This study highlights how the implementation of International Financial Reporting Standards, in a context of minimal readiness, induces power imbalance between corporate accounting and audit, and changes acceptable accounting practices, and roles. Using the concept of institutional work, I analyze data from interviews and secondary sources, focusing attention on the practices of issuing financial statements. I find that the technical dependency of corporate accounting on audit blurs the boundaries between the two fields. I argue that this generates conditions for implicit negotiations, in which both groups (corporate accountants and auditors) engage in institutional work. Two subtypes of institutional work are identified as corporate accountants relinquish some of their traditionally institutionalized activities to the ‘expert’ auditors, to maintain field stability, while auditors encroach on the corporate accounting field, to remove obstacles during the implementation of IFRS. While there is no shortage of research documenting the economic outcomes of the adoption of IFRS, there is hardly any examination of how this technical disruption, has affected practices and relations within the accounting domain. Incorporating views and actions from the much-ignored corporate accounting field enables a more holistic view of how responses to IFRS are constructed, especially in contexts where IFRS are adopted for legitimacy.
The interpretive stream of research argues that the adoption of International Financial Reporting Standards (IFRS) across many countries is motivated by seeking the legitimacy from powerful states and transnational organizations, within a context of increased institutional complexity and the interconnectedness of national and global forces (e.g. Arnold, 2005; Chand & White, 2007; Gallhofer, Haslam, & Kamla, 2011; Guerreiro, Rodrigues, & Craig, 2012; Irvine, 2008; Mir & Rahaman, 2005). Prior research explains developing countries’ decisions to adopt IFRS with economic dependence, pressures from the World Bank and the International Monetary Fund (IMF), absence of national accounting standards, and a perception of the neutrality of IFRS, (Annisette, 2004; Chua & Taylor, 2008; Judge, Li, & Pinsker, 2010; Mir & Rahaman, 2005). In one example, Al-Akra, Jahangir Ali, & Marashdeh (2009) argue that Jordan’s economic and political dependency is critical in explaining the wholesale adoption of IFRS. Institutional theorists suggest that, in light of legitimacy-seeking acts, we can expect at least loose coupling between the formal processes, and subsequent technical activities (Bromley & Powell, 2012; Meyer & Rowan, 1977). Abd-Elsalam and Weetman (2003) point to the lack of familiarity with international accounting standards, and the linguistic challenges involved in producing compliant financial statements, in Egypt.