The Big Four and the Development of the Accounting Profession in China (Studies in the Development of Accounting Thought, 16)

Drawing upon established academic theory, the study argues that the Big Four, as part of a globalizing transnational capital class, has dominated indigenous firms by bringing to China an ideology that came to be accepted as normative. By winning this battle of ideology, the Big Four gained access to the coercive power of the State, and to the power of transnational institutions that have subsumed part of the power of the State. Indigenous firms have pursued a counter-hegemonic strategy of undermining the ideological superiority of the Big Four through the infiltration and modification of institutional arrangements following what the academic literature calls "the long march through the institutions." This Study Is A Historical Critical Analysis Of The Role Of The Transnational Professional Services Firms Known As The Big Four In The Development Of The Accounting Profession In China. China Emerged In The Early 1980s After Decades Of Seclusion And Began An Economic Transformation That Would Make It The World?s Second Largest Economy By 2010. China Did Not Have An Accounting Profession After The Founding Of The People's Republic Of China In 1949 Until The Accounting Profession Restarted In 1980 As The Country Opened Up To Foreign Investment. The Big Four, As Members Of The Globalizing Transnational Capital Class Came To Dominate The Accounting Profession In China With The Support Of Other Members Of The Transnational Capital Class Including Investment Bankers, International Lawyers, And Transnational Institutions Such As The World Trade Organization. Grounded In Marxist Theories Of Class Struggle, Particularly In Gramsci's Theory Of Hegemony, This Study Explores How Ideology, Expressed As Normative Roles For Independent Accountants, Enabled The Big Four To Dominate The Market. Using Mixed Research Methods With Archival And Interview Data, This Study Finds That The Big Four Achieved Its Dominant Position Through Three Hegemonic Projects: Foreign Direct Investment, The Reform Of State-owned Enterprises Through International Capital Markets, And The Enabling Of Private Enterprise To Access International Capital Markets. This Study Also Explains How Indigenous Accounting Firms Followed Dutschke's Counter-hegemonic Strategy Of A Long March Through The Institutions That Reformed The Domestic Accounting Profession And Gave It Access To The Coercive Power To The State To Challenge The Hegemony Of The Big Four. This Study Finds That The Globalization Of Accounting Markets Leads To Regulatory Holes, Gaps In The Transnational Regulation Of Accounting Firms. This Study Provides Recommendations To The Big Four, Indigenous Firms, And Local And Transnational Regulators. 1. Introduction. -- 1.1. Introduction -- 1.2. The Purpose And Significance Of This Book; 1.3. The Research Question; 1.4. Overview Of Methodology; 1.5. Limitations And Delimitations; 1.6. Organization Of The Book -- 2. Theoretical Foundations. -- 2.1. Historical Critical Accounting Research; 2.2. Alternative Theoretical Foundations For Historical Accounting Research -- 3. The Big Four. -- 3.1. The Big Four; 3.2. Globalization Of The Big Four; 3.3. The Big Four In Emerging Markets3.4. Law Firms -- 4. Building Foundations. -- 4.1. Accounting Practices In Early China; 4.2. War And Revolution; 4.3. China Opens To The World; 4.4. Tiananmen Square -- 5. Foreign Direct Investment And Capital Markets As Hegemonic Projects. -- 5.1. Foreign Direct Investment; 5.2. Joint Venture Accounting Firms; 5.3. Development Of Capital Markets; 5.4. Accounting Frauds And Scandals; 5.5. Securities Regulation -- 6. Maintaining Hegemony. -- 6.1. The People Dimension; 6.2. Member Firms In China; 6.3. China And The World Trade Organization; 6.4. Competition Between The Big Four6.5. Structure Of The Accounting Market In China -- 7. Counter-hegemony. -- 7.1. Accounting And Auditing Standards; 7.2. Licensing Of Certified Public Accountants; 7.3. Local Firm Reforms; 7.4. Audit Rotation; 7.5. Mainland Chinese Firms And The H-share Market -- 8. Analysis And Conclusions. -- 8.1. How The Big Four Came To Dominate Accounting Markets In China; 8.2. Why The Big Four Came To Dominate Accounting Markets In China; 8.3. How Have Indigenous Firms Tried To Break The Dominance Of The Big Four? -- 9. Implications And Topics For Further Research. -- 9.1. What The Big Four Needs To Do; 9.2. What Local Firms Need To Do; 9.3. What Regulators Need To Do; 9.4. Further Research Topics. By Paul L. Gillis. Includes Bibliographical References (pages 307-337) And Index. This volume provides a history of the domination of the Big Four in the Chinese accounting industry, explaining why China was unable to keep the market for its own accounting firms. The book details how easy access to U.S. capital markets led to major accounting scandals, and a clash between U.S. and Chinese regulators.