The Development of China's Auditing Profession : Globalizing Translation Meets Self-Determination in Identity Construction

The indigenous audit industries of most non-US/UK countries have confronted perceived market monopolization by the set of international ‘Big 4' firms which, at least outside the EU, may be regarded as ‘foreign firms'. The history of China's attempts over the last four decades at self-determination in creating and developing its indigenous firms provides an important comparator, especially now that it is often predicted that the next ‘Big N' international firm could be a Chinese CPA firm. We explore the history during the last 35 years or so of the relationships between the international firms, as they have themselves developed a changing identity, and the Chinese government's initiatives to create, develop and regulate an indigenous profession, in the context of the translation into China of international accounting and auditing standards and the rapid growth in China's own stock-markets and in its international trade and investment. We draw on interviews we have conducted with senior representatives of audit firms, regulatory bodies and universities in the UK and in mainland China and Hong Kong. We explore the potential of the Chinese audit firms in the ‘2nd-tier' international networks and among the large 'stand alone' firms to rival the ‘Big 4' in international reputation for quality.Our analysis of these developments and of the current situation problematizes the prevailing identity stereotypes of both ‘Big 4' and ‘indigenous' firms and brings out important aspects of the ‘Chinese characteristics', that contrast with the factors that have influenced international developments in the structure of the accounting and audit profession and in the shape of its regulation elsewhere, and that may now prove to be significant in the future development of accounting and auditing worldwide