal genus that make up his substance (or essence).

However, Aristotle mentions that the essential property of the primary substance is

that if it did not exist, it would be impossible for anything else to exist (Aristotle,

Organon I, ch.5, 115). This is the most exclusive category because everything is

necessarily a substance or related to one. Thus, everything known must be present in

nature or be related to a so-called “natural” substance.

Is audit a substance?

First, for Aristotle, substance refers to an indivisible subject. It pertains to an

individual present in nature such as an animal or plant. Audit does not correspond to

an indivisible element present in nature because it is not found naturally. Second,

Aristotle indicates that without substance, nothing can exist. This signifies that if

something needs another thing to exist, it does not correspond to a substance, but

rather to another attribute. One must then ask whether audit can exist in isolation

from everything else. The answer is no, because audit does not exist in itself.

Notably, it needs, as will be shown in the analysis of relatives, an auditor, an auditee

and an audit object to exist. Consequently, audit is not a substance in the Aristotelian

sense. If audit is not a substance, this implies that it consists of one or more relatives.

The relatives in question are examined in the next section.

1.2 Relation to something Relation (to something) is a way to describe concepts related to a distinct element.

The relatives cited by Aristotle are: habit, disposition, perception, knowledge, and

attitude (Aristotle, Organon I, ch.7, 142). It is difficult or even impossible to grasp the

  

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essence of a relative without considering that to which it refers. To better understand

what Aristotle identifies as a relative, consider the example of conceiving that one

possesses an object and that this object is distinct from oneself. This relativity can be

expressed in phrases such as “I possess something,” “this which is situated to the right

of that” and “she knows the job.” The relation is therefore illustrated by putting two or

more elements into perspective.

Is audit a relative?

It may be appropriate to conceive of audit as a relative because it always refers to

something. Audit necessarily addresses a particular object. It is an absolute necessity

because without the object of the audit, the audit has no reason for existing. One

cannot audit “nothing.” Regarding knowledge, if the object of knowledge does not

exist there can be no knowledge (Aristotle, Organon I, ch.7, 153). Consequently,

considering audit as a relative implies that one must know the object (and name it) to

describe it adequately, but more importantly, the object of audit must exist. When

Power (2005, 18) mentions that auditability is indispensable to audit, he is saying that

not only must the object of the audit exist, but it also must be auditable. Thus, audit is

a relative. This argument will be revisited below.

Table 2 shows that the definitions presented generally refer to the object of the audit.

Thus, when Mautz and Sharaf (1964, 14) refer to the proofs that support financial

statements in their definition of audit, they directly name a specific relative object to

better describe the concept of audit. Similarly, Wallace (1980) refers to the “terms of

a contract” and Flint (1988) to “performance and expectations.” These authors

integrate the object of audit in the definition. They cannot mention an audit without

giving it an object. According to Francis (1994), audit is a hermeneutical exercise.

  

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The goal of hermeneutics is to establish a judgment of truthfulness of an assertion.

Francis implicitly considers audit as a relative; it cannot exist without that to which it

refers.

1.3 Quantity The relative “quantity” is related to measurement of a concept, for example, 100 cm

or 200 cm. Aristotle differentiates “quantity in the strict sense” from “relative

quantity” (Aristote, Catégories, ch. 6, 135).

Quantity in the strict sense is that which exists independently of anything else, e.g.

100 cm. Aristotle lists some topical properties of quantity in the strict sense. He

states that nothing can be the contrary of a quantity in the strict sense. One cannot say

whether a measurement is true or false. For example, one cannot find the opposite of

200 cm nor affirm that this measure is true or false. This property of quantity helps

distinguish what is a quantity in the strict sense from what is not.

The use of a measure to describe a specific substance or other relative embodies a

relative quantity. Thus, one could say that a tree is big or that it measures 200 cm.

These measures are considered relative quantities because they contribute to

quantitatively qualifying the subject “tree” to better understand what it is (its reality).

These quantities are relative elements because they do not exist by themselves

(Aristote, Catégories, ch. 6, 137)). Thus, the tree is big in comparison to another

element. It is therefore possible to say, referring to this comparable element, that it is

true (or false) that the tree is big.

Is audit a “quantity”?

Asking whether audit is a “quantity in the strict sense” amounts to asking whether

audit is a quantity that exists in itself. As mentioned above in the discussion of

  

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substance, audit does not exist in itself. It therefore cannot constitute a quantity in the

strict sense as Aristotle described. The term “audit” does not invoke an absolute

measure as would the term “200 cm.”

Necessarily linked to another element,6 audit therefore serves to better understand that

to which it is related. For example, in an external audit of financial statements, the

auditor reviews the measure of economic activity of its client to form an opinion on

the level of accuracy of the financial statements according to pre-determined criteria.

The audit therefore clarifies the financial statements on which an opinion must be

issued. In this sense, audit may be considered a relative quantity, that is a tool used to

better identify an object quantitatively. Nonetheless, it is not an absolute measure as

such. Audit thus does not correspond to a relative quantity in the strict sense,

according to Aristotle.

1.4 Quality Quality is a term that is used in many senses. Aristotle defines it as a “habit” or

“disposition.” Habit differs from disposition because it is more lasting and more

firmly established. The various kinds of knowledge, capacity and virtue are habits

(Aristotle, Organon, ch.8). Aristotle gives several examples, including: “Persons are

called good boxers or good runners, not in virtue of such and such a disposition, but in

virtue of an inborn capacity to accomplish something with ease” […] “the body is

called white because it contains whiteness” (Aristotle, Organon, ch. 8). In general, the

relative quality (also called qualifying term) is used to qualify a substance or another

relative permanently or temporarily to describe it more precisely and pertinently. It is

therefore a form of relation to something, a relative.

Is audit a qualifying term?

                                                            6 Refer to Section 1.2 for the discussion of audit as a “relation to something.”

  

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Wallace (1980) and Flint (1988) seem to think that audit is a qualifying term. In their

respective definitions, they both mention that audit meets economic needs such as the

need for follow-up and for security (assurance of truthfulness), relative to the

information transmitted to the principal by the agent. According to agency theory,

information asymmetry between the principal and the agent creates agency conflict.

The greater the information asymmetry, the greater the moral hazard (Jensen and

Meckling 1976; Watts and Zimmerman 1983). Demand for a quality audit occurs

when the principal and agent want to reduce information asymmetry, and hence moral

hazard. The greater the agency conflict between the shareholder and the manager, the

stronger the demand for quality audit7 (Francis and Wilson 1988; DeFond 1992;

Craswell et al. 1995; cited in Watkins et al. 2004). In other words, audit contributes to

decreasing the risk assumed by the principal by reducing the moral hazard, and hence

the demand for audit (Wallace 1980).

Implicitly, these researchers conceive of the fact of being audited as a desirable

quality relative to communication of financial information (Wallace 1980) or to

accountability in a broader perspective (Flint 1988) because there is a demand for

audit.

This conceptualization of audit as a qualifying term is omnipresent in the empirical

research on audit. Researchers in this field regularly attempt to determine whether the

fact of disclosing audited information (unqualified opinion) compared with unaudited

                                                            7 The quality of audit is measured using proxy indicators between studies, including percentage of compliance with auditing standards (Krishnan and Schauer, 2001; Tie, 1999; Aldhizer et al., 1995); perception of the market as to the probability that the financial statements contain significant errors and that the auditor discovers and discloses them (DeAngelo, 1981a); probability that the auditor issues an unqualified report whereas the financial statements contain significant errors (Lee et al.,1999); the precision of information disclosed in audited financial reports (Titman and Trueman, 1986; Beatty, 1989; Davidson and Neu, 1993); and the auditor’s capacity to reduce “noise” and bias in financial reports, and to increase their precision (Wallace, 1980), together with other indicators (Watkins et al., 2004).  

  

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information modifies users’ decision-making processes or judgment. They investigate

whether the users of reported information attribute value to audit. Users try to gauge

whether audit is a success according to a precise performance criterion. This implies

necessarily having considered audit as essentially a qualifying term of the object of

audit. For example, some results show that the presence of an audit report

accompanying financial information disclosure influences users’ decisions (Holt and

DeZoort 2009)

1.5 Action and affection The relatives action and affection refer to performance of an action and, conversely,

to being affected by an action (Aristotle, Organon I, ch.9). According to Aristotle, one

does something when one is in action. Every act, whether deliberate or not, falls into

this category. Inversely, one is affected by the action of another, or by an

unforeseeable emotion or natural event that was not requested or required. For

example, one is affected by changes in temperature imposed by nature. Similarly, one

may be affected by a spontaneous fit of rage and other types of emotional outbursts

(Aristotle, Organon I, ch. 9).

Is audit an action or affection?

If audit is something that one does, this implies that one must execute it for it to exist.

It must then be determined whether the auditor must “do something” for the audit to

exist or not. Francis (1994) views audit as a hermeneutical practice. This implies that

the auditor must engage in a process of interpretation for the audit to be realized.

Without this concept, the auditor must act for the audit to exist because he must

interpret the various objects of the audit wisely (this argument will be revisited in the

more detailed discussion of hermeneutics in the following section). The definition of

audit by Mautz and Sharaf (1964) is based on logic, specifically the logical reasoning

  

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of the auditor. It therefore implies that the auditor must act for the audit to take shape.

Flint (1988) maintains that audit is a process of examination and analysis of results by

a third party. This third party must also take action for the audit to unfold. In light of

the three definitions regarding the Aristotelian concept of the relative “action,” it

appears that audit must be done to exist; it is a “done act.”

Conversely, can audit be an affection? The auditee (a company, routine, process or

person) (Power 1997) is conceivably affected by the presence of auditors regardless of

whether the audit was deliberately requested. Power (1997) considers that companies,

routines (processes) and people undergo audit. This is reflected in his critical

conception of audit as a means of submission or domination because it is seen as “a

mean to submit companies, professional routines and person to an external look8”

(Power 2005)(Power 2005, 16). He adds that in the context of new public

management, audit is part of “what impose themselves companies in the name of the

improvement of corporate governance9” (Power 2005, 16). Audit can therefore also

be considered an act that affects in the Aristotelian sense of the term.

Nonetheless, this finding does not preclude the possibility of the auditee’s

participating in the audit while being affected by it. Because the auditee is solicited

extensively by the auditor as part of the action, one can also assert that the auditee

“does” the audit because its participation is essential for the implementation of the

audit. This is the crux of the relationship between the auditee and auditor, which is

essential for the performance of the audit. Empirical research shows that negotiation

between the auditor and auditee is an integral part of the audit process of financial

statements and that consequently the auditee acts during the audit. Specifically,

                                                            8 This quotation is translation from the preface of the 2005 original French edition. 9Ibid

  

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financial statements result from this negotiation between the auditor and the auditee

(Iyer and Rama 2004): inaccuracies noted are subject to negotiation between the

associate responsible for the audit (auditor) and the client (auditee) (Gibbins et al.

2007). Consequently, to understand the audit, it must therefore be considered an

action done by the auditor and by the auditee, which affects the auditee.

1.6 Time This relative refers to something that is prior or simultaneous to another (Aristotle,

Organon I, ch. 12 - 13).10 Aristotle states that one thing is prior to another if it occurs

before the other thing, especially if it is of longer duration. For example, a mother is

older than her child, because she has been living longer. Similarly, Aristotle deems

that something is prior to another when the sequence of their being cannot be

reversed. In this sense “one” is “prior” to “two.” For if “two” exists, it follows directly

that “one” must exist, but if “one” exists, it does not follow necessarily that “two”

exists. One is thus prior to two (Aristotle, Organon I, ch.12, 201).

Simultaneity implies that one thing is neither prior nor posterior to the other. Two or

more simultaneous things may therefore occur at the same time. Consequently, one

may not be the cause of the other’s existence. As Aristotle maintains: “Those things,

again, are ‘simultaneous’ in point of nature, the being of each of which involves that

of the other, while at the same time neither is the cause of the other’s being”

(Aristotle, Organon I, ch.13, 205). One thing is either prior to another or

simultaneous. It cannot be both at the same time. However, it is possible that

something is simultaneous with another while being prior to a third thing. This

signifies that a thing’s being prior or simultaneous depends on the reference; this is a

relation.                                                             10 There are several other ways to be prior or simultaneous, in the Aristotelian sense, than those retained for this paper. Interested readers are invited to see chapters 12 and 13 of the Organon.

  

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Is audit in a prior or simultaneous relation with one or more referential elements?

First, as demonstrated above, audit may not exist without the presence of the object

audited. Audit is thus in a relation of being posterior to the audit object because the

latter determines the existence of the audit. They cannot be simultaneous because one

thing (audit) cannot exist without the other’s (object of audit) prior existence.

Concretely, as Power (2005, 16) argues, audit is an external control. This control

occurs after the action; it is a control a posteriori. The definition by Mautz and Sharaf

(1964) is particularly clear in this respect because they state that audit reviews the

measurement of accounting data and related financial statements. This implies that the

data are compiled and drawn up before the audit. Flint (1988) refers to accounting for

performance relative to “expectations.” This implies that expectations and related

reasons exist before audit. Wallace (1980) mentions the “contract” that audit must

make observable. This contract must, like the expectations and results of Flint (1988),

exist before the audit. In parallel, Francis (1994) contends that audit must make a

judgment on the audit object. This object must also exist before the audit. According

to these authors, the audit is therefore necessarily posterior to the audit object.

Second, we may ask whether the audit is prior to the auditor or the auditee. As

mentioned above, the audit is done by the auditor and the auditee. This relation of

action-affection occurs simultaneously because we cannot say which is prior to the

other. Negotiation between the auditor and auditee is one example; it is an interaction

between the two parties (Iyer and Rama 2004; Gibbins et al. 2007). If indeed the audit

cannot occur without the simultaneous action of either party, neither the auditor nor

the auditee precedes the audit because if there were no audit, the auditor and auditee

would have no reason for being. In other words, the person doing the audit or being

affected by it becomes the auditor or auditee in action, or they could not be designated

  

19  

as such. The audit act done simultaneously by the auditor and auditee therefore

implies the simultaneous nature of audit involving these parties.

Therefore audit is posterior to the object to which it refers. Similarly, audit, auditor

and auditee are created simultaneously.

1.7 Conclusion on categories The exercise above is the first step toward a conceptual model representing audit by

applying Aristotelian categories. Table 1 entitled “Audit by Aristotelian categories”

presents the categories that should be considered (or not) to determine what audit is,

and should consequently be integrated (or not) in a conceptual model to pertinently

understand the concept of audit.

With reference to the Aristotelian categories, it has been established that audit is an

act performed simultaneously by the auditor and auditee, which affects the auditee.

Audit is a relative of an audit object that is prior to it. Once it is completed, the audit

becomes a qualifying term of the audit object.11 .

                                                            11 In a pure Aristotelian application, audit must therefore be represented by only a single category. If one were forced to choose a single category, the category “relation to something” would serve to understand audit most precisely. However, Aristotle himself leaves room for discussion as to whether some relatives can be also relations (Aristote, Organon I, ch.7, 155) and mentions that it can be difficult to clearly classify some concepts in this respect (Aristote, Organon I, ch.7, 159). Accordingly, audit can be understood by using several categories rather than a single one, bearing in mind that the attribution that best represents audit is “relation to something.”

  

20  

Aristotle’s Categories

Highlights of categories Element of what audit is?

Substance What is, without which nothing other can exist. No

Quantity Quantitative measure of something. No

Relation A relative term, a term that cannot exist without being in relation to another term.

Yes

Quality Temporary or permanent dispositions, natural capacity or incapacity relative to a specific action and virtues of a subject.

Yes

Time State of being simultaneous or prior of several terms in relation to one another.

Yes

Action Term that exists in the performance of an act. Yes

Affection Event that affects one, but is not required. Yes

Table 1. Audit by Aristotelian categories

Below, the objective of audit will be identified, to add to the knowledge of audit.

Specifically, the treatise On Interpretation (Aristotle, Organon I and II) is analysed.

2 On Interpretation In Greek, the second treatise of the Organon is entitled Peri hermeneias (translated in

English by On Interpretation). This treatise presents the propositions on which a

judgment of truth (or falsity) can be made. As a complement to Categories, this

treatise by Aristotle is fundamental to the understanding of what audit is because it

lays the foundations for the interpretation required for professional judgment and

dichotomous thought, typically Aristotelian, surrounding the fundamentals of audit.

The treatise On Interpretation states that every sentence is not a proposition; the only

ones that are propositions are those that contain either truth or falsity (Aristote,

Organon II, ch.4, 271). Affirmations or negations are declarative assertions (Aristote,

Organon II, ch.5, 273). “An affirmation is a positive assertion of something about

something, a denial a negative assertion” (Aristote, Organon II, ch.6, 275). An

affirmation-negation (opposite) pair constitutes what Aristotle considers to be a

  

21  

contradiction (Aristote, Organon II, ch.6, 275). A contradiction is a central theme of

the treatise On Interpretation. Several examples of contradiction and declarative

assertion are explained12. However, for the purposes of this paper, suffice to say that

this is how affirmation-negation pairs, on which judgment of truth or falsity are made,

are formed. When one statement in this pair is true, the other is necessarily false

because they are opposed to each other. These pairs follow an “or logic” because it is

impossible for both components to be true and false at the same time.

In audit, several sets of typically Aristotelian dichotomous contradictions are

omnipresent, particularly in the conceptual foundations. For example: auditors are

prudent or not, auditors are independent or not, auditors are knowledgeable or not.

This dichotomous thought related to certain fundamental concepts of audit is seen in

the standardization of the practice. In Canada, for example the CICA Manual

mentions ethical obligations to which all firms that carry out certification missions are

bound: “the firm shall establish policies and procedures designed to provide it with

reasonable assurance that the firm and its personnel comply with relevant ethical

requirements (as independence) and, […] the firm shall obtain written confirmation of

compliance with its policies and procedures on independence” (L'Institut Canadien

des Comptables Agréés, NGC-CQ.024).

Apparently, the auditor may or may not be independent regarding certain policies and

procedures established by firms. The auditor, as a member of the staff bound to be

independent, cannot be simultaneously independent and not independent during a

particular audit.

                                                            12 For more details on examples of contradictions and affirmation, interested readers can refer to chapters 7 to 13 of the treatise On Interpretation (Aristote Organon II).

  

22  

Further, Aristotle does not exclude the use of levels of truthfulness relative to

affirmations judged following interpretation. The judgment of truth can be modulated

on several levels such as “necessarily true,” “probably true” and “apparently true”

(Dalimier 2007, 247). Once again, Aristotelian thought is directly transposable to

audit practice. The levels of assurance associated with types of audits modulate the

levels of assurance of the judgment of truth made. For example, “in an audit

engagement, the practitioner provides a high, though not absolute, level of assurance

[…]. Use of the term ’high level of assurance’ refers to the highest reasonable level of

assurance a practitioner can provide concerning a subject matter” (L'Institut Canadien

des Comptables Agréés, 5025.0011). The next level is the “moderate level of

assurance” associated with a review engagement, whereby the auditor can draw a

conclusion about the plausibility of the elements considered under particular

circumstances (L'Institut Canadien des Comptables Agréés, 5025.0012). This level

provides lesser assurance of the truthfulness of the report audited, seen for example in

financial statements. Assurance takes concrete form in an opinion issued in the audit

report because the practitioner must “state a conclusion that conveys the level of

assurance being provided and/or any reservation the practitioner may have” (L'Institut

Canadien des Comptables Agréés, 5025.0062 g). This opinion is the judgment of truth

that the audit makes, in the Aristotelian sense. Because this judgment is the fruit of an

interpretation process, hermeneutics will now be applied to audit.

2.1 Hermeneutic thought and audit The importance of hermeneutics in the audit practice has been underscored by Francis

(1994), who was inspired by Gadamer and Riocoeur. Francis compares experience

and human action to texts that can be read and interpreted. “The point is not that

actions or experiences are texts, but rather they are like texts inasmuch as they are

  

23  

understood through a hermeneutical interpretative process” (Francis 1994, 238).

Hermeneutics therefore let one know and understand the world as experienced by

humans. Audit can be viewed as a process of understanding the world by humans; it

is based on elements already known via experience (prior understanding). This

conception of the process of human understanding is Aristotelian in the sense that it

results from the doctrine of Categories presented above, and On Interpretation.

Gadamer’s concept of hermeneutics implies a distance with the object observed.

Indeed, distance favours the interpretation process. It is therefore important to avoid

trying to shorten this distance (Francis 1994, 238). Gadamer states that “temporal

distance is a positive and productive condition enabling understanding” (Gadamer,

1991, 297 inFrancis 1994, 238). Distance aids interpretation because it allows the

transfer of knowledge that is general, or that originates from another field of

knowledge, to a particular domain. This entails understanding the world based on

prior knowledge by categorizing the specific into more general categories.

Hermeneutics is thus an exercise of interpretation that engenders knowledge and

circumstantial understanding. For this understanding to be adequate, the auditor must

exhibit phronesis, another Aristotelian concept (Francis 1994, 242). Francis affirms

that a good audit (audit with the potential to do “good” in the Aristotelian sense)

necessitates that the auditor engage in a hermeneutical practice with phronesis

(Francis 1994, 235). Accordingly, the practitioner’s “good” judgment is characterized

by subjective understanding of the object of audit in a particular circumstance

(Francis 1994, 241). The auditor can thus achieve the finality of audit.

2.2 What is the finality of audit? Several points of view have been expressed on the ultimate goal of audit (Power

2005, 57). Mautz and Sharaf (1964) described audit as a discipline intimately linked

  

24  

to but independent from accounting. They assert that whereas accounting is

responsible for compiling and categorizing financial data of organizations in order to

aggregate them and make them understandable for users, audit reviews these data and

their communication mode (financial statements) in order to make assertions that

emphasize convincing elements that support the findings (Mautz & Sharaf, 1964). For

Mautz and Sharaf (1964), the outcome of audit therefore lies uniquely in the review of

the measure and disclosure of financial information. However, when they note that

audit reviews the work done by accountants, this implies a judgment of the truth of

the financial information subject to audit. The financial statements thus serve as an

assertion in the Aristotelian sense. Lee corroborates this point of view (Lee 1986, in

Power 1997, 20), in a historical study of financial audit. He maintains that between

1881 and 1941, financial audit uniquely ensured the “adequacy of financial accounts.”

It is only after 1941 that its objective shifted to passing judgment on financial

statements. In 1948, the Companies Act in Great Britain stipulated that the goal of

audit was to state an opinion as to the true and accurate nature of financial statements

(Lee 1986, in Power 1997, 21).

Inspired by agency theory, Wallace (1980) argues that the goal of audit is to counter

the agency problem and limit the possibility of moral hazard. His definition clearly

states that audit is intended to make the terms of the contract that binds the principal

to the agent visible. There author therefore does not limit audit to financial statements,

as do Mautz and Sharaf (1964), but positions it instead as a control mechanism that

protects the principal from losses caused by distortion of information potentially

induced by the agent. Thus, the underlying idea that audit ensures the truthfulness of a

statement is also present in Wallace (1980) because the less distorted the information

transmitted to the principal, the closer it is to the truth.

  

25  

Flint (1988) adopts a broader perspective than Wallace (1980): he contends that audit

allows objective accountability by examining the accountability process externally in

order to control and monitor it. This necessarily includes the goals stated by Mautz

and Sharaf (1964) and Wallace (1980). One can consider that production of financial

statements is a form of accountability, as defined by Flint (1988). Similarly, ensuring

follow-up and control of the accountability process, whether it be public or private,

can be envisioned as a relation between principal and agent, as Wallace (1980)

describes. The fact of examining elements of the accountability process from the

outside is similar to making a judgment of truth about a statement. Once again, the

Aristotelian concept of judgment of truth is present in the goal of audit, applied to a

particular area.

Therefore, the objective of audit would be to pass a judgment of truth or falsity on a

statement issuing from a hermeneutical process where the object of audit is the

assertion in the Aristotelian sense. For example, when an auditor produces an

unqualified audit report regarding financial statements, he gives a high level of

assurance of the truthfulness of the financial statements without providing absolute

certainty. The auditor can then pass judgment on any statement, not only the

truthfulness of financial statements. Affirming that the finality of audit is to pass a

judgment of truth is consistent with Francis (1994) because it integrates the concepts

of interpretation and circumstantial judgment. This allows all forms of possible

assertions and is quite inclusive, contrary to the definitions of Mautz and Sharaf

(1964), Wallace (1980) and Flint (1988), who discuss only one particular type of

assertion.

  

26  

2.3 Understanding the concept of audit It is now possible to construct a conceptual model that can serve as methodological

tool to understand audit in light of the treatises Categories and On Interpretation.

Audit is a process of interpretation performed simultaneously by the auditor and the

auditee, which affects the auditee. Its objective is to judge the truthfulness of a precise

assertion or a set of prior assertions. Once made, this judgment becomes a qualifying

term of the assertion. Figure 1 illustrates the model schematically. This model states

that to understand audit, one must name that to which it refers, because the category

that best represents audit is the relation relative (relation to something). The

application of Categories and of On Interpretation to the concept of audit leads to a

proposed model distant from the technocratic audit described by Mautz and Sharaf

(1964) in that it draws on the interpretation process necessary for the statement of a

judgment of truth. The proposed model is thus closer to the views of Francis (1994).

• Precise prior assertion or a set of prior assertions. 

•Ultimate aim  of audit

• Qualifying term of the audit object

• Do audit• Affected by audit

• Do audit

Auditors Auditees

Audit objectTruthfulness judgement 

Figure I. Model of the hermeneutic process of audit

  

27  

  

Authors Definition of audit Fundamental discipline Finality of audit

Aristotelian categories (explicitly or implicitly considered)

Subs

tanc

e

Qua

ntity

Rel

atio

n

Qua

lity

Act

ion

Aff

ectio

n

Tim

e

Mautz and Sharaf (1964)

“Audit reviews the measurements and communications of accounting for propriety. Auditing is analytical, not constructive; it is critical, investigative, concerned with the basis for accounting measurements and assertions. Auditing emphasizes proof, the support for financial statement and data. Thus auditing has its principal roots, […], in logic […].”

Philosophy (and economics)

Review the measure and disclosure of financial information that can be captured by general accounting

Wallace (1980)

“The audit process makes the terms of a contract sufficiently observable to facilitate specialization by agents, diversification of principal’s resources, and increased productivity. The audit fulfils three explicit demands: a demand for a monitoring mechanism, a demand for information production and a demand for insurance to protect against losses from distorted information.”

Economics Make the terms of the contract observable by the principal to counter the agency problem by limiting moral hazard

Flint (1988)

“The social concept of audit is a special kind of examination by a person other than the parties involved which compares performance with expectation and reports the results; it is part of the public and private control mechanism of monitoring and securing accountability.”

Economics and sociology

Support accountability by allowing the comparison of results with expectations.

Francis (1994)

“Auditing is a normatively hermeneutical enterprise.” Philosophy Pass enlightened judgment of truthfulness.

Table 2 Definitions of audit

28  

3 The power of example As explained above, Aristotle states that people learn by associating the particular with

the general. Hence the exercise that we have conducted to develop a model to understand

audit through general categories. We will now demonstrate how to use this model as a

methodological tool. Aristotle will again serve as an inspiration, and one concrete

example of audit will be presented. Aristotle considers examples powerful: it is

impossible to exhibit phronesis without embedding the concept studied in its particular

context. Aristotle consequently places great importance on real examples in his work.

This is called the “power of example” (Flyvbjerg 2009, 58). Below, the model presented

above is applied to a case: the audit of the consolidated financial statements of the

Québec government for the fiscal year 2007-2008 (Auditor General of Quebec 2008b,

2008a) To clearly understand this specific audit, we simply ask who is the auditor and the

auditee, what is the subject of the audit and what judgment of truthfulness results from

the audit.

3.1 Who is the auditor? To determine who the auditor is, we must ask who performed the audit. One can surely

say that the auditor is the Auditor General of Québec in person, because it is he who

signed the audit report (Auditor General of Quebec 2008a, 55; Gouvernement du Québec

2008, 53). That being said, he is supported by a team of over 50 auditors (Auditor

General of Quebec 2008a, 1). It is also necessary to consider these professionals to

determine who performed the audit because it is they who planned and implemented the

audit. The auditor is therefore the team of the Auditor General of Québec that was

assigned to this audit, led by the auditor general himself.

  

29  

3.2 Who or what is the auditee? According to the model, the auditee is the one who undergoes or contributes to the audit.

During the audit of consolidated financial statements of the Québec government, the

question is therefore who or what underwent the audit, and which people or organizations

contributed to it. The organization in charge of producing these financial statements, i.e.

the Comptroller of finance of Québec on behalf of the Ministry of Finance (Auditor

General of Quebec 2008a, 6), has also undergone the audit. In addition, the comptroller’s

employees must contribute to the audit by cooperating with the auditor general’s team

during the audit. Further, the ministry of finance formulates comments on the “remarks

resulting from the audit of consolidated financial statements for the fiscal year 2007-

2008,” expressed by the auditor general of Québec. These comments appear in a special

report presented to the National Assembly, together with the comments by the Ministry

of Finance. Hence, in addition to undergoing the audit, the Ministry of Finance

cooperates explicitly to the audit by formulating its comments on the audit. This implies

that in this audit there are several auditees: the Ministry of Finance, the Comptroller of

finance of Québec and the members of the staff of these organizations that are involved

in formulating and carrying out the audit of public accounts of the Québec government.

Consequently, the Quebec government by itself is also part of the auditees.

3.3 What is the object of audit? It has been established above that the object of audit is the assertion of truthfulness on

which the judgment of truthfulness is produced at the end of the audit. In this case, this

assertion is represented by the statement of responsibility (regarding the consolidated

financial statements, on behalf of the Québec government) signed jointly by the Deputy

Minister of Finance and the Comptroller of Finance:

  

30  

The Government is responsible for the integrity and objectivity of the consolidated financial statements prepared by the Comptroller of Finance for the Minister of Finance under the Financial Administration Act (R.S.Q., c. A-6.001, s. 86). The statements were drawn up in accordance with the accounting policies disclosed in Note 1. The analysis of the financial statements contained in Volume 1 was also prepared by the Québec government.[…]

(Gouvernement du Québec 2008, 51) In this statement, the Québec government affirms that the consolidated financial

statements are “integral and objective” and “in accordance with the accounting policies”.

It is therefore a declaration of truthfulness on which the Auditor General of Québec must

pass judgment. The subject of the audit comprises both the consolidated financial

statements and the statement of responsibility signed jointly by the Deputy Minister of

Finance and the Comptroller of Finance of Québec.

3.4 What is the truthfulness judgment? The truthfulness judgment issued by the Auditor General of Québec takes the form of an

opinion presented in the Auditor General’s report. Here is an excerpt:

“[…] In my opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Government of Québec as at March 31, 2008 as well as the results of its activities, the changes in its accumulated deficits, its net debt and its cash flow for the fiscal year then ended in accordance with Canadian generally accepted accounting principles. In other respects, as required by the Auditor General Act, I express the opinion that these consolidated financial statements present fairly, in all material respects, the financial position of the Government of Québec as at March 31, 2008 and the results of its activities, the changes in its accumulated deficits, its net debt and its cash flow for the fiscal year then ended in accordance with the accounting policies of the Government of Québec set out in note 1 of the consolidated financial statements. […] ”

(Auditor general of Quebec in Gouvernement du Québec 2008, 53)

It is in this report that the auditor’s judgment of the object of the audit appears. The

auditor expresses his opinion on the accuracy of the consolidated financial statements

according to “accounting policies of the Government of Québec as set out in note 1 of the

consolidated financial statements,” as the statement of responsibility mentions.

  

31  

3.5 What is the audit of consolidated financial statements of the Québec government? 

Now that we have identified the components of the audit process inherent in the model

proposed, we can better understand the audit of consolidated financial statements of the

Québec government. As Figure II - Audit of consolidated financial statements of the

Government of Québec - shows, this audit is a process of interpretation carried out by the

Auditor General of Québec and by its team of auditors regarding the consolidated

financial statements of the Québec government. The Ministry of Finance, the Comptroller

of Finance and their staff also participated to this process. The truthfulness judgment is

formulated in the auditor’s report and concerns the statement of responsibility signed

jointly, on behalf of the Québec government, by the Deputy Minister of Finance and the

Comptroller of Finance. The Auditor General’s report immediately follows this statement

of responsibility (Gouvernement du Québec 2008, 51-53) acts as a truthfulness

judgement.

• The consolidated financial statements of the government of Quebec

• The statement of responsibility signed by the Deputy Minister of Finance and the Comptroller of Finance on behalf of the Québec government

• Auditor general's report  

• The misnistry of finance and it's personnal.• The Comptroller of finance and it's personnal

• The Quebec government

• Auditor General of Quebec and his team of auditors

Auditors Auditees

Audit objectTruthfulness judgement

 

Figure II. Audit of consolidated financial statements of Government of Québec 

  

32  

  

Conclusion Power (1997) observes an explosion of audit, yet a veil of essential obscurity covers the

audit concept. The resulting uncertainty about the nature of audit has engendered rules,

standards and technocratic procedures, which, Francis (1994) argues, arises from the way

audit is understood. He complains that subjectivity has been eliminated from audit

practice, despite its being necessary for the hermeneutical process that culminates in the

auditor’s judgment. The two authors converge in their assertion that the audit concept is

poorly understood, which has practical consequences. By producing a methodological

tool with philosophical anchors that can clarify the understanding of specific case of

audit, this article contributes to the literature on the nature of audit

Chua (1986) indicates that the world view of the researchers influences the way research

is conducted. She notes that the dominant paradigm in accounting research is

structuralism. (Burrell and Morgan, 1979). Francis (1994) reports this same problem

regarding audit research. The domination of the structuralist paradigm leads to the

massive use of economic and psychological theories that fit the structuralist world view

well. Nonetheless, recent research has adopted the interpretative or critical paradigms

proposed by Chua (1986). These works have drawn on sociological theory to study audit,

thus shedding new and pertinent light on this area.

Nonetheless, it is clear that the concept of audit is still veiled in essential obscurity, as

Power (1997) contends. The objective of this paper is consequently to develop a

methodological tool, anchored in philosophy, to better understand audit. We have turned

to philosophy rather than economics, psychology and sociology to produce this tool,

presented in the form of a conceptual model. Philosophy was selected because it analyses

33  

  

the nature of concepts and expresses its foundations (Mautz and Sharaf, 1964).

Philosophy therefore eases access to knowledge and understanding (Mautz and Sharaf,

1964). Specifically, two Aristotelian treatises were applied to audit: Categories and On

Interpretation. These treatises were selected because they are tools developed by

Aristotle to facilitate the understanding of concepts (Pelletier, 2009). In this way, a

conceptual model that can serve as a methodological tool to study audit was proposed.

This model depicts audit as a process of interpretation performed simultaneously by the

auditor and the auditee, which affects the auditee. Its objective is to judge the truthfulness

of a precise assertion or a set of prior assertions. Once made, this judgment becomes a

qualifying term of the assertion. The result is that the model developed based on the

application of the treatises Categories and On Interpretation to the concept of audit

deviates considerably from the technocratic audit described by Mautz and Sharaf (1964)

in that it draws on the interpretation process necessary for the statement of a judgment of

truthfulness. The proposed model is thus closer to the views of Francis (1994), which

implies the use of hermeneutics and phronesis. Consequently, this paper fuels the heated

debate between the proponents of putative scientific objectivity in audit practice (Mautz

and Sharaf 1964) and advocates of subjectivity (Francis 1994).

This paper has several limitations. First, Aristotelian philosophy is not the only one that

can be applied to audit. Another essay using different philosophical bases could define

audit alternatively, which could also contribute to the understanding of its nature. Second,

this paper is a hermeneutical (interpretative) exercise per se. Consequently, the

conceptual model proposed as a methodological tool is subjective. Even if the

subjectivity of the researcher is considered an advantage in research, it can also constitute

34  

a limitation. Third, the applicability of the conceptual model and its pertinence as a

methodological tool to understand audit in empirical reality remains to be demonstrated.

The practical demonstration presented in Section 3 of this article, although pertinent, is

insufficient to constitute a true test of the applicability of the model proposed. Empirical

studies are necessary to validate the conceptual model proposed in practice.

Several research avenues remain open regarding the understanding of audit and its

philosophical foundations. If the model derived from the application of two of the

philosophical treatises of Aristotle makes a contribution, the thoughts of other

philosophers could also enrich the knowledge and understanding of this practice. Too

few conceptual and empirical studies based on philosophy are currently available. Further

analysis of what audit is should extend the investigation of audit to reduce the expectation

gap induced by the veil of essential (or ontological) obscurity.  

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