Methodological Insights “Materiality is …”: sensemaking and sensegiving through storytelling

Abstract

PurposeThe purpose of this paper is to explore the role and implications of storytelling and narrative as a means of making sense of, and giving sense to, the ambiguous concept of materiality.Design/methodology/approachThe use of stories was “discovered” through the authors' attempts to “make sense” of data from 16 interviews with participants from the financial and nonfinancial reporting and assurance contexts. The authors analyse the participants' use of stories through a sensemaking/sensegiving lens.FindingsWhile participants struggle to define what materiality is, they are able to tell “stories” about materiality in action. The authors find stories are a key vehicle through which participants make sense of and give sense to materiality, for themselves and (an)other. Participants tell three types of stories in sensemaking/sensegiving processes: the lived, the adopted and the hypothetical. The authors further identify “rehearsed” and “ongoing” narratives, which take any of the three story types. The use of stories to make and give sense to materiality reveals a disconnect between the static, technical definitions of materiality currently favoured by standard setters and guidance providers, and the creative authoring processes the participants employ.Practical implicationsThe authors argue for a move towards the use of stories and narratives about materiality in standard setting, specifically “materiality in action”, which the findings suggest may assist in creating shared understandings of the ambiguous concept.Originality/valueWhile previous research considers what materiality means within financial and nonfinancial reporting and assurance contexts, the authors empirically analyse how people understand and make sense/give sense to materiality. The authors also contribute to the use of sensemaking/sensegiving processes within the accounting literature.

Auditors' sensemaking of other comprehensive income through metaphors

“…While these studies are enlightening, we concur with Bolt and Tregidga (2023) who underline that more research is needed to better understand complex accounting concepts through a sensemaking perspective. We respond to this call by providing more insight into auditors' sensemaking, specifically their sensemaking about an ambiguous financial statement component, OCI.…”

“…As professionals, auditors must make sense of numerous ambiguous concepts in their daily practice. Audit quality (Brivot et al, 2018), auditor independence (Kouakou et al, 2013), materiality (Bolt and Tregidga, 2023) and, we argue, OCI are but a few examples of these ambiguous notions. Sensemaking is the process by which auditors come to understand the professional world that surrounds them.…”

“…An emerging research stream also provides insight into how auditors make sense of complex concepts. For instance, Kouakou et al (2013) examine the sensemaking strategies notably undertaken by ISO auditors to construct the meaning of independence, Brivot et al (2018) and Sulaiman (2023) explore how audit partners make sense of audit quality, while Bolt and Tregidga (2023) investigate how auditors make sense of the concept of materiality. Overall, these studies highlight how auditors' sensemaking processes assist them in translating the ambiguity of their professional environment into intelligible and practically manageable understandings.…”

“…Overall, these studies highlight how auditors' sensemaking processes assist them in translating the ambiguity of their professional environment into intelligible and practically manageable understandings. They also reveal that auditors mobilize various devices, such as narrative (Gendron and Spira, 2009), storytelling (Bolt and Tregidga, 2023), stereotyping (Kouakou et al, 2013), or classification (Brivot et al, 2018) in their sensemaking processes in trying to mitigate aberrations and complexities encountered in the course of their work. Most of these authors note auditors' sensemaking processes sometimes involve a lack of reflective attitude and self-criticism (Brivot et al, 2018;Kouakou et al, 2013) which could lead to a narrow conception of reality (Dermarkar and Hazgui, 2022;Stein et al, 2017).…”

GRI and materiality: discussions and challenges

“…Rather than explaining how others define and interpret the construct (Bolt and Tregidga, 2023), I discuss below the different and differing definitions of materiality according to GRI over the years, starting at the time of my involvement in GRI working groups.…”