The impact of digital innovation on the social structure of professional public accounting practice in Australia

Abstract

The Impact of Digital Innovation on the Social Structure of Professional Public Accounting Practice in Australia Abstract: This thesis investigates the impact of digital innovation, associated with Standard Business Reporting (SBR) and cloud accounting, on the social structure of professional public accounting practice in Australia. Social structure in public accounting practice refers to the social arrangement of internally diverse groups of professionals and is hierarchical due to disparity in intra-professional status. At issue here is the commodification of traditional accounting work in serving small-medium enterprises (SMEs), the primary work of small-medium practitioners (SMPs). The innovation poses both jurisdictional threats and opportunities for SMPs but has ramifications for public accounting practice as a whole, due to the nature of the innovation impacting professional work. The impact on professional work, creates a ripple effect, altering the boundaries between different sub-groups within the social structure of professional public accounting practice, namely location of work, firm size, firm structure, client base and in the end professional values. The impact of the digital innovation on the social structure of public accounting practice is examined through the lens of the emergence of an organisation field centring on the commodification of traditional accounting work in servicing SMEs (i.e., an issue-based approach). From the perspective of organisational and institutional theory, the innovation represents a form of exogenous shock to the institutional environment of professional public accounting practice in Australia, which disrupts the existing institutional arrangement and leads to intra-professional competition (i.e., institutional war). A mixed methods research approach is carried out in examining the issues involved. The study finds that the boundaries associated with professional work, location of work, firm structure, client base and professional values have become less distinct. This is attributable to SMPs increasingly becoming multidisciplinary practices and having a tendency towards a commercial logic; and larger sub-groups such as the Big 4 and Next Big 8 expanding their share of the market for servicing small businesses, including reclaiming bookkeeping as part of their portfolio of services. Overall, the results indicate that the professional identities of public accountants in Australia are less fragmented as professional values converge towards commercialism. Firm size and the combinations of capitals that each sub-group possesses are, on the other hand, becoming more relevant in differentiating between them.