Practice variation in Big-4 transparency reports

Purpose: The purpose of this paper is to examine the transparency reports published by the Big-4 public accounting firms in the UK, Germany and Denmark to understand the determinants of their content within the networks of big accounting firms. Design/methodology/approach: The study draws on a qualitative research approach, in which the content of transparency reports is analyzed and semi-structured interviews are conducted with key people from the Big-4 firms who are responsible for developing the transparency reports. Findings: The findings show that the content of transparency reports is inconsistent and the transparency reporting practice is not uniform within the Big-4 networks. Differences were found in the way in which the transparency reporting practices are coordinated globally by the respective central governing bodies of the Big-4. The content of the transparency reports is particularly influenced by the national institutional environment in which the Big-4 member firms operate, thus leading them to introduce practice variation and resulting in cross-national differences. Practical implications: The study results have important implications for standard setters, regulators and practitioners, as the research provides insights into the variation taking place within the common regulatory frame. Originality/value: This is the first study to analyze how transparency reporting practices are developed within the networks of Big-4 firms, thereby influencing the content of transparency reports.