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    Globalization and Multinational Auditing: The Case of...
    research summary posted October 19, 2015 by Jennifer M Mueller-Phillips, tagged 15.0 International Matters 
    Globalization and Multinational Auditing: The Case of Gazprom and PwC in Russia.
    Practical Implications:

    The study provides conceptual and empirical insight into the global audit function. It highlights the contradictory expectations for, and influences on, auditing that can exist in a developing market. The analysis highlighted the considerable importance of supporting infrastructure in the transfer of auditing into a new sphere. Also, the analysis revealed the importance of preexisting norms regarding the auditor’s right to gather evidence from outside the audited entity. Most important, the results call into question once more the possibility of a universal, global norm as relates to the external audit function.


    Alon, A., and P. D. Dwyer. 2012. Globalization and Multinational Auditing: The Case of Gazprom and PwC in Russia. Behavioral Research in Accounting 24 (1): 135-160.

    audit in Russia, blat, convergence, multinational audit firms
    Purpose of the Study:

    Accounting researchers continue to display interest in the evolution of global audit markets. Some scholars in this area examine the role of large multinational accounting firms in achieving global convergence of business and economic practices. Examples include studies of the homogenizing and colonizing effects of globalization and studies of the impacts of multinational audit firms’ entries into preexisting local audit markets. The effects of standardized audit processes, of generally Anglo-American origin, have also been a topic of interest in this area of research.

    A narrower line of globalization research has developed that relates to accounting’s role in the liberalization of financial markets. Much of this research focuses on the importance and impact of accounting and auditing practice on the governance and financial capital needs of companies in developing and transition economies. For example, researchers have examined the development of accounting and auditing in transition economies such as the Czech Republic, China, Russia, and Romania.

    This article is situated at the intersection of these two lines of globalization research. It focuses on the developing audit market in Russia. The general purpose is to gain insight into social expectations regarding the audit function and the nature of the auditor/client relationship in Russia.

    Design/Method/ Approach:

    In the case of both English- and Russian-language media, the data consist of articles published from January 1, 1995, to May 30, 2007. Search terms included PriceWaterhouse, or “PwC,” and Gazprom in both languages. The analysis process was iterative. As a sampling of the local perspective, the authors analyzed accounts in 227 articles from Russian language sources. To sample the global perspective, the authors read and analyzed 146 English-language media accounts.


    Analyses of media commentary on the Gazprom audits reveal differences in expectations for the audit function, depending on whether the media outlet was local or international. Accounts in the international media tended to take a neutral or disapproving tone when discussing PwC’s relationship with and audits of Gazprom. In addition, media sources referenced Western auditing concepts and values in contexts that suggest the authors expected adherence to those values. Expectations expressed in the international media reflected functionalist models of professional values such as objectivity, adequate disclosure, reliance upon evidence, and professional skepticism.

    Analysis of local media commentary revealed a more nationalistic perspective. Local media focused on the possible loss of prestige to Gazprom and to the country that could be experienced when minority shareholders criticize the firm. Further, local media accounts attacked the minority shareholders and the suggested alternative audit firm, Deloitte & Touche. In their accounts supporting the behavior of Gazprom and PwC, local media revealed an acceptance of the old way of doing things in Russia and implied, at times, that expecting Western audit values was unrealistic.

    International Matters