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The positive impact of sustainability on reputation has been assumed but not sufficiently examined. This study probes the veracity of these claims by applying legitimacy and signaling perspectives to examine whether sustainability performance and assurance contribute to corporate reputation. We find superior sustainability performance has a positive association with sustainability reputation. Companies with better performance are also more likely to obtain external assurance of their sustainability disclosure, but assurance does not directly affect reputation. Assurance appears to be a managerial tool associated with the congruence of internal processes rather than a differentiating signal to external stakeholders.

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Manuscript Type: EmpiricalResearch Question/Issue: Companies operating in transition economies encounter a broad range of potential challenges. In the area of tax, firms make direct tax payments but may also encounter unofficial tax costs in the form of bribery or extortion. We focus on institutional determinants, including formal rules, informal rules, and enforcement, to examine conditions under which firms are more likely to encounter these transactions. We operationalize formal rules as rule-based trust and informal rules as dispositional trust.

Manuscript Type Empirical Research Questions/Issue The widespread adoption of International Financial Reporting Standards (IFRS) by many transition economies is expected to contribute to greater transparency in financial reporting. However, the business environment in many of these countries is associated with institutional voids and ongoing economic and institutional change. Organizations operating in this environment face considerable institutional complexity due to influences from incongruent institutional logics of local and global institutions. This study investigates how organizations manage institutional complexity created by the incompatible institutional logics which are linked to IFRS adoption. Research Findings/Insights In Russia, institutional change related to IFRS adoption was not revolutionary as IFRS did not replace Russian Accounting Standards (RAS) but both standards coexist. Based on a sample of 1,236 firms, organizational identity and the discretion in standard implementation were identified as factors that play a role in how organizations manage institutional complexity created by the coexistence of both standards. Theoretical/Academic Implications With organizations in transition economies increasingly managing global and local pressures, this study highlights conditions under which practices rooted in conflicting institutional logics coexist and create dual institutionality. Dual institutionality occurs when distinct but related practices that organizations are using have legitimacy but are rooted in diverse institutional logics and coexist due to different levels of discretion associated with their implementation. This concept is distinct from previously identified institutional duality, where competing institutional logics of subsidiary and the host country influence how a particular practice is implemented by organizations. Practitioner/Policy Implications While adoption of IFRS is expected to contribute to greater financial transparency and comparability, some countries choose to continue with the local standards while permitting or requiring IFRS. This type of parallel adoption may undermine the influence of IFRS. However, divergence between the logics and discretion in standard implementation makes it possible for both practices to exist.

We examine the role of auditing in developing markets. Our purpose is to gain insight into social expectations for the audit function and the nature of the auditor/client relationship in Russia. Conceptually we rely on two related theoretical sources. First we draw on Giddens' theorizing with regard to the process of globalization. We also draw conceptual insight from sociologically informed research on the evolved institutional role of the multinational audit firms. Against that theoretical framework, we conduct a qualitative empirical analysis based on the case of the PricewaterhouseCoopers' audits of the Russian gas giant OAO Gazprom. Three controversial episodes were analyzed using accounts from the international media and the local, Russian-language, media. In general, the international media accounts express their expectations for auditing by reference to functionalist accounting and concepts, such as auditor objectivity, disclosure of related party transactions, and unrestricted audit scope. In contrast, local media accounts express expectations for auditing that are more generally nationalist. Local media accounts often focused on themes relating to Russian national prestige, treated the presence of non-arms-length transactions as unexceptional, and revealed perceptions that Western style auditing approaches may not be appropriate in the Russian context. We interpret the data in light of the theoretical framework, prior literature, and the contradictory expectations revealed in the analysis of media accounts. The study adds insight regarding the possibility of universal, global norms and standards for accounting and auditing.

Accounting and auditing are often cited as key sites where business regulation has been privatized, globalized and neoliberalized. Yet, these sites have also undergone a legitimacy crisis in recent years, marked by a shift from self-regulation to increased public oversight. This paper investigates these developments by reference to the evolution of a public/private audit oversight regime (audit of the auditors) in Russia. We show how, in the early stages of post-Soviet reforms, old state-administered forms of financial oversight were replaced with market-oriented arrangements (peer reviews) offered by newly founded private professional accountancy associations as a service to their members. Fifteen years later, the process of regulatory privatization culminated in a reinvigoration of public authority. Our longitudinal analysis highlights the pivotal role of the state in the liberalization of governance by showing how audit oversight privatization was not only enabled by, but also provided a condition for, the strengthening of government actors. We introduce the term ‘legislative layering’ to denote the mechanism that enabled public actors to redeploy themselves in the face of the rising market logic to ensure continuity in their regulatory objectives.