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.