Institutional embeddedness and the language of accountability: Evidence from 20 years of Canadian public audit reports

Abstract

Due to the expansion of the mandate assigned to public auditors in the past decades, audit reports have become more prominent indicators of the quality of government. Accordingly, it is important to investigate the factors that shape the communication of audit findings. We suggest that while internal and legislative auditors belong to the same community of practice, they are also embedded in distinct institutional environments that incentivize them to report their findings in different ways. In particular, we hypothesize that to draw attention and mobilize support for their work, legislative auditors are encouraged to use a language that is more negative and emotive than internal auditors. Applying methods of computational text analysis to a corpus of 3245 audit reports produced in the Government of Canada between 2000 and 2019, we present empirical evidence in favor of these hypotheses. Among other things, our findings provide large-sample evidence that despite comparable professional norms and guidance, public auditors are sensitive to their institutional context and, in response to their environment, resort to rhetorical strategies to either amplify or mitigate the reputational risks associated with their reports.