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This paper aims to offer insight into how strategies within the accounting profession, which has been becoming more global, might be changed by the recent outbreak of the Second Cold War between the West and the Rest of the World.

We explore the strategies of those who called themselves “Confucian accountants” in China, a country which has recently discouraged its state-owned enterprises from using the services of the Big 4. We do this by employing qualitative research methods, including reflexive photo interviews, in which Big-4 accountants, recognised as the most Westernised accounting actors in China, and Confucian accountants are asked to take and explain photographs representing their professional lives. Bourdieu’s notions of “economy of practices” and “vision-of-division strategy” are drawn upon to understand who the Confucian accountants are and what they do strategically in their pursuit of a higher revenue stream and improved social standing in the Chinese social space.

The homegrown Confucian accountants share cultural-cognitive characteristics with neighbouring social actors, such as their clients and government officials, who have been inculcated with Confucianism and the state’s cultural confidence policy in pursuit of a “socialist market economy with Chinese characteristics”. Those accountants try to enhance their social standing and revenue stream by strategically demonstrating their difference from Big-4 accountants. For this purpose, they wear Confucian clothes, have Confucian props in their office, employ Confucian phrases in their everyday conversations, use Confucian business cards and construct and maintain guanxi with government officials and clients.

This paper is the first attempt to explore Confucian accountants’ strategies for increasing their revenue and social standing at the start of the Second Cold War.

This study aims to examine the effects of the entry of foreign direct investments (FDIs) on the audit markets in developing countries (i.e. Egypt). There is a long-standing debate on the impact of FDIs on developing markets, but little is still known about the effect of FDI on national suppliers, such as audit firms.

This paper reports the results of a study that used qualitative research methods. It involves interviews with senior management teams of the Big 4 audit firms, to find out how these firms deal simultaneously with conflicting global and local influences. The interviews were complemented by the publicly available data on the firms’ websites as well as published reports related to the Egyptian economy and current investment regulations.

Drawing on the institutional theory, the findings suggest that an increased litigious environment, compliance with developed markets’ regulations, auditor regulatory sanctions and improved local accounting and auditing standards are highly significant consequences of foreign investment inflows. The findings indicate that more emphasis has been given to the quality of audit and auditors’ independence when auditing FDIs. Both audit regulators and audit firms in the domestic market pay higher attention to improving the quality of financial reports when FDIs have entered the market. More inspections and reviews for audit firms have been conducted, and local auditing and accounting standards have been revised to be in compliance with international standards.

Our results have important implications for investors, regulatory authorities and governments in relation to the development, implementation and enforcement of international financial reporting and auditing standards.

Policymakers and regulators in Egypt have responded to international pressure by revitalizing their local accounting and auditing standards and adopting international financial reporting and auditing standards. The authors identify strategies that have been adopted by audit firms to face the FDIs’ challenges.

The study examines the changes in audit market concentration, auditor choice and audit quality in Russia following International Financial Reporting Standards (IFRS) adoption. Scholars have called for further examination of the effects of IFRS adoption on auditors, with an emphasis on the importance of analyzing emerging markets that are characterized by enforcement challenges and lack of proper infrastructure. It focuses on a unique feature of Russian companies – dual audits under Russian Accounting Standards (RAS) and IFRS – and investigates changes in audit concentration and audit quality for the two audit markets.

The authors rely on the audited financial statements of Russian public companies and perform pre-/post-IFRS adoption estimation using a logit regression to ascertain whether public firms change auditors from local firms with limited IFRS expertise to those with global reputation, namely Big 4 audit firms. Further, they examine whether the change in audit market concentration post-2012 affects audit quality as proxied by companies' propensity to receive a modified audit opinion and discretionary accruals. Auditor attributes were hand-collected from audited financial statements and matched with financial variables from Datastream.

The IFRS audit market was dominated by the Big 4 audit firms prior to 2012, and there is strong evidence that audit market share (concentration) increases for IFRS reports but not for RAS reports. In addition, companies are more likely to choose a Big 4 audit firm for an RAS audit, conditional upon a Big 4 firm conducting the IFRS audit. The authors do not find evidence of decrease in the probability of audit firms issuing a modified audit opinion under either RAS or IFRS, indicating that, in the Russian setting, increased auditor concentration post-IFRS adoption does not lead to enhanced risk or decline in audit quality. Moreover, they find that discretionary accruals decline post-2012. Overall, the findings indicate that the concern of global regulators regarding audit market concentration is not justified.

The Russian reporting environment is unique and generally characterized by significant agency problems, and the study’s estimation sample is not large, compared to prior studies conducted predominantly in Western jurisdictions. Nevertheless, the authors shed light on the audit concentration phenomenon within emerging markets, for which empirical evidence is scarce. Future research could explore the impact of other capital market events and exogenous shocks, not limited to IFRS adoption, on the characteristics of Russia's audit market.

The IFRS reporting regime is commonly associated with enhanced reporting quality and improved information transparency among public companies. Yet, impairment of audit quality as a result of IFRS-driven increase in audit market share of Big 4 can potentially negate these capital market effects. This study shows that the concerns of global regulators are not valid and that audit quality does not change with increased share of Big 4 post-IFRS adoption.

Dual audits, whereby companies must prepare two sets of financial statements per the IFRS mandate, are not unique to Russia, and the evidence of IFRS reporting on the structural changes in the audit market and implications for audit quality under a dual regime is scarce. Accordingly, the study's findings are important and timely and are expected to aid regulators of countries that have announced or are contemplating the adoption of IFRS for public reporting purposes.

This study aims to investigate whether organizational complexity (hereafter firm complexity) increases audit report lag (ARL) in a unique environment of GCC countries.

The research study uses a panel data set of 6,084 firm-year observations of nonfinancial firms from GCC economies from 2009 to 2022. First, the study uses an ordinary least square estimator to examine the association of firm complexity with ARL. Second, for robustness purposes, the study applies the propensity score matching technique.

This research study finds that the firms’ complexity increases ARL. Supporting the argument that auditors respond to firm complexity with increased effort, the authors find a positive relation of firm complexity with ARL. This relationship is augmented by auditor change, auditors’ tenure, auditor-qualified opinion and adoption of IFRS. In addition, the authors also find that Big-4 and audit firm industry specialization curtail the positive impact of firm complexity on ARL.

Firms in the GCC have less time to complete their audit and complex firms are likelier to have bigger ARLs. This study provided evidence regarding the curtailing effect of audit quality in GCC. Our findings suggest policymakers and reformers choose improved audit quality to reduce the possibility of larger ARL.

This study enriches the scholarship by presenting a mechanism for reducing the ARL of complex firms through higher audit quality. This study contributes to agency theory by emphasizing audit quality’s important role in emerging markets.

This paper aims to investigate the impact of audit mechanisms on earnings management (EM) practices in listed Saudi Arabian companies. Specifically, it examines the association between audit committee (AC) characteristics, external audit quality and EM before and after the revision of Saudi Regulations on Corporate Governance (SRCGs) in 2017.

The study analyzes a data set comprising 135 Saudi-listed companies observed from 2013 to 2020. EM practices are measured using the absolute value of discretionary accruals, and external audit quality is assessed by the involvement of BIG 4 auditors. The authors also consider four variables to gauge AC characteristics: independence, size, meeting frequency and expertise. To test the hypotheses, the authors use multivariate regression on panel data.

The findings provide robust evidence regarding the impact of audit mechanisms on EM practices. The presence of accounting and finance experts within the AC is shown to have a substantial and statistically significant effect in reducing EM practices. Similarly, AC independence demonstrates a negative association with EM after the implementation of the SRCGs 2017. However, the study does not uncover any statistically significant impact of AC size and meeting frequency on EM practices. Moreover, the research highlights a noteworthy positive relationship between EM practices and engagement with BIG 4 audit firms before the SRCGs 2017. However, this relationship ceases to exist following the regulatory amendment.

The practical implications of this research are significant for policymakers and companies operating in Saudi Arabia, as well as for practitioners and auditors working in the region. The findings underscore the importance of high-quality auditing work to prevent EM practices and promote transparent financial reporting. The study recommends increasing the number of independent members and financial experts on the AC, as well as rigorous monitoring of AC size and meetings. It also emphasizes the need for compliance with governance regulations to focus on effective monitoring of the AC rather than mere fulfillment of requirements.

The study enhances the existing literature on the effectiveness of ACs and external audit quality in mitigating EM by providing evidence from a unique and Islamic context that has not been extensively studied before. This can help in validating or challenging the findings of previous studies and provide a more comprehensive understanding of the factors that impact EM in different contexts.

Big 4 professional services firms increasingly lay claim to recruiting and including staff of diverse genders, cultures, ages and sexualities. Drawing on Foucauldian insights, this study explores how LGBTIQ+ staff navigated shifting technologies of client power, at the time marriage equality was legislated in Australia.

This article explores changing experiences of LGBTIQ+ staff and allies, through 56 semi-structured interviews undertaken through 2018–2019.

Technologies of client power were central to shaping workplace experiences for LGBTIQ+ staff. However, each firm was also keen to carve unique and bold responses to changing societal attitudes regarding sexuality and gender. These progressive moves did not sit comfortably with all clients, and so this article provides insight into the limitations of client privilege within professional services firms. For staff, this increasing complexity of sometimes opaque, contradictory and shifting technologies of client and firm power, enabled agency to explore a sense of self for some, but continued to exclude others.

Little attention has been directed to exploring challenges for staff of sexual and gendered diversity within professional services firms, or to exploring how staff navigate changing perceptions of client power.

The purpose of this paper is to explore the role of three different audit characteristics in loan pricing—the most significant credit term for borrowers. Three characteristics include audit reputation, audit tenure and audit specialization.

To examine audit characteristics simultaneously to measure their effect on loan pricing, this study uses a full-rank, three-way interaction model and conducts slope difference tests. It also includes the joint effects of these variables to estimate any incremental benefits of possessing multiple qualifications.

When studying the three qualifications together, none of them alone is strong enough to affect the loan interest. But, a Big 4 auditor with tenure can benefit the client by reducing the interest by about 1.98%. The more expertise the auditor has, the better value it brings to borrowers. A highly qualified auditor with additional expertise can significantly reduce loan pricing further by about 2.96 percent.

Examining the costs and benefits of hiring certified auditors is crucial for borrowers. While the variables are not exhaustive, an understanding of the added value of hiring high-quality auditors with more than one or two qualifications to their potential premium fees helps borrowers in managers' audit selection decisions. At the same time, the results shed some light on which of the auditor's qualifications lenders might prioritize when pricing a borrower's loan.

This paper analyzes and compares segments disclosure practices of listed companies of Pakistan and Bangladesh under International Financial Reporting Standard (IFRS) 8 with companies from India under Accounting Standard 17 over three-year period from 2013 to 2015. Furthermore, the purpose of this paper was to investigate that how the selection of chief operating decision-maker (CODM) by management, industry type, governance and firm characteristics affects segments disclosure practices in South East Asia. Finally, how the relationship among segment disclosure, firm characteristics and corporate governance is moderated through the big 4 audit firm.

To achieve these objectives, data were collected from annual reports of the top 100 companies of each country and selected based on market capitalization for three years period 2013–2015.

Results state that majority of companies in South East Asia are using business class for defining operating/primary segments. Regarding reporting of operating/primary segments and geographic/secondary segments along with geographic fineness score, Indian companies are continuously on the lower side as compared to companies from Pakistan and Bangladesh. Furthermore, it was found that industry type and selection of CODM have a highly significant effect on segments disclosure practices. Finally, results of regression analysis found that the application of IFRS 8 in Pakistan and Bangladesh has a significant positive effect on disclosure of operating/primary as well as geographic/secondary segments as compared to India. Further, the role of corporate governance mechanism in influencing segments disclosure was found as least in South East Asia. Further appointment of big 4 audit firm as external auditor has only significant positive effect on disclosure of segments items. Finally, based on additional analysis, it was found that big 4 auditor moderates the relationship only in the case of reporting of operating/primary segments.

Based on these results, the performance of Indian companies regarding disclosure of operating/primary segments, geographic/secondary segments along geographic fineness score is quite low despite the fastest growing economy in the world. This raises concerns about the quality of segment reporting in India, the world’s fastest expanding economy.

These results imply that there is a need of an effective role by the external auditor to improve the quality of segment reporting in developing countries, which is principle based.

Audit consortium of joint and dual audits is one of the most controversial mechanisms aimed at improving audit quality and resolving several related debatable issues. This study aims to empirically investigate the impact of audit consortium on audit quality assessment in Egypt. It specifically examines whether audit opinion modification level is triggered by joint and dual audits existence and whether it is influenced by the relative importance of the auditor pair combination types.

A sample of companies listed on the Egyptian Stock Exchange constituting the EGX 30 index is examined over a period of five years, from 2016 to 2020. A quantitative research methodology is used, using content analysis of companies’ audit reports and carrying out longitudinal panel ordinary least squares multiple regression tests.

Results show that audit quality is significantly enhanced by conducting joint and dual audits of Egyptian companies’ financial statements. Findings indicate that both joint and dual audits significantly increase auditors’ propensity to modify audit opinions as compared to companies that engage in single audits. However, this increase in audit quality is not supported by the presence of Big 4 joint auditors or affiliated joint auditors, while the impact of Big 4 dual auditors cannot be confirmed. Nevertheless, such a potential increase in audit opinion modification is boosted by the presence of affiliated dual auditors, which appears to translate into higher quality.

The study has important implications for researchers, corporates, those charged with governance, financial statement users, auditors, regulators and standard setters, who might be interested in whether an audit consortium and a particular auditor pair combination are associated with superior audit quality. It provides empirical evidence that might contribute to the continuous challenge of promoting the quality and effectiveness of the external audit.

This study adds to the relatively limited and challenging literature on the potential contribution of audit consortium, using audit opinion modification level as a direct assessment of audit quality. It extends the scope of prior research by examining the existence of joint and dual audits and the relative importance of joint and dual auditor pair combination types. The study provides key insights from a distinctive and complex emerging audit market.

The authors examine the determinants of ESG disclosure and differentiate between voluntary and mandatory disclosure regimes in Hong Kong.

The authors analyse both Bloomberg ESG scores and a disclosure index score, manually constructed according to the 2019 Hong Kong Exchange ESG Guide using regression tests.

The results indicate that the level of concentrated ownership is negatively associated with the quantity of ESG disclosure only in the voluntary disclosure period, suggesting that agency problems are alleviated when ESG reporting is mandatory. The findings also show that larger firms significantly disclose higher levels of ESG information in both voluntary and mandatory disclosure periods. Furthermore, the extent of ESG disclosure significantly increases when firms' sustainability reports are audited by Big 4 accounting firms only in the voluntary disclosure period. Finally, the control variables are significantly related to the level of ESG disclosure showing that ESG disclosure increased over time and is significantly different among industries.

The authors make contributions to the literature on non-financial disclosure in relation to ESG reporting by examining the relationship between firm characteristics and ESG disclosure in the Hong Kong context under both voluntary and mandatory disclosure regimes. This study also provides important implications for other stock markets and relevant stakeholders including preparers, users and the sustainability profession.