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Globalization and its discontents: Accounting firms buy limited liability partnership legislation in Jersey

Prem Sikka (University of Essex, Colchester, UK)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Article publication date: 28 March 2008

Abstract

Purpose

The purpose of this paper is to seek to illuminate some of the dynamics of globalization that enable capital to advance its interests.

Design/methodology/approach

The paper uses theories of globalization focusing upon the “race‐to‐the‐bottom”. Such theories draw attention to the way major businesses are using their power to secure advantages, often by playing‐off one nation state against another. Increasingly, offshore financial centres (OFCs) are becoming key players in this race. The paper uses a case study relating to the enactment of limited liability partnership (LLP) in Jersey, a UK Crown Dependency. The legislation was financed and developed by the UK firms, Price Waterhouse and Ernst & Young in collaboration with a network of advisers.

Findings

The paper sheds light on the resources deployed by major accountancy firms to secure conditions necessary for the smooth accumulation of private wealth and power. Accountancy firms used OFCs or microstates to reposition the state‐capital relationship in globalization and reconfigure the UK auditor liability laws. The paper also highlights the importance of the state to capital and globalization.

Research limitations/implications

In common with major capitalist enterprises, accountancy firms rarely provide background material to explain how they advance their interests. Inevitably, this limits the analysis. Nevertheless, the case study shows some trajectories that have enabled accountancy firms to advance their economic interests.

Practical implications

The paper shows that accountancy firms are able to use novel tactics to advance their interests and that national regulation cannot easily be understood without consideration of the wider international context.

Originality/value

Accounting researchers have rarely focused upon the use of offshore financial centres by major accountancy firms to advance their interests. It also shows that the local and the global are intertwined.

Keywords

Citation

Sikka, P. (2008), "Globalization and its discontents: Accounting firms buy limited liability partnership legislation in Jersey", Accounting, Auditing & Accountability Journal, Vol. 21 No. 3, pp. 398-426. https://doi.org/10.1108/09513570810863987

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited