The Institutionalization of Commercialism in the Accounting Profession: An Identity-Experimentation Perspective

Abstract

SUMMARY This paper draws on theories of institutional work, institutional experimentation, and identity work to develop a conceptual framework of identity experimentation in order to better understand the institutionalization of commercialism in the accounting profession. The framework highlights two key collective identity-experimentation strategies by the profession: boundary work (claiming auditor knowledge and traits and redefining auditors as “versatile experts”) and practice work (reinventing audit to create an “expert work” identity and tailor-making expert work to fit the image of supercharged versatile experts). Such identity experimentation moves the accounting profession toward the commercialization of not only auditing practices but, more importantly, the very identity of the auditor and the profession as a whole. Such change is an important issue as it may have profound implications for the profession's roles in the market economy.

The auditor : Creating a concept of the auditor through auditors' own perceptions and understandings of their work in relation to boundary-setting forces

“…The market for audit services has shrunk, contributing to greater competition between audit firms (Beattie, Brandt, & Fearnley, 1999;Sweeney & Pierce, 2004). There has been increased commercialization within the audit profession (Clow et al, 2009;Guo, 2016;Shafer, 2009;Sweeney & McGarry, 2011), which has arguably changed the nature of the audit profession (Forsberg & Westerdahl, 2007). The change from five to four audit firms has been described as the "most momentous event in a long gradual change from traditional professional values towards more commercial concerns over the last decades" (Carrington, Johed, & Öhman, 2011, p. 1).…”

“…According to Guo (2016), it is not only the audit practice that has changed due to this commercialization but also the identity of individual auditors and the profession as a whole. Forsberg and Westerdahl (2007) stated that "the auditor has become a businessman".…”

“…To conclude, due to changes in the auditor's work environment in recent decades, such as increased commercialization (Clow et al, 2009;Guo, 2016;Shafer, 2009;Sweeney & McGarry, 2011) and significant regulatory changes (EU, 2014/537;Holm & Zaman, 2012;Knechel, 2016), the role and functions of the auditor are undergoing change. According to several of the functions of the auditor described in prior theory, the utility of the audit is primarily for the stakeholders of the audited company (e.g., Beattie et al, 1999;O'Reilly et al, 2006;Pentland, 1993;Power, 2003;Öhman, 2007).…”

“…The audit firm influences both who becomes an auditor, by recruiting and selecting candidates, and the auditor's work through, for example, audit manuals and control mechanisms. The increased commercialization of the audit profession (Guo, 2016;Sweeney & McGarry, 2011) has resulted in audit firms being run in a more "business-like" way, with reward systems focusing on the individual auditor's productivity, such as number of clients or billed hours (Brock, 2006). This increased business focus could be assumed to have created a more stressful work environment for individual auditors and affected how auditors perceive their work.…”

“…In the auditors' context there are several boundary-setting forces (Jenkins, Deis, Bedard, & Curtis, 2008;Lokatt, 2018), namely, the audit profession, the audit firm, the client, society (including stakeholders), regulations, and the market, all of which influence the work of auditors and how auditors perceive and understand their work. These boundary-setting forces have in recent decades undergone significant and rapid changes (Broberg, 2013;DeFond & Zhang, 2014;Knechel, 2007;Öhman, 2007), with, for example, increased commercialization (Clow, Stevens, McConkey, & Laudon, 2009;Guo, 2016;Shafer, 2009;Sweeney & McGarry, 2011) as well as significant regulatory changes (see EU, 2014/537;Holm & Zaman, 2012;Knechel, 2016). Since the forces that influence the work of auditors and auditors' perceptions and understandings of their work have undergone changes, this could be expected to have consequences for the concept of the auditor.…”