Coaching in the auditing field

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School of Business | Master's thesis
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There is a need for redesigning performance management processes. Commonly used end reviews do not serve well as these do not provide the needed real time feedback and guidance that would further enhance the performance of individuals. Coaching focuses on the near-term work and provides a way between the subordinate and manager to go through feedback, further guidance and new information relating to the near- term work and to the challenges encountered. Management accounting has traditionally focused mainly on financial outcomes, employing frameworks and theories that are largely derived from economic principles only. Moreover, usually the focus in prior research has been on how to design control systems in production environments. With the introduction of Balanced Scorecard, the management accounting community was introduced to non-financial measures and since the importance of non-financial measures has steadily risen. When considering specifically the auditing sector the managers have grasped the concept of balanced scorecard and noticed that the learning and growth is the most important perspective when talking about the auditing field. The auditing sector relies heavily on the knowledge that the audit professionals themselves possess highlighting further the importance of developing the individuals. This qualitative research aims to look into coaching methods and more specifically identifying what is the best possible way to coach junior auditors at Big 4 firms. Besides looking at coaching at the junior level the study also addresses what other management control systems are in place in the auditing field specifically for the junior auditors. The results from this study show that the guidance coaching is the best method to approach the coaching with junior auditors. Furthermore, the study adheres the importance of coaching as bringing clarity for the juniors on the job they are doing. Main management control systems that are in place in the junior level include: results controls that mainly consist of grade promotion as a motivator or feedback from managers, personnel controls such as training, and action controls such as work reviews. When it comes to the daily work that the auditors are doing the juniors see coaching as an important tool to bring clarity to the work they are doing. Future research should focus on gaining knowledge whether coaching could be built into a more structured approach.
Thesis advisor
Malmi, Teemu
coaching, audit, auditor learning, management control systems, PSF
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