All Offshore - The Sprat, the Mackeral, Accounting Firms and the State in Globalization

25 Pages Posted: 24 Nov 2008 Last revised: 9 Apr 2009

See all articles by Prem Sikka

Prem Sikka

Essex Business School

Hugh Willmott

Cardiff University - Cardiff Business School

Date Written: November 20, 2008

Abstract

This paper explores some trajectories in the relationship between the state and accounting firms. When, in the mid-1990s, major firms considered the UK state to be insufficiently responsive to their lobbying for a limitation of their liability, pressures were exerted on the UK government by privately arranging for the drafting of a Limited Liability Partnership (LLP) Bill. The intention was to persuade the government of Jersey, a small offshore financial centre, to enact the law so as to create a favourable liability regime. This strategic manoeuvre, we suggest, is illustrative of accounting firms' long history of "entrepreneurialism" in pursuit of a more benign and/or financially beneficial regulatory environment. The paper offers a perspective on the state-capital relationship in which account is taken of the globalisation of economic activity including the expansion of accounting services in the context of the emergence of offshore financial centres. To address the significance of the state-accounting firms relationship, attention is drawn to a number of liability concessions granted to auditing firms by the UK state before providing details of how the firms coopted and mobilised the authorities in Jersey in pursuit of a more advantageous regulatory regime.

Keywords: Accounting Firms, Offshore Financial Centres, Entrepreneurialism, Limited Liability, Regulatory Regime, Globalization

Suggested Citation

Sikka, Prem and Willmott, Hugh, All Offshore - The Sprat, the Mackeral, Accounting Firms and the State in Globalization (November 20, 2008). Available at SSRN: https://ssrn.com/abstract=1304599 or http://dx.doi.org/10.2139/ssrn.1304599

Prem Sikka

Essex Business School ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Hugh Willmott (Contact Author)

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

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