Some readers know that I was with PwC for 28 years. I took early retirement at 50, played a lot of golf, and then decided I needed to do something more intellectually challenging. I decided to get a Ph.D at Macquarie Graduate School of Management in Australia. It was the hardest, and most rewarding thing I have done in my life.
This blog was originally conceived of as a way for me to put out some of the findings in my research so that I could get some feedback as I wrapped up the thesis. To my surprise, the issues I had studied suddenly became very popular. This blog gets 6,000 readers a month.
Some readers have asked for a copy of my thesis, and then have told me that I should make it widely available. A publisher offered to make it available on Amazon, but rather than collect the $25 or so in likely annual royalties I will just give it away here.
Here is the abstract or you can download the thesis:
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 of 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.