The Big 4 Under Pressure: Scanning Work in Transnational Fields*

Abstract

We investigate what happens when accounting professionals come under external pressure to change established practices. We focus on corporate tax transparency, which has become an important battleground as stakeholders increasingly demand more information on corporate tax practices. While the Big 4 global accounting firms have traditionally played a dominant role in shaping what is perceived as acceptable corporate tax behavior, activists and critical politicians have recently mobilized public attention, challenging how accounting professionals legitimate their practices. We provide evidence of these challenges from 33 interviews and participation in 13 professional events from 2013 to 2019. We conceive of the confrontation between dominant professionals and challengers as taking place in a transnational “field,” where a range of actors struggle over how a common object—corporate tax transparency—is defined and treated. This approach helps us understand how the Big 4 navigate new challenges while seeking to maintain control over professional practices. Our interviews and observations show that Big 4 professionals are sensitive to political challenges, requiring that they engage in what we characterize as “scanning work”—ongoing activity to search for, identify, and assess challenges—to fend off outside interventions. Our analysis has important implications for further research. First, the need for scanning work when facing transnational political pressure implies a different way of seeing interactions between accounting professionals and (global) society at large. Second, viewing global accounting from a transnational field lens helps us identify complex sources of change external to already‐powerful actors.

Unsettling West-centrism in the study of professional service firms

“…A close reading of these reveals scholars to be theorizing the 'global' almost exclusively based on research conducted in the West. And the same generally also applies to studies exploring the role of PSFs in transnational governance (e.g., Christensen and Seabrooke, 2022;Suddaby et al, 2007).…”

The changing spatial arrangements of global finance: Financial, social and legal infrastructures

“…Freeports are thus part of the 'offshore world' but are located in plain sight. In response to greater scrutiny of tax avoidance activities (Christensen and Seabrooke 2022), freeports have embedded themselves in the art world and elite social networks to legitimate their activities and existence.…”

Transnational Infrastructural Power of Professional Service Firms

“…Suddaby, Cooper and Greenwood (2007) show the dominance of global accounting firms in creating a transnational regulatory field for professional services through shifts in field boundaries, logics, identity and power; Dezalay and Garth (2010) describe how elite law firms and lawyers manufacture the demand for and legitimacy of international commercial arbitration, creating a new global field under their control. This control over new global fields confers a structural power that coerce other actors to align with GPSF interests through field domination -although such domination requires continuous 'scanning work' to assess and fend off challenges from field outsiders (R. C. Christensen & Seabrooke, 2022). As advisors to multinational corporations and wealthy elites, professional service firms invest significantly in (political) positioning that enable command of the structuring beliefs in national and transnational fields of tax and transfer pricing (Anesa et al, 2018;Harrington, 2015;Mulligan & Oats, 2016).…”

“…Given these high stakes, transfer pricing is marked by substantial conflict, between corporate managers inside firms (Eccles, 1985), between corporations and states (Armstrong, 1998), and between states (Rixen, 2008). Thus transfer pricing has been subject to significant scrutiny on ethical and political grounds (Armstrong, 1998;Borkowski, 2005;Hansen et al, 1992;Mehafdi, 2000;Ylönen & Teivainen, 2017), increasingly so in recent years, where transfer pricing has become the subject of unprecedented regulatory initiative (Baudot & Cooper, 2021;R. C. Christensen & Seabrooke, 2022;Rogers & Oats, 2021).…”

“…Instead, global professional service firms insist on established hierarchies in the field, problematizing proponents of formulary apportionment as simply misunderstanding what transfer pricing is about (cf. R. C Christensen & Seabrooke, 2022)…”