INFORMAL COMMUNICATIONS, NONFORMAL COMMUNICATIONS AND

MENTORING IN PUBLIC ACCOUNTING FIRMS

MARK W. DIRSMITH
The Pennsylvania State Universip
UniversiQV Park, PA 16802

and

MARK A. COVALESKI
The University of Wisconsin at Madison
Madison, WI

Abstract

Control is important within public accounting firms for a variety of reasons. Yet professional pronounce-
ments are limited in providing guidance to auditors in the form of formally stated rules and requirements.
The purpose of this article is to examine the non-formalized, non-rule oriented approaches employed in
large public accounting firms to effect control. More specifically. it is directed towards understanding the
possible roles of informal and nonformal communications and mentoring in managing public accounting
firms.
Based upon evidence gathered using a naturalistic, qualitative research methodology, it is concluded
that: ( 1) informal communications exist in public accounting firms, play a limited role in informing organi-
zational members of the politics and power within the organization, and are of some benefit to lower level
individuals; and (2) nonformal communications and mentoring are involved with the performance of audit
tasks. socialization of the individual firm, and instruction as to politics and power within the organization,
and benefit the protege, mentor and firm, though at some cost. Implications of the study are also explored.

Control is important within public accounting
firms for at least three reasons. First, within the
U.S., the individual practitioner is required by
the American Institute of Certified Public
Accountants’ first field work standard to super-
vise assistants (AICPA, 1984, AU 150.02). Sec-
ond, at an organizational level, public account-
ing firms are required to have quality control
standards which ensure that firm members com-
ply with auditing standards, such as the first field
work standard (AICPA, 1984, AU 161.03).
Importantly, if either the supervision or quality
control standard is violated, then the audit is
judged to be substandard with regard to con-
forming with generally accepted auditing stan-
dards. Thus, auditors have a professional obliga-
tion to effect good control. And third, as profit
making entities, public accounting firms need to
exert control from a business standpoint.
Despite the importance of control, however, the
guidance provided by generally accepted audit-
ing standards is itself quite general in nature,
being limited to four paragraphs - 291 words
(AICPA, 1984, AU 311.09-.12).

W’e wish to thank the individuals who participated in the study for their intensiry and candor. We also wish to thank an
anonymous reviewer for suggestions.

149
150 IMARK W. DIRSMITH and MARK A. COVALESIU
The question arises as to how members of
public accounting firms are controlled. Perhaps
naively, it may be presumed that the exercise of
control lies in monitoring conformity with for-
mal audit programs. However, as suggested by
various sociological and organizational theory
views of control (cf. Larson, 1977; Van de Ven et
al.,1976; Ridgway, 1983; Ouchi & Maguire,
1975; Ouchi, 1977) it may well be that the inhe-
rent complexity of what auditors do, expressed
in terms of task uncertainty, task interdependen-
ties among audit team members, and a possible
lack of determinancy of relevant knowledge
bases, serves to question the sufficiency of a
bureaucratic, rule-oriented, formalized app-
roach to effecting control. Perhaps focus must
be shifted to less formalized, more interpersonal,
context dependent approaches.
Within the accounting literature, this shift in
approach to exercising control is most nearly
reflected by Boland’s discussion of control
“over” vs control “with”
Control “over” is related to hierarchically structured,
bureaucratically operated processes in which orders and
rules flow from the top of an organization down, and per-
formance reports and exception conditions flow up.
Control “with” is related to shared realities that are the
result of social interaction processes. Control “with” is
the result of socialization into a clan where values and
beliefs that are shared serve as a basis for co-ordinated
action without orders and adjustment and without
exception reports (Boland, 1979. p. 263 ).
Concerning the work processes of professions
in general, Larson (1979, esp. Ch. 4; see also
Mintzberg, 1979, esp. Ch. 19) takes a similar pos-
ition, stating that professions selectively define
those areas or tasks that are amenable or not
amenable to standardization and formalized
communication, with those areas judged not so
amenable dominating actual practice. Jamous &
Peloille ( 1970) also hold that professions are
characterized by a high “indeterminationtech-
nicality” ratio, where technicality involves the
tasks that can be mastered and communicated in
the form of rules, and indetermination involves
those tasks not able to be committed to rules
which concern the individual’s talent or the per-
sonal charisma of the practitioner. The indeter-
minant mastery of the subject is then passed on
to future generations of professionals (appren-
tices) in a largely informal, interpersonal mode
of communication and control. This mastery of
the subject vs formal application of rules, is also
echoed by Hall, who states
As the level of professionalization of the employees
increased, the level of formalization decreases. The
presence of professionals appears to cause a diminished
need for formalized rules and procedures. Since profes-
sionals have internalized norms and standards. the impos-
ition of organizational requirements is not only unneces-
sary, it is likely to lead to professional-organizational
conflict (Hall, 1971, p. 121).
The purpose of this paper is to examine some
of the non-formalized, non-bureaucratic. non-
rule oriented approaches employed in public
accounting firms to effect control. More specifi-
cally, we will seek to understand the possible
roles of informal and nonformal communica-
tions and mentoring in coordinating and con-
trolling members of large public accounting
firms with reference to evidence gathered using
a qualitative research methodology.
The paper is organized into six sections. In the
first section, the informal communications liter-
ature is reviewed and some propositions for
further examination are derived. Secton two
describes our research methodology. The third
section describes the results of the first phase of
our empirical work, and discusses the complex-
ity of and limitations in the concept of informal
communications. These limitations, in turn, give
rise to our considering nonformal communica-
tions and mentoring as important means by
which control is effected in the fourth section;
the relevant literature is reviewed and proposi-
tions are also derived in this section. The fifth
section presents the second, more major phase
of our empirical analysis and discusses the
results. And finally, the implications of our study
are considered.
INFORMAL COMMLTNICATIONS
Kecognition of informal communications in
organizations is fdr from new. Beginning,
 INFORMAL. COMMUNICATIONS. NONFOKMAI. COMMIINI(:ATIONS AN11 MENTOKING 151

perhaps. with the famous Hawthorne experi- because they are perceived as being faster, more
ments at Western Electric. Roethlisbergcr & reliable, more robust and more fine textured,
Dickson (1939) recognized that informal com- though perhaps less tangible and more specula-
munications were an important means of achiev- tive, than are formal communications (c.f.
ing mutual adjustment among members of work Mintzberg, 1973, 1975; Aguilar, 1967; Sutton &
groups. Based largely on this study, the “human Porter, 1968).
relations” school of thought found that the sole Even ths social dimension of informal com-
use of formal, bureaucratic methods of control is munications cannot be disparaged as transmit-
ill-advised in that they tend co demotivate ting merely gossip. Trist & Bamforth ( 195 1 ), for
people and underrepresent the importance of example. found that informal communications
informality within organizations (cf. Likert. were vital to providing emotional support and
196 1; Mintzberg. 1979 ). encouragement to individuals in performing
Retreating, somewhat, from the position of tasks that were physically dangerous. Although
the human relation school, a series of studies some social communications may be dysfunc-
conducted during the 1950’s and 60’s (cf. Trist tional from the viewpoint of management in that
& Bamforth, 195 1; Crozier, 1964; Galbraith, they interfere with work an&or can involve
1973 ) have demonstrated that the more formal. advancing individual needs, Wilensky ( 1967)
bureaucratic and informal, social means to coor- observed that they are also used by upper level
dinating members of tasks groups are perva- people to gather ideological and political infor-
sively intertwined, with informal communica- mation on lower level echelons which enables
tions at once supplementing and circumventing managers to maintain existing power, most mar-
the formal channels (Mintzberg, 1979). kedly in “democratic” organizations where lead-
Defining the formal organization as “that ers must know the minds of tile electorate. In
which is planned and agreed upon,” and infor- this sense, formal leaders must orient to the
mal as “the spontaneous and flexible tie among informal organization to gain loyalty and legiti-
members, guided by feelings and personal macy from subordinates, and have them respond
interests indispensible for the formal, but too to the spirit rather than the absolute letter of
fluid to be entirely contained by it” (p. 2 19). Dal- bureaucratic rules (Blau, 1964).
ton observed that Most of the literature on informal communica-
tions dwells on verbal communications - talk.
For centuries observers and leaders have remarked on
Mintzberg (1973), for example, found that
the distinctions beween expected and unexpected
behavior in organizations. The fact that the distinctions
much of what managers do in managing is talk
continue to be made under various names points to an and listen because of the varieties of signals that
apparently universal condition. From at least the time of such communicatons convey (see also Weick,
Augustus Caesar. these dissimilarities were recognized 1978). Similarly Gronn (1983) demonstrated
and incorporated in the terms de jure (by right) and de
that talking and listening dominated much of
facto (in fact ). which are roughly equivalent to legal or
official andnctualbut unofficiul(Dalton, 1959. p. 219).
management activity, that this talk is administra-
tion. and that it is used to perform the work of
alternately tightening and loosening formal,
It has generally been observed that informal bureaucratic controls. Gronn interpreted talk as
communicatons center on both job-related and creating an inter-subjective, sense-making of
social information. For example, Conrath organization reality, encouraging subordinates
( 1973) found that roughly 60% of informal com- to broadly attend to the values of superiors, and
munications directly concern the performance getting people to actively do things (see also
of organizational tasks. Similarly. managers have Forester, 1980).
been found to favor informal. personal. verbal Similar to Boland ( 1979), Blakar ( 1979)
channels of communications (devoting as much argued that reality is largely socially mediated
as 65-80% of their rime to such activity) through the construction and use of words, as is
152 MARK W. DIRSMITH and .MARK A. COVALESICl
the sense of “community” among the talkers.
Blakar attributes this to verbal language being
open and generative in the sense that new word
combinations, shadings of words, accents placed
on words by body movements are influenced by
social contexts and, in turn, intluence social con-
texts (see also March & Simon, 1958; Berger &
Luckman, 1967; Meyer & Rowan, 1977).
Three basic themes surfaced in the above dis-
cussions which relate to the use of informal com-
munications in performing tasks, in socializing
the individual into the organization, and in pre-
serving power through symbolic interchange.
Concerning tasks, Feldman & March ( 1981)
reasoned that informal communications are
used not so much to make task-related decisions,
but to broadly monitor the environment for
problems and opportunities in an inductive,
exploratory manner. Thus, while formal com-
munications may involve a focusing of attention
to make decisions, informal communications are
broadening.
Daft & Wiginton ( 1979) surmised that the use
of broadening, naturalistic language is intended
to provide high variety information necessary
for detecting and considering ill-structured,
complex problems (see also Hedberg et al.,
1976). Similarly, Thomas & Griffin (1983) con-
cluded that informal communications signific-
antly influence the perceived variety of tasks, as
well as perceived autonomy, task significance,
satisfaction and motivation of individuals, and, to
a less significant extent, professionalism and
attitude towards feedback.
Informal communications have also been
linked with socializing individuals into the
organization, which, in turn, involves the inter-
nalization of, and moral commitment to, the val-
ues, norms and objectives of the organization
( Inzeriili & Rosen, 1983). Feldman ( 1981,
1984) argued that such group norms are largely
informally expressed rules that groups/organiza-
tions adopt to both aid the individual in inter-
preting their everyday work experiences and
regularize the individual’s behavior in order to:
ensure organizational survival; develop, simplie
or make predictable the behavior expected of
individuals; avoid potentially embarassing inter-
personal problems; develop work skills; encour-
age innovation and cooperation; remain with
and be committed to the organization; and
articulate the central values of the organization
(see also Buchanan, 1977; Van IMaanen, 19’9a;
Weiner, 1982).
Implicitly, the preservation of power through
maintenance of shared values, language, ritual
and precedent pervades the foregoing discus-
sion of informal communications (in contrast
with the formal construct of authority). Simpl)
expressed, the issue involves how organizational
members acquire and maintain power, and how
superiors get subordinates to behave as desired
where formal, bureaucratic rules are insufft-
cient. In a relatively early discussion, Blau
(1964) reasoned that a key ingredient to the
acquisition and use of power is that it must be
legitimated in an informal way, which entails the
subordinate respecting and desiring to gain the
approval of a potentially powerful person.
Pfeffer (1981, see also Mintzberg, 1983)
argued that disagreement over organizational
goals and indeterminancies in operational know-
ledge bases contributes to a breakdown both in
the applicability of technically rational decision
making and in the sufftciency of formal, bureauc-
ratic communications. Rather than the organiza-
tion being conceived of as a machine that con-
sumes resources and achieves something, its
reality is socially constructed and its processes
must be supported through political activity and
use of informal communications. Such com-
munications are, in turn, devoted to supporting,
rationalizing and legitimating decisions that are
made as a result of power and politics (see also
Burchell et al., 1980). Paradoxically, formal.
bureaucratic communicatons cannot directly
accommodate the discounting of technical
rationality in favor of power and politics inter-
nally, while keeping up rational appearances
externally (see also IMeyer & Rowan. IV”).
Within the accounting literature. informal
communication has received little attention.
Consistent with the earlier findings of Simon rt
al. ( 195-i), Hopwood ( 19’3. 1974 ) concluded
that informal accounting information exists and
is used because formal communications do not
 INFORMAL COMMIINICATIONS. NONFORMAL C:OMMlJNICATIONS AND MENTOKING 153

provide necessary information in a timely man- a largely inductive, descriptive, interpretive

ner to adequately manage departmental manner (Van Maanen, 1979b; Edie, 1962). Typi-
activities. Similarly, Clancy & Collins ( 1979) cal of such studies, our analysis essentially
found that informal accounting systems are involved: (a) eliciting views and recounted
widespread, that individuals who use them view experiences of participants concerning informal
them positively in terms of their being efficient communications, (b) analyzing how these
and effective, and that they are a necessary and experiences impacted upon the subject in their
appropriate complement to formal communica- own terms; and (c) critically examining these
tions rather than being a dissipation of experiences and perceptions in an interpretive
resources. Consistent with Boland’s ( 1980) dis- manner (Lauer, 1965; Sanders, 1982; Garfinkel,
cussion, informal communication appears to be 1967; Glaser & Strauss, 1967; Lazarfield, 1972).
a “control with” concept. Data was collected over a 2.5 yr period using
Based on the foregoing analysis, we propose in-depth, semi-structured, oral history inter-
the following: views with approximately 110 individuals. In
addition, interview data were supplemented by
Proposilion 1. Informal communications exist in public correspondence and telephone interviews.
accounting firms.
Interview sessions were predominantly person
Proposition 2a Informal communications convey non-
organizationally relevant information of the purely social to person, often with repeated interviews with
varier). the same person, although small (three per-
Proposition 2b. Informal communications convey task- sons), intermediate (six persons), and large
related information, most particularly that concerned
group interviews (ten persons) were used as
with the level of complex&y of the task and surveillance
determined by the circumstances. No attempt
of the task environment.
Proposition 2c. Informal communications play a role in was made to randomly select participants. Inter-
the socialization of the individual into the organization views ranged from 1 to 6.5 h, with an average of
through the articulation of a shared language and values. over 2 h, and took place in a variety of relatively
Pvoposition 2d. Informal communications convey politi- spontaneous as opposed to researcher-struc-
cal information concerning power relations within the
tured settings. Individuals representing all ranks,
organization.
Proposition 3. All members of the organization partici- from all “Big 8” firms, predominantly from five
pate in informal communications, particularly those non- Eastern and one Mid-West city (although South-
isolates who are in the central power structure. eastern, Southwestern and Western cities were
Proposition 4. Both the individual and the organization
spottily represented) were interviewed. In addi-
benefit from varying aspects of informal communica-
tion, interviews were held with individuals who
tions
had recently retired but were thought by prac-
titioners to be particularly knowledgeable about
the subject matter, and individuals from the
RESEARCH METHODOLOGY national offices of five of the firms; all but two of
this latter group were recent line managers or
A naturalistic/qualitative methodology was partners, or were serving “tours of duty” in the
employed in examining informal communica- national office.
tions in large public accounting firms (for an The basic questions asked of al1 interviewees
extended debate on the use of naturalistic/qual- during the first phase of testing included the fol-
itative methods in accounting research, see lowing:
Tomkins & Groves, 1983; Abdel-Khalik & Ajin- Do informal communications exist in public
hya, 1983; Morgan, 1983; Willmott, 1983). accounting?
A qualitative methodology seeks to preserve What is their nature?
some of the complexity and integrity of the Are they related to the performance of audit
phenomenon under study from the viewpoint tasks, socialization, and the management of
and using some of the language of the subject in power and politics?
154 ,MARK W. DIRSMITH and hlARK A. COVALESKI

How are these relationships manifested? organizational members had as yet “to earn their
During the course of the interviews, no spurs”.
attempt was made to retain constancy in the Concerning the issue of benefits to the indi-
questions asked beyond those stated above. vidual and the firm, partners and managers
Rather, information gathered in previous inter- thought that while informal communications
views was selectively shared with participants to may tend to ease the “culture shock” of joining
engender further reflection and discussion con- the firm, it did little to benefit the firm itself, that
cerning issues thought to be critical by the par- it was “useless but harmless” other than generat-
ticipants. In addition, as the study progressed, ing some misinformation.
there was a tendency to emphasize the latter, Stti and senior views contrasted markedly.
more complex questions as a consensus Virtually unanimously. they held that informal
emerged concerning the more simple issues. communications did much more than conve)
As the study progressed, researcher interpre- social information and that they all participated
tations were shared with selected participants in in the informal network. They saw such com-
order to elicit their views as to their applicabil- munications as being fairly accurate and
ity. The first phase of the analysis of interview directed at serving two principal functions. First,
data is presented in the following section. they centered on the business of auditing-con-
veying such information as: (a) compensation
information across all ranks within each office.
INFORMAL COMMUNICATION (b) the value of partners’ shares, (c) utilization
OBSERVATIONS (charged time/available time) and billing rates of
individuals at the various ranks, (d) impending
What was to become the initial phase of the turnover, (e) prospective client acquisitions and
study, involved interviews with approximately losses, (f) realization rates (collected fees
30 individuals, primarily at the partner and staff resources expended) for specific clients, (g)
levels. All individuals concurred that informal engagement and budget information for specific
communication networks were much in evi- clients, (h) billings to clients and (i ) office pro-
dence in large public accounting firms. But here fits. This information was reported as being
the similarity in views across ranks ended. accessed within 1-2 yr after joining the firm. and
As determined during the earlier interviews. cut across all levels of the o&e. Importantly.
partners and managers generally viewed infor- while such information \vas sometimes available
mal communications as being a “grapevine”, from formal sources, it ~sas ovenvhelmingl>.
“random rumor generator” or “gossip mill”. that obtained via informal sources both because it
was almost purely social in nature. To the extent was more readily accessed (see Ci’Keill!.. 1981. )
that it did relate to the firm. they reported that it and because it was obtainable earlier in ;t career.
was concerned with transmitting salary informa- Second, it conveyed political information. such
tion, although the substance of such information as: (a) “career making or career busting” engagc-
was viewed as being quite inaccurate. Clearly. ments, (b) reputations. attitudes. aptitudes and
individuals from these ranks did not view infor- career paths of upper level organizational mem-
mal communications as involving audit task- bers, typically expressed in terms of persons
related functions or socialization of staff. They being “t&t trackers” and “vegetators”, and those
did feel that it rouchrd on politics within the having or not having organizational power. and
office, although such information was again ( c) personal conflicts among tirm members.
viewed as being inaccurate. It W;LSfelt that staff Such information was not viewed as being araila-
members and seniors were involved primarily in blc from formal sources. informal communica-
executing the “crati- of auditing”, as opposed to rions were roof viewed as involving audit tasks
being involved with the “business of auditing” nor socializing the individual into the firm’s/
and the politics ot’ practice management; such office’s way of thinking and doing. Paradoxically.
 INFORMAL. <:OMhl~lNICATIONS. NONFORMAL <:OMMIINI<:ATIONS AND MI~NTORIN(; 155

it was generally thought that the informal net- vidual fits in with the firm’s values (see also Bar-
work did much to buoy up morale, particularly nard. 1946; Sofer. 1970 ). For people below man-
during the initial stages of a career when indi- agers, compensation tended to be informall?
viduals are groping to find out where and how linked with utilization - the “stars” were seen
they fit into the organization. and to communi- as more committed and more heavily utilized,
cate the importance of demonstrating organiza- and therefore received larger raises. Ironically,
tional commitment to building a career. While such a state was also seen as tending to “burn out
the formal policy for every offtce from which the best”.
people were interviewed was that “eating time” The issues of information sources and benefits
(not charging a client for tasks performed) was were then broached. Despite acceptance and
strictly forbidden, the informal system noted use of the term “informal”. such information was
that it is one way of demonstrating a commit- seen as being a “trickle down” from partners and
ment (universally judged to be important by managers to selected individuals, the “chosen”,
interviewees) to the firm and also the client. who were perceived to be being groomed for
One theme that emerged from interviews promotion. These individuals then selectively
with staff and seniors was “we-they” thinking shared information laterally with peers and ver-
and talking. They perceived that they were tically with subordinates. Both concepts of
expected to execute the technical craft of audit- “trickle down” to “select individuals” were
ing (the “we”) while letting the managers and interpreted to be key.
partners (the “they”) perform the business func- Concerning benefits. as noted above, a major-
tions. Most of those interviewed were keenly ity of interviewees thought that individuals
interested in the business of auditing and benefitted through improved morale and know-
actively engaged in informal communications in ledge of where they fit into the overall organiza-
order to learn more of the “they” world, includ- tion, while a minority held that it was useless but
ing the status of power and politics in the offtce. harmless. Opinions were fairly divided between
Thus. the informal network was seen as being such activity benefitting the firm and being use-
directed at higher ranked individuals and peers less but harmless. Interestingly, a few held that
(competitors). And their effort was apparently the perception of engaging in informal com-
successful, as they viewed their business skills as munications could actually be detrimental if
being fairly well to very well developed despite such an action was deemed by managers and
a reported lack of support of such development partners to be “indiscreet”, “lacking in loyalty”,
by the formal system. or engaging in “office politics” ifit were done in
The most mentioned theme of informal com- a readily visible manner.
munications was compensation. Despite stric- Partners and managers were then interviewed
tures against formally conveying such informa- once more to discuss the similarities and dis-
tion in all offices interviewed (in some cases, the similarities in views between the two sets of
formal system actively sought to suppress shar- ranks. They commonly expressed surprise at the
ing such information), it was contended that vir- degree to which staff and seniors reported using
tually everyone in the office knew everybody informal communications to convey business
else’s raise and bonus within one week after the information. For example, one partner in charge
individual was notified. with an admission that (PIC) of an offrce explained his presentation of
higher level salary information was less accurate. business related information, e.g. offtce and firm
Generally. this informally generated compensa- profits, client acquisitions and losses, at formal
tion information was interpreted by staff and quarterly and annual meetings for the office.
seniors as communicating organizational goals Talking at length on the matter, he eventually
and values: thus. what is usually thought to be an expressed surprise at exactly how much he was
extrinsic reward. was interpreted as having sharing with its lower levels compared to only a
intrinsic meaning. of dramatizing how an indi- few years ago. He attributed this change to both
156 MARK W. DIRSMITH and MARK A. COVALESKI
an increasing demand for such information by
lower levels and the increasingly competitive
environment of public accounting which neces-
sitates stressing the business aspects of public
accounting across ranks. He also remarked that
although business information is not actively
communicated by the formal system, it is availa-
ble. But, as revealed by lower levels, an impor-
tant difference was that the informal system was
anticipatory, client and individual specific, and
more readily accessible. This finding seems to
stress the “we-they” observation noted earlier,
that lower levels view the informal system more
favorably and the higher levels view the formal
system as being sufficient to the firm’s needs.
This same view was echoed by other, espe-
cially younger partners who indicated that the
business of auditing had to be recognized by
members of the firm beyond partners, especially
managers and to a lesser degree seniors. How-
ever, they saw this focus as being transmitted in
a “personal mode” rather than by formal,
bureaucratic means, to select, lower level mem-
bers who “had the right stuff ‘. It is in this manner
that the “trickle-down” to the “chosen” was
born.
Although the existence of informal communi-
cations was again admitted, its accuracy was still
questioned. One national office partner
recounted an experience while he was a PIC of a
medium-sized office. After announcing the raises
and bonuses to seniors, one expressed marked
disappointment. When questioned on the basis
for this, the senior said that each year the seniors
wrote their own salary information on a slip of
paper and placed it in a hat. This information was
then used to construct a distribution of salaries
while preserving individual anonymity. The PIC
asked what this distribution looked like, was
told, and commented, based upon his own com-
plete information, “I don’t know what office this
salary information applies to, but it certainly isn’t
ours!”
When asked directly about the “trickle-down”
of information, tne common response of mana-
gers and partners was that it does occur and that
this is a naturally occurring feature of organiza-
tional life. but that they did not feel that the term
“informal communication” was wholly applica-
ble. Granted it was not done in a formal and
bureaucratic mode, it did, however, have some
measure of organizational sanction. Thus, impor-
tantly, such interpersonal relations, were inter-
preted as lying somewhere between formal (that
which is planned and agreed upon, Dalton,
1959) and informal (that which involves spon-
taneous and flexible ties among members,
guided by feelings and personal interests, Dal-
ton, 1959).
It was then noted that when asked about infor-
mal communications in public accounting,
partners and managers characterized it as a
lower organizational level activity. When asked
of this, partners stated that they do engage in lat-
eral dialogue concerning the business, power
and politics of public accounting, but again the
term “informal communications” did not seem
to be a good descriptor; they saw such activity as
something they should be doing that was not
wholly spontaneous, and that involved consider-
ably more than “feelings and personal interests”
(Dalton, 1959).
We consequently concluded that “informal
communications” per se is a complex and yet
limited construct. By this we mean that it is dis-
cussed in a wide variety of literatures and is seen
as being associated with a number of organiza-
tionally-related functions; and yet we found that
its role in performing these functions in public
accounting firms to be quite limited. It appears
to be, at least in part, a lateral phenomenon, and
that something between formal and informal
communications appears to be going on verti-
cally and at higher levels. We surmised that
“nonformality” might be the answer. In addition,
eventually the term “mentoring” was applied by
one partner to the “trickle-down” to the “cho-
sen” notion. These findings, in turn, gave rise to
a partial reformation of our research concerns
and to the second phase of our empirical work.
NONFORMAL COMIMUNICATIONS AiiD
LMENTORING
The term “mentor” originally appeared in
 INFORMAL COMMUNICATIONS. NONFORMAL
Homer’s O@ssql~ as the name of King Ulysses’
trusted friend, Mentor, who nurtures, protects
and educates Ulysses’ son, Telemachus, during
Ulysses’ absence. Mentor introduces Tele-
machus to the other leaders and guides him in
the assumption of his duties and position, thus
going beyond teaching specific skills, to foster-
ing personal, professional and civic develop-
ment, and integrating him into the existing
power structure by educating him as to its social
norms and expectations.
According to Levison et al. ( 1978), and con-
sistent with Telemachus’ experience, a mentor
does many things for the protege, including:
teaching specific skills; developing intellectual
abilities; intervening and protecting to foster
entry, adjustment and advancement in the
organization; serving as a host and guide who
welcomes the newcomer into the profession,
shows him how it operates and introduces him
to the most important actors; providing advice,
encouragement and constructive criticism; and
serving as a role model who exhibits appropriate
values and a workable approach to professional
endeavor (see also Berleu & Hall, 1966; Schein
& Van Maanen, 1977). Thus, mentoring involves
many of the themes, expressed as Propositions
l-4, being examined in our study.
Generally, it has been found that mentoring is
important to successfully launching and build-
ing professional and business careers (cf. Jen-
nings, 1971; Orth &Jacobs, 1971; Roche, 1979;
Kram, 1983). Shapiro et al. ( 1978) suggested a
contimuum of mentor-like dyads within organi-
zations. At the most powerful, emotionally
charged end of the continuum, is the true men-
tor-protege dyad, which tends to be hierarchi-
cal. parental, exclusionary, elitist and the most
free-ranging in terms of scope (see also Ranter,
1977). Next is the sponsor-protege dyad, which
lacks the power and robustness of mentorship in
that the sponsor occupies a lower level position
and consequently has less power and is less able
to protect the protege than the mentor. Then
comes the guide-protege dyad in which the
guide conveys information and advises the pro-
tege on the workings of the system, and the pre-
sence of organizational pitfalls and shortcuts.
COMMUNICATIONS AND MENTORINC; 157
Lastly comes “peer pals.” who more informally
aid each other to be successful.
Hunt & Michael ( 1983) have argued that men-
toring directly impacts on the mentor, protege
and organization. Effective mentors typically
gain satisfaction both in seeing a protege be suc-
cessful and in ensuring that organizational values
are preserved. Mentoring provides the mentor
with a creative outlet during the middle years of
organizational life, thus combating stagnation
and also aiding the mentor to build and maintain
organizational power. The obvious benefit to the
protege is enhanced success, but also can have a
positive effect on emotional adjustment in that
the protege tends to have a better self-image,
better knows where he fits in the organization
and senses that someone cares. Perhaps the
organization receives the most far-ranging
benefits; mentoring tends to foster improved
education, less mobility, improved job satisfc-
tion, an appreciation for complexity, develop-
ment of more far-ranging managerial talent, the
adoption of organizational values as the indi-
vidual’s own, and “professional” behavior and
attitudes; it also ensures philosophical con-
tinuity in cases of upper managerial level succes-
sion (see also Levinson et al., 1978; Kram,
1983). The existence of mentoring, as well as
the presence of such benefits, tend to be more
prominent in settings characterized by multiple
management levels, committee based promo-
tion decisions, and an ever narrowing pyramid of
positions (Hunt & Michael, 1983) characteris-
tics directly applicable to large public account-
ing firms.
In a typically equal, bilateral relationship,
mentors tend to be at a high organizational level,
possess power, have self confidence, are par-
ticipatory in their orientation, are willing to
share and protect, and are trustworthy (Hunt &
Michael, 1983; Blau, 1964). Proteges, on the
other hand, tend to have already established a
record good performance, possess the right
social background (usually similar to the men-
tor), know officers socially, look professional,
have demonstrated commitment, have high visi-
bility and are loyal (Hunt & Michael, 1983).
Thus, each party has something to offer in a
158 MARK W. DIRSMITH
relationship.
Importantly for purposes of the current dis-
cussion, mentor relationships are infrequently
formal in nature: they are not purposely planned,
regulated and rule bound, nor is the medium of
exchange fared among parties (Blau, 1964). In
addition, it does have characteristics of being
emergent and self-designing (see also Hedberg
et al., 1976). Neither are mentor relationships
informal; they are not wholly spontaneous, but
rather “the right stuff’ (a phrase frequently used
by our participants) must first have been
observed by each, and then gradually tested; nor
are they casual, for each party has too much
invested in the relationship should it fail; nor is it
solely personal and emotional in character, for
parties enter into them, in part, for extrinsic and
political gain, and usually such relationships
enjoy some sort of nonexplicit sanction given
the benefits derived by the organization. And so
mentoring appears to be nonformal in nature.
The purpose of the reformulated phrase of our
study is to reassess propositions 1, 2a, b, c, d, 3
and 4 with respect to mentoring and nonformal
communications.
MENTORING AND NONFORMAL
COMMUNICATION OBSERVATIONS
The purpose of this section is to describe our
observations regarding mentoring and nonfor-
mal communications in public accounting firms.
The discussion is organized into subsections
which correspond to Propositions 1.2a, b, c, d, 3
and 4, although it is important to point out that
there is substantial overlap among subsections.
Mentoring and nonformal communications
exist in public accounting firms
Similar to our informal communications find-
ing, all interviewees stated that mentoring exists
in public accounting, although not all thought
that they had participated in a mentor relation-
ship.
Initial effort was devoted to proving the gen-
eral character of mentoring. Consistent with
Shapiro etuf.‘s ( 1978) observations. mentor-like
and MARK A. COVALESKI
dyads did seem to vary in terms of robustness
and were closely associated with rank. The true
mentor-protege relationship occurred predo-
minantly at the partner-manager level, where
robust, free-ranging career counselling took
place. The mentor-partner had had a long period
of time to observe: performance, commitment
to clients and the firm, the ability to handle
increased visibility, discretion, loyalty and the
appearance of behaving “partner-like”. Similarly.
the protege/manager had had occasion to
observe: the power, self confidence, willingness
to extend himself, and dependability of the men-
tor, often using informal communications as a
source of information. Fairly frequently,
relationships had developed from lower level
relations, e.g. sponsor-protege, as the members
of the dyad were promoted; indeed, a “coat-tail
effect” was reported to be an important part of
effective mentoring. Sponsor-protege dyads
seemed to occur at the manager-senior bound-
ary and guide-protege at the senior-staffbound-
ary, as relations seemed weaker, and more infor-
mational and reactive in character. In addition.
the lower level relations seemed increasingly
directed toward audit tasks as opposed to learn-
ing the business of auditing and managing a
career.
With two self-reported exceptions, mentoring
did not seem to be “generation skipping”. That
is, partners tended not to overtly mentor
seniors, etc., for primarily two reasons. First, par-
ticipants held that target proteges tend to see a
barrier between themselves and the possible
mentor, particularly at the senior-partner, and
to a lesser extent, at the staff-manager levels;
they consequently thought it prudent to “keep
their guard up” - a response inconsistent with
a relationship that operates on trust (Hunt clr
[Michael. 1983). Indeed, Blau ( 1964) argued that
it is the impressive, powerful qualities that make
the individual attractive as a mentor (a term not
used by Blau ) that also pose a status threat to the
protege. Second. due to high turnover in public
accounting, possible mentors saw such genera-
tion skipping as involving energy loss and possi-
bly loss of face - potential lower level proteges
were viewed as “World War II bomber pilots
 INFORMAL COMMUNICATIONS. NONFORMAL COMMUNICATIONS AND MENTORING
doing daylight runs, they may not be here tomor-
row”. We found this response somewhat ironic
given one possible benefit of decreasing mobil-
ity.
Well seasoned partners also reported a shift-
ing importance of mentoring. One PIC com-
mented
In the old days, there were formal stepping stones that
st&ers strove for, such as membership on the Practice
Development Committee. You got there because two or
three partners helped you after you’d served technical
apprenticeship. Now things are decentralized. Staffdon’t
see that as important. The power of the mentor has
increased.
This idea of a shift from serving a technical
apprenticeship to having a rrientor for “career
management” purposes was voiced by many
managers and younger partners, with the change
being reported as occurring during the 1975-
1978 period - a period marked by dramatically
increased competition among the Big 8.
Participants were asked to comment on the
relationship between mentoring and formal and
informal communication systems. Partners fre-
quently reported a discomfort with their firms’
reliance on mentoring to nurture future part-
ners, and their occasional, failed attempts to for-
malize the process with formally appointed
career counselors and manager training semi-
nars. These typically were seen as failing because
neither the counselor nor the counsellee had
proven they had “the right stuff’ to the other in
terms of trustworthiness, etc. In addition, formal
counsellors were thought to carry too many
advisees, typically reported to be nine or ten,
which contrasts with a typical mentor relation-
ship of two or three. The basic problem with the
seminar approach involves the auditor’s occupa-
tional hazard of being a cynic. One senior man-
ager reported
In our firm. the non-technical CPE [Continuing Profes-
sional Education] seminars for managers are called
“charm school.” One time we had a consultant come in
to talk about the importance of company values. At one
point. he stressed the importance of an “I’m ok, you‘re ok
attitude.” It was a lead balloon. Then one manager [since
promoted to partner] stood up and said “You don’t
understand our firm. or at least our level. Around here,
159
it’s an ‘I’m ok, everyone else is an asshole’ attitude.” The
place went up for grabs.
The interviewee concluded that the consultant
had not understood that within public account-
ing there exists competition in abundance, and
yet comradery among their people, there’s pres-
sure, and there’s rampant cynicism. There’s also
a record of the firms formally exhibiting little
and inconsistent people-orientation. Thus, while
firms may like to formalize the mentoring pro-
cess, they see inherent obstacles to doing so.
Concerning informal communications, men-
toring was reported-to be a “feeder” of informa-
tion. One individual spoke of a need for partners
to “vent information laterally,” particularly that
of a political and business ilk. He repeatedly
observed that, despite certain information being
sensitive, within a half day it would have made
the rounds of “partner row,” until it hit a men-
tor-protege dyad when it would be “vented ver-
tically” to the next level to again go through “lat-
eral ventation.” Thus, the “trickle down” of
informal communications arose, at least in part,
because of mentoring, although, as it trickles
down strata, it was reported to pick up more
‘impurities. However, mentoring was not inter-
preted as an informal process as it was not casual
in nature and was very much organizationally
directed and tacitly recognized.
We conclude that there is support for Propos-
ition 1 as it relates to mentoring and nonformal
communications.
Mentoring relationships convey social
infomation
The social aspects of mentoring were judged
by participants to not be particularly interesting.
It was held that mentor relationships almost only
arose where the individuals involvrd were
“comfortable” with one another. This comfort
went hand in hand with socializing. In contrast
with informal communications, which were
judged to be mostly social gossip mills by
partners, the purely social aspects of mentoring
were thought to be secondary as mentoring was
more organizationally purposive. Thus we con-
clude that there is some support for Proposition
160 MARK W. DIRSMITH and MARK A. COVALESKI
2a as it relates to mentoring, but that this may
not be very noteworthy.
Mentor@ relationships involve audit task
relatedfunctions, particularly in terms of level
of complexity of the task and surveillance
Conveying audit task complexity and surveil-
lance instruction was judged by participants to
be applicable to mentoring relationships, espe-
cially during the earlier years of a career. First,
whereas formal audit programs instruct staff
what to do, the mentor, (or in this case, more
nearly the “guide”) nonformally (they are not
strictly, bureaucratically required to do so)
attempts to instruct as to the bow and why of an
audit task. Second, whereas the audit program
merely lists instructions, the guide may amplify
or deamplify a particular audit step. One exam-
ple given was understanding the client’s busi-
ness; while such an instruction is listed in all
audit programs, the guide can intensify the
meaning of the step. For example, one seasoned
engagement partner reported stressing this
point with his managers to improve both the
power of the audit per se and client relations,
stating,
Typically, non mega-big clients have a hole in the VP
Finance area. I try to teach my managers how to fill that
hole by “role playing.” not in decision making but in
analysis. At the end of audit, they try to understand the
client’s business risks to see ifwe’ve covered them in our
audit. In part, they do this through analytical review.
They do it, but don’t get credit for it. What 1 have them
do, is don the hat of an external financial analyst or lend-
ing officer, and share the risk assessment portion of their
analysis with client management, much as a VP Finance
does/should do. It helps them truly understand the
client’s business and get credit for it, thereby cementing
client relations and setting up the possibility for exten-
sion of services.
Third, whereas audit programs require verbal
inquiries to be made of the client, the guide may
indicate who of the client’s staff to ask them of
and how much credence to place in the answers.
Fourth and related to three above, where audit
programs appear to stress the heavily procedural
work, a guide can stress the more amorphous
auditor steps, such as simply asking “What.
changes or unusual things happened this year?”
or “Who covers when X goes on vacation?”
Guides can teach people the non black and
white mental sets behind the “it depends rather
than the right answer thinking”, “I can live with
that”, “I can get my arms around this problem”
world of the everyday auditor. Guides teach to
see with peripheral vision (for oblique corrob-
oration, see also Hylas & Ashton, 1982). And
finally, surveillance was also interpreted as
grooming peope to be alert to situations suggest-
ing an extension of client services -particularly
for sponsor dyads (manager-senior).
However, our use of the word “can” is
pointed. Some guides/seniors, while reporting
that they think such functions are important and
that they sometimes perform them, felt that they
were under such time constraints that they
could not do a very effective job. We conclude,
therefore, that mentoring and nonformal com-
munications are related to the performance of
audit tasks as stated in Proposition 2b.
Mentoring involves socialization
The issue of socialization was not interpreted
to be important at the lower ranks as it relates to
mentoring. At these levels, it was reported that
more formal effort was made to socialize the
individual into the firm through training prog-
rams, office social functions, etc. As noted above,
at the lower levels, mentoring seems to be more
audit craft-directed, although guides reported
that they did try to give insights into some of the
“ins and outs” of the firm, and more particularly
the political “touch points” of the client and the
engagement partner. The mental set seems to be
more one of supporting a technical appren-
ticeship.
At the manager level, there was a trend away
from counselling on doing toward behaving and
being partner-like (see Baker, 1980). The impor-
tance of this shift was underscored by one sea-
soned partner who commented “The most
important criterion I look at in considering the
promotion of a manager, is ‘Does this person
behave like a partner?’ ”
The issue of active vs passive socialization
through mentoring also arose. It was com-
 INFORMAL COMMUNICATIONS. NONFORMAL
mented by a few participants that earlier, lower
level mentoring involved actively teaching the
protege, with the mentor actively guiding and
giving advice. In the later. higher level mentor-
ing, some of the essence of public accounting
was viewed as not being readily taught, but only
demonstrated through action. Here, mentoring
was seen as serving as a role model. One partner
commented, “There are many things a good
partner does that cannot be articulated to
others. This means that he has to make himself
visible to the manager”.
Select partners were then asked if they were
talking about core organizational values. Virtu-
ally all suffered a temporary glazing of the eyes.
When asked if there were any individuals who
they thought had established the philosophical
tone for the firm, each partner was able to name
one, two or thee individuals without hesitation,
and to discuss each person’s impact on the firm,
even though most of the interviewees had never
met them. Upon reflection, they “guessed” that
mentoring did involve imprinting the protege
with their/the firm’s values.
When asked if mentoring involved engender-
ing organizational commitment, those asked vir-
tually all answered yes (all partners answered in
the affirmative), but that the commitment had
already to be there as a base for the partner-
manager mentoring to take place. Interviewees
interpreted commitment as involving a mosaic
of traits which included goodness, loyalty, dis-
cretion. trustworthiness and dependability. One
seasoned partner commented that he “ . only
worked with managers who have shown com-
mitment first to their clients and then to the
firm”. Commitment was at once seen as a pre-
requisite, a resource and an output of effective
mentoring.
We conclude that there is quite strong sup-
port for Proposition 2c. that mentoring is closely
associated with socialization into the public
accounting firm. particularly at higher levels.
Mentoring inr)olues power and politics
The strongest and most emotionally charged
responses were obtained in this portion of our
interviews. Again in contrast with guide and
COMMUNICATIONS AND MENTORING 161
sponsor relations, the consensus of partners and
managers was that the raison d’etre for mentor-
ing was for the career management of the pro-
tege. Mentoring was seen as touching on politics
in a number of ways. All partners and managers,
particularly the nonseasoned veterans, believed
that a good mentor instructed the protege on
office and firm politics. He also gave advice and
directly assisted the protege in managing his vis-
ibility and the perceptions of important others.
Much of this visibility involved: being assigned
to the “right” jobs in terms of their being highly
visible in the firm, bringing in significant busi-
ness, and presenting and effectively participat-
ing in office, regional and national continuing
education meetings. This management of per-
ceptions sometimes took a turn toward the ton-
gue-in-cheek. One partner told ofhis own, termi-
nal promotion and the assistance given him by a
PIC who was widely reported to be a consum-
mate mentor. After gaining the promotion, the
partner met the senior managing partner of the
firm, who commented that his partnership prop-
osal (a dossier-like document) picture did not
show that he had had a beard. Apparently the
mentor had changed the individual’s most
recent picture to one that appeared more “part-
ner-like”.
In terms of perceptions, one younger partner
stated that an effective mentor instructs the pro-
tege on managing the perception of client ser-
vice and commitment to the engagement and
conurring partners, in contrast with giving client
service. Similarly, a senior manager argued that a
good mentor “ . . . looks after the numbers of his
disciples and defends them against the higher
ups in the promotion process. I’ve seen this pro-
cess have to start earlier and earlier in a person’s
career”. When asked what these “numbers”
were, he replied I‘ . . . the classics - realization
rates, client billings, time budget averages”. In
addition, he stated that a mentor reveals the
“touch points” of the partners the protege works
with so that these may be “touched” or avoided
as the case may be.
This management of perceptions and num-
bers was repeatedly echoed by managers and
younger partners, but as conditioned by office
162 MARK W. DLRSMITH and MARK A. COVALESKI
context. To begin with, office size was perceived
to be important, for in smaller offices, it was dif-
ficult to covertly manage the perception of
client service because a PIC was typically seen as
maintaining client contact, at least for the more
important engagements. In addition, “maturity
of the market” was important-the more highly
competitive the client market among the Big 8,
the more a “Pat Man” spirit tended to pervade
the office and the more mentors had to stress
“looking after the numbers”. As noted earlier, a
shift toward this numbers orientation was seen
as arising in the 1975-1978 period during which
competition markedly increased among the Big
8.
This numbers orientation was reported to
take place both in fact and appearance. That is,
managers had to do things to produce the right
numbers, but also these had to be prominently
displayed in the partnership proposal; one
important role of the mentor was to “orchestrate
the proposal process.” But, office context was
again important. For the more established, pro-
fitable, powerful, non-nouvauc ricbe offices, this
“numbers orchestration” ran the risk of being
thought “bush-league and garrish” by partners
within the office.
Age of the mentor emerged as important, Dur-
ing two independent interview sessions with
individuals from two different firms at the ranks
of senior manager (one was being considered for
promotion at the time), a recently promoted
partner and a seasoned partner, the issues of
numbers and perceptions management were
broached. In both situations, the manager and
younger partner became animated that this does
exist and must be attended to, to be successful.
In contrast, the seasoned partners at first denied
that it exists, that excellence and client service
alone are enough. But then, after 45 min of dis-
cussion, admitted that they “guessed” the man-
agement of perceptions was indeed true, but
deeply regretted it. Once more, the shift toward
such management occurring during the 1975-
1978 period arose as a topic of conversation.
The interchange pointed to a dilemma for mana-
gers and partners, that not only must the mentor
instruct the protege as to politics, bt also that the
act of mentoring is itself politically charged in
that non-mentoring, seasoned partners, may
interpret the perceptions management aspects
of mentoring as somehow undermining the
integrity of the firm.
The issue of age was then posed during a
limited number of individual interviews with
other-than-seasoned partners. Most thought that
the dilemma did exist. One manager, for exam-
ple, said that he had had an “old guard” mentor
during the 1977-1978 period who did not “tune
him in to the shifting values of the firm” toward
the business rather that profession of auditing,
wherein he had to attend to “the numbers.”
Another stated that it was important to have
involvement with a mentor of similar vintage
who was recently promoted to partner “because
they are attuned to the realities of the situation.”
Interestingly, most partners and managers who
were interviewed who had mentors at some
time, reported the desirability of having two or
three mentors who varied in “vintage,” from sea-
soned partners with “clout” to younger partners
with recent experience with proposal orchestra-
tion.
The issue of mentoring itself being political
was broached in six interviews. Generally, it was
reported that mentoring was indeed a sensitive
activity. In fact, two had moved their offices to
foster or suppress mentoring activity (see Davis
1984): the partner had moved his office out of
“partner row” so that possible proteges could
feel freely about seeing him; the senior manager
moved his office as close to the PIG’s as possible
to both “strip away disciples” and increase his
visibility. Generally, it was reported that there
existed a jealousy of the “have riots”” for the
“haves.” Being a protege was also reported to be
politically sensitive. First, discretion is a key
ingredient to mentor relationships. After receiv-
ing vertically transmitted information, ifthe pro-
tege indiscretely “ventates laterally” to peers
the mentorship could be attenuated. Paradoxi-
cally, however, mentoring involves building the
organizational power of the protege which does
involve sharing information laterally. but selec-
tively so. Second, similar to the mentor findings,
individuals who did not have mentors were
 INFORMAL COMMUNICATIONS, NONFORMAL
reported to be jealous of peers who did.
On the issue of power, mentoring was widely
reported to arise to help the protege advance,
not the mentor. (Here it is important to note,
that interpretation by the researchers played a
more active, inferential role.) Latently, inter-
viewees “guessed” that mentoring could bring
power to the mentor: it involved passing on the
individual’s way of thinking and doing; mentors
help those who are, in return, loyal; and proteges
seek leaders whom they respect and have
power, aiming to gain their approval as part of
the exchange, and in so doing, legitimate the
power of the mentor. And so, a base for power
appears to exist. However, participants ques-
tioned whether or not this power is ever
mobilized, at least on an overt level.
Mentoring seemed to cope with, and yet be
fraught with paradoxes (once more, interpreta-
tion by the researchers played an elevated role
in the following discussion). The first paradox
relates to the profession/business of auditing.
Mautz 8r Sharaf stated, for example,
If we feel auditing performs a useful service and that this
sewice should be continued, we hare an obligation
professional institutions that make this service available
to the public. We may modiq or alter the nature and var-
ieq of such service ifwe will, but with this privilege goes
an important responsibilir) to do so only ifit unquestion-
ably is in the best long range interests of society. a pro-
fession exists, not to compensate its members more or
less handsomely. but to serve society ( 1961, p. 239).
Reflecting an opposite viewpoint, but with an
identical conclusion, Larson ( 1977, esp. Ch. 11)
argued that any profession has a self-interest to
posture professional disinterest. “anti-bureauc-
racy” and a service ideal above all else. while
simultaneously suppressing the appearance of
“business”: its very survival rests with this post-
eringsuppression. The juxtaposition of Mautz 8r
Sharaf vs Larson is one of professionalism in fact
vs appearance.
How does a public accounting firm handle the
dualiry of the profession/business of auditing? To
stress the business of auditing via formal,
bureaucratic means for the purpose of managing
people would prove difficult to suppress given
the “public” nature of Big 8 firms. Perhaps the
COMMUNICATIONS AND MENTORING 163
preservation of the “professional” image exter-
nally and internally is fostered by teaching the
business of auditing via nonformal and informal
means. 0ne phenomenon that many of our inter-
viewees commented on is that the “business of
auditing” is rising to the surface and is beginning
to be formally stressed at the manager level and
somewhat at the senior level. Whether this por-
tends the death of a profession (Mautz & Sharaf,
196 1) or a profession becoming candid about
itself (Larson, 1977) remains to be seen. Usually
paradoxes are hard to handle in a direct manner.
A second paradox concerns the craft of audit-
ing. Earlier within this section, it was noted that
mentors can aid in developing a protege’s
peripheral vision, and an appreciation for softer,
more qualitative auditing. However, according
to Meyer & Rowan (1977) society has an appe-
tite for the harder, quantitative, technically
rational services upon which it depends. Does
there exist a decoupling between what gets
documented and what is auditing, and do men-
tors aid in this decoupling? This question was
asked of a limited number of seasoned partners.
Virtually all answered in the affirmative, that one
to
of their major problems is to keep staff long
enough so that they may learn what auditing is
all about. Two national office partners, using
such phrases as “sniff tests”, indicated that fairly
routinely they spend a week or more with the
client, without an audit program, without even a
memo pad, gaming a deep understanding of the
client problems and strengths, just by “wander-
ing around talking with key people”. The formal
audit is then, in part, built around this free form,
impressions-audit to document and corraborate
their impressions. The reason? When the partner
then discusses the financial reporting problems
with the client, “the documentation sells him on
booking the proper [ adjusting] entries where my
impressions would not”. Thus, the formal
aspects of the audit can be used in legitimating
the nonformal. These partners also indicated
that their firms do not formally address this audit
craft duality, but rather leave it to the seasoned
partners to “pass on” to the younger generations
by nonformal means; these and several other
partners, however, worried whether increasing
164 IMARK W. DIRSMITH
emphasis on the formal documentation would
eventually displace these looser audit tech-
niques and concerns.
A third paradox concerns that of being vs
appearing (see also Baker, 1980). As noted ear-
lier, proteges are chosen because they are com-
mitted to the client and firm, and offer the prom-
ise of being loyal to the mentor. Next, a younger
mentor counsels the protege on the necessity of
appearing to be committed to the client and
generating the “right” numbers. If commitment
exists as a base, being and appearing are both
present across the two steps. But, ifthe potential
protege is keenly politic, might he not observe
that the appearance of client and firm commit-
ment is also necessary to taking step one? Might
not the mentor’s perceptions also be managed?
If so, being is possibly decoupled from appearing
and, if widespread, this could again spell the
demise of the profession. This was feared by a
number of seasoned partners in our study who
lamented the gamesmanship involved in manag-
ing numbers and proposal orchestration.
A fourth paradox relates to business training.
As mentioned earlier, informal communications,
nonformal communications and mentoring
appear to be key to teaching the business of
auditing. One of the researchers attended a CPE
session for twenty six managers on managing.
During the session, the question was posed of
“what characteristics kept you in public
accounting and what caused you to almost
leave?” Curiously the level of business training
received appeared near the top of each respec-
tive list! Similarly, amount and quality of partner
contact also appeared in each list, though more
in the middle. At the very top of the list of factors
that caused the managers to almost leave, and
one that was voiced with considerable anima-
tion, was “ no handle on your career as a man-
ager”. This finding is strongly suggestive of that
obtained from the informal communications
phase of our study noted earlier - that inter-
viewees thought that the business training they
received was strong, but that the formal system
did not provide it. Perhaps these managers held
a similar view, but were uncomfortable with the
informality and uncertainty of it! Perhaps in con-
and MARK A. COVALESKI
tradiction to more established theories, it is the
organization that may shy away from formality
because of the paradoxes that it would have to
face, and its members prefer formality to know
where they fit in despite the supposition that
informal systems arise to serve them. As a final
note on this session, one casual partner
observer, unknown to the researcher, indepen-
dently asked “How important is a mentor in your
staying with the firm?” The consensus response
from the 26 managers was that it can and does
play an important role.
The fifth and final paradox to be considered,
relates to an extended bureaucratic/political
mentoring. Every younger partner interviewed
commented that before promotion, partnership
was seen as being “ . the final plateau”. But after
promotion, a whole new “superstructure”
became visible. All but one had indicated that he
had had a mentor until partnership, but now, for
this unforeseen set of hurdles, they had none.
They were considered to be a peer, at least in
name, and yet they felt that “All partners are not
created equal - even in a general partnership.”
It seemed the “rookie” partners sensed a need
for both counselling and protection in this
“new” environment, and yet the need to
demonstrate that they needed it not. In any
event, it was widely reported that mentoring
was dead at the partnership level, aside from the
passive, role model form of mentoring.
We conclude that mentoring and nonformal
communications are closely, strongly and com-
plexly allied with the power and politics of pub-
lic accounting firms, as suggested by Proposition
2d.
Everyone participates in mentor relationships
As noted in the beginning of this section,
while everyone interviewed recognized that
mentoring exists in public accounting firms, not
everyone participated in such a relationship,
other than the lower level, “peer pal” form of
mentor-like dyads. Many partners who viewed
themselves as mentors, lamented a reluctance
by other partners to engage in such an activity
commenting that they believed it necessary to
the long run survival of the firm. Typically, the
 INFORMAL COMMUNICATIONS, NONFORMAL
reluctant partners were interpreted as viewing
themselves as “client men”. Other non-mentor
partners who viewed it as important, lamented
that they were not involved in such relationships
and sensed some sort of lack as a consequence,
both from a firm contribution and a personal
development standpoint. Similarly, not all lower
level staff reported being a protege; those who
were not, typically reported that they did not
feel fully integrated into the firm. Only one
younger partner reported not having had a men-
tor, other than a partner who orchestrated his
proposal (it is important to note that this person
was promoted only after fourteen years of ser-
vice, while the average was twelve years and ten
years was the low end for “fast trackers”).
We therefore conclude that not everyone
engages in mentoring relationships and that
Proposition 3 is not supported.
The protege, the mentor and the firm benefit
from the mentor relationship
Persons who reported being or having been a
protege also reported feeling more integrated
into the firm’s way of thinking and doing, that
they were nurtured, or perhaps more nearly,
groomed and supported during the promotion
process, and better attuned to the political
realities of the firm. They also felt mentoring
bore costs, in terms of loyalty to the mentor,
some political sensitivity to nonmentor
partners, and peer pressure by non-proteges.
Mentors, particularly well seasoned and
retired partners, reported a strong sense of
accomplishment from having been a mentor.
Two retired PICs unequivocably stated that
mentoring was the most rewarding activity that
they had performed as a partner. Although inter-
viewees were reluctant to speak in terms of
organizational values, they became animated in
discussing “passing on the genetic heritage of
the firm”. Once more, particularly for the
younger partner-mentors, the cost of political
sensitivity was advanced, as well as the threat of
losing face from a failed protege.
Deriving from the benefits to proteges and
mentors, the firms were seen as benefitting by
having better educated members who possessed
COMMUNICATIONS AND MENTORING 165
an appreciation for the complexity and the poli-
tics of organizational life, and continuity of
leadership philosophy. As a cost, seasoned, non-
retired partners, however, voiced a concern
over the gamesmanship-teaching that appa-
rently was part and parcel of mentoring; they
feared a loss of preserving “the spirit” of the firm
profession. Once more, the spectre of a dilemma
faced by mentors and proteges, as well as the
firms, arose. Finally, the benefit of continuity of
leadership philosophy was thought by some
(most of these were national office personnel)
to be a two edged sword in that this tendency
made it difficult to change that philosophy as
rapidly as may be desirable; for example, push-
ing the firm toward thinking more in terms of the
business of auditing was reported as one
philosophical shift they thought desirable. In
fact, one partner reported that his firm seemed
to be accelerating the business numbers orienta-
tion by appointing much younger PIG’s who
would, in turn, counsel managers on their
importance. If true, this state seems to hint at the
mutually dependent nature of formal and non-
formal systems as discussed by Mintzberg
( 1979a). Thus, consistent with Proposition 4, it
appears that the protege, mentor and firm
benefit from mentoring, although not without
costs.
IMPLICATIONS
Perhaps the most significant implication aris-
ing from our study is that nonformal communi-
cations and mentoring exist as one way in which
management comes about in large public
accounting firms. In fact, it may well be that the
non-bureaucratic, non-regulated forms of man-
agement, such as mentoring, are the principal
means to effecting coordination and control. As
such, nonformality and mentoring are well
deserving of further research, on at least two
fronts. The first front is concerned with auditing,
per se. That is, effort should be devoted to exa-
mining the nature, extent and consequences of
nonformal communications and mentoring on
the conduct of the audit. That is, focus should be
166 MARK W. DIRSMITH
placed on how auditing is done - the process
rather than the technology of auditing. As noted
earlier, their impact on performing audit tasks
characterized by high variety and audit surveil-
lance activities appear to be particularly fruitful.
The second front is more concerned with
coordinating and controlling organizational
members from a control theory standpoint. Con-
sistent with the reasoning advanced by Van de
Ven et al. ( 1977) Mintzberg( 1979a) and Ouchi
( 1979) it appears that coordination and control
within public accounting firms may reside
largely in the individual rather than through the
external and formal application of bureaucratic
rules, sanctions and rewards. As discussed by
Larson ( 1977) the person rather than the task is
programmed to think and do in a certain manner
within a profession. This programming appears
to involve the broad socialization of the indi-
vidual into the profession. Consequently,
major implication of our study is to underscore
the need to examine the socialization process in
the public accounting profession, that, in part,
involves mentoring relationships.
Combining these first and second fronts, it is
noteworthy to point out that the processes of
conducting audits and managing a practice are
co-mingled, and that it may therefore be neces-
sary to examine practice management philoso-
phies and techniques in order to fully under-
stand auditing as a discipline.
Based on our analysis of a variety of literatures,
it is evident that informal communication is a
multi-theoretical construct which is more com-
plex than any one area suggests. Ironically, based
on the initial phase of our research, it also
appears to be limited in how it has thus far been
articulated. That is, it appears to be at one end of
a continuum, with formal communications on
the other end. The middle region appears to be
the domain of nonformal communications
which appear to have some degree of organiza-
tional sanction or at least recognition. We
believe that future research should seek to
examine the relationship among these three
forms of communication. One analogy which we
feel may prove useful is that formal communica-
tions are used to convey organizational rules and
and MARK A. COVALESKI
laws, while nonformal communications convey
and enculture people to conform to organiza-
tional norms, while informal communications
instruct as to organizational and group mores.
More specifically concerning the relation bet-
ween informal and formal systems, we question
the conclusion that they are useful compliments
to one another and that they tend not to conflict
(cf. Clancy & Collins, 1979). While this may be
more nearly true of formal and nonformal sys-
tems, our findings concerning the informal com-
munication of salary information suggests that
its inaccuracy, combined with the interpretation
that relative salaries communicate organiza-
tional values, may motivate aberrant behavior by
organizational members.
As another implication, the concepts of poli-
tics, power and paradox have long remained
unexamined by accounting researchers. Focus-
a ing on the basic definitions of politic as being “
. sagacious in promoting policy” and of power
as having “ . the ability to get things done”
(Webs&m), we question the wisdom of resear-
chers ignoring the complex processes that
underly the promotion and implementation of
audit and practice management policies (see
Blau, 1964, and Pfeffer, 1981 for useful discus-
sions). In particular, we find the numerous
paradoxes that our inquiry touched upon (e.g.
the profession vs business of auditing, cf. Larson,
1977, the dramatized and documented vs the
backstage and amorphous aspects of the auditing
craft, Meyer St Rowan, 1977) to be intriguing
areas for future research. In addition, we believe
the apparent “structuration” (Di Maggio & Pow-
ell, 1983) of these paradoxes, wherein their
dialectic interplay is artificialy contained by
forcing the appearance rationality (e.g. manage-
ment of the “right” numbers) on an essentially
arational situation, to be worthy of future
research.
The last implication to be considered con-
cerns the nature of the research methodology
we employed. Similar to those doing quantita-
tive, positivistic research, those doing qualita-
tive, naturalistic research must also be con-
cerned with validity, perhaps even more so since
the “sociology of validity” has not yet been fully
 INFORMAL COMMUNICATIONS. NONFORMAL COMMUNICATIONS AND MENTORING I67

articulated (Campbell, 1984). More specifically
as it concerns the current research, a question
arises of whether our findings are a function of
the characteristics of informal and nonformal
communications and mentoring in public
accounting, or whether our preconceptions
intruded on our analysis. In describing our inter-
views, however, what is missing is the animation
of participants’ answers to our questions. It is
due to the intensity of subjects responses to our
questions that we conclude that they were
responding honestly. However, as is true for all
research, the value of our analysis can only be
ascertained through future research.

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