Waves of Global Standardization: Small Practitioners' Resilience and Intra-Professional Fragmentation within the Accounting Profession

Abstract

SUMMARY We examine how small practitioners perceive and react to global standards of practice and the underlying mechanisms put in place by the accounting profession to ensure “appropriate” implementation. Interviews with practitioners, standard setters, and other informants indicate that small practitioners consider many features of global standards ill-adapted to their practices' particular circumstances. However, they do not tend to resist actively global standardization, adopting instead a logic of resilience under which they mobilize coping mechanisms, such as support mobilization, selective application of standards, and increased involvement in the activities of the profession. An important paradox ensues from small practitioners' professional resilience: by adapting to globalization pressures, small practitioners arguably sustain their own marginalization and intensify the fragmentation processes within the accounting profession. For instance, their role is increasingly peripheral within the audit market, and they are often constrained to use “second order” accounting standards.

SMPs’ Strategic Responses to Conflicting Normative, Material and Client Constraints

“…; Durocher et al. ; IFAC ), but they are nonetheless vital actors in society. According to the International Federation of Accountants’ (IFAC ) website, SMPs ‘are a critically important part of the profession: they constitute the vast majority of accountancy practices worldwide and, in many areas of the world, are believed to employ the majority of professional accountants working in practice.…”

“…Durocher et al. (: 81) point out the dilemma in which the smallest firms, including sole practitioners, find themselves after abandoning auditing: ‘This allegedly engenders recruitment problems since small partnerships and sole practitioners then disqualify as a training office because of their inability to secure a sufficient number of audit hours to trainee auditors’. The main labour problems SMPs experience, as identified by the literature (recruitment, training, etc.…”

“…; Defond and Lennox ; Hecimovic and Martinov‐Bennie ; Durocher et al. ), which have fewer resources. After the enactment of SOX and the creation of the PCAOB in the US, smaller firms were thus more inclined to exit the market for public company audits (Read et al.…”

The Accounting Profession's Engagement with Accounting Standards: Conceptualizing Accounting Complexity through Big 4 Comment Letters

“…One example is Durocher, Gendron, and Picard (2016) who examine how small accounting firms perceive and react to complex, global accounting standards. A significant proportion of small firms opt for lower assurance engagements in response to the increasing complexity in standards (Durocher et al 2016).…”

“…One example is Durocher, Gendron, and Picard (2016) who examine how small accounting firms perceive and react to complex, global accounting standards. A significant proportion of small firms opt for lower assurance engagements in response to the increasing complexity in standards (Durocher et al 2016). Such firms might not have the resources to devote to participation in the standard-setting process (Fogarty, Radcliffe, and Campbell 2006) even though their clients may be the most affected by complexity in accounting standards (Evans et al 2005).…”