Student career aspirations and perceptions: The case of Israeli accounting students

The study investigates changes in Israeli accounting students' career aspirations during their course of studies, and the relationship between these and their perceptions of professional accountancy firms. We employed a cross-sectional analysis of students across consecutive educational levels from the first year to the end of their formal education. We assumed that revealed differences between the accounting student cohorts, in terms of their perceptions of professional accountancy firms and their career aspirations, could be interpreted as reflecting changes over time in students' attitudes. Results from the sample show that accounting student' aspirations to pursue a career with a professional accountancy firm decline significantly between the first and postgraduate years, while their desire to work in the business sector increases. The results show the same trend with regard to the student's positive perceptions of the above firms as future workplaces. Non-parametric tests demonstrate significant relationships between students' career aspirations and their perceptions of professional accountancy firms. We suggest that the change in students' perceptions and aspirations is a symptom of something similar to a ‘reality shock’, and that it results from the students' exposure to the accounting profession. Professional accountancy firms need to implement innovative policies to meet the challenge.     

Changing gender domination in a Big Four accounting firm: Flexibility, performance and client service in practice

Traditionally, accounting has been described as a gendered profession. Recently, accounting firms, and especially the Big Four, have made very public commitments to promote greater gender equality. Yet they struggle to retain women, especially at more senior levels. Drawing on a recent empirical field study of managers in one of the Big Four accounting firms (pseudonym Sky Accounting), we explore the effects of a flexible work initiative that was developed with the aim of creating “the best professional workplace for women”. The paper addresses the flexibility program as a key organizational practice that was specifically designed to enhance the progression and retention of talented women at senior levels. We show how the initiative that was designed to challenge the status quo was, in practice, translated into a mechanism that actually reinforced gender barriers. In order to theorize our findings, we draw on contemporary theoretical approaches to gender from both accounting and organization theory and suggest several critical reflections on the dynamics of bringing about change in relation to gender inequality.     

Rationalisation,charisma and accounting professionalisation: perspectives on the intra-professional conflict in Greece, 1993–2001

During the 1990s Greek auditors and branches of international accounting firms in Greece fought a veritable professional war over the jurisdiction of statutory auditing. This intra-professional conflict developed against a backdrop of profound changes in the socio-economic and political fabric of the country, along pro-liberal, free market lines. This paper looks at a particular episode of that conflict––an attempt by the indigenous auditors to regain the monopoly of practice they lost, following the `liberalisation' of the Greek auditing profession in 1992. The paper argues that Max Weber's theoretical work on history and social development can be applied in helping to understand complex processes of contemporary change in the accounting profession. The analysis of this case study posits that rationalisation and charisma play a major role in helping to effect historical change through their influence on class–status–party, the tripartite stratificatory structure of modern society. In these encounters, multifarious social, economic and political actors with overlapping or differing interests interact with one another. The end result is that historical development is read as a fluid process whose outcome appears uncertain, although certain trends may be discernible in the particular historical juncture examined in this case study.     

A content analysis of CPA firms’ correspondence following PCAOB inspections: 2004–2010

The Public Company Accounting Oversight Board (PCAOB) has conducted well over 1000 inspections of public accounting firms since 2004, the year their inspections began. The PCAOB inspections are mandated by the Sarbanes–Oxley Act of 2002, and are designed to promote high professional audit standards and improve the audit quality of registered public accounting firms (U.S. House, 2002). Since then, a growing body of research has emerged focusing on the process, results, and decision implications of the inspections. Most of the research to date has focused on determining the impact of the inspection regimen from the perspective of regulators, clients, or markets, but there has been very little research focused on the effect of inspections on the accounting firms themselves.We evaluate the letters provided by triennial audit firms (100 or fewer issuer clients) to the PCAOB in response to their inspections. The response letters provide insight into what the firms themselves think about the value of the inspection and the results of the inspections. Our study and its findings are particularly timely in light of the PCAOB Chairman James Doty’s recent speech (Doty, 2011) in which he claimed that deficiencies were concrete instances of audit failure, and sharply criticized the responses of many audit firms who received inspection deficiency reports, most of whom maintain that their deficiency finding resulted from either differences in professional judgment or inadequate documentation, or both (but not audit deficiencies).We find that a majority of firms writing response letters (1) state they support the PCAOB’s objective of improving audit quality and (2) believe the inspection process will lead to higher audit quality. However, a substantial majority of firms that had an audit engagement deficiency disagreed with the PCAOB’s evaluation, citing differences in professional judgment and/or documentation issues. Our findings do not support but run counter to the PCAOB Chairman’s criticisms and insistence that inspection deficiencies are not attributable to professional judgment differences.     

Literature section

Abstract

The goal of professional accounting education is to produce competent professional accountants capable of making positive contributions over their lifetimes to the profession and society in which they work. International Education Standards (IESs) establish global benchmarks for pre-qualification education and continuing professional development for professional accountants.     

The reflective accountant: towards a new model for professional development

The accounting profession in recent times has been under intense scrutiny. Questions have been raised about, among other things, the right of the profession to regulate its activities, the behaviour of accounting firms and the usefulness of accounting information, a situation that would seem to indicate the existence of a crisis. This paper argues that the present crisis facing the accounting profession can be attributed to the inability of the tradional (technical rationality) model for professional development to cope with the new demands placed on the modern accounting profession which is characterized by professional pluralism. The paper proposes an alternative model for professional development based on the concept of the ‘reflective practitioner’. It is argued that the proposed model would equip accounting professionals with a degree of flexibility which is considered essential in carrying out their functions in a changing environment.     

Beyond the boring grey: The construction of the colourful accountant

The accounting profession has long laboured under the weight of the stigma of the accounting stereotype. This unappealing persona may pose a potential problem for recruitment into the profession. How is the gregarious graduate to be tempted into the tentacles of the dull and the dreary? Drawing on Goffman's work on stigma and impression management, this paper examines the recruitment literature of the ‘big four’ accounting firms and six of the professional institutes in an attempt to unravel the techniques deployed by the profession to camouflage the spectre of the stereotype. The investigation reveals how the recruitment discourse, an important stage in the process of professional socialization, is used to construct an image of the trendy and fun loving accountant. Through text and image, a carefully orchestrated campaign of impression management casts aside the boring bookkeeper in favour of an altogether more colourful characterisation.     

Identity narratives under threat: A study of former members of Arthur Andersen

This paper examines the processes by which individuals work their sense of organizational and professional identity in the aftermath of a professional failure. Drawing on twenty-five interviews carried out with former members of Arthur Andersen who mostly worked for the firm in Canada and the United Kingdom, we investigate interviewees’ identity work ensuing from the breakdown of the firm. Specifically, identity work comprises processes by which individuals reflectively seek to maintain or revise their sense of identification with the AA organization and also with the public accounting profession, along with developing self-understandings regarding causes and consequences ensuing from the firm’s collapse. Our analysis indicates that four interpretive schemes or patterns mainly characterize interviewees’ identity work: disillusion; resentfulness; rationalization; and hopefulness. Each of these patterns can be viewed as conveying a distinct representation of what “truly” happened within AA. In this sense, identity work, sense-making and truth contests are inextricably linked altogether. Moreover, the present paper underlines the pertinence of studying entangled processes of identity work and sense-making in order to better understand how broader social forces or discourses (e.g., commercialization and risk) are experienced and translated by the self in the context of identity-threatening events. That is, the identity work/sense-making nexus constitutes a relevant theoretical anchoring to study the circulation of discourses in society.     

PERCEPTIONS OF EXTERNAL AUDITORS’ INDEPENDENCE: SOME CROSS-CULTURAL EVIDENCE

The objective of our paper is to contribute to the accounting education literature by demonstrating that there are significant differences among final year undergraduate accounting students in the United Kingdom, Australia, India, and Malaysia with respect to an important concept in auditing, namely, perceptions of external auditors’ independence. To attain this objective, we make an original contribution to accounting cross-cultural studies by operationalizing culture in terms ofindependent and interdependent construals of selfhood. These fundamental core cultural differences are important because they play a major role in regulating psychological processes including perceptions. Additionally, to gain insight into the evolving complexities associated with understanding culture in a global economy, the concept of acculturation is invoked in hypothesis formulation. We find support for the hypothesis that students from countries with greater political, economic and socio–cultural interactions (UK and Australia) are likely to have greater similarities (i.e., lesser variations) in their perceptions of external auditors’ independence, compared to students from countries that have less acculturation (other pairs of countries). The results have implications for improving learning and teaching of auditing in the four countries. Specifically, accounting educators may like to ensure that the meaning intended in the various national and international auditing pronouncements with respect to external auditors’ independence is effectively communicated to students within specific national cultural contexts. Our findings may also be useful to various international bodies whose objectives are to harmonize auditor education. The results also suggest that there is a need to critically question the assumptions made by professional accounting firms operating cross-nationally that it is possible to attain a single global set of audit procedures and codes of professional conduct.     

Women accountants: Is the grass greener outside the profession?

Studies of professional accountancy firms have indicated a complex process of internal socialisation which shapes the professional and organisational identities of the chartered accountants working within them. These processes have acted as a mechanism for excluding women, hindering their progress and facilitating their exit. Previous evidence suggests that women leave professional accountancy firms in order to accommodate more flexibility, experience less pressure, achieve consistency of hours and hence attain a better work/life balance.In this paper we seek to examine whether the gendered work practices of professional accountancy firms influence female choice to seek alternative employment outside the professional accountancy firm environment. Specifically the paper seeks to answer two research questions (1) why and when do women leave professional accountancy firms? (2) is the working environment outside professional accountancy firms less gendered?Data was collected by means of a postal questionnaire distributed in 2005 to women who had qualified in the years 1990–1995 (n = 1022). Responses were received from 370 women, of whom 100 were employed with professional accountancy firms and 270 employed within industry. In depth interviews were also conducted with 7 partners in professional accountancy firms and 6 women who had left the professional accountancy environment to pursue employment elsewhere.Whilst there was evidence that professional accountancy firms continue to reflect gendered working norms practices, rather than compound the dominant view, this study suggests that the primary reason women leave professional accountancy firms is to seek more interesting work as opposed to obtaining more flexibility in their working lives. In addition, the experiences of the women, the working patterns, and rates of progression were similar irrespective of employment type.     

The Role of Accounting Information in Valuing Unlisted Shares

Little research has been conducted on how professional accountants value unlisted shares. The study reported in this paper analyses the accounting and other data drawn from 185 actual unlisted share valuation reports within seven major Canadian accounting firms to estimate a model of and to explain variations in the values placed on unlisted shares.

The findings suggest that valuation of unlisted shares can be explained largely in terms of historic accounting data, the main sources being earnings, earnings stability and asset book value. A high degree of consensus on the importance of variables was found across accounting firms. The implications of these findings are discussed.     

Shunning careers in public accounting firms: The case of Indonesia

A rapidly growing emerging economy such as Indonesia has an increasing need for qualified accountants to service the many needs of business. However, the current dearth of qualified accountants is becoming critical, and this situation will only get worse as Big 4 firms, mid-tier firms and local firms struggle to recruit enough trainees to qualify as professional accountants. This study examines the plight of the Indonesian accounting profession by investigating why accounting students are shunning the profession, possibly leading to the demise of the Indonesian profession as we know it today.The study shows that although career intention constantly changes as new experiences are encountered, background factors matter. Ethnicity, living in an urban or rural environment, and where one is educated all matter to career intention. Further, one's own self-efficacy, such as English language ability, and other people's views are all influential in where we want to work.To address this looming crisis in the profession the Indonesian government needs to implement policies that ensure that the education curriculum addresses English language literacy, especially in rural areas; and the profession needs to engage more with remoter universities in rural locations to recruit high achieving students to provide greater diversity in the profession.     

International Professional Labour Markets and the Narratives of Accountants

This paper analyses the emergence of an international labour market in accountancy and the role it plays in the careers of Big Six Irish accountants. It suggests that within Irish accountancy an international hierarchy has arisen which places sites such as London above areas like Bermuda. The justifications for this hierarchy are often technical, i.e. one learns new accounting techniques in London but not in Bermuda. However, although technical justifications play a role in this hierarchy, the paper argues that its emergence has more to do with narrative than with technical factors. That is, it is argued that Irish accountants perceive core sites as being more “progressive” than peripheral areas and in order to display their ambition and adherence to “progressive” accounting values they migrate to the core and not the periphery. This narrative coincides with a wider narrative in Ireland, which claims professional migration is a good thing because it means Irish professionals learn new skills in the core and bring these back thus enabling the state, and the firms they work for, become competitive in an increasingly global economy. This narrative rejects the concept that professional migration is a reflection of Ireland's economic dependence in favour of viewing it as a sign of progress.     

Tests of time: organizational time-reckoning and the making of accountants in two multi-national accounting firms

There has been remarkably little study of the recruitment, training and socialization of accountants in general, much less the specific case of trainee auditors, despite many calls to do so. In this paper, we seek to explore one key aspect of professional socialization in accounting firms: the discourses and practices of time-reckoning and time-management. By exploring time practices in accounting firms we argue that the organizational socialization of trainees into particular forms of time-consciousness and temporal visioning is a fundamental aspect of securing and developing professional identity. We pay particular attention to how actors consciousness of time is understood to develop, and how it reflects their organizational and professional environment, including how they envision the future and structure their strategic life-plan accordingly. Also of particular importance to the advancement of career in accounting firms is an active engagement with the politics of time: the capacity to manipulate and resist following the overt time-management routines of the firms. Rather than simply see trainees as passive subjects of organizational time-management devices, we noted how they are actively involved in ‘managing’ the organizational recording of time to further their career progression.     

Perceptions of master of accountancy graduates concerning their job search and employment experiences with public accounting firms

The public accounting profession has been calling for a 150-hour education requirement for new entrants to the profession for over two decades. The rationale for increasing the entry-level education requirement is that since the business world is more dynamic and complex than ever before, new professionals need broader knowledge and skills to be able to cope. Graduates of master of accountancy (MSA) programs would appear to be the type of students that public accounting firms are seeking since they often have intellectual breadth gained through undergraduate degrees in areas other than accountancy, current technical competence in accountancy, and frequently have work experience. This paper reports the results of a study undertaken to determine the perceptions of MSA graduates concerning: (1) how recruiters from public accounting firms viewed their non-accounting academic backgrounds and work experience; (2) how well prepared they were for their first jobs in public accounting as compared to traditional undergraduate accounting majors; and (3) any bias they experienced during the hiring process. The results of this study indicate that although a majority of the respondents who desired careers in public accounting were able to secure jobs in the field, they believed it was harder for them to get jobs in public accounting than their peers with just undergraduate degrees. The majority did not feel that public accounting firms viewed their non-accounting academic backgrounds and work experience favorably. Although more than half believed that they were paid more than their peers who held only undergraduate degrees, less than half felt that they were given more responsibility. The results also indicate that older MSA graduates believed that they were subject to age bias during the interview process.     

Informal communications, nonformal communications and mentoring in public accounting firms

Control is important within public accounting firms for a variety of reasons. Yet professional pronouncements are limited in providing guidance to auditors in the form of formally stated rules and requirements. The purpose of this article is to examine the non-formalized, non-rule oriented approaches employed in large public accounting firms to effect control. More specifically, it is directed towards understanding the possible roles of informal and nonformal communications and mentoring in managing public accounting firms.Based upon evidence gathered using a naturalistic, qualitative research methodology, it is concluded that: (1) informal communications exist in public accounting firms, play a limited role in informing organizational members of the politics and power within the organization, and are of some benefit to lower level individuals; and (2) nonformal communications and mentoring are involved with the performance of audit tasks, socialization of the individual firm, and instruction as to politics and power within the organization, and benefit the protege, mentor and firm, though at some cost. Implications of the study are also explored.     

Organizational culture in public accounting: Size, technology, rank, and functional area

This study examines the nature of organizational culture in public accounting and demonstrates that different aspects of culture exist across and within public accounting firms. Organizational culture is defined in terms of values shared by members of an organization (or organizational sub-unit) that manifest themselves in the practices of that organization. Practices particularly important to the development and maintenance of culture include selection and socialization. The hypotheses state that different aspects of organizational culture vary across public accounting firms of different size and technology, and public accountants of different rank and functional area. These hypotheses are tested and largely supported with responses to a paper and pencil instrument, the Values Survey Module (Hofstede, Institute for Research on Intercultural Cooperation, 1982), which was completed by 338 public accountants across the United States. Implications for accountants and future research are also discussed.     

How do Professional Financial Services Firms Understand their Skill Needs and Organise their Recruitment Practices?

Abstract

The recruitment practices of professional financial service firms are informed by hegemonic cultural norms embedded in global and national institutions. There is a propensity, particularly in the financial services, to employ ‘people like us’ [Erel, U. (2010). Migrating cultural capital: Bourdieu in migration studies. Sociology, 44(4), 642–660. doi:10.1177/0038038510369363], which, it is argued, has constrained the employment outcomes of skilled migrants. Using the concept of cultural fit, this paper draws on interviews with representatives of accounting firms in Australia to understand the criteria for recruiting in a highly commercialised and globalised professional labour market. The results demonstrate that client-focused firms place an emphasis on cultural fit in the recruitment process. It is concluded that a lack of cultural capital by migrants means that their efforts to infiltrate the professional accounting labour market in Australia are limited. Furthermore, from an education perspective, the skill set taught in the accounting curriculum is increasingly geared to meet the recruitment strategies of professional service firms.     

Multi-disciplinary Professional Practice: Recent Developments and Attitudes of Accounting and Legal Practitioners

Recent developments in the professional accounting market and by the New South Wales legal profession indicate increasing pressure to consider multi-disciplinary professional practice in some form or other. Two of the Big Six accountants have launched new legal firms. In NSW, legislation has been amended to permit solicitors and other professionals, for the first time in Australia, to share their income. Australian legal and accounting professionals must seriously consider whether, and how, to facilitate the formation of multi-disciplinary partnerships (MDPs) where members of different disciplines combine to service clients' needs and share commercial profits.