Accounting Firms: Global Spread with Limited Transnationalization

26 Pages Posted: 19 Dec 2012

See all articles by Jochen Zimmermann

Jochen Zimmermann

University of Bremen - Faculty of Business Studies and Economics; University of Bremen - Chair of Accounting and Control

Jan-Christoph Volckmer

University of Bremen - Faculty of Business Studies and Economics

Date Written: December 18, 2012

Abstract

As financial markets have increasingly globalised, the regulatory framework is still nationally fragmented. One core regulatory element is the provision of assurance services by accounting firms. The Big 4 – the leading international providers of audit services – are not as international as are accounting standards or their clients.

The paper traces three facets of the transnationalization of accounting firms: explanations for internationalization rooted in the theory of the firm, their modes of internal organization and limits to further transnationalization. Accounting firms are professional service firms with low fixed and high intangible assets. This limits the theories that can explain the internationalization of firms. We examine which theories are the most promising to explain the internationalization of the Big 4. Regarding their internal structures, our empirical analysis suggests that Big 4 accounting firms aspire to develop an integrated network structure which is known from the transnational corporation of the Bartlett and Ghoshal typology. This becomes particularly manifest in international staff exchange. Accounting firms are also deeply embedded in the regulatory framework. Its national fragmentation sets limits to further globalisation of assurance services.

Keywords: Accounting firms, professional service firms, internationalization, regulatory embeddedness

JEL Classification: F23, L22, L84, L50

Suggested Citation

Zimmermann, Jochen and Volckmer, Jan-Christoph, Accounting Firms: Global Spread with Limited Transnationalization (December 18, 2012). ZenTra Working Paper in Transnational Studies No. 11/2012. Available at SSRN: https://ssrn.com/abstract=2190836 or http://dx.doi.org/10.2139/ssrn.2190836

Jochen Zimmermann (Contact Author)

University of Bremen - Faculty of Business Studies and Economics ( email )

Hochschulring 4
Germany
+49 421 218 9121 (Phone)

University of Bremen - Chair of Accounting and Control ( email )

Universitaetsallee GW I
Bremen, D-28334
Germany
+49 421 218-9119 (Phone)

HOME PAGE: http://www.controlling.uni-bremen.de

Jan-Christoph Volckmer

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany

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