Description
This paper analyses the use and circulation of international auditing standards within a large post-Soviet Russian
audit firm, as it faces up to the challenges of international harmonisation. It describes this process as one of ‘‘connecting
worlds’’ and translation. In a detailed field study based investigation, it traces various attempts to articulate and link
Soviet and post-Soviet worlds, old and new imagined audit worlds
Connecting worlds: The translation of international
auditing standards into post-Soviet audit practice
Andrea Mennicken
*
London School of Economics and Political Science, Department of Accounting and Centre for
Analysis of Risk and Regulation, Houghton Street, London WC2A 2AE, UK
Abstract
This paper analyses the use and circulation of international auditing standards within a large post-Soviet Russian
audit ?rm, as it faces up to the challenges of international harmonisation. It describes this process as one of ‘‘connecting
worlds’’ and translation. In a detailed ?eld study based investigation, it traces various attempts to articulate and link
Soviet and post-Soviet worlds, old and new imagined audit worlds. The paper underscores the fragile and precarious
nature of international standardisation projects. It shows how ideals of audit universalism and international compara-
bility become enmeshed in, and challenged by, global divisions of audit labour, problems and practices of power and
exclusion, and struggles for intra-professional distinction, which in turn undermine as well as promote the connecting of
worlds through standards.
Ó 2007 Elsevier Ltd. All rights reserved.
Introduction
The connecting and integrating of di?erent
worlds is at the heart of most international stan-
dardisation attempts. Global standards and models
are developed with the aim of increasing interna-
tional comparability, enhancing cross-national
cooperation, and facilitating co-ordination (see
e.g. Braithwaite & Drahos, 2000; Brunsson &
Jacobsson, 2000; Held & McGrew, 2002; Tamm
Hallstro¨ m, 2004). They are deployed with the aspi-
rationof making things work together, of traversing
space and overcoming heterogeneous metrics (Bow-
ker & Star, 2000; Drori, Meyer, & Hwang, 2006;
Drori, Meyer, Ramirez, & Schofer, 2003; Meyer,
2002).
1
In accounting and auditing, international
0361-3682/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2007.06.001
*
Tel.: +44 (0)2078494641; fax: +44 (0)2079557420.
E-mail address: [email protected]
1
Etymologically, the word ‘‘standard’’ was derived from the
Latin word ‘‘extendere’’ – to stretch out, to extend, extension
(Williams, 1983, pp. 296–299). The word referred to dreams of
international expansion and cross-national comparability.
According to Williams (1983, p. 296), in modern language the
word ‘‘standard’’ is in addition often used to mark a source of
authority or a level of achievement.
Available online at www.sciencedirect.com
Accounting, Organizations and Society 33 (2008) 384–414
www.elsevier.com/locate/aos
standards have been advocated as a way of enhanc-
ing the international comparability and credibility
of ?nancial reporting and audit work, so as to stim-
ulate the ?ow of cross-national investment, expand
the scope for market-oriented development, and
integrate local enterprises into global ?nancial
markets (see e.g. Botzem & Quack, 2006; IDW,
1978; Roussey, 1992, 1999).
2
Yet, despite this bur-
geoning interest in international standardisation
projects, apart from a few isolated studies (see e.g.
Barrett, Cooper, &Jamal, 2005) there has been little
research that examines how these standardisation
projects are articulated in local settings and interac-
tions, and how these local interactions enable the
connecting of worlds through the often intricate
andlaborious translationof international standards
(Callon, 1980; Latour, 1987, 1999).
The literature on transnational governance has
paid much attention to the rise and spread of glo-
bal rules at the international level, but not to their
actual involvement in the re-organising and re-
de?ning of local practices. Studies of global
accounting and audit regulation have contributed
to our understanding of the complex structure of
transnational accounting governance arrange-
ments (Botzem & Quack, 2006; Bromwich & Hop-
wood, 1983; Caramanis, 2002; Fogarty, 1992,
1998; Nobes & Parker, 2004), the mechanisms
and dreams underlying the di?usion of interna-
tional accounting standards and audit models
(Jang, 2006; Power, 2002; Tamm Hallstro¨ m,
2004), and the strategies of the IASB (Interna-
tional Accounting Standards Board) and IAASB
(International Audit and Assurance Standards
Board) to enhance their authority (Loft, Hum-
phrey, & Turley, 2006; Tamm Hallstro¨ m, 2004).
But in all of these studies, the primary focus has
been on the standard-setting organisations them-
selves. Much work has focused on the di?usion
of global regulation at the macro-level, and on
the groups that develop worldwide models and
standards. Detailed case studies examining the
links and interactions between processes of inter-
national rule-setting and local practices are rare.
This paper aims to help remedy this gap in the
literature through a detailed examination of the
use and circulation of International Standards on
Auditing (ISAs) within a large post-Soviet audit
?rm, as it faces up to the challenges of interna-
tional harmonisation. The analysis shows that
international accounting and audit standardisa-
tion is not just a top-down process, as much of
the existing literature seems to suggest (see e.g.
Drori et al., 2006; Held & McGrew, 2002; Tamm
Hallstro¨m, 2004). It is equally driven by the day-
to-day activities of local, peripheral actors, who
bring with them dreams and desires of belonging
to a better, more prosperous, globally integrated
world (Burawoy et al., 2000; Sahlin-Andersson &
Engwall, 2002b). Transnational standard-setting
institutions play an important role in the globalisa-
tion and standardisation of social and economic
life. But we need to draw attention also to the net-
works of actors, instruments and activities that
support and shape standardising agendas in local
settings. To paraphrase Sahlin-Andersson and
Engwall (2002a, pp. 6–7), we need to combine
broad contextual and historical investigations with
detailed case studies to understand how and why
the expansion of global models and standards
occurs.
Utilising the works of Latour (1986, 1987) and
other proponents of actor-network theory,
together with related constructivist approaches to
the study of science and technology (Bowker
& Star, 2000; Callon, 1980, 1986; Czarniawska &
Sevo´ n, 1996, 2005; Hacking, 1983, 1999; Law &
Hassard, 1999; Star & Griesemer, 1989), this paper
pays close attention to the multiple linkages and
webs of interaction through which attempts are
made to translate international auditing standards
2
The ?rst international auditing standard was issued by the
International Federation of Accountants (IFAC) in 1979, but it
is only since the 1990s that these standards have gained
considerable attention (Roussey, 1996, 1999). In the 1990s,
organisations such as the IMF, the World Bank, the OECD and
large multinational audit ?rms began to promote ISAs against
the backdrop of wider debates about global economic gover-
nance. Events, such as the Mexican (1994–1995) and South-
East Asian (1998) ?nancial crises and the collapse of the
Barings bank, had led to serious doubts about the regulatory
capacities of state-bound command-and-control regimes. Inter-
national standards, including those for auditing, came to be put
forward as a new source and technique of regulation that would
help overcome the boundaries of state control and facilitate
economic co-ordination and stabilisation at an international
level.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 385
into possibilities for regulatory and professional
action. To address ‘‘connecting worlds’’, the theme
of this article, means to open up for investigation
the multiplicity of instruments, ideas, actors and
activities involved in making ISAs spread and link
up with di?erent contexts and processes. The
notion of ‘‘connecting worlds’’ refers to the com-
plex of linkages formed between ISAs and Soviet
and post-Soviet worlds, local and global worlds,
East and West, formal and informal practices,
together with the desires and experiences of those
enacting ideas and techniques of audit standardi-
sation. It directs our attention to the various ways
in which international standardisation attempts
are projected and linked to local contexts of audit-
ing practice, and how those contexts in turn are
connected to other ‘‘worlds’’.
3
ISAs often come
to inhabit multiple, contradictory contexts, which
can promote the connecting of some worlds, but
also lead to the disconnecting of others. The
worlds within which ISAs become embedded are
composed of heterogeneous elements and diverse
historical trajectories. ‘‘Connecting worlds’’ aims
to make space not only for the wider political pro-
grammes and rationales (see e.g. Miller & Rose,
1990) that articulate and popularise international
auditing standards, but also for the juxtapositions
and tensions (see e.g. Czarniawska & Sevo´ n, 1996,
2005; Latour, 1987, 1999; Star & Griesemer, 1989)
within which the standards become entangled
throughout their translation into localised audit
practice.
In particular, the concepts of translation and
networking (e.g. Callon, 1980, 1986; Chua, 1995;
Czarniawska & Sevo´ n, 1996; Gendron, Cooper,
& Townley, 2007; Latour, 1987, 1999; Miller,
1991; Robson, 1991; Sahlin-Andersson & Engwall,
2002b; Star & Griesemer, 1989) are useful concepts
from which we can start to develop a heuristic
facilitating empirically rich and historically sensi-
tive descriptions of the intersecting discourses,
practices and techniques that shape and character-
ise processes of international audit standardisa-
tion. As will be shown in more detail later, the
notion of translation helps emphasise the con-
structed nature of the indispensability of interna-
tional standards, and points to the various
persuasive strategies, power plays and relations
underlying their di?usion (e.g. Callon, 1986;
Latour, 1987; but see also Chua, 1995; Miller,
1991; Robson, 1991). The notions of networks
and networking help us draw attention to the fact
that ISAs do not work all by themselves, and do
not engender processes of organisational change
and global harmonisation without support (e.g.
Callon, Law, & Rip, 1986; Czarniawska & Sevo´ n,
1996; Gendron et al., 2007; Latour, 1986; Sahlin-
Andersson & Engwall, 2002b). In order to turn
the ISAs into a connecting device, one needs pow-
erful alliances providing the standards and their
users not only with technical resources, but also
political in?uence, identity and legitimacy. The
adoption of ISAs requires a series of technical
adjustments. But in the case of Russia, it also
demands of auditors, regulators and managers
that they become comfortable with an identity
which, to a large extent, is both o?ered and de?ned
by the West. By examining how ISAs become
inscribed in di?erent worlds of audit action, repre-
sentation and regulation, we gain insight into the
complex processes, activities and controversies
underlying attempts to establish ISAs as a con-
necting device linking up local audit worlds with
imagined global forms of audit activity.
The case of Moskva-Audit
The audit ?rm studied in this paper was estab-
lished during the Perestroika period. Throughout
the paper, the ?rm will be referred to as ‘‘Mos-
kva-Audit’’. At the time when this ?eld study
was carried out, Moskva-Audit was one of Rus-
sia’s leading audit and consulting ?rms. The ?rm
had more than 700 employees, of which more than
120 possessed Russian professional auditing and
3
In this respect, the notion of ‘‘connecting worlds’’ is very
similar to Miller and O’Leary’s (2007) notion of ‘‘mediating
instruments’’, although Miller and O’Leary investigate a
completely di?erent context. Miller and O’Leary (2007) use
the notion of ‘‘mediating instruments’’ to study the roles of
‘‘Moore’s Law’’ and ‘‘technology roadmaps’’ in the micropro-
cessor industry. They examine the ways in which these
instruments ‘‘are used to envision a future, and how they link
a multitude of actors and domains in such a way that the
making of future markets for microprocessors and related
devices can continue’’ (Miller & O’Leary, 2007, p. 2).
386 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
accounting quali?cations. In 2001, the ?rm’s
annual revenues amounted to more than 20 Mil-
lion US-Dollars, of which around 50% was raised
by auditing and assurance services (see Russian
business journal Pro?l’, 11.03.2002, pp. 78–85).
In the Russian audit and consulting ?rm ratings
conducted by the internationally acknowledged
Russian rating agency ‘‘Ekspert-RA’’ (an organi-
sation a?liated to the Russian business journal
Ekspert), Moskva-Audit was consistently ranked
amongst the ?rst 10 leading Russian audit and
consulting ?rms (in terms of revenue, number of
employees and market share) between 1995 and
2005.
4
Access to the ?rm was obtained through a two-
month long internship which was carried out in
Moscow during March and April 2002. During
the period spent with the ?rm, the author con-
ducted participant observations (Spradley, 1980)
in the international audit department of the ?rm
and observed the preparation and use of audit pro-
grammes, working papers and audit ?les. Access
was also obtained to the audit manuals, internal
standards and quality control procedures of the
?rm. In addition to the participant observations,
semi-structured interviews (Wengraf, 2001) were
carried out with: the Deputy Director of the ?rm,
the heads of internal audit quality control, busi-
ness development, audit methodology, the interna-
tional standards department, two audit managers,
two senior auditors and one audit trainee. All but
one of these interviews were tape-recorded and
transcribed. The length of the interviews varied
between one and three hours. The formal inter-
views were complemented with several informal
talks conducted during co?ee breaks, lunches and
dinners. Outside the ?rm, further interviews were
carried out with audit professionals working for
other indigenous or international audit ?rms, reg-
ulators, academics, Western consultants and repre-
sentatives of professional associations. The total
number of formal, fully transcribed interviews
amounted to 48. Most interviews were conducted
in Russian and transcribed in Cyrillic. For the pur-
poses of this article, quotes taken from Russian
language interviews have been translated into Eng-
lish by the author. Where the translation of a spe-
ci?c term was ambiguous, the original Russian
term has been added in brackets next to the Eng-
lish translation.
Together, the methods of participant observa-
tion, in-depth interviewing and document analysis
helped add depth and rigour to this study. Notes
taken during periods of participant observation
made it possible to compare and contrast
responses of interviewees.
5
It was also possible to
locate the interviews within the work contexts of
the participants, and to interrelate the di?erent
perspectives opened up by each method. For the
data analysis, text passages derived from inter-
views, ?eld notes and other documents were
grouped and coded in relation to particular
themes, problems and questions. The material
was, inter alia, ordered and analysed in relation
to the di?erent dreams and desires that had
become attached to the standards, logics and pol-
itics of professional representation, competing
notions of rule-following, and relations between
auditing, standards and documentary practices in
order to gain a deeper understanding of the com-
plex interrelations and intersections between past
socialist inspection practices and new imagined
Western audit practices.
The decision to focus on the articulation and
circulation of international auditing standards
within a post-Soviet audit ?rm is because it is par-
ticularly in peripheral market-oriented economies
that international standards and world organisa-
tional models have gained in?uence and pose par-
ticular challenges (e.g. Chamisa, 2000; Lin &
Chan, 2000; Meyer, Boli, Thomas, & Ramirez,
1997; Sucher, Moizer, & Zelenka, 1998). Most
international models and standards tend to spread
from the centre to the peripheries of capitalist
4
Results of the rankings and more detailed information
about the largest 100 Russian audit and consulting ?rms are
regularly published in the Russian business journal ‘‘Ekspert’’.
See e.g. the issues of Ekspert Nr. 35, 16.09.1996; Nr. 14,
14.04.1997; Nr. 42, 09.11.1998; Nr. 11, 22.03.1999; Nr. 10,
13.03.2000; Nr. 12, 26.03.2001; Nr. 12, 25.03.2002; Nr. 14,
14.04.2003; Nr. 13, 05.04.2004; Nr. 12, 28.03.2005; Nr. 12,
27.03.2006. For reasons of con?dentiality, more details cannot
be disclosed.
5
Minutes of the observations were typed into a 70-page long
journal.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 387
development (Braithwaite & Drahos, 2000; Coo-
per, Greenwood, Hinings, & Brown, 1998; Meyer
et al., 1997). But, it is argued here, this is not a sim-
ple matter of unidirectional di?usion. Instead, it is
suggested that it is at the peripheries of capitalism
that new spaces for globalisation are delineated,
and new elements and actors are de?ned and inte-
grated. Here, international standards and models
are taken particularly seriously. They are funda-
mental to the re-de?ning of organisational identi-
ties and regulatory politics. They are linked to
dreams of modern development, and their adop-
tion is seen as a way of linking up with, and
becoming accepted by, Western worlds of eco-
nomic and political activities.
At Moskva-Audit, the adoption of international
auditing standards was driven by the desire to
belong to ‘‘the West’’. The standards were seen as
instruments that can help overcome local di?er-
ences, develop post-Soviet audit expertise, and gain
access to international audit markets. But, as the
following analysis will show, the translation of the
standards into day-to-day audit practices is not a
matter of straightforward implementation. Stan-
dards, including international auditing standards,
are always in some sense idealised (Bowker & Star,
2000; Power, 2002). They embody goals of practice
that are never perfectly realised. International
auditing standards express neo-liberal dreams of
control and governability, but they do not consti-
tute an instrument that is perfectly suited to organ-
ising and standardising audit practice per se.
International standards do not constitute a
homogeneous class of rules or regulatory norms
(see e.g. Bowker & Star, 2000; Brunsson & Jacobs-
son, 2000). They vary in scope, detail and objec-
tives. Standards can take a formal or informal
shape. They can be visible or invisible. They can
be used to classify things, to specify production
designs, or to determine outputs. They can be
aimed at the regulation of processes or the speci?-
cation of inputs. They can express ideals or refer to
already established practices. International Stan-
dards on Auditing (ISAs), which are aimed at
the international regulation of professional
conduct, are very di?erent from well established
technical norms setting out paper sizes or de?ning
measurement scales. In contrast to output or prod-
uct standards and norms of calibration, interna-
tional auditing standards are primarily concerned
with the regulation of procedures and processes.
They do not refer to the immediate work environ-
ment of auditors, but to the procedures and plans
that auditors and audit ?rms should develop when
performing audit work. To adopt a phrase from
Brunsson and Jacobsson (2000, pp. 4–5), auditing
standards, like other process standards, do not
refer to quality actually achieved, but to the types
of administrative processes that are supposed to
lead to high quality. Or, to paraphrase Power
(2002, p. 195), they are of little substantive con-
tent. International auditing standards follow rela-
tively closely the general structure of audit
processes, as for example outlined in many Wes-
tern textbooks (see e.g. Gray & Manson, 2005).
For example, the standards deal with such issues
as audit planning, the gathering and assessment
of audit evidence, internal control procedures
and the formulation of audit reports. But neither
audit objectives nor the actual output of audit pro-
cesses is made concrete.
In most Western countries, ISAs typically cod-
ify existing audit practices, instead of transforming
or reforming them. For example, in countries like
the UK or the US, auditing standards constitute
an outcome, rather than a starting point, of pro-
cesses of audit development and professionalisa-
tion (Campbell, 1985). In Russia, the situation is
quite di?erent. Here, the international auditing
standards are introduced into an environment
where market-oriented auditing is only in its initial
phase of development. In such an environment,
the same ISAs that in the West function primarily
as a mechanism of codi?cation and symbolic rep-
resentation become tools for supporting and accel-
erating processes of post-communist audit reform
and economic transition.
Standardisation projects are culturally and stra-
tegically complex (Barrett et al., 2005; Brunsson &
Jacobsson, 2000; Loya & Boli, 1999; Power, 2002).
They are aimed at the enhancement of international
comparability. Yet, at the same time, they are
always articulated and enacted in speci?c places
(for the case of Eastern European transition see
also the studies by Burawoy & Verdery (1999),
Cooper et al. (1998), Stark (1998), Stark & Bruszt
388 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
(1998)). Hence, to obtain a deeper understanding of
how processes of international audit standardisa-
tion work, we need to take a closer look at the dif-
ferent connections that are established between the
standards, local practices, people and instruments,
as well as the wider networks of actors, expecta-
tions and demands involved in de?ning what it
means to work in accordance with international
standards. We need to pay close attention to locally
speci?c ‘‘constellations’’ (Burchell, Clubb, & Hop-
wood, 1985) of actors, strategies, instruments,
beliefs, bodies of knowledge and activities. Study-
ing the roles of ISAs within a post-Soviet audit ?rm
helps open up for investigation the complex of
political and economic rationales, hopes and
desires that accompany the rise and spread of the
standards, and how these interact with the localised
processes that seek to operationalise and give sub-
stance to the dream of global standards.
Translation, standardisation and the stabilisation of
networks
This paper suggests that working in accordance
with international standards is more than a matter
of technical implementation. Studies of technical
implementation tend to focus on the tools and pro-
cesses that are needed to make certain models,
rules, concepts or standards operable. Standardi-
sation is seen as a unidirectional process with
objectives and outcomes that can be unequivocally
de?ned (see e.g. David & Greenstein, 1990; Gabel,
1987; Grindley, 1995). But, as this study will show,
ISAs do not constitute unequivocal, ready-made
tools that without further ado can be used and
acted upon. Processes of ‘‘ISA-implementation’’
are contested and ISAs play multiple roles in dif-
ferent settings. In order to capture the multiplicity
of roles, concepts and practices that become
attached to the standards as they journey through
and connect di?erent worlds, the paper uses the
concept of translation in place of implementation.
Initially developed within the context of socio-
logical studies of science and technology and
actor-network theory (Callon, 1980, 1986; Callon
et al., 1986; Latour, 1987, 1999), the concept of
translation refers to the relational and rhetorical
work involved in making the development and
spread of scienti?c inventions, calculative practices
or models of ?nancial control, such as auditing in
our case, happen. Since the early 1990s, the con-
cept came to be used in analyses of accounting
(see e.g. Miller, 1991; Preston, Cooper, & Coombs,
1992; Robson, 1991, 1994). Robson (1994), for
example, used the concept to analyse how issues
of national economic growth, the calculation of
taxation and wage bargaining became linked to
in?ation accounting techniques. Miller (1991) used
the concept to examine how programmes of mac-
roeconomic government became inscribed in tech-
niques of discounted cash ?ow accounting. Within
organisational research, Czarniawska and Sevo´ n
(1996, 2005) and Sahlin-Andersson and Engwall
(2002b) have used the notion of translation in
the study of processes of organisational change,
the global expansion of management expertise
and the transformation of global organisational
models into local organisational practices. For
the purposes of our study, the concept is useful
in at least three respects.
First, it points to the work that is needed to
make the spread of ISAs happen (see e.g. Callon,
1986; Latour, 1987, 1999). The notion of transla-
tion makes us aware that international auditing
standards cannot be conceptualised as self-con-
tained entities. They need to be actively mobilised.
They need to be made translatable. They need to be
made operable, and this requires a whole set of dif-
ferent people, technical devices and activities. It
includes, for example, powerful actors lobbying
on behalf of the standards, political agendas stress-
ing their importance, conferences and seminars
promoting their usefulness. It includes also a whole
host of other ‘minor’ or more local techniques and
strategies, such as their inscription in audit manu-
als, working papers and organisational control
procedures, which ensure that the standards con-
tinue to be viewed as desirable and indispensable.
Second, the notion of translation helps us ask
how ISAs alter, and are altered by, the contexts
or arenas they pass through and connect (for this
point see in particular Czarniawska & Sevo´ n,
1996; Evans, 2004; Sahlin-Andersson & Engwall,
2002a; Star & Griesemer, 1989). The concept of
translation draws attention to the changes that
the standards undergo and produce. In order to
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 389
take root, the standards have to be adjusted to the
environment into which they are brought. They
have to be made understandable, applicable and
workable, resulting in a series of transformations
which a?ect not only the adopters and their prac-
tices but also the standards themselves. In this
respect, the concept of translation di?ers signi?-
cantly from neo-institutionalist conceptualisations
of di?usion. Neo-institutionalist studies draw
attention to important sources and institutional
pressures that trigger the spread of organisational
models and standards (e.g. DiMaggio & Powell,
1983; Strang & Meyer, 1994). But they tend to
leave the struggles underlying standardising pro-
cesses black-boxed. Neo-institutionalist conceptu-
alisations of di?usion are often described in
terms derived from the physical sciences, such as
notions of saturation, contagion or thermody-
namic equilibriums (see e.g. Strang & Tuma,
1993), which tend not to give prominence to the
various movements and alterations happening
around the spread of ISAs.
Third, the concept of translation highlights the
unde?ned and open nature of the standards. It
draws attention to the gaps and indeterminacies
accompanying the spread and utilisation of inter-
national auditing standards (Czarniawska &
Sevo´ n, 1996, 2005; Latour, 1999; Rottenburg,
2003). What constitutes compliance with ISAs
cannot a priori be fully or precisely de?ned. Socio-
logical studies of regulation in other areas have
shown that compliance is rarely a static, a priori
de?ned concept. The de?nition and achievement
of compliance is the product of interaction, inter-
pretation, competing demands and principles, as
well as the broader social and institutional context
within which regulation takes place (see e.g. Hut-
ter, 1997). Neither the objectives nor the outcomes
of international audit standardisation projects can
be viewed as wholly ?xed. This does not mean that
the standards are open to all kinds of di?erent
interpretations at all times. As we will see later in
the paper, interpretations of the standards can
become temporarily ?xed and stabilised. But such
interpretive stabilisations are only to a limited
extent determined by the rules themselves. Rather,
it is the speci?cities of the ‘‘communities of prac-
tice’’ (Wenger, 1998) within which the standards
become circulated that de?ne how ISAs should
be used and interpreted.
6
In order to understand how ISAs become trans-
lated into, and connect, di?erent worlds, we sug-
gest that it is important to trace the complex
networks of actors, instruments, ideas and activi-
ties within which they become entangled (see e.g.
Czarniawska & Sevo´ n, 1996; Gendron et al.,
2007; Latour, 1987, 2005; Sahlin-Andersson &
Engwall, 2002b). ISAs are translated into audit
practice through being linked to, and interde?ned
with, a range of di?erent, historically and geo-
graphically speci?c concerns and issues (for this
point see also Barrett et al., 2005; Burchell et al.,
1985; Miller & O’Leary, 1994, 2007; Robson,
1991). In the context of this study, the notions of
network and the stabilising of networks are used
to stress that the translation of ISAs is a relational
achievement. As Callon (1998, p. 8) might put it,
how ISAs work depends on the ‘‘morphology of
relations’’ in which they are involved. What
‘‘working in accordance with ISAs’’ means ?uctu-
ates with the structure and dynamics of the rela-
tions formed around the standards between
di?erent actors, concepts of rule-following, audit
instruments, expectations and audit activities.
7
6
In this respect, ISAs di?er from International Accounting
Standards (IAS), which tend to be much more detailed and
prescriptive. Whereas International Accounting Standards set
out speci?c requirements for the calculation and representation
of certain accounting entities, ISAs are much vaguer. They set
out the general structure of an audit process and require, for
example, auditors to design their audit programmes and audit
tests in accordance with identi?ed audit risk levels (see e.g. ISA
300 ‘‘Planning an Audit of Financial Statements’’ and ISA 330
‘‘The Auditor’s Procedures in Response to Assessed Risks’’).
But the types and mix of tests (e.g. regarding the mix of
substantive tests and tests of internal control) are left open to
the auditor’s judgement.
7
It should be noted that the notion of network used in this
paper is distinct fromorganisational network theory which tends
to focus almost exclusively on the establishment of interpersonal
and inter-organisational relations (see e.g. Nohria & Eccles,
1992). The networks described here are not only held together by
social and organisational relations. They are also shaped by
material things, technical instruments as well as wider ideas,
concepts and discursive rationalities (see e.g. Callon, 1998;
Hacking, 1992; Latour, 2005; Law & Hassard, 1999; Miller &
O’Leary, 1994; Miller & Rose, 1990).
390 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
In the case studied here, international auditing
standards became involved in, and were called
upon to mediate between, very di?erent worlds
of auditing and audit professionalism. These
worlds were made up of di?erent approaches to
rule-following, concepts of standardisation and
bodies of accounting and audit expertise. On the
one hand, ISAs were seen as a vehicle to enhance
international acceptance and modernise account-
ing and auditing in accordance with ideals mainly
derived from Anglo-Saxon worlds of audit profes-
sionalism. On the other hand, the standards
became mixed up with former, socialist traditions
of control. They became implicated in paper-based
checks of formal accuracy, bureaucratic controls
of legal compliance and applications of old
accounting rules. The paper traces the various
attempts that were undertaken at Moskva-Audit
to build linkages and bridges between Soviet and
post-Soviet worlds, old as well as new imagined
audit worlds. It examines where the introduction
of ISAs initiated change, and where it produced
con?ict, cleavages and resistance. In so doing,
the paper underscores the fragile and precarious
nature of international standardisation projects.
Utilising the concept of translation makes us focus
on ‘‘the messy actualities of governance’’ (O’Mal-
ley, Weir, & Shearing, 1997, p. 504). Or as Miller
and Rose (1990, p. 11) put it, it highlights how dif-
?cult it is to put into practice the will to govern,
which applies as much to international standardi-
sation projects as to other aspirations such as
enhancing competitiveness, national e?ciency or
personal satisfaction at work.
But the paper uses the notion of translation not
only to analyse movements from the abstract to
the concrete, and to highlight the complex and
problematic process of making standards practica-
ble. We pay attention not only to the doings of
accounting professionals, but also to the di?erent
ideas and concepts that shape their activities. Pre-
vious studies have made us aware that seemingly
mundane techniques of auditing and audit stan-
dardisation, such as sampling, substantive testing
or risk and materiality calculations, are deeply
implicated in, and conditioned by, speci?c ways
of thinking about the nature and practice of audit-
ing, and control more generally. Power (1992,
1999), for example, has demonstrated that the
development of audit sampling techniques in the
UK and USA was inextricably linked to the emer-
gence of new perceptions of social control and
attempts to rationalise and objectify intuitively
based practices. For the case of public sector
auditing, Radcli?e (1998) has shown that a recon-
?guration of political rationalities in terms of
management stimulated the development of e?-
ciency auditing in Alberta. These studies suggest
that in order to explain how international auditing
standards become translated into post-Soviet
audit practice, we should not only focus on the
instruments used to make them practicable. We
should also examine how these instruments are
shaped by the di?erent concepts and ideals that
become attached to them. For example, we can
expect that international auditing standards play
di?erent roles in contexts with strong emphases
on individual expert judgement, in contrast to
contexts where audit functions are closely tied to
the assurance of legal rule-following. It is one of
the central tasks of this study to describe and ana-
lyse the di?erent connections drawn between ISAs,
audit instruments and speci?c ways of thinking
about the nature and practice of auditing.
It is further important to note that the transla-
tion of ISAs is always shaped by plays of power
and identity politics. To understand how ISAs
work, we also need to look at the struggles, negoti-
ations and dynamics of recognition involved in
de?ning whether somebody is working in accor-
dance with ISAs or not. Work in accordance with
the standards needs to be authorised and validated
(for a similar line of argument focussing on the
authorisation and validation of governmental audit
expertise in Canada see Gendron et al., 2007).
Whether or not an audit organisation (or an audi-
tor) is de?ned as working in accordance with inter-
national standards is in large part externally
ascribed. In the case of Moskva-Audit, the accom-
plishment of compliance with international audit-
ing standards was highly dependent on the
de?nitional powers of the West, represented by
the Big Four audit ?rms and multilateral organisa-
tions, such as the World Bank and the OECD.
To become seen and identi?ed as a ?rm that is
able to provide work in accordance with ISAs,
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 391
Moskva-Audit had to ?nd allies who already
enjoyed worldwide acceptance. It had to build up
relations with globally operating audit networks
to validate its work. The paper traces the ?rm’s
manifold strategies to build up international insti-
tutional recognition and discusses the implications
this had for the roles and relevance of the interna-
tional auditing standards.
The remainder of the paper is structured as fol-
lows. The next section (‘‘ISAs and agendas of
change’’) examines how, at Moskva-Audit, inter-
national auditing standards became implicated in
agendas of economic and organisational change.
The subsequent sections (‘‘Machine dreams’’ and
‘‘Struggles for recognition’’) trace the involvement
of ISAs in two phases of development of the
?rm. Section ‘‘Machine dreams’’ examines how,
between 1994 and 1997, the standards became
involved in attempts to formalise and rationalise
Moskva-Audit’s developing audit expertise. Here,
the utilisation of ISAs in the establishment of
internal control structures and audit methodolo-
gies is investigated. It is shown how particularly
in the early years of Moskva-Audit’s development,
the standards became linked up with ‘‘machine
dreams’’ (Mirowski, 2002) of auditing and
inscribed in an organising logic that, to some
extent, rested on Soviet ideals of scienti?c manage-
ment and control. Section ‘‘Struggles for recogni-
tion’’ examines how, between 1997 and 2002, the
standards became involved in strategies and strug-
gles to enhance the ?rm’s international recogni-
tion. Here, the role of ISAs in attempts to gain
access to global audit markets and audit communi-
ties is discussed. In 2002, the international ambi-
tions of Moskva-Audit culminated in the ?rm’s
membership of a large international auditing net-
work and the re-branding of the organisation in
accordance with the name of that network. Work-
ing with ISAs helped Moskva-Audit to enter such
a network, but only by incorporating itself within
the network was it possible for the ?rm to be
de?ned and internationally accepted as ‘‘working
according to standards’’. The ?nal section (‘‘Dis-
cussion and conclusion’’) concludes the paper with
a discussion of the implications of this ?nding with
respect to the general prospects and limits of pro-
jects of international audit standardisation.
ISAs and agendas of change
Moskva-Audit’s history is inextricably linked to
Russia’s move from socialism to capitalism. Like
many other Russian auditing ?rms, Moskva-Audit
started o? its life as a small, self-?nanced Soviet
consulting ?rm in 1990. Under Gorbachev, the
Soviet government welcomed the foundation of
privately organised consulting ?rms as part of a
wider move to encourage market-based economic
reform. Firms like Moskva-Audit were one of
the ways in which the government hoped to realise
its plans of economic decentralisation, privatisa-
tion and commercialisation. In 1992, Moskva-
Audit began to develop its audit practice. After
the fall of the Iron Curtain, government o?cials
as well as academics had begun to promote Wes-
tern-oriented auditing as a mechanism to imagine
and realise governmental schemes of market-dri-
ven economic reform (Bychkova, 1996; Danilev-
sky, 1990, 1991). In 1991, Danilevsky, who at
that time headed the major inspection and control
division of the Ministry of Finance, for example
wrote:
The presence of enterprises and organisa-
tions with di?erent forms of property
urgently requires the foundation of self-
?nanced [khozraschetny] control organs, i.e.
auditing services. The organisation of a web
of audit ?rms is the beginning of a genuine
introduction of economic principles of ?nan-
cial control, which are based on contractual,
commercial relations between the auditors
and the audited enterprises and other organ-
isations. (Danilevsky, 1991, p. 6)
In the same year, two of his colleagues wrote:
Completely new forms of control should
accompany the market economy; one form
of those [new controls, A.M.] is auditing.
[. . .] In developed countries, audit services
make up one of the strands of big business.
A thoughtful adoption of auditing services
in our country could have a huge social
and organisational impact on the improve-
ment of the management of industry in
our developing market economy. [. . .] It is
392 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
necessary to learn quickly and intensively
more about Western audit expertise. (Bukh-
galterskii uchet, 1991, No. 1, p. 37)
The collapse of the communist system and an
envisaged marketisation of economic relations
had set the scene for the replacement of the sys-
tem of Soviet state control with forms of Wes-
tern-oriented audit professionalism. In 1993, the
government adopted the ‘‘Temporary Rules of
Auditing in the Russian Federation’’, approved
by presidential decree No. 2263, in December
1993, and made audits mandatory for a large
number of business entities. Following the decree,
audits became compulsory for all public joint-
stock companies, banks, insurance companies,
investment institutions, joint ventures and compa-
nies whose total revenues exceeded 500,000 MS
(minimum monthly salaries), or whose total
assets were worth more than 200,000 MS (based
on net book value).
8
The introduction of mandatory audits opened
up for Moskva-Audit, as for many other newly
founded Russian audit ?rms, important new busi-
ness opportunities in auditing. But audit objec-
tives and audit functions were still largely
unde?ned, and the boundaries between practices
of socialist inspection and capitalist auditing
appeared to be extremely blurred. The establish-
ment of Russian commercial audit ?rms did not
automatically lead to recognisable changes in
inspection practice. In the beginning, the term
‘‘auditing’’ was primarily used to demarcate a
new control area, namely the control of opera-
tions carried out by newly established private
enterprises, rather than to denote changes in
actual inspection practice. The term ‘‘audit’’ had
been introduced, but the practical meaning of
audits, and what made them distinct from inspec-
tions, still had to be worked out (see e.g. Bychk-
ova, 1996; Danilevsky, 1990, 1991, 1995a, 1995b).
In this context, international auditing standards
gained increasing attention.
The standards were discussed as a mechanism
through which new audit professionalism could
be articulated and demonstrated. They were seen
as a device with which to imagine the unknown.
They constituted something tangible, readily avail-
able and internationally validated, and which
auditors could refer to in their work. At Mos-
kva-Audit, international auditing standards came
to be put forward as a device that could help the
?rm and its clients link up with the Western world,
de?ne a new identity and realise dreams of market-
oriented development. As one of Moskva-Audit’s
senior auditors put it:
For our company ISAs are important,
because they enhance our prestige. If a ?rm
o?ers services in accordance with interna-
tional standards, I think that this is an entry
to a more, well, to a higher level. The busi-
ness reputation of the ?rm will be much
higher and [its services] more expensive.
(Interview No. 3, 2002)
The Deputy Director and Head of Audit Meth-
odology stated in this respect:
International standards set an example for
best world practice. To show that our
audits follow general principles, that they
are of high quality, we have to employ
international standards. (Interview No. 1,
2001)
The use and circulation of the standards was
reinforced by the strong presence of the big inter-
national accounting ?rms in the emerging Russian
audit market. Since the late 1980s, the then Big
Six international accounting ?rms (Pricewater-
house, KPMG, Coopers & Lybrand, Deloitte &
Touche, Ernst & Young and Arthur Andersen)
had begun to open up o?ces in Russia. Soon,
they assumed a central position in the developing
Russian audit market.
9
The Russian business
press portrayed them as ‘‘the leaders of the
international audit and consulting industry – in
8
In 1997, 500,000 MS equalled approximately 7 million US-
Dollars (Enthoven, Sokolov, Bychkova, Kovalev, & Semenova,
1998, p. 87).
9
For a detailed account of how one of the Big Six invested in
the former Soviet Union see Cooper et al. (1998).
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 393
the world and in Russia’’ (see e.g. Ekspert, No.
35, 16.09.1996), as organisations ‘‘with many
years of experience and worldwide prominence,
prestige and reputation’’ (Kommersant, No. 46,
22.11.1993). According to the business journal
Ekspert, in the ?rst half of 1998 the Big Six
together earned 250–280 million Russian Roubles
(in terms of revenues) in the Russian audit
market, representing about two thirds of the rev-
enues earned altogether by the 100 largest Rus-
sian audit ?rms at that time (see Ekspert, No.
42, 09.11.1998). By the end of 1998, after the mer-
ger of Pricewaterhouse and Coopers & Lybrand,
the Big Five held approximately a 70–75% share
of the Russian audit market (Ekspert, No. 11,
22.03.1999).
10
In Russia, the big international
accounting ?rms promoted ISAs as guarantors
of audit quality and the benchmark of ‘‘good
practice’’. The ?rms referred explicitly to the stan-
dards in their own work and audit reports, and
they participated actively in the compilation of
o?cial Russian translations of the standards. Fur-
ther, they promoted the ISAs – together with
International Accounting Standards (IAS) – at
conferences and workshops dealing with matters
of Russian accounting and audit reform.
For many of the newly founded Russian audit
businesses, the big international accounting ?rms
functioned as role models. The Big Six, which
became later the Big Five and subsequently the
Big Four, were seen as organisations which had
the expertise, international connectedness and eco-
nomic success that many of the more ambitious
Russian audit ?rms aspired to acquire. Also the
management of Moskva-Audit tried to model
itself on the big international accounting ?rms. It
wanted to turn the Russian ?rm into an interna-
tionally recognised business; ‘‘a real alternative
to the big six ?rms’’, as the director and founder
once remarked.
11
The adoption of international
auditing standards was seen as an important step
in the realisation of such ideals.
12
Moskva-Audit began introducing the standards
in the mid-1990s. As will be shown in more detail
later, a dual functionality was ascribed to the stan-
dards. Internally, the standards were promoted as
templates on the basis of which new organisational
hierarchies and structures should be devised. The
standards were introduced as a means to organise,
demonstrate and rationalise audit expertise. It
was hoped that ‘‘working with standards’’ would
improve Moskva-Audit’s measures of internal con-
trol and enhance the economic value of the ?rm’s
audit activities. The standards were expected to
help the management of Moskva-Audit to establish
structures that would make it possible for them to
turn auditing into an e?cient, organisationally
manageable process. Further, it was hoped that
externally, i.e. to outside audiences, such as clients,
regulators and competitors, ‘‘working according to
standards’’ would provide Moskva-Audit with an
identity that underlined its pioneering role in the
development of Russian audit expertise and dem-
onstrated the ?rm’s level of professionalism. It
was expected that the standards would provide
outside parties with a clearer, internally validated
picture of what modern, capitalist auditing was
about. ISAs came to be regarded as a core element
in a regime of post-Soviet representation, through
which Moskva-Audit hoped to overcome the lega-
cies of the socialist past and gain entry to new
worlds of Western audit professionalism.
But the rhetorical appeal of the standards did
not easily translate into their technical operation-
alisation. Working with the standards involved
much more than putting a copy of the ISAs on
10
Out of the Big Five, PricewaterhouseCoopers (PwC) had by
far the largest market share. In 1998, for example, the ?rm
earned more than 10 times as much as the largest Russian audit
?rm (in terms of revenues) (Ekspert, No. 11, 22.03.1999).
11
The founder and director stated this in a newspaper article
of a popular Russian business paper in 1998. For reasons of
con?dentiality, the exact reference details cannot be disclosed.
12
Of course, it should be noted that not all founders of
Russian audit businesses modelled their organisations on the
big international accounting ?rms. Especially in the 1990s,
before the 2001 Russian audit law was adopted, the Russian
audit market was populated by a large number of very small
?rms which often had only 1–10 employees. These ?rms were
locally oriented and provided mainly Russian bookkeeping, tax
advisory and statutory audit services to smaller organisations,
or they were highly specialised in a speci?c industry sector and
served almost exclusively a couple of larger client organisations
(see e.g. Ekspert, No. 35, 16.09.1996 and Ekspert, No. 11,
22.03.1999).
394 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
the bookshelf. As already suggested, international
auditing standards are not e?ective by themselves.
ISAs have to be made to work. And in the case
of Moskva-Audit, the standards had to be taken
out of the book and actively made part of the
organisation. On the one hand, the ISAs had to
be provided with infrastructures that would
allow people to work with, and have control
over, the rules. On the other hand, external par-
ties needed to be convinced that one was working
according to standards. Devices and relations had
to be created that allowed the ?rm to demon-
strate and communicate compliance with the
standards. Such processes of organisational local-
isation and public certi?cation were not trouble-
free, nor could their course be determined in
advance.
Firms like Moskva-Audit imagined themselves
as a professional community comparable to those
in the West, but the realisation of this aspiration
was rooted in local speci?city and accompanied
by heterogeneity and di?erence. Especially in the
early years of Moskva-Audit’s development,
between 1994 and 1997, the standards became
implicated in an organising logic that, to some
extent, rested on Soviet traditions of scienti?c
management and ideals of total controllability.
In the following, we will investigate how ISAs
can become involved in di?erent, locally variable
and con?icting standardising strategies. We will
also examine what consequences this has for
attempts to establish ISAs as a global connection
device.
Machine dreams
13
The ?rst two centres from which the ISAs began
to be circulated throughout Moskva-Audit were
its Audit Methodology and Audit Quality Control
Departments. Here, initial steps were taken to cre-
ate an administrative system through which the
standards could be rendered operable. The inter-
national auditing standards were to be embedded
in heavily rationalised and formal processes aimed
at the objecti?cation and depersonalisation of
audit expertise. ‘‘Machine dreams’’ (Mirowski,
2002) of modernisation, rooted in ideals of scien-
ti?c control, organisational legibility
14
and techni-
cal e?ciency, accompanied Moskva-Audit’s early
audit standardisation projects.
The Audit Methodology and Audit Quality
Control Departments were created in the mid-
1990s, the period when Moskva-Audit had started
to take on its ?rst bigger audit assignments. Ini-
tially, the Audit Methodology Department was
sta?ed with ?ve people: Yuri Litkov
15
and Alexey
Yakunin who had both previously worked for two
large international accounting ?rms in Moscow;
Elena Lutskaya who had worked for Moskva-
Audit as an auditor since 1992; and two adminis-
trative assistants. The Audit Quality Control
Department was founded in September 1996. Ini-
tially sta?ed with four people, the Department
grew rapidly in the following years. The Audit
Methodology Department and the Audit Quality
Control Department were located at the interface
between the external representation and internal
organisation of audit work. In both departments,
international auditing standards were promoted
as an instrument that could provide the ?rm with
a frame of externally accepted regularity and inter-
nally manageable e?ciency. The standards were
seen as a regulatory tool, through which societal
concerns about due professional care could be pro-
jected into the ?rm and, vice versa, the ?rm’s devo-
tion to modern audit technology could be
communicated to society – in particular clients,
regulators, peers and other international business
partners.
Issues of internal quality assurance and
demands to explicitly demonstrate professional
due care had become all the more pressing for
Russian audit ?rms when – in 1996 – the Central
13
This heading is borrowed from the title of Mirowski (2002).
14
The notion of ‘‘legibility’’ was ?rst developed and used by
Scott (1998). In his work, Scott uses the term to describe
processes of formalisation, categorisation and standardisation,
with the help of which modern states learnt ‘‘to see’’ and
‘‘know’’ their terrain and people. In the context of this paper,
‘‘organisational legibility’’ is used to describe activities of
codi?cation and documentation aimed at making audit activ-
ities ‘‘legible’’, visible and governable, from the standpoint of
the audit organisation.
15
For reasons of con?dentiality, all names have been changed.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 395
Bank stated its concerns about the quality of bank
audits (see e.g. Finansovaya gazeta, 1996, No. 43).
Standardised audit methodology, explicated in
formal rules and procedures, was presented by reg-
ulators, academics and the big audit ?rms as a
mechanism through which the quality and profes-
sionalism of audit activities could be signi?cantly
improved. But as noted earlier, ISAs in isolation
are little more than vague textual documents,
which neither prescribe nor explain what it would
actually mean to use them. Apart from the rela-
tively short working experiences of Litkov and
Yakunin in two of the big international accounting
?rms in Moscow, the people at Moskva-Audit did
not have any knowledge of how the standards had
been applied elsewhere in the world. In any event,
the standards do not form a stable reference sys-
tem. International auditing standards are fre-
quently revised, updated and changed. The
International Auditing and Assurance Standards
Board regularly reviews existing ISAs, removes
old standards and develops new standards.
16
For
the people at Moskva-Audit, the standards repre-
sented a moving target, constantly changing and
therefore not easy to pin down and stabilise within
Moskva-Audit’s own structures. Furthermore, at
that time there did not even exist an o?cially
authorised Russian translation of the ISAs. When
Moskva-Audit began to make use of the stan-
dards, the ?rst translation attempts had only just
begun, and they were not considered very reliable.
One member of Moskva-Audit’s Audit Division
stated in this respect:
I remember that when we began to work [in
auditing], ?rst of all, it was not possible to
?nd the standards in Russian. Some transla-
tions existed, but only in a very fragmented
way. These were terrible translations. It
would have been better if these had not
existed at all. (Interview No. 2, 2002)
The professional association titled the ‘Russian
Collegium of Auditors’ was one of the ?rst groups
that pushed the Russian translation of ISAs. In
the mid-1990s other organisations, such as audit
?rms and academic institutions also began the
process of translating the standards. But it was
only in the year 2000 when these single e?orts
merged into a single, uniform and IFAC-author-
ised translation.
The adoption of the standards was further com-
plicated by developments in the national regu-
latory scene. When Moskva-Audit began the
introduction of the standards, the Russian govern-
ment had also started with the development of a
set of national auditing rules (Danilevsky, 1994).
These rules had been closely modelled on the
International Standards on Auditing, but they
did not constitute literal translations. Danilevsky,
Ostrovsky, and Guttseit (2001, p. 11), three state
servants who were involved in the drafting of the
?rst set of the Russian standards, stated in this
respect:
The underlying principles of ISAs were
almost automatically incorporated in Rus-
sian standards. But, of course, one could
not do without changes and amendments.
[. . .] Localization was sought at the outset,
which manifested itself both in the wording
of the Russian equivalents of ISAs and in
audit rules that do not have ISA prototypes.
When Moskva-Audit began the adoption of the
standards, the national audit rules were still in the
process of being drafted and had not yet been o?-
cially endorsed. But it was expected that they
would become mandatory in the near future.
17
All of these faltering developments disturbed the
16
For example, between 1999 and 2001 the Board had revised
ISA 240 on fraud and error; published a new Auditing Practice
Statement on the audit of derivative ?nancial instruments and
issued two Exposure Drafts with revisions to ISA 700, The
Auditor’s Report on Financial Statements.
17
With the adoption of the federal audit law in August 2001,
national auditing standards have to be followed when conduct-
ing Russian statutory audits. The new national auditing
standards follow closely the text of the international standards,
but they still do not constitute exact one-to-one translations.
The national auditing rules, for example, di?er in terms of
length, detail and added legal requirements. For example, they
include detailed regulations about educational requirements for
auditors, legal rights and obligations of audit ?rms, procedures
for the conclusion of audit contracts and recommendations for
the performance of tax audits (Remizov, 2001, pp. 5–21).
396 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
stability of the standards. On their journey into and
through the Russian auditing world, the ISAs
began to connect up a variety of di?erent contexts
and actors, each of whom accorded them di?ering
importance and interpretations. As a consequence,
the auditing standards became a rather blurred and
multiplied reference point. The people at Moskva-
Audit had to deal with this confusion. They had to
?nd a way through the di?erent interpretations,
Russian translations and governmental regulations
that had been attached to the standards, so that
they might work ‘according to the standards’.
18
Moskva-Audit’s Audit Methodology Depart-
ment tried to deal with the duplication and local
di?erentiation of the standards through a concen-
tration on the similarities of the audit process steps
described. Standards that were speci?c to and
internal to the ?rm were created, in attempts to
fuse the Russian and international rules. Instead
of juxtaposing Russian and international audit
standards, they were re-joined. In the opening
paragraphs of Moskva-Audit’s internal audit stan-
dards, explicit reference was made to both the
international and Russian audit standards. The
internal rules were built on excerpts taken from
both the Russian standards and the international
rules. To emphasise international similarity, all
texts were permeated with Western audit terminol-
ogy. Reference was made to the conduct of ‘‘ana-
lytical procedures’’ [analiticheskie protsedury],
‘‘tests of internal control systems’’ [testy sredstv
vnutrennogo kontrolya], ‘‘levels of audit risk’’
[urovny auditorskogo riska] and ‘‘materiality
thresholds’’ [urovny material’nosti].
Further, the Methodology Department tried to
re-enforce the uniformity of the standards by
embedding them in standardised, machine-like
audit practices. The elusiveness of the standards
was addressed through the establishment of a
well-structured apparatus of formal rules. Audit-
ing became couched in a mathematical language
of planning and control. Excel sheet templates,
for example, were developed to aid the mathemat-
ical modelling of audit risk. Algorithms were
designed to standardise the calculation of materi-
ality levels. And detailed statistical sampling pro-
cedures were set out to formalise the selection of
audit samples.
19
Thus, the standards became
embedded in a very speci?c strategy of rule-follow-
ing. They became implicated in a strategy that
focused on procedural orderliness, accurate docu-
mentation and the formally rational appearance
of audit activities. Litkov, Head of Audit Meth-
odology at Moskva-Audit between 1996 and
2001, described such a formalistic-mathematical
approach to auditing and audit standardisation
in the following way:
Audits should require a minimum of creativ-
ity [judgement] and a maximum of formality.
[. . .] Auditing is only a technology, a process
similar to an assembly line, where specially
drilled [nataskanny] sta? perform a set of
procedures related to a certain algorithm
within short time and to the required quality.
The [audit] process contains a lot of recur-
ring routine elements that can be highly
automated. [. . .] Standards make it possible
to create an e?cient system of coherent pro-
cedures for [such] audit sta? activities.
20
In the auditing literature, the approach that Lit-
kov describes has been described as ‘‘mechanistic’’.
Dirsmith and McAllister (1982), for example, dis-
tinguish between ‘‘mechanistic’’ and ‘‘organic’’
18
For an insightful, more general discussion of the nexus
between accounting, language, culture and thought see Evans’
(2004) analysis of ‘‘Language, Translation and the Problem of
International Accounting Communication’’.
19
It should be noted that such mathematical approaches to
auditing and audit standardisation were prevalent in many
Russian audit ?rms at the time when this ?eld study was carried
out. When people began to rede?ne audit practices in accor-
dance with Western audit models and standards in the early
1990s, much attention was generally given to ‘‘mathematical’’
audit issues, such as statistical audit sampling, the mathematical
modelling of audit risk and calculations of materiality levels.
This interest in the mathematical modelling of auditing is also
re?ected in academic and professional journal articles. Since the
early 1990s, accounting journals, such as ‘‘Bukhgalterskii
uchet’’ [Accounting Review] and ‘‘Auditorskiye Vedomosti’’
[Auditing News] have been publishing a large number of articles
discussing the mathematics of audit risk models, the pros and
cons of di?erent sampling technologies and issues connected to
materiality level calculations.
20
The quote was taken from an article Litkov had published
in 1999.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 397
audit approaches. According to them, mechanistic
audit approaches rely heavily on formalised proce-
dures, whereas unstructured, organic approaches
provide more scope for judgement and individual
practical reasoning. At Moskva-Audit, the mecha-
nistic images of auditing and audit standardisation
were grounded at least in part in the former profes-
sional backgrounds of Litkov and his group,
together with the established traditions of Soviet
scienti?c management and control. Especially in
the 1960s and 1970s, Soviet economic planning
accorded great signi?cance to administrative sci-
ence and mathematical modelling (see e.g. Cony-
ngham, 1982; Thompson & Vidmer, 1983).
Subjects, such as cybernetics and linear program-
ming, were seen as promising approaches through
which, at least in theory, scienti?c control of the
Soviet economy could be achieved (Thompson &
Vidmer, 1983, p. 79). Litkov had obtained a degree
in mathematics and administrative science during
the Soviet period. Before his career as an auditor,
he had worked as a programmer for the Soviet mil-
itary. Yakunin, his colleague, had worked in eco-
nomic planning for one of the Soviet branch
ministries.
21
These experiences reinforced beliefs
that auditing standards could be concretised and
pinned down with the help of a set of well-de?ned
procedures and algorithmic decision tools. As Lit-
kov expressed it in an interview:
I think that it is quite easy for mathemati-
cians and programmers to adapt to the
auditing sphere. For us it is quite easy to deal
with such issues as risk analysis, sampling
technologies, the calculation of materiality
levels etc. [. . .]. Everything which concerns
auditing, well, that doesn’t have any national
cores. That is a technology, a science; you
have plans; you have instruments. (Interview
No. 1, 2001)
The adoption of a mechanistic approach to
auditing and audit standardisation was further
stimulated by the extreme levels of institutional
uncertainty surrounding Moskva-Audit. During
the early 1990s, government as well as non-state
organisations and individuals experimented with
a range of di?erent economic and regulatory mod-
els with the aim of furthering economic and polit-
ical transition. The transition period was a period
in ?ux. Processes of privatisation, liberalisation
and deregulation had moved post-Soviet Russian
society into a state of extreme structural instability
and institutional uncertainty. As Elster et al. put it
(1998, p. 34), society was ‘‘felt to be in a state of
disorder and fragmentation’’. In this context,
excessive proliferation of rules can be seen as the
outcome of the desire for order and stability
(Elster, O?e, & Preuss, 1998). As Litkov described
it in an interview, activities of rule development
became associated with stability and certainty:
Our auditors want to have rules and stan-
dards that describe in detail what they should
do, and what they don’t need to do. The
international standards show you how you
should think. Our [internal] rules show you
how to think and what to do in concrete sit-
uations. [. . .] If I had to show you all our
internal documents, that wouldn’t be just
two or three books, as in the international
?rms, but several cupboards full of paper.
(Interview No. 1, 2001)
As with the international auditing standards,
Moskva-Audit’s internal rules were organised
according to a series of standardised process steps,
beginning with rules on audit planning, the assess-
ment of audit risk, the formulation of audit
engagement letters and then leading on to the col-
lection of audit evidence, the documentation of
audit processes and the formulation of standar-
dised audit reports. In addition, internal audit
manuals, methodical instructions and audit risk
templates were developed to delineate explicit
spheres of audit action.
Codifying compliance
The de?nition and evaluation of compliance
with standards was grounded largely in paper-
work. In this respect, one could say that Mos-
kva-Audit embraced the standards in a way
21
The cases of Litkov and Yakunin are not unique. Many of
the bigger Russian audit ?rms hired former natural scientists,
engineers and state bureaucrats for the development of their
audit methodologies.
398 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
similar to many Western audit ?rms (see e.g.
Power, 1999; Van Maanen & Pentland, 1994).
The basis for matching work to standards became
the collection and storage of standardised ‘‘docu-
mented representations’’ (Gar?nkel, 1967/1999)
of audit work. It was believed that standardised,
documented audit accounts would enable partici-
pants to re-construct past courses of action as
‘‘showcases’’ of proper auditing. On the other
hand, we can observe that the collection and stor-
age of such showcases became embedded in a very
speci?c, locally distinctive way of thinking about
auditing and audit standardisation. New, Wes-
tern-oriented ‘‘form-giving’’ devices (The´venot,
1984) were adopted to aid the planning, control
and documentation of audit work, but the applica-
tion of such Western-oriented routines, to a large
extent, was still rooted in control and management
practices stemming from the Soviet period.
One of the core technologies adopted from
one of the big international accounting ?rms to
aid the operationalisation of international audit-
ing standards took the form of a standardised,
59-page long documentation index. Originally,
the documentation index had been developed
by one of the then Big Five ?rms for their
own internal control and documentation pur-
poses. The documentation index was imported
by Moskva-Audit from a big international ?rm,
not only to aid control but also to demonstrate
international openness and enhance similarity
with Western ?rms. The Western origin of the
index underlined its authoritativeness and alleged
adequacy.
The indexing system compartmentalised the
audit process into sections of audit planning, the
evaluation of audit risk, the auditor’s knowledge
of the audited business, the description of internal
control systems, results of performed audit proce-
dures, etc. Each audit activity was provided with a
number. Under numbers from 1000 to 1199, for
example, activities concerning audit planning were
reported. From 5000 to 5999 the audit of assets
was documented. Indices ranging from 6000 to
6999 were used for reports on the audit of liabili-
ties. Attached to the indices were special instruc-
tions, for example for the determination of audit
risk, and models of working papers.
The indexing system provided the auditors
with a frame of objecti?cation that helped them
establish a predictable, routinised environment
for auditing, an environment that could be
ordered and controlled largely independent of
the speci?cities and complexities of actual audit
objects. In so doing, the indexing system consti-
tuted much more than a neutral, technical device
aiding the production of accurate accounts of
‘‘what happened’’. The indexing system itself
was a central part of a bigger organisational
apparatus of charts, rules, lists and other form-
giving devices that did not just re?ect, but made
it possible to perform work in accordance with
standards.
22
The documents collected and stored
with the help of the indexing system became con-
stitutive of work in accordance with standards in
a way that reinforced Moskva-Audit’s focus on
descriptive accuracy and administrative orderli-
ness. Especially in the early 1990s, at Moskva-
Audit, much attention was paid to the checking
of single operations. The audit tests focused on
detailed transaction testing. In comparison with
Western contexts of audit activity (see e.g. Power,
1999), much less attention was paid to analytical
procedures or the audit of the control systems of
a business.
23
Work in accordance with standards
came to be associated with images of rational
bureaucratic order and formal rule-following.
Emphasis was placed on the disciplinary charac-
ter of audit rules. It was believed that the applica-
tion of standards could be ensured through
enhancing the level of control over individual
practitioners and reducing the scope for individ-
ual judgement. As the Head of the International
Audit Department at Moskva-Audit described it:
The quality of audit work should not depend
on the personality. . . on the person that came
22
The performative role of instruments like the indexing
system is not just a speci?city of our case, but has been
documented elsewhere as well. See e.g. Power (1999) and Van
Maanen and Pentland (1994).
23
The ISAs de?ne analytical procedures as ‘‘evaluations of
?nancial information made by a study of plausible relationships
among both ?nancial and non-?nancial data’’ (IFAC, 2006, p.
228). Tests of control are performed to check ‘‘the operating
e?ectiveness of controls in preventing, or detecting and
correcting, material misstatements’’ (IFAC, 2006, p. 248).
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 399
to work for the organisation. We only have a
great deal of certainty that everything is done
with quality, if a person works in accordance
with standardised programmes. (Interview
No. 6, 2002)
24
Such projects of formal standardisation and
codi?cation were reinforced by the demands of
outside parties. Western agencies, such as the
World Bank or the European Bank for Recon-
struction and Development (EBRD), would only
award audit contracts to ?rms who could explicitly
demonstrate that standardised, publicly visible,
systems of internal quality control had been
installed. Also, Russian regulatory authorities,
when carrying out audit quality controls, were pri-
marily interested in determining whether detailed
administrative procedures had been established
by the audit ?rms. When this case study was con-
ducted, Russian auditors had not been sued for
professional negligence. But observing the court
activities of their international counterparts, Rus-
sian audit ?rms imagined that this could be the
case in the future and therefore saw the establish-
ment of formal controls and documentary mecha-
nisms as an important step in preparing themselves
for such events. As Moskva-Audit’s Deputy Direc-
tor commented in an accounting newsletter in
1999:
Audit rules should become the most impor-
tant argument in the review of court investi-
gations against audit organisations with
respect to allegations of professional
negligence.
25
Parallel to the indexing system, Moskva-Audit’s
Quality Control Department developed a numeri-
cal compliance code.
26
With the help of the code,
expertise was represented in a standardised for-
mat, allowing it to be ranked, compared and eval-
uated. The code consisted of a list of 36 di?erent
criteria which audit quality controllers had to take
into account when assessing compliance. The crite-
ria had been subdivided into three main sections.
The sections focused on the correctness and com-
pleteness of audit work with respect to: audit pro-
cedures performed; audit reports written; and
audit ?les assembled. The control criteria ranged
from general questions asking, for example, for
an overall assessment of the correspondence of
the contents of audit procedures, audit reports
and audit ?les with internal rules and Russian
laws, to more speci?c questions addressing issues
of documentary uniformity and formal accuracy.
Quality controllers had to consider questions such
as: does the structure of the audit report comply
with the structure provided in the standards; are
sentences clearly formulated; is every remark of
the auditors backed up with evidence, e.g. source
documents; does a memorandum on audit plan-
ning exist; has a statement on the independence
of auditors been attached; have materiality levels
been correctly calculated; does the selection of
the audit samples correspond with the ?rm’s inter-
nal sampling rules?
The audit quality controllers ranked the extent
to which each criterion had been met on a scale
from zero (for non-compliance) to one (for 100%
compliance). In the second step, the ranking given
for each criterion was added up to give a total
score. The results were entered into a table. On
the basis of the table, diagrams were created visu-
alising the quality of audit work delivered by each
audit team. Regularly, these diagrams were for-
warded to the director and owner of Moskva-
Audit to inform him about the performance of
24
It should be noted, that such a prescriptive approach to
audit standardisation is not only a Russian speci?city. The
recent ‘‘clarity project’’ of the IAASB (International Audit and
Assurance Standards Board) shows that the auditing profession
in Europe is generally divided about the level of prescription to
be established by auditing standards. As we can read in a recent
article of the journal Accountancy: ‘‘Some take the view that
audit quality is likely to be improved by having detailed
prescriptive standards [. . .]. Others, including the APB [British
Audit Practices Board], favour a more principles-based
approach recognising that many of the key features of good
auditing are dependent on auditor experience and judgement’’
(Grant, 2006, p. 84).
25
For reasons of con?dentiality more precise details about the
source of the quote cannot be disclosed.
26
In the development of internal controls and documentary
mechanisms, the Department based itself largely on ISA 220,
the international standard dealing with ‘‘Quality Control of
Audit Work’’ (IFAC, 2001, pp. 158–162). The compliance code
had been developed by the Quality Control Department from
scratch and, unlike the documentation index, had not been
taken on from other international institutions.
400 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
his workers. In so doing, the codi?cation system
actively helped con?gure compliance. The compli-
ance scores, which stood at the end of each quality
assessment, helped attribute individual acts of
judgment to the outcome of rule-following. They
made it possible for controllers to conceal di?cul-
ties related to processes of quality assessment and
supplied them with a grid that made compliance
legible from the standpoint of the organisation.
To quote Power (1999), the system made compli-
ance with the standards ‘‘auditable’’. It helped
the quality controllers at Moskva-Audit arrive at
a common representation of diverse audit prac-
tices.
27
The control system might have intersected
poorly with the day-to-day realities of audit work.
Nonetheless, it provided an important reference
point that enabled the organisation to embed stan-
dards within its internal regulatory systems, and to
demonstrate to regulatory and other bodies that
audit standards were being realised.
But how far did these dimensions of regulatory
conformity take Moskva-Audit? To what extent
did the ‘‘form-giving’’ devices described above
help turn the international auditing standards
into a connecting device making it possible for
Moskva-Audit to link up with Western audit
worlds? As will be shown in the next section,
although the standards had been turned into a
pervasive, circulating point of reference within
the ?rm, they did not constitute a narrow ‘‘oblig-
atory passage point’’ that could be easily con-
trolled and utilised to generate international
acceptance. According to Latour (1987, p. 150),
‘‘obligatory passage points’’ are constituted by
things, events, persons and activities which people
have to pass if they want to belong to a certain
group of actors (e.g. the accounting profession)
or a speci?c network of activities (e.g. auditing
practices). ‘‘Obligatory passage points’’ refer to
the means and processes by which things, ideas
or standards in our case, are turned into stable,
‘‘indispensable’’ entities (Callon, 1986; Latour,
1987, 1988). In the case of Moskva-Audit,
attempts had been undertaken to incorporate
and stabilise the standards within its audit manu-
als and methodologies, but working with the stan-
dards did not automatically translate into the
?rm becoming de?ned and classi?ed as working
according to international standards. It is this
issue that we now turn to consider.
Struggles for recognition
The indexing system and the compliance code
contributed to the creation and stabilisation of
an administrative control system that reinforced
images of orderliness and regularity. This led to
an increased appearance of internal consistency
and conformity, but it did not automatically bring
about higher external acceptance, especially not at
the international level. At Moskva-Audit, ISAs
had become linked up with very speci?c, localised
strategies of rule-following and ideas of what an
auditing standard is. These were not easily com-
patible with Western, in particular Anglo-Saxon,
ideals of auditing and audit standardisation. What
counted as ‘‘working in accordance with stan-
dards’’ was contested. It was challenged by the dif-
fering beliefs, demands and expectations within
which Moskva-Audit operated. A British audit
partner who had worked for several years in a
large international audit ?rm in Moscow remarked
in this respect:
There is a lot of debate. [. . .] At one end of
the spectrum you have the former Finance
Ministry controllers [revizory] – their view
of internal control is to re-perform every-
thing. If you get the same out of it, you are
probably right. And then you get the other
end of the spectrum, which I guess would
be the Big Five [now Big Four, A.M.] trained
professionals with experience. These two got
such absolutely opposite views of everything,
and yet they are all part of the same profes-
sion. (Interview No. 33, 2001)
Moskva-Audit was operating in a di?erentiated
environment. There existed di?erent views on what
counted as auditing, on how to approach it and
27
The above-mentioned points describe general functions of
grading and performance measurement. For an insightful
analysis of grading practices in schools see Kaltho? (1996).
For a more general discussion of the objectifying qualities of
quanti?cation see Porter (1992).
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 401
what its outcome should be. Views di?ered, for
example, with respect to the detail of regulation
needed to ensure audit quality. Views di?ered also
with respect to the objectives that audits should
serve. On the one hand, auditing and auditing
standards were promoted as a means to enhance
state control and stimulate compliance with Rus-
sian taxation and accounting laws. Such perspec-
tives were especially propagated by the Ministry
of Finance and the Russian taxation authorities
(Danilevsky, 1994; Krikunov, 2001). Here, audit-
ing standards were seen as an instrument of jurid-
ical regulation that could guide state authorities in
the establishment of a coherent system of regula-
tory oversight.
On the other hand, there existed more capital
market-oriented views, which regarded auditing
as a control mechanism that was called upon to
enhance the information content of ?nancial state-
ments for economic decision makers; in particular
private shareholders. Here, ISAs were regarded as
broad principles in need of being grounded in indi-
vidual expert judgement and Anglo-Saxon cultures
of self-regulated professionalism. Such views were
in particular articulated by the big international
accounting ?rms operating in Moscow and multi-
lateral agencies, such as the World Bank, OECD
and EBRD. At Moskva-Audit, the international
auditing standards had become implicated in
faithful, machine-like applications of rules, which
high-ranking members of the big international
accounting ?rms in particular sneered at. As the
following dialogue between two British audit part-
ners who worked for a large international account-
ing ?rm in Moscow illustrates, Western, especially
Anglo-Saxon, audit professionals saw auditing as
something which cannot be learned from a book
or the text of international standards:
Audit Partner 1: How many of them [interna-
tional auditing standards] have you read this
week [audit partner 1 addresses audit partner
2 with a smile]?
Audit Partner 2: I can’t remember. It would
be embarrassing, if I tried to remember what
order they are in.
Audit Partner 1: You know, that just does
not make sense. I could never cite all the
standards by their title. This is something
you just know. [. . .]
Audit Partner 2: You can’t learn auditing.
That is something you got to grow into.
Auditing is a particularly psychology-based
study; you don’t learn that from a book.
Audit Partner 1: A good auditor never looks
at the law; never looks at the standards. He
knows it, it’s in his blood. He drank it from
his mother’s milk as it were. Ahm, law and
regulations all they do is formalise that, but
if the basic culture is not there, then you have
a big problem.
28
No doubt this is an idealised and stereotypical
Anglo-Saxon representation of audit expertise.
Nonetheless, this mirage of audit expertise as
something that needs to be grounded in individual
experience and judgement, rather than adherence
to rules, clashed with post-Soviet ideals of regula-
tion and ?nancial control. This disparity was fur-
ther reinforced by the di?erent accounting worlds
Russian and Anglo-Saxon auditors were operating
in. In contrast to Anglo-Saxon accounting worlds,
Russian accounting was and still is much more
focused on compliance with tax regulations and
government decrees. It is centrally regulated, and
the Chart of Accounts provides detailed guidance
on how to comply with Russian accounting rules
(see e.g. Bakaev, 2001; Kondrakov, 2004). In addi-
tion, we need to take into account that formal
structures travel more quickly than knowledge
and expertise anchored in individual experience
(Drori et al., 2006; Westney, 1987). The formal
texts of the auditing standards may have reached
Russia quickly. But the connecting of worlds is
much more than the arrival of formal standards.
There is further to go before one can say that the
standards exist within an internationally accepted
realm of auditing practice.
28
This dialogue was observed by the author during an
informal meeting where the audit partners discussed the
usefulness of conferences on international accounting and
auditing standards prepared and delivered by Western expatri-
ates to Russian accountants and auditors. The interchange
quoted above was prompted by a comment that the author
made regarding the great popularity of such events.
402 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
The Russian and Western audit worlds did not
exist side by side, on the same horizontal plane.
They were embedded in a hierarchical relationship.
The breakdown of communism within Eastern
Europe, and the attendant de-legitimisation of
Soviet institutional structures, put Western audit
?rms and audit professionals in a position that
allowed them to present themselves as superior
to their Russian counterparts. The supposedly suc-
cessful capitalist societies of Western Europe and
the United States had become important reference
points for what post-communist Russian society
aspired to become (see e.g. Pickles & Smith,
1998). The creation of new market-oriented politi-
cal and economic structures, including the estab-
lishment of commercial auditing, relied to a great
extent on the imitation and transplantation of
Western patterns. This strengthened the position-
ing of Western audit ?rms and professionals in
the Russian audit market, who had knowledge
and experience on their side. By de?nition, their
Russian counterparts were lagging behind.
These continuing di?erences between Russian
and international audit worlds thus placed the spe-
ci?c regulatory traditions and local accountability
styles of the Russian audit world in a curious and
inferior position relative to the actors and agencies
that had entered from the ‘outside’, from the
West.
29
In particular, the presence of the big inter-
national accounting ?rms on the Russian audit
market contributed to the creation of further axes
of local di?erentiation and particularisation. The
international ?rms claimed to be doing ‘‘truer’’
and ‘‘better’’ audits than their Russian counter-
parts on the grounds of their longstanding experi-
ence, worldwide interconnectedness and general
reputation. During interviews that were conducted
with partners from Western audit ?rms, respon-
dents frequently made distinctions between the
kind of audits ‘‘we, the internationals’’ do, and
the kind of audits ‘‘they, the Russians’’ perform.
This depended on a contrast between the ‘‘experi-
enced’’ Western application of international stan-
dards on the one hand, and the ‘‘inexperienced’’
Russian applications on the other. The following
quotes illustrate some of the di?erences that were
ascribed to Russian auditing by Western practitio-
ners. A British senior audit partner who had
worked for several years in a big international ?rm
in Moscow, for example, pointed to the di?erent
levels of experience:
What they are trying to develop in Russia
has taken decades, if not centuries, in the
West. I think there is a pretty genuine inter-
est in looking at how it’s done in the West
and saying ‘We must do this’ or something
like it. But you cannot do it overnight, if
there is no culture of having done this. [. . .]
In the Western world, you have years of
experience. You have thousands of practitio-
ners. Here, you don’t have that. [. . .] What’s
missing is the experience and maybe the com-
mon sense. (Interview No. 32, 2001)
Another senior, but Russian, audit partner who
also worked for a big international ?rm in Mos-
cow emphasised di?erences in professional
approaches:
When talking about Russian audits and inter-
national audits, one needs to be careful to dis-
tinguish between them. If you take the
[Russian and international] audit standards,
in principle, they are not much di?erent from
each other. [. . .] But you ?nd di?erences in
their practical adoption, in the practice of
auditing. [. . .] They [the Russian ?rms], for
example, don’t understand this concept
where, during the audit process, you look at
the ?nancial statements as a whole. For them
only the individual transactions are very
important. (Interview No. 35, 2002)
Looking back on his time in Russia during the
early 1990s, a British ex audit partner, who also
had worked for a large audit ?rm, re?ected more
critically:
Russian auditing grew as a business in the
time I was there. But it was held in very
low esteem when I ?rst went out. It was very
29
Cooper et al. (1998) make a very similar point about the
constitutive e?ects of national stereotyping. Analysing the
behaviour of managers in multinational accounting ?rms, they
aptly illustrate the complex and problematic nature of the idea
of an ‘international’ orientation.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 403
much a pure compliance exercise, nobody
really cared about it. [. . .] And we [the West-
erners] were quite ignorant. (Interview No.
41, 2002)
These quotes are not o?ered as a way of testify-
ing the ‘‘actual’’ realities of Russian auditing.
Whether based on ?rst-hand experience or stereo-
types, in both cases the above remarks re?ect
and contribute to the creation of ‘‘an ideology of
di?erence’’ (Said, 1985), which frustrated the con-
necting potential of the international auditing
standards. Work conducted in accordance with
international standards came to be rooted in divi-
sions of global and local, Western and post-Soviet
audit labour. Discourses about local speci?city
furthered the incorporation of the standards in
hierarchies of expertise that were promulgated by
the big international accounting ?rms and their
networks. As a consequence, practices of Russian
?rms claiming to perform work in accordance with
international auditing standards were de-legiti-
mised. Work in accordance with international
standards came to be marketable only for those
?rms that were already internationally connected
and enjoyed worldwide recognition. Also, Mos-
kva-Audit came to feel the power of the big inter-
national ?rms. For many years, Moskva-Audit’s
audit division stood in the shadow of the activities
of the big Western ?rms. As the following remark
of a senior auditor from April 2001 illustrates, the
area of international auditing was neither a lucra-
tive, nor widely accepted business:
Usually, ISA-audited ?nancial statements
are required by clients who plan to sell shares
abroad, who go for the international mar-
kets. But unfortunately, in these cases the
big international ?rms prevail in the market,
because their stamp counts for much more
than ours does. Because [abroad] nobody
knows what [Moskva-Audit] is. And conse-
quently, if one talks about international
audits, usually the Big Five are chosen.
(Interview No. 6, 2002)
The quote indicates that working with interna-
tional auditing standards had not been enough to
enhance Moskva-Audit’s international acceptance.
The international standards did not ful?l their role
as a mechanism for connecting the ?rm and its cli-
ents with international markets. Or at least they
were insu?cient on their own. To become widely
accepted on an international scale, Moskva-Audit
had to do much more than adopt standards. To
become part of the international audit world,
Moskva-Audit had to ?nd allies who already
enjoyed worldwide acceptance. As Mary Douglas
(1987, p. 59) argues, ‘‘sameness is not a quality
that can be recognised in things themselves; it is
conferred upon elements within a coherent
scheme.’’ Analogies have to be agreed upon. Same-
ness, at least to a large extent, is conferred and
?xed by the institutions that comprise cultural
conventions, shared belief systems, common cog-
nitive schemes and other social and cultural struc-
tures (Douglas, 1987, pp. 45–67). To be widely
recognised and able to overcome local boundaries,
Moskva-Audit needed wider institutional support.
It had to re-connect itself and the standards that it
worked with to the wider sets of ideas, belief sys-
tems and institutional contexts within which the
ISAs had been developed, and through which they
had been propagated in the ?rst place. For Mos-
kva-Audit’s management, this meant it had to cre-
ate further linkages to the international world,
through international cooperation, the achieve-
ment of external accreditation and other interna-
tionally oriented activities.
To achieve this, amongst other things, Moskva-
Audit founded in 1997 the ‘‘Department for inter-
national audit activities’’. For the running of the
international audit department, people were hired
who were ?uent in English, had been trained in
the West or had been enrolled in internationally
recognised training programmes which were
o?ered locally, for example by associations such
as the ACCA (Association of Chartered Certi?ed
Accountants). A de?ning feature of the Depart-
ment became its international accounting expertise.
People had been taken on board who had had
experience with the application of International
Accounting Standards (IAS), American Gener-
ally Accepted Accounting Principles (US-GAAP)
and British Generally Accepted Accounting
Principles (UK-GAAP). One of the main services
that the Department began to o?er consisted in
404 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
reconciliations of Russian ?nancial statements with
US-GAAP or IAS. In addition, members of the
international audit department gave presentations
at internationally oriented accounting and audit
conferences and established close connections with
the International Centre of Accounting Reform
(ICAR) in Moscow, a Western agency which had
been set up to further the reform of accounting
and auditing in Russia.
30
Members of Moskva-
Audit’s international audit department regularly
wrote articles for ICAR’s accounting newsletter
and participated in ICAR’s project of creating an
IFAC-endorsed Russian translation of interna-
tional auditing standards (IFAC, 2000).
With the newly acquired, internationally oriented
accounting expertise, the aggressive marketing of
it and its relations with ICAR, Moskva-Audit
became able to participate successfully in bids for
audit assignments from international agencies,
such as the European Bank for Reconstruction
and Development, World Bank and the subsidiar-
ies of Western multinationals. In addition, it
became actively involved in the conduct of Tacis-
funded
31
accounting and audit reform projects,
usually jointly run by local and international audit
?rms. Initially, these involvements did not bring
much revenue, due to their small size and number,
but they were considered to be very prestigious
and, hence, important for the further develop-
ment of Moskva-Audit’s international reputation.
Through these audit assignments and its active par-
ticipation in accounting and audit reform projects,
Moskva-Audit managed to build more direct con-
tacts with the international, Western audit world
and made itself widely known amongst Western
agencies and organisations operating in Moscow.
But the new international audit department did
not replace Moskva-Audit’s old ‘‘Russian’’ audit
department. Rather, a new world began to be cre-
ated next to the old. With more than 150 members,
Moskva-Audit’s old ‘‘general’’ [obshy]
32
audit
department, which had been founded in 1991, con-
tinued to be the ?rm’s largest department, whereas
the new international audit department, which had
started o? working with seven people, expanded
only to about a dozen members. With the founda-
tion of the international audit department, Mos-
kva-Audit’s audit practice began to become
divided, as did the use of the ?rm’s internal meth-
odological guidelines and compliance codes. Both
departments made reference to international audit-
ing standards and they used the same internal
methodological guidelines, indexing systems and
compliance codes, but they did this in very di?er-
ent ways. The auditing activities became split into
‘‘Russian’’ and ‘‘international’’ audits [russkiye i
mezhdunarodnye audity]. Moskva-Audit’s old
audit department continued to carry out the so-
called Russian audits. These were highly forma-
lised and standardised audits which were overseen
by the Ministry of Finance and primarily aimed at
the checks of compliance with national tax and
accounting regulations. Much emphasis was
placed on formal accuracy and detailed transac-
tion testing. The ways in which materiality levels
were calculated and audit programmes designed
were highly standardised and the quality control
department checked meticulously whether audi-
tors’ working papers complied with the ?rm’s
indexing system, guidelines and methodologies.
30
ICAR had been set up in 1998 by the European Bank for
Reconstruction and Development, the American Chamber of
Commerce, the Foreign Investment Advisory Council and the
British Department for International Development in cooper-
ation with the Russian Institute of Professional Accountants to
provide guidance to the Russian government and other entities
concerned with the transition towards international accounting
and auditing standards.
31
The Tacis Programme Initiative was launched by the
European Commission in 1991. Through the Tacis Programme,
the EU seeks to provide grant-?nanced technical assistance to
countries of Eastern Europe and Central Asia. The Tacis
Programme provides support for projects of institutional, legal
and administrative reform. As a rule, Tacis-funded projects
have to be carried out in consortiums with at least one local
project partner. Between 1991 and 1997 and 1999 and 2005, the
EU had launched 10 di?erent Tacis-funded accounting and
audit reform projects in Russia.
32
In Russia, a distinction is made between general and
specialised audits. Specialised audits are statutory audits carried
out in speci?c service sectors, such as the banking and insurance
industries. General audits are statutory audits carried out in all
other sectors and not subject to sector-speci?c regulations.
Moskva-Audit’s general audit department was responsible for
the conduct of general audits. More specialised audits, such as
bank audits, were carried out in other divisions.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 405
In contrast, the international audit department
became responsible for the conduct of so-called
international audits. Here, ‘‘working according to
international standards’’ became linked to the
application of Western accounting principles (e.g.
IAS or US-GAAP) and the conduct of audits that
were not subjected to any speci?c national regula-
tory authority. More emphasis was placed on indi-
vidual expertise and judgement, than on the
following of detailed rules. Because the auditors
were operating outside the realm of Russian law,
they had more freedom to decide what checks to
carry out. As one senior Russian auditor with an
ACCA quali?cation put it:
You have many requirements and instruc-
tions which you need to follow when carrying
out a Russian [statutory] audit. It is much eas-
ier to audit in accordance with international
standards. [. . .] In a Russian audit you have
to check the enterprise in accordance with
various instructions, which are issued by the
individual regulatory bodies. Checks that fol-
low these instructions take up much time. I
just remember now, that we had to ?ll in all
those forms, which were quite long. Some-
times they were even 10 pages long. [. . .] An
international audit [i.e. an audit of ?nancial
statements prepared in accordance with a
non-Russian accounting framework; A.M.]
gives you more freedom and autonomy [sam-
ostoyatel’nost’]. (Interview No. 4, 2002)
Moskva-Audit’s international audit department
used the ?rm’s indexing system and compliance
codes as a starting point in structuring its work.
But the department was accorded much more free-
dom by the internal quality control division in
deciding on how to follow the internal rules. Much
less standardisation was required in the prepara-
tion of working papers, and auditors had much
more freedom in deciding where the main focus
of the audit should lie. The audit quality control
department adopted a ‘‘comply or explain’’
approach when checking the audit ?les from the
international audit division. Deviations from the
indexing system and compliance codes were
allowed, if the auditors noted down reasons for
these in their working papers.
Between 1997 and 2002, the old audit depart-
ment continued to be Moskva-Audit’s main bread-
winner and pillar in the Russian audit world, but
the new international department was central for
Moskva-Audit’s international presentation. It
made it possible to build up an international client
base and become more directly exposed to Western
accounting and audit expertise. Although the
department remained small in terms of number
of employees, it became an important window
and point of contact to the West.
In 2000, Moskva-Audit’s international e?orts
culminated in the o?cial accreditation of its inter-
national audit department by the World Bank.
Apart from Moskva-Audit, only seven other Rus-
sian audit ?rms managed to become o?cially
accredited by the World Bank as World Bank
auditors. The accreditation was based on a survey
that World Bank employees carried out in more
than 50 Russian audit ?rms during July 2000.
The survey’s aim was to test to what degree the
?rms complied with international standards. The
survey was carried out on the basis of an inspec-
tion of the ?rms’ audit ?les. Speci?c attention
was devoted to the documentation of work pro-
cesses, internal quality control procedures, adher-
ence to independence requirements and the
composition of audit programmes. Further, the
employees’ knowledge of international and US-
American accounting standards was tested. Out
of the 50 ?rms tested, only 11 ?rms, including
the then Big Five accounting ?rms, were consid-
ered to comply with international standards. For
Moskva-Audit, the results of the survey were of
great importance, as accreditation by the World
Bank added enormously to the ?rm’s international
credibility, and helped to consolidate Moskva-
Audit’s network of international support.
But this was still not enough. To become part of
the globally operating audit world, Moskva-Audit
had to ?nd additional allies. Its ISA-compliant
audits were still not marketable on a worldwide
scale. On international stock exchanges, a ?rm like
Moskva-Audit was not able to compete against the
kind of resources and reputation that the large
multinational audit ?rms had. International capi-
tal markets distinguish between audits carried
out by small and medium-sized local ?rms, such
406 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
as Moskva-Audit, and audits carried out by large
multinational audit ?rms – such as PwC, KPMG,
Ernst and Young, Deloitte – or second tier ?rms
such as BDO, Grant Thornton and PKF (see e.g.
Teoh & Wong, 1993). As the study by Wolk,
Michelson, and Wootton (2001) shows, by 1999
smaller accounting ?rms had virtually been elimi-
nated from the NYSE market, and over 98% of
the companies listed on the NYSEhad been audited
by the then Big Five accounting ?rms. Beattie,
Goodacre, and Fearnley (2003) draw a similar
picture for the UK. That is, the Big Five ?rms
audited 82.6% of all companies listed in the UK,
100% of the FTSE 100 ?rms, and 97.8% of the
FTSE 250 ?rms in 2002 (Beattie et al., 2003, p. 257).
After having explored various ways of showing
itself to be ‘western’ or ‘international’, Moskva-
Audit’s management decided in 2001 to apply for
membership in one of the large international audit
networks.
33
At that time, most of Moskva-Audit’s
Russian counterparts had already joined one of
these international audit networks and, as Gen-
dron et al. (2007, p. 105) would put it, anchored
their claims to expertise through their membership
of one of these. For most of these ?rms, member-
ship of these networks had opened up signi?cant
new international business opportunities. Seeing
this, Moskva-Audit now sought to do the same.
In choosing a possible network partner, Moskva-
Audit was looking for a network whose brand
name was already internationally well known and
established. For the ?rm, it was important that
the network would be of considerable size, with
an interesting portfolio of large multinational cli-
ents and good connections to the international reg-
ulatory scene (e.g. through membership in IFAC’s’
‘‘Forum of Firms’’).
34
To attract the attention of
such an audit network, Moskva-Audit hired a mar-
keting manager with international experience and
education (MBA) to present and ‘‘sell’’ Moskva-
Audit’s international orientation, its work force,
methodological rigour, contributions to local audit
reform initiatives and wide-ranging Russian client-
network. Following a series of meetings, talks and
negotiations, in 2002, Moskva-Audit managed to
become fully incorporated into one of the largest
international audit networks. Soon after joining
the network, Moskva-Audit changed its name to
that of the network. It became part of the net-
work’s brand and, thereby, signi?cantly enhanced
its position within the international division of
audit labour.
35
The Director and founder of Mos-
kva-Audit commented on what membership of
the network meant:
Our accession to the international audit net-
work marks a new stage in the development
of our company. We have always emphasised
our commitment to national business and
priorities, but we have never hidden our aspi-
ration to gain access to the world community
and expand the stage of our professional
activity by adding an international dimen-
sion to it. Now we have attained this goal.
[. . .] With the integration into the interna-
tional network we can e?ciently assist our
clients in their entry to the world capital mar-
kets, IPOs or fundraising from Western
?nancial institutions. [. . .] Until recently,
international audit was the exclusive domain
of the Big Four. Now we can make it possi-
ble for our clients to have their IAS-compli-
ant ?nancial statements certi?ed with a
‘‘stamp’’ of an internationally recognised
auditor.
36
33
Examples of such globally operating audit networks are:
BDO International, Grant Thornton and PKF International.
These networks form the world’s second tier of large audit ?rms
after the Big Four.
34
The Forum of Firms (FOF) was launched in January 2001
‘‘to bring together ?rms which perform transnational audits
and involve them more closely with IFAC’s activities in audit
and other assurance-related areas’’ (FOF Constitution, p. 3).
The FOF conducts its business primarily through the Trans-
national Auditors Committee, an IFAC committee whose
members have been nominated by the members of the Forum.
35
Moskva-Audit was not a unique case. By the end of 2003,
most large Russian accounting ?rms had been integrated into
international audit ?rm networks. Examples of such ?rms are:
FBK, who became a member of the PKF network; UNICON,
who became part of the BDO group and Russaudit, who
became a member of Baker Tilly International.
36
The quote was taken from Moskva-Audit’s website in
November 2003. For reasons of con?dentiality, website details
cannot be disclosed.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 407
Moskva-Audit’s incorporation into the interna-
tional network provided the ?rm with greater
chances of being seen and identi?ed as a ?rm that
is able to provide work in accordance with interna-
tional standards. Inter alia, the membership
enabled Moskva-Audit to register with the US-
American Public Company Accounting Oversight
Board (PCAOB) and to carry out audits for com-
panies listed on the New York Stock Exchange.
Thereby, the ?rm could not only strengthen its
international connections, but also further extend
its already strong position in the local Russian
audit market. Ultimately, Moskva-Audit’s direc-
tor became a member of the network’s interna-
tional council, which allowed the ?rm, for the
?rst time, to explicitly exert in?uence at an interna-
tional level, rather than just react to Western direc-
tives and standards.
What had made it possible for Moskva-Audit
to join the network? Working with international
standards had been a necessary, but by no means
su?cient condition. What had attracted the net-
work’s attention was not only related to Mos-
kva-Audit’s adoption of international standards.
It was also linked to the general reputation that
the ?rm had managed to build up in the Russian
audit market, the recognition it had gained from
the Russian World Bank o?ce, the cooperation
with ICAR, and its contributions to local account-
ing and audit reform projects. In addition, Mos-
kva-Audit had a portfolio of interesting Russian
clients, which it could bring into the network,
and good relations with national regulatory insti-
tutions.
37
Thus, joining the network and becoming
de?ned as ‘‘working in accordance to standards’’
had required much more than investments in form,
organisational structure and audit methodology. It
had also involved hard representational work, the
establishment and cultivation of public relations,
the management of diverse expectations, and the
formation and maintenance of a balanced network
of di?erent local and non-local allies. And with the
joining of the international audit network, ?nally,
Moskva-Audit had begun the process of connect-
ing the multiple and diverse ‘worlds’ of interna-
tional auditing standards.
Discussion and conclusion
To make an audit compliant with international
standards means satisfying multiple conditions. It
depends on much more than ‘proper’ technical
implementation. It is equally linked to a ?rm’s
position within hierarchies of credibility, and its
ability to generate acceptance across many di?er-
ent frames of reference, regulatory contexts, polit-
ical programmes and economic circumstances. For
Moskva-Audit, the decisive step in becoming
recognised as working in accordance with interna-
tional standards was the joining of a large interna-
tional audit network, and the re-naming of the
?rm to that of the network. The ISAs turned out
to be of lower value than the names of the interna-
tional audit groups. The legitimating and market-
ing potential of ISAs had become closely linked to
the names and ranks of already established, large
Western audit ?rms. The application of interna-
tional audit standards on their own did not have
the capacity to constitute an international audit.
International auditing expertise had become the
territory of the big international ?rms, and inter-
national auditing standards had been turned into
an exclusive label for them.
In a way, the ISAs had come to lead a double
existence. On the one hand, the standards had
been propagated as a universally applicable, civil-
ising measure. They had become implicated in
dreams of auditing as a uniform set of procedures,
and desires to create an internationally homoge-
neous whole. In particular, regulatory authorities
and multilateral organisations, such as the World
Bank, the OECD and IFAC, had promoted the
standards as a means of increasing the quality, uni-
formity and international comparability of audit
practice. As a consequence, especially for develop-
ing and transitional economies seeking trans-
national investment and political acceptance,
adherence to international standards came to be
seen as a crucial factor for the establishment of
37
Members of Moskva-Audit, for example, were actively
involved in the work of the Audit Expert Council, which had
been set up by the Ministry of Finance to further the
cooperation between government, audit ?rms and professional
associations.
408 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
international recognition and legitimacy. The ISAs
became regarded as an entry point for modernisa-
tion and achieving equivalence. Underlying their
spread had been universalising and homogenising
semantics of the inclusion of everyone (Meyer
et al., 1997).
On the other hand, the standards had come to
acquire global authority only in a very speci?c
realm. The ISAs had been incorporated in a hier-
archy of credibility led by the large, globally oper-
ating audit networks. The standards had become
involved in strategies of the big international ?rms
seeking to stabilise and protect their occupational
monopoly, for example, with respect to services
provided to companies listed on Western stock
exchanges, such as the New York or London
Stock Exchange. These ?rms had used the rules
to rea?rm their leading market position and cred-
entialise their audit practice. The universality of
the standards had become con?ned to a speci?c
locus. Ideals of audit universalism and interna-
tional standardisation had become attached to a
particular group of audit ?rms and their activities.
Dreams of sameness had become enmeshed in
problems and practices of exclusion. What stan-
dardisers in post-Soviet Russia had considered to
be modern was seen as outdated in the West.
The politics of international entrepreneurial net-
works, to a large extent, had come to determine
the legitimising and connecting potential of the
standards.
Also in the case of Moskva-Audit, adopting
the brand name of an international audit network
had led to higher international institutional recog-
nition than the organisational incorporation of
the standards. To become modern in Western
terms, the management of the audit ?rm had to
establish an explicitly internationally oriented
audit department with a new generation of audi-
tors holding Western accounting quali?cations
and possessing knowledge of Western accounting
rules. The international auditing department pro-
vided Moskva-Audit with the possibility of creat-
ing small, con?ned pockets of reform, which the
?rm could use to reach out to the West and
develop a network of international support
which, ?nally, led to its membership of the inter-
national network.
But Moskva-Audit’s integration into the global
audit network did not lead to a complete dissolu-
tion of local di?erences. On the contrary, the brand
name of the international audit network had made
it possible for Moskva-Audit to achieve both, to
become de?ned as working in accordance with
international standards by the West whilst main-
taining at least some of its local speci?city. Divi-
sions between its Russian audit department
serving the Russian audit market and its interna-
tional auditing department serving international
markets, for example, continued to exist – at least
up to the point when this paper was written. The
joining of the network had made it possible for
Moskva-Audit, and the ISAs respectively, to con-
tinue to inhabit multiple contexts and audit cul-
tures, old and new, local and global, Western and
post-Soviet worlds of audit activity. With the name
of the global audit network local di?erences had
become legitimate and, moreover, internationally
marketable. Joining the international audit net-
work had been important for Moskva-Audit, as it
allowed the ?rm to join the ‘‘world community’’
of audit ?rms. Thereby, the ?rm could signi?cantly
enhance its international reputation, open up new
business opportunities and get closer to the meth-
odologies of internationally established audit
expertise. But equally Moskva-Audit constituted
a strategically important partner for the network.
Through Moskva-Audit’s membership, the net-
work became able to create closer linkages with
the Russian audit world, delineate new spheres of
audit activity and expand its global business terri-
tory. The ‘‘connecting’’ of worlds is the process of
forming such multiple linkages, including the vari-
ous detours and experiments that Moskva-Audit
had to undertake before it could ?nally stabilise
its connections – at least for a while.
In the long run, Moskva-Audit’s integration
into the global audit network may stimulate the
harmonisation of its audit approaches with those
of the other member ?rms of the network. But it
is very unlikely that this will lead to the reproduc-
tion of a monolithic and unitary ‘Western’ audit
culture. As the study by Barrett et al. (2005) has
shown, the homologies that international auditing
standards help to produce, for example in areas of
audit methodologies and process structures, are
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 409
always accompanied by di?erence, even at the level
of large international audit networks. These di?er-
ences, inter alia, arise out of the locally speci?c
accounting frameworks, economic interests, politi-
cal contexts and regulatory cultures within which
the auditors and their clients are operating.
From this it follows that processes of audit
standardisation can hardly be closed or ?nalised.
International auditing standards do not have a
clearly bounded existence. Processes of interna-
tional audit standardisation oscillate between
sameness and di?erence, universalism and particu-
larism. They move back and forth between ideas of
cross-national comparability and contexts of local
speci?city. To paraphrase Brunsson (2000), we
have to be careful not to con?ate standardisation
and uniformity. The value and applicability of
ISAs can be strategically renegotiated by those
who claim to work with them, or who try to regu-
late auditing in accordance with them. Although
the adoption of ISAs is often motivated by
attempts to imagine and create auditing as a uni-
form, internationally homogeneous whole, di?er-
ences between the local and non-local, between
the big international and the smaller indigenous
audit ?rms, can never be completely erased. Ideals
of audit universalism and international compara-
bility become enmeshed in, and challenged by, glo-
bal divisions of audit labour, problems and
practices of power and exclusion, and struggles
for intra-professional distinction, which in turn
promote as well as undermine the connecting of
worlds through standards.
International auditing standards constitute a
pervasive, but by no means unequivocal reference
point. The ?rm we investigated tried to stabilise
and concretise international auditing standards,
initially through the establishment of machine-like
internal rule systems and work processes. Although
these rule systems, to some extent, resembled those
of large international ?rms, their creation was not
enough to enhance Moskva-Audit’s international
acceptance. The attractiveness that the standards
came to enjoy was rooted in beliefs that they could
be used as a connecting device to become accepted
by, and integrated into, Western worlds of audit
business. But the integrative power of the stan-
dards was undermined by existing divisions of
audit labour, processes of intra-professional di?er-
entiation, and discrepancies between di?erent local
accounting and accountability cultures. Interna-
tional auditing standards stimulated the produc-
tion of uniform representations of audit work, for
example with respect to written audit reports,
working papers and audit ?les. But this uniformity
alone did not lead to greater acceptance and inter-
national integration.
Hence, one needs to be careful to distinguish
between standard forms of carrying out a process
and standards as an abstract concept, a goal or
benchmark which actors aspire to. In the case of
Moskva-Audit, international auditing standards
were translated into standard forms of carrying
out audit processes, but this did not result in
the transmission of uniform, clearly identi?able
audit ideas. International Standards on Auditing
might have the capability to produce harmony in
form, but they are still far from being able to
increase convergence with respect to professional
approaches, programmes and ethical attitudes to
actual audit work. Whether or not international
auditing standards arrive at a certain place, and
whether or not they are ‘‘successfully’’ translated,
is always prone to debate. ISAs evoke ideas of sim-
ilarity and compatibility, but they do not consti-
tute a universal yardstick against which auditing
practices can be easily measured or compared.
What standardisation means is constantly remade
and traversed. Although international auditing
standards make reference to concrete audit tech-
niques, for example with respect to sampling or
testing procedures, they do not entail very precise
de?nitions of the objectives and outcomes of an
audit.
As this paper has shown, the ambiguity of the
standards is both their strength and their weak-
ness. To be connectable to a variety of di?erent
situations, worlds, dreams and ideals, ISAs neces-
sarily have to maintain a level of abstraction that
can only be made concrete by the users themselves.
The text of the standards is formulated in an
abstract manner, so that it can embrace a variety
of meanings and interpretations and, thereby,
make the standards attractive to a wide range of
people and institutions. On the other hand, the
vagueness of the ISAs makes it di?cult to hold
410 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
them in place. International audit standardisation
agendas are implicated in a range of heterogeneous
interests, mechanisms and instruments which can
undermine their interconnecting and reform-
engendering function. Hence, rather than assum-
ing that ISAs function as carriers of ‘‘best
practice’’, this paper draws attention to the open
and fragile nature of processes of translation and
standardisation. It shows how the standards
became embedded in, and were made to mediate
between, multiple arenas of audit action and repre-
sentation. Studying the micro-processes of audit
standardisation in post-Soviet Russia can help
direct our attention to important issues and prob-
lems connected with the promulgation of Western
audit models and standards and how these depend
on multiple processes of ‘‘connecting worlds’’.
Acknowledgements
This study was ?nancially supported by the
Department of Accounting and Finance at LSE,
the Centre for Analysis of Risk and Regulation
(CARR, also based at LSE), the British Economic
and Social Research Council (Award No.
R42200034280) and a fellowship from the Cli?ord
Barclay Scholarship Fund. The support of these
institutions and foundations is gratefully acknowl-
edged. Further, I would like to thank particularly
Peter Miller for his academic support throughout
this study. I would also like to thank Mike Power,
David Cooper, Anthony Hopwood, Chris Hum-
phrey, Anne Loft, Richard Macve, Signe Vikkelsø
and the two anonymous reviewers for helpful com-
ments on earlier drafts of this paper. Finally,
thanks are due to those auditors, government o?-
cials, consultants, academics and representatives
of professional associations who participated in
my research and allowed me to interview and ob-
serve them.
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doc_740990820.pdf
This paper analyses the use and circulation of international auditing standards within a large post-Soviet Russian
audit firm, as it faces up to the challenges of international harmonisation. It describes this process as one of ‘‘connecting
worlds’’ and translation. In a detailed field study based investigation, it traces various attempts to articulate and link
Soviet and post-Soviet worlds, old and new imagined audit worlds
Connecting worlds: The translation of international
auditing standards into post-Soviet audit practice
Andrea Mennicken
*
London School of Economics and Political Science, Department of Accounting and Centre for
Analysis of Risk and Regulation, Houghton Street, London WC2A 2AE, UK
Abstract
This paper analyses the use and circulation of international auditing standards within a large post-Soviet Russian
audit ?rm, as it faces up to the challenges of international harmonisation. It describes this process as one of ‘‘connecting
worlds’’ and translation. In a detailed ?eld study based investigation, it traces various attempts to articulate and link
Soviet and post-Soviet worlds, old and new imagined audit worlds. The paper underscores the fragile and precarious
nature of international standardisation projects. It shows how ideals of audit universalism and international compara-
bility become enmeshed in, and challenged by, global divisions of audit labour, problems and practices of power and
exclusion, and struggles for intra-professional distinction, which in turn undermine as well as promote the connecting of
worlds through standards.
Ó 2007 Elsevier Ltd. All rights reserved.
Introduction
The connecting and integrating of di?erent
worlds is at the heart of most international stan-
dardisation attempts. Global standards and models
are developed with the aim of increasing interna-
tional comparability, enhancing cross-national
cooperation, and facilitating co-ordination (see
e.g. Braithwaite & Drahos, 2000; Brunsson &
Jacobsson, 2000; Held & McGrew, 2002; Tamm
Hallstro¨ m, 2004). They are deployed with the aspi-
rationof making things work together, of traversing
space and overcoming heterogeneous metrics (Bow-
ker & Star, 2000; Drori, Meyer, & Hwang, 2006;
Drori, Meyer, Ramirez, & Schofer, 2003; Meyer,
2002).
1
In accounting and auditing, international
0361-3682/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2007.06.001
*
Tel.: +44 (0)2078494641; fax: +44 (0)2079557420.
E-mail address: [email protected]
1
Etymologically, the word ‘‘standard’’ was derived from the
Latin word ‘‘extendere’’ – to stretch out, to extend, extension
(Williams, 1983, pp. 296–299). The word referred to dreams of
international expansion and cross-national comparability.
According to Williams (1983, p. 296), in modern language the
word ‘‘standard’’ is in addition often used to mark a source of
authority or a level of achievement.
Available online at www.sciencedirect.com
Accounting, Organizations and Society 33 (2008) 384–414
www.elsevier.com/locate/aos
standards have been advocated as a way of enhanc-
ing the international comparability and credibility
of ?nancial reporting and audit work, so as to stim-
ulate the ?ow of cross-national investment, expand
the scope for market-oriented development, and
integrate local enterprises into global ?nancial
markets (see e.g. Botzem & Quack, 2006; IDW,
1978; Roussey, 1992, 1999).
2
Yet, despite this bur-
geoning interest in international standardisation
projects, apart from a few isolated studies (see e.g.
Barrett, Cooper, &Jamal, 2005) there has been little
research that examines how these standardisation
projects are articulated in local settings and interac-
tions, and how these local interactions enable the
connecting of worlds through the often intricate
andlaborious translationof international standards
(Callon, 1980; Latour, 1987, 1999).
The literature on transnational governance has
paid much attention to the rise and spread of glo-
bal rules at the international level, but not to their
actual involvement in the re-organising and re-
de?ning of local practices. Studies of global
accounting and audit regulation have contributed
to our understanding of the complex structure of
transnational accounting governance arrange-
ments (Botzem & Quack, 2006; Bromwich & Hop-
wood, 1983; Caramanis, 2002; Fogarty, 1992,
1998; Nobes & Parker, 2004), the mechanisms
and dreams underlying the di?usion of interna-
tional accounting standards and audit models
(Jang, 2006; Power, 2002; Tamm Hallstro¨ m,
2004), and the strategies of the IASB (Interna-
tional Accounting Standards Board) and IAASB
(International Audit and Assurance Standards
Board) to enhance their authority (Loft, Hum-
phrey, & Turley, 2006; Tamm Hallstro¨ m, 2004).
But in all of these studies, the primary focus has
been on the standard-setting organisations them-
selves. Much work has focused on the di?usion
of global regulation at the macro-level, and on
the groups that develop worldwide models and
standards. Detailed case studies examining the
links and interactions between processes of inter-
national rule-setting and local practices are rare.
This paper aims to help remedy this gap in the
literature through a detailed examination of the
use and circulation of International Standards on
Auditing (ISAs) within a large post-Soviet audit
?rm, as it faces up to the challenges of interna-
tional harmonisation. The analysis shows that
international accounting and audit standardisa-
tion is not just a top-down process, as much of
the existing literature seems to suggest (see e.g.
Drori et al., 2006; Held & McGrew, 2002; Tamm
Hallstro¨m, 2004). It is equally driven by the day-
to-day activities of local, peripheral actors, who
bring with them dreams and desires of belonging
to a better, more prosperous, globally integrated
world (Burawoy et al., 2000; Sahlin-Andersson &
Engwall, 2002b). Transnational standard-setting
institutions play an important role in the globalisa-
tion and standardisation of social and economic
life. But we need to draw attention also to the net-
works of actors, instruments and activities that
support and shape standardising agendas in local
settings. To paraphrase Sahlin-Andersson and
Engwall (2002a, pp. 6–7), we need to combine
broad contextual and historical investigations with
detailed case studies to understand how and why
the expansion of global models and standards
occurs.
Utilising the works of Latour (1986, 1987) and
other proponents of actor-network theory,
together with related constructivist approaches to
the study of science and technology (Bowker
& Star, 2000; Callon, 1980, 1986; Czarniawska &
Sevo´ n, 1996, 2005; Hacking, 1983, 1999; Law &
Hassard, 1999; Star & Griesemer, 1989), this paper
pays close attention to the multiple linkages and
webs of interaction through which attempts are
made to translate international auditing standards
2
The ?rst international auditing standard was issued by the
International Federation of Accountants (IFAC) in 1979, but it
is only since the 1990s that these standards have gained
considerable attention (Roussey, 1996, 1999). In the 1990s,
organisations such as the IMF, the World Bank, the OECD and
large multinational audit ?rms began to promote ISAs against
the backdrop of wider debates about global economic gover-
nance. Events, such as the Mexican (1994–1995) and South-
East Asian (1998) ?nancial crises and the collapse of the
Barings bank, had led to serious doubts about the regulatory
capacities of state-bound command-and-control regimes. Inter-
national standards, including those for auditing, came to be put
forward as a new source and technique of regulation that would
help overcome the boundaries of state control and facilitate
economic co-ordination and stabilisation at an international
level.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 385
into possibilities for regulatory and professional
action. To address ‘‘connecting worlds’’, the theme
of this article, means to open up for investigation
the multiplicity of instruments, ideas, actors and
activities involved in making ISAs spread and link
up with di?erent contexts and processes. The
notion of ‘‘connecting worlds’’ refers to the com-
plex of linkages formed between ISAs and Soviet
and post-Soviet worlds, local and global worlds,
East and West, formal and informal practices,
together with the desires and experiences of those
enacting ideas and techniques of audit standardi-
sation. It directs our attention to the various ways
in which international standardisation attempts
are projected and linked to local contexts of audit-
ing practice, and how those contexts in turn are
connected to other ‘‘worlds’’.
3
ISAs often come
to inhabit multiple, contradictory contexts, which
can promote the connecting of some worlds, but
also lead to the disconnecting of others. The
worlds within which ISAs become embedded are
composed of heterogeneous elements and diverse
historical trajectories. ‘‘Connecting worlds’’ aims
to make space not only for the wider political pro-
grammes and rationales (see e.g. Miller & Rose,
1990) that articulate and popularise international
auditing standards, but also for the juxtapositions
and tensions (see e.g. Czarniawska & Sevo´ n, 1996,
2005; Latour, 1987, 1999; Star & Griesemer, 1989)
within which the standards become entangled
throughout their translation into localised audit
practice.
In particular, the concepts of translation and
networking (e.g. Callon, 1980, 1986; Chua, 1995;
Czarniawska & Sevo´ n, 1996; Gendron, Cooper,
& Townley, 2007; Latour, 1987, 1999; Miller,
1991; Robson, 1991; Sahlin-Andersson & Engwall,
2002b; Star & Griesemer, 1989) are useful concepts
from which we can start to develop a heuristic
facilitating empirically rich and historically sensi-
tive descriptions of the intersecting discourses,
practices and techniques that shape and character-
ise processes of international audit standardisa-
tion. As will be shown in more detail later, the
notion of translation helps emphasise the con-
structed nature of the indispensability of interna-
tional standards, and points to the various
persuasive strategies, power plays and relations
underlying their di?usion (e.g. Callon, 1986;
Latour, 1987; but see also Chua, 1995; Miller,
1991; Robson, 1991). The notions of networks
and networking help us draw attention to the fact
that ISAs do not work all by themselves, and do
not engender processes of organisational change
and global harmonisation without support (e.g.
Callon, Law, & Rip, 1986; Czarniawska & Sevo´ n,
1996; Gendron et al., 2007; Latour, 1986; Sahlin-
Andersson & Engwall, 2002b). In order to turn
the ISAs into a connecting device, one needs pow-
erful alliances providing the standards and their
users not only with technical resources, but also
political in?uence, identity and legitimacy. The
adoption of ISAs requires a series of technical
adjustments. But in the case of Russia, it also
demands of auditors, regulators and managers
that they become comfortable with an identity
which, to a large extent, is both o?ered and de?ned
by the West. By examining how ISAs become
inscribed in di?erent worlds of audit action, repre-
sentation and regulation, we gain insight into the
complex processes, activities and controversies
underlying attempts to establish ISAs as a con-
necting device linking up local audit worlds with
imagined global forms of audit activity.
The case of Moskva-Audit
The audit ?rm studied in this paper was estab-
lished during the Perestroika period. Throughout
the paper, the ?rm will be referred to as ‘‘Mos-
kva-Audit’’. At the time when this ?eld study
was carried out, Moskva-Audit was one of Rus-
sia’s leading audit and consulting ?rms. The ?rm
had more than 700 employees, of which more than
120 possessed Russian professional auditing and
3
In this respect, the notion of ‘‘connecting worlds’’ is very
similar to Miller and O’Leary’s (2007) notion of ‘‘mediating
instruments’’, although Miller and O’Leary investigate a
completely di?erent context. Miller and O’Leary (2007) use
the notion of ‘‘mediating instruments’’ to study the roles of
‘‘Moore’s Law’’ and ‘‘technology roadmaps’’ in the micropro-
cessor industry. They examine the ways in which these
instruments ‘‘are used to envision a future, and how they link
a multitude of actors and domains in such a way that the
making of future markets for microprocessors and related
devices can continue’’ (Miller & O’Leary, 2007, p. 2).
386 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
accounting quali?cations. In 2001, the ?rm’s
annual revenues amounted to more than 20 Mil-
lion US-Dollars, of which around 50% was raised
by auditing and assurance services (see Russian
business journal Pro?l’, 11.03.2002, pp. 78–85).
In the Russian audit and consulting ?rm ratings
conducted by the internationally acknowledged
Russian rating agency ‘‘Ekspert-RA’’ (an organi-
sation a?liated to the Russian business journal
Ekspert), Moskva-Audit was consistently ranked
amongst the ?rst 10 leading Russian audit and
consulting ?rms (in terms of revenue, number of
employees and market share) between 1995 and
2005.
4
Access to the ?rm was obtained through a two-
month long internship which was carried out in
Moscow during March and April 2002. During
the period spent with the ?rm, the author con-
ducted participant observations (Spradley, 1980)
in the international audit department of the ?rm
and observed the preparation and use of audit pro-
grammes, working papers and audit ?les. Access
was also obtained to the audit manuals, internal
standards and quality control procedures of the
?rm. In addition to the participant observations,
semi-structured interviews (Wengraf, 2001) were
carried out with: the Deputy Director of the ?rm,
the heads of internal audit quality control, busi-
ness development, audit methodology, the interna-
tional standards department, two audit managers,
two senior auditors and one audit trainee. All but
one of these interviews were tape-recorded and
transcribed. The length of the interviews varied
between one and three hours. The formal inter-
views were complemented with several informal
talks conducted during co?ee breaks, lunches and
dinners. Outside the ?rm, further interviews were
carried out with audit professionals working for
other indigenous or international audit ?rms, reg-
ulators, academics, Western consultants and repre-
sentatives of professional associations. The total
number of formal, fully transcribed interviews
amounted to 48. Most interviews were conducted
in Russian and transcribed in Cyrillic. For the pur-
poses of this article, quotes taken from Russian
language interviews have been translated into Eng-
lish by the author. Where the translation of a spe-
ci?c term was ambiguous, the original Russian
term has been added in brackets next to the Eng-
lish translation.
Together, the methods of participant observa-
tion, in-depth interviewing and document analysis
helped add depth and rigour to this study. Notes
taken during periods of participant observation
made it possible to compare and contrast
responses of interviewees.
5
It was also possible to
locate the interviews within the work contexts of
the participants, and to interrelate the di?erent
perspectives opened up by each method. For the
data analysis, text passages derived from inter-
views, ?eld notes and other documents were
grouped and coded in relation to particular
themes, problems and questions. The material
was, inter alia, ordered and analysed in relation
to the di?erent dreams and desires that had
become attached to the standards, logics and pol-
itics of professional representation, competing
notions of rule-following, and relations between
auditing, standards and documentary practices in
order to gain a deeper understanding of the com-
plex interrelations and intersections between past
socialist inspection practices and new imagined
Western audit practices.
The decision to focus on the articulation and
circulation of international auditing standards
within a post-Soviet audit ?rm is because it is par-
ticularly in peripheral market-oriented economies
that international standards and world organisa-
tional models have gained in?uence and pose par-
ticular challenges (e.g. Chamisa, 2000; Lin &
Chan, 2000; Meyer, Boli, Thomas, & Ramirez,
1997; Sucher, Moizer, & Zelenka, 1998). Most
international models and standards tend to spread
from the centre to the peripheries of capitalist
4
Results of the rankings and more detailed information
about the largest 100 Russian audit and consulting ?rms are
regularly published in the Russian business journal ‘‘Ekspert’’.
See e.g. the issues of Ekspert Nr. 35, 16.09.1996; Nr. 14,
14.04.1997; Nr. 42, 09.11.1998; Nr. 11, 22.03.1999; Nr. 10,
13.03.2000; Nr. 12, 26.03.2001; Nr. 12, 25.03.2002; Nr. 14,
14.04.2003; Nr. 13, 05.04.2004; Nr. 12, 28.03.2005; Nr. 12,
27.03.2006. For reasons of con?dentiality, more details cannot
be disclosed.
5
Minutes of the observations were typed into a 70-page long
journal.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 387
development (Braithwaite & Drahos, 2000; Coo-
per, Greenwood, Hinings, & Brown, 1998; Meyer
et al., 1997). But, it is argued here, this is not a sim-
ple matter of unidirectional di?usion. Instead, it is
suggested that it is at the peripheries of capitalism
that new spaces for globalisation are delineated,
and new elements and actors are de?ned and inte-
grated. Here, international standards and models
are taken particularly seriously. They are funda-
mental to the re-de?ning of organisational identi-
ties and regulatory politics. They are linked to
dreams of modern development, and their adop-
tion is seen as a way of linking up with, and
becoming accepted by, Western worlds of eco-
nomic and political activities.
At Moskva-Audit, the adoption of international
auditing standards was driven by the desire to
belong to ‘‘the West’’. The standards were seen as
instruments that can help overcome local di?er-
ences, develop post-Soviet audit expertise, and gain
access to international audit markets. But, as the
following analysis will show, the translation of the
standards into day-to-day audit practices is not a
matter of straightforward implementation. Stan-
dards, including international auditing standards,
are always in some sense idealised (Bowker & Star,
2000; Power, 2002). They embody goals of practice
that are never perfectly realised. International
auditing standards express neo-liberal dreams of
control and governability, but they do not consti-
tute an instrument that is perfectly suited to organ-
ising and standardising audit practice per se.
International standards do not constitute a
homogeneous class of rules or regulatory norms
(see e.g. Bowker & Star, 2000; Brunsson & Jacobs-
son, 2000). They vary in scope, detail and objec-
tives. Standards can take a formal or informal
shape. They can be visible or invisible. They can
be used to classify things, to specify production
designs, or to determine outputs. They can be
aimed at the regulation of processes or the speci?-
cation of inputs. They can express ideals or refer to
already established practices. International Stan-
dards on Auditing (ISAs), which are aimed at
the international regulation of professional
conduct, are very di?erent from well established
technical norms setting out paper sizes or de?ning
measurement scales. In contrast to output or prod-
uct standards and norms of calibration, interna-
tional auditing standards are primarily concerned
with the regulation of procedures and processes.
They do not refer to the immediate work environ-
ment of auditors, but to the procedures and plans
that auditors and audit ?rms should develop when
performing audit work. To adopt a phrase from
Brunsson and Jacobsson (2000, pp. 4–5), auditing
standards, like other process standards, do not
refer to quality actually achieved, but to the types
of administrative processes that are supposed to
lead to high quality. Or, to paraphrase Power
(2002, p. 195), they are of little substantive con-
tent. International auditing standards follow rela-
tively closely the general structure of audit
processes, as for example outlined in many Wes-
tern textbooks (see e.g. Gray & Manson, 2005).
For example, the standards deal with such issues
as audit planning, the gathering and assessment
of audit evidence, internal control procedures
and the formulation of audit reports. But neither
audit objectives nor the actual output of audit pro-
cesses is made concrete.
In most Western countries, ISAs typically cod-
ify existing audit practices, instead of transforming
or reforming them. For example, in countries like
the UK or the US, auditing standards constitute
an outcome, rather than a starting point, of pro-
cesses of audit development and professionalisa-
tion (Campbell, 1985). In Russia, the situation is
quite di?erent. Here, the international auditing
standards are introduced into an environment
where market-oriented auditing is only in its initial
phase of development. In such an environment,
the same ISAs that in the West function primarily
as a mechanism of codi?cation and symbolic rep-
resentation become tools for supporting and accel-
erating processes of post-communist audit reform
and economic transition.
Standardisation projects are culturally and stra-
tegically complex (Barrett et al., 2005; Brunsson &
Jacobsson, 2000; Loya & Boli, 1999; Power, 2002).
They are aimed at the enhancement of international
comparability. Yet, at the same time, they are
always articulated and enacted in speci?c places
(for the case of Eastern European transition see
also the studies by Burawoy & Verdery (1999),
Cooper et al. (1998), Stark (1998), Stark & Bruszt
388 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
(1998)). Hence, to obtain a deeper understanding of
how processes of international audit standardisa-
tion work, we need to take a closer look at the dif-
ferent connections that are established between the
standards, local practices, people and instruments,
as well as the wider networks of actors, expecta-
tions and demands involved in de?ning what it
means to work in accordance with international
standards. We need to pay close attention to locally
speci?c ‘‘constellations’’ (Burchell, Clubb, & Hop-
wood, 1985) of actors, strategies, instruments,
beliefs, bodies of knowledge and activities. Study-
ing the roles of ISAs within a post-Soviet audit ?rm
helps open up for investigation the complex of
political and economic rationales, hopes and
desires that accompany the rise and spread of the
standards, and how these interact with the localised
processes that seek to operationalise and give sub-
stance to the dream of global standards.
Translation, standardisation and the stabilisation of
networks
This paper suggests that working in accordance
with international standards is more than a matter
of technical implementation. Studies of technical
implementation tend to focus on the tools and pro-
cesses that are needed to make certain models,
rules, concepts or standards operable. Standardi-
sation is seen as a unidirectional process with
objectives and outcomes that can be unequivocally
de?ned (see e.g. David & Greenstein, 1990; Gabel,
1987; Grindley, 1995). But, as this study will show,
ISAs do not constitute unequivocal, ready-made
tools that without further ado can be used and
acted upon. Processes of ‘‘ISA-implementation’’
are contested and ISAs play multiple roles in dif-
ferent settings. In order to capture the multiplicity
of roles, concepts and practices that become
attached to the standards as they journey through
and connect di?erent worlds, the paper uses the
concept of translation in place of implementation.
Initially developed within the context of socio-
logical studies of science and technology and
actor-network theory (Callon, 1980, 1986; Callon
et al., 1986; Latour, 1987, 1999), the concept of
translation refers to the relational and rhetorical
work involved in making the development and
spread of scienti?c inventions, calculative practices
or models of ?nancial control, such as auditing in
our case, happen. Since the early 1990s, the con-
cept came to be used in analyses of accounting
(see e.g. Miller, 1991; Preston, Cooper, & Coombs,
1992; Robson, 1991, 1994). Robson (1994), for
example, used the concept to analyse how issues
of national economic growth, the calculation of
taxation and wage bargaining became linked to
in?ation accounting techniques. Miller (1991) used
the concept to examine how programmes of mac-
roeconomic government became inscribed in tech-
niques of discounted cash ?ow accounting. Within
organisational research, Czarniawska and Sevo´ n
(1996, 2005) and Sahlin-Andersson and Engwall
(2002b) have used the notion of translation in
the study of processes of organisational change,
the global expansion of management expertise
and the transformation of global organisational
models into local organisational practices. For
the purposes of our study, the concept is useful
in at least three respects.
First, it points to the work that is needed to
make the spread of ISAs happen (see e.g. Callon,
1986; Latour, 1987, 1999). The notion of transla-
tion makes us aware that international auditing
standards cannot be conceptualised as self-con-
tained entities. They need to be actively mobilised.
They need to be made translatable. They need to be
made operable, and this requires a whole set of dif-
ferent people, technical devices and activities. It
includes, for example, powerful actors lobbying
on behalf of the standards, political agendas stress-
ing their importance, conferences and seminars
promoting their usefulness. It includes also a whole
host of other ‘minor’ or more local techniques and
strategies, such as their inscription in audit manu-
als, working papers and organisational control
procedures, which ensure that the standards con-
tinue to be viewed as desirable and indispensable.
Second, the notion of translation helps us ask
how ISAs alter, and are altered by, the contexts
or arenas they pass through and connect (for this
point see in particular Czarniawska & Sevo´ n,
1996; Evans, 2004; Sahlin-Andersson & Engwall,
2002a; Star & Griesemer, 1989). The concept of
translation draws attention to the changes that
the standards undergo and produce. In order to
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 389
take root, the standards have to be adjusted to the
environment into which they are brought. They
have to be made understandable, applicable and
workable, resulting in a series of transformations
which a?ect not only the adopters and their prac-
tices but also the standards themselves. In this
respect, the concept of translation di?ers signi?-
cantly from neo-institutionalist conceptualisations
of di?usion. Neo-institutionalist studies draw
attention to important sources and institutional
pressures that trigger the spread of organisational
models and standards (e.g. DiMaggio & Powell,
1983; Strang & Meyer, 1994). But they tend to
leave the struggles underlying standardising pro-
cesses black-boxed. Neo-institutionalist conceptu-
alisations of di?usion are often described in
terms derived from the physical sciences, such as
notions of saturation, contagion or thermody-
namic equilibriums (see e.g. Strang & Tuma,
1993), which tend not to give prominence to the
various movements and alterations happening
around the spread of ISAs.
Third, the concept of translation highlights the
unde?ned and open nature of the standards. It
draws attention to the gaps and indeterminacies
accompanying the spread and utilisation of inter-
national auditing standards (Czarniawska &
Sevo´ n, 1996, 2005; Latour, 1999; Rottenburg,
2003). What constitutes compliance with ISAs
cannot a priori be fully or precisely de?ned. Socio-
logical studies of regulation in other areas have
shown that compliance is rarely a static, a priori
de?ned concept. The de?nition and achievement
of compliance is the product of interaction, inter-
pretation, competing demands and principles, as
well as the broader social and institutional context
within which regulation takes place (see e.g. Hut-
ter, 1997). Neither the objectives nor the outcomes
of international audit standardisation projects can
be viewed as wholly ?xed. This does not mean that
the standards are open to all kinds of di?erent
interpretations at all times. As we will see later in
the paper, interpretations of the standards can
become temporarily ?xed and stabilised. But such
interpretive stabilisations are only to a limited
extent determined by the rules themselves. Rather,
it is the speci?cities of the ‘‘communities of prac-
tice’’ (Wenger, 1998) within which the standards
become circulated that de?ne how ISAs should
be used and interpreted.
6
In order to understand how ISAs become trans-
lated into, and connect, di?erent worlds, we sug-
gest that it is important to trace the complex
networks of actors, instruments, ideas and activi-
ties within which they become entangled (see e.g.
Czarniawska & Sevo´ n, 1996; Gendron et al.,
2007; Latour, 1987, 2005; Sahlin-Andersson &
Engwall, 2002b). ISAs are translated into audit
practice through being linked to, and interde?ned
with, a range of di?erent, historically and geo-
graphically speci?c concerns and issues (for this
point see also Barrett et al., 2005; Burchell et al.,
1985; Miller & O’Leary, 1994, 2007; Robson,
1991). In the context of this study, the notions of
network and the stabilising of networks are used
to stress that the translation of ISAs is a relational
achievement. As Callon (1998, p. 8) might put it,
how ISAs work depends on the ‘‘morphology of
relations’’ in which they are involved. What
‘‘working in accordance with ISAs’’ means ?uctu-
ates with the structure and dynamics of the rela-
tions formed around the standards between
di?erent actors, concepts of rule-following, audit
instruments, expectations and audit activities.
7
6
In this respect, ISAs di?er from International Accounting
Standards (IAS), which tend to be much more detailed and
prescriptive. Whereas International Accounting Standards set
out speci?c requirements for the calculation and representation
of certain accounting entities, ISAs are much vaguer. They set
out the general structure of an audit process and require, for
example, auditors to design their audit programmes and audit
tests in accordance with identi?ed audit risk levels (see e.g. ISA
300 ‘‘Planning an Audit of Financial Statements’’ and ISA 330
‘‘The Auditor’s Procedures in Response to Assessed Risks’’).
But the types and mix of tests (e.g. regarding the mix of
substantive tests and tests of internal control) are left open to
the auditor’s judgement.
7
It should be noted that the notion of network used in this
paper is distinct fromorganisational network theory which tends
to focus almost exclusively on the establishment of interpersonal
and inter-organisational relations (see e.g. Nohria & Eccles,
1992). The networks described here are not only held together by
social and organisational relations. They are also shaped by
material things, technical instruments as well as wider ideas,
concepts and discursive rationalities (see e.g. Callon, 1998;
Hacking, 1992; Latour, 2005; Law & Hassard, 1999; Miller &
O’Leary, 1994; Miller & Rose, 1990).
390 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
In the case studied here, international auditing
standards became involved in, and were called
upon to mediate between, very di?erent worlds
of auditing and audit professionalism. These
worlds were made up of di?erent approaches to
rule-following, concepts of standardisation and
bodies of accounting and audit expertise. On the
one hand, ISAs were seen as a vehicle to enhance
international acceptance and modernise account-
ing and auditing in accordance with ideals mainly
derived from Anglo-Saxon worlds of audit profes-
sionalism. On the other hand, the standards
became mixed up with former, socialist traditions
of control. They became implicated in paper-based
checks of formal accuracy, bureaucratic controls
of legal compliance and applications of old
accounting rules. The paper traces the various
attempts that were undertaken at Moskva-Audit
to build linkages and bridges between Soviet and
post-Soviet worlds, old as well as new imagined
audit worlds. It examines where the introduction
of ISAs initiated change, and where it produced
con?ict, cleavages and resistance. In so doing,
the paper underscores the fragile and precarious
nature of international standardisation projects.
Utilising the concept of translation makes us focus
on ‘‘the messy actualities of governance’’ (O’Mal-
ley, Weir, & Shearing, 1997, p. 504). Or as Miller
and Rose (1990, p. 11) put it, it highlights how dif-
?cult it is to put into practice the will to govern,
which applies as much to international standardi-
sation projects as to other aspirations such as
enhancing competitiveness, national e?ciency or
personal satisfaction at work.
But the paper uses the notion of translation not
only to analyse movements from the abstract to
the concrete, and to highlight the complex and
problematic process of making standards practica-
ble. We pay attention not only to the doings of
accounting professionals, but also to the di?erent
ideas and concepts that shape their activities. Pre-
vious studies have made us aware that seemingly
mundane techniques of auditing and audit stan-
dardisation, such as sampling, substantive testing
or risk and materiality calculations, are deeply
implicated in, and conditioned by, speci?c ways
of thinking about the nature and practice of audit-
ing, and control more generally. Power (1992,
1999), for example, has demonstrated that the
development of audit sampling techniques in the
UK and USA was inextricably linked to the emer-
gence of new perceptions of social control and
attempts to rationalise and objectify intuitively
based practices. For the case of public sector
auditing, Radcli?e (1998) has shown that a recon-
?guration of political rationalities in terms of
management stimulated the development of e?-
ciency auditing in Alberta. These studies suggest
that in order to explain how international auditing
standards become translated into post-Soviet
audit practice, we should not only focus on the
instruments used to make them practicable. We
should also examine how these instruments are
shaped by the di?erent concepts and ideals that
become attached to them. For example, we can
expect that international auditing standards play
di?erent roles in contexts with strong emphases
on individual expert judgement, in contrast to
contexts where audit functions are closely tied to
the assurance of legal rule-following. It is one of
the central tasks of this study to describe and ana-
lyse the di?erent connections drawn between ISAs,
audit instruments and speci?c ways of thinking
about the nature and practice of auditing.
It is further important to note that the transla-
tion of ISAs is always shaped by plays of power
and identity politics. To understand how ISAs
work, we also need to look at the struggles, negoti-
ations and dynamics of recognition involved in
de?ning whether somebody is working in accor-
dance with ISAs or not. Work in accordance with
the standards needs to be authorised and validated
(for a similar line of argument focussing on the
authorisation and validation of governmental audit
expertise in Canada see Gendron et al., 2007).
Whether or not an audit organisation (or an audi-
tor) is de?ned as working in accordance with inter-
national standards is in large part externally
ascribed. In the case of Moskva-Audit, the accom-
plishment of compliance with international audit-
ing standards was highly dependent on the
de?nitional powers of the West, represented by
the Big Four audit ?rms and multilateral organisa-
tions, such as the World Bank and the OECD.
To become seen and identi?ed as a ?rm that is
able to provide work in accordance with ISAs,
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 391
Moskva-Audit had to ?nd allies who already
enjoyed worldwide acceptance. It had to build up
relations with globally operating audit networks
to validate its work. The paper traces the ?rm’s
manifold strategies to build up international insti-
tutional recognition and discusses the implications
this had for the roles and relevance of the interna-
tional auditing standards.
The remainder of the paper is structured as fol-
lows. The next section (‘‘ISAs and agendas of
change’’) examines how, at Moskva-Audit, inter-
national auditing standards became implicated in
agendas of economic and organisational change.
The subsequent sections (‘‘Machine dreams’’ and
‘‘Struggles for recognition’’) trace the involvement
of ISAs in two phases of development of the
?rm. Section ‘‘Machine dreams’’ examines how,
between 1994 and 1997, the standards became
involved in attempts to formalise and rationalise
Moskva-Audit’s developing audit expertise. Here,
the utilisation of ISAs in the establishment of
internal control structures and audit methodolo-
gies is investigated. It is shown how particularly
in the early years of Moskva-Audit’s development,
the standards became linked up with ‘‘machine
dreams’’ (Mirowski, 2002) of auditing and
inscribed in an organising logic that, to some
extent, rested on Soviet ideals of scienti?c manage-
ment and control. Section ‘‘Struggles for recogni-
tion’’ examines how, between 1997 and 2002, the
standards became involved in strategies and strug-
gles to enhance the ?rm’s international recogni-
tion. Here, the role of ISAs in attempts to gain
access to global audit markets and audit communi-
ties is discussed. In 2002, the international ambi-
tions of Moskva-Audit culminated in the ?rm’s
membership of a large international auditing net-
work and the re-branding of the organisation in
accordance with the name of that network. Work-
ing with ISAs helped Moskva-Audit to enter such
a network, but only by incorporating itself within
the network was it possible for the ?rm to be
de?ned and internationally accepted as ‘‘working
according to standards’’. The ?nal section (‘‘Dis-
cussion and conclusion’’) concludes the paper with
a discussion of the implications of this ?nding with
respect to the general prospects and limits of pro-
jects of international audit standardisation.
ISAs and agendas of change
Moskva-Audit’s history is inextricably linked to
Russia’s move from socialism to capitalism. Like
many other Russian auditing ?rms, Moskva-Audit
started o? its life as a small, self-?nanced Soviet
consulting ?rm in 1990. Under Gorbachev, the
Soviet government welcomed the foundation of
privately organised consulting ?rms as part of a
wider move to encourage market-based economic
reform. Firms like Moskva-Audit were one of
the ways in which the government hoped to realise
its plans of economic decentralisation, privatisa-
tion and commercialisation. In 1992, Moskva-
Audit began to develop its audit practice. After
the fall of the Iron Curtain, government o?cials
as well as academics had begun to promote Wes-
tern-oriented auditing as a mechanism to imagine
and realise governmental schemes of market-dri-
ven economic reform (Bychkova, 1996; Danilev-
sky, 1990, 1991). In 1991, Danilevsky, who at
that time headed the major inspection and control
division of the Ministry of Finance, for example
wrote:
The presence of enterprises and organisa-
tions with di?erent forms of property
urgently requires the foundation of self-
?nanced [khozraschetny] control organs, i.e.
auditing services. The organisation of a web
of audit ?rms is the beginning of a genuine
introduction of economic principles of ?nan-
cial control, which are based on contractual,
commercial relations between the auditors
and the audited enterprises and other organ-
isations. (Danilevsky, 1991, p. 6)
In the same year, two of his colleagues wrote:
Completely new forms of control should
accompany the market economy; one form
of those [new controls, A.M.] is auditing.
[. . .] In developed countries, audit services
make up one of the strands of big business.
A thoughtful adoption of auditing services
in our country could have a huge social
and organisational impact on the improve-
ment of the management of industry in
our developing market economy. [. . .] It is
392 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
necessary to learn quickly and intensively
more about Western audit expertise. (Bukh-
galterskii uchet, 1991, No. 1, p. 37)
The collapse of the communist system and an
envisaged marketisation of economic relations
had set the scene for the replacement of the sys-
tem of Soviet state control with forms of Wes-
tern-oriented audit professionalism. In 1993, the
government adopted the ‘‘Temporary Rules of
Auditing in the Russian Federation’’, approved
by presidential decree No. 2263, in December
1993, and made audits mandatory for a large
number of business entities. Following the decree,
audits became compulsory for all public joint-
stock companies, banks, insurance companies,
investment institutions, joint ventures and compa-
nies whose total revenues exceeded 500,000 MS
(minimum monthly salaries), or whose total
assets were worth more than 200,000 MS (based
on net book value).
8
The introduction of mandatory audits opened
up for Moskva-Audit, as for many other newly
founded Russian audit ?rms, important new busi-
ness opportunities in auditing. But audit objec-
tives and audit functions were still largely
unde?ned, and the boundaries between practices
of socialist inspection and capitalist auditing
appeared to be extremely blurred. The establish-
ment of Russian commercial audit ?rms did not
automatically lead to recognisable changes in
inspection practice. In the beginning, the term
‘‘auditing’’ was primarily used to demarcate a
new control area, namely the control of opera-
tions carried out by newly established private
enterprises, rather than to denote changes in
actual inspection practice. The term ‘‘audit’’ had
been introduced, but the practical meaning of
audits, and what made them distinct from inspec-
tions, still had to be worked out (see e.g. Bychk-
ova, 1996; Danilevsky, 1990, 1991, 1995a, 1995b).
In this context, international auditing standards
gained increasing attention.
The standards were discussed as a mechanism
through which new audit professionalism could
be articulated and demonstrated. They were seen
as a device with which to imagine the unknown.
They constituted something tangible, readily avail-
able and internationally validated, and which
auditors could refer to in their work. At Mos-
kva-Audit, international auditing standards came
to be put forward as a device that could help the
?rm and its clients link up with the Western world,
de?ne a new identity and realise dreams of market-
oriented development. As one of Moskva-Audit’s
senior auditors put it:
For our company ISAs are important,
because they enhance our prestige. If a ?rm
o?ers services in accordance with interna-
tional standards, I think that this is an entry
to a more, well, to a higher level. The busi-
ness reputation of the ?rm will be much
higher and [its services] more expensive.
(Interview No. 3, 2002)
The Deputy Director and Head of Audit Meth-
odology stated in this respect:
International standards set an example for
best world practice. To show that our
audits follow general principles, that they
are of high quality, we have to employ
international standards. (Interview No. 1,
2001)
The use and circulation of the standards was
reinforced by the strong presence of the big inter-
national accounting ?rms in the emerging Russian
audit market. Since the late 1980s, the then Big
Six international accounting ?rms (Pricewater-
house, KPMG, Coopers & Lybrand, Deloitte &
Touche, Ernst & Young and Arthur Andersen)
had begun to open up o?ces in Russia. Soon,
they assumed a central position in the developing
Russian audit market.
9
The Russian business
press portrayed them as ‘‘the leaders of the
international audit and consulting industry – in
8
In 1997, 500,000 MS equalled approximately 7 million US-
Dollars (Enthoven, Sokolov, Bychkova, Kovalev, & Semenova,
1998, p. 87).
9
For a detailed account of how one of the Big Six invested in
the former Soviet Union see Cooper et al. (1998).
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 393
the world and in Russia’’ (see e.g. Ekspert, No.
35, 16.09.1996), as organisations ‘‘with many
years of experience and worldwide prominence,
prestige and reputation’’ (Kommersant, No. 46,
22.11.1993). According to the business journal
Ekspert, in the ?rst half of 1998 the Big Six
together earned 250–280 million Russian Roubles
(in terms of revenues) in the Russian audit
market, representing about two thirds of the rev-
enues earned altogether by the 100 largest Rus-
sian audit ?rms at that time (see Ekspert, No.
42, 09.11.1998). By the end of 1998, after the mer-
ger of Pricewaterhouse and Coopers & Lybrand,
the Big Five held approximately a 70–75% share
of the Russian audit market (Ekspert, No. 11,
22.03.1999).
10
In Russia, the big international
accounting ?rms promoted ISAs as guarantors
of audit quality and the benchmark of ‘‘good
practice’’. The ?rms referred explicitly to the stan-
dards in their own work and audit reports, and
they participated actively in the compilation of
o?cial Russian translations of the standards. Fur-
ther, they promoted the ISAs – together with
International Accounting Standards (IAS) – at
conferences and workshops dealing with matters
of Russian accounting and audit reform.
For many of the newly founded Russian audit
businesses, the big international accounting ?rms
functioned as role models. The Big Six, which
became later the Big Five and subsequently the
Big Four, were seen as organisations which had
the expertise, international connectedness and eco-
nomic success that many of the more ambitious
Russian audit ?rms aspired to acquire. Also the
management of Moskva-Audit tried to model
itself on the big international accounting ?rms. It
wanted to turn the Russian ?rm into an interna-
tionally recognised business; ‘‘a real alternative
to the big six ?rms’’, as the director and founder
once remarked.
11
The adoption of international
auditing standards was seen as an important step
in the realisation of such ideals.
12
Moskva-Audit began introducing the standards
in the mid-1990s. As will be shown in more detail
later, a dual functionality was ascribed to the stan-
dards. Internally, the standards were promoted as
templates on the basis of which new organisational
hierarchies and structures should be devised. The
standards were introduced as a means to organise,
demonstrate and rationalise audit expertise. It
was hoped that ‘‘working with standards’’ would
improve Moskva-Audit’s measures of internal con-
trol and enhance the economic value of the ?rm’s
audit activities. The standards were expected to
help the management of Moskva-Audit to establish
structures that would make it possible for them to
turn auditing into an e?cient, organisationally
manageable process. Further, it was hoped that
externally, i.e. to outside audiences, such as clients,
regulators and competitors, ‘‘working according to
standards’’ would provide Moskva-Audit with an
identity that underlined its pioneering role in the
development of Russian audit expertise and dem-
onstrated the ?rm’s level of professionalism. It
was expected that the standards would provide
outside parties with a clearer, internally validated
picture of what modern, capitalist auditing was
about. ISAs came to be regarded as a core element
in a regime of post-Soviet representation, through
which Moskva-Audit hoped to overcome the lega-
cies of the socialist past and gain entry to new
worlds of Western audit professionalism.
But the rhetorical appeal of the standards did
not easily translate into their technical operation-
alisation. Working with the standards involved
much more than putting a copy of the ISAs on
10
Out of the Big Five, PricewaterhouseCoopers (PwC) had by
far the largest market share. In 1998, for example, the ?rm
earned more than 10 times as much as the largest Russian audit
?rm (in terms of revenues) (Ekspert, No. 11, 22.03.1999).
11
The founder and director stated this in a newspaper article
of a popular Russian business paper in 1998. For reasons of
con?dentiality, the exact reference details cannot be disclosed.
12
Of course, it should be noted that not all founders of
Russian audit businesses modelled their organisations on the
big international accounting ?rms. Especially in the 1990s,
before the 2001 Russian audit law was adopted, the Russian
audit market was populated by a large number of very small
?rms which often had only 1–10 employees. These ?rms were
locally oriented and provided mainly Russian bookkeeping, tax
advisory and statutory audit services to smaller organisations,
or they were highly specialised in a speci?c industry sector and
served almost exclusively a couple of larger client organisations
(see e.g. Ekspert, No. 35, 16.09.1996 and Ekspert, No. 11,
22.03.1999).
394 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
the bookshelf. As already suggested, international
auditing standards are not e?ective by themselves.
ISAs have to be made to work. And in the case
of Moskva-Audit, the standards had to be taken
out of the book and actively made part of the
organisation. On the one hand, the ISAs had to
be provided with infrastructures that would
allow people to work with, and have control
over, the rules. On the other hand, external par-
ties needed to be convinced that one was working
according to standards. Devices and relations had
to be created that allowed the ?rm to demon-
strate and communicate compliance with the
standards. Such processes of organisational local-
isation and public certi?cation were not trouble-
free, nor could their course be determined in
advance.
Firms like Moskva-Audit imagined themselves
as a professional community comparable to those
in the West, but the realisation of this aspiration
was rooted in local speci?city and accompanied
by heterogeneity and di?erence. Especially in the
early years of Moskva-Audit’s development,
between 1994 and 1997, the standards became
implicated in an organising logic that, to some
extent, rested on Soviet traditions of scienti?c
management and ideals of total controllability.
In the following, we will investigate how ISAs
can become involved in di?erent, locally variable
and con?icting standardising strategies. We will
also examine what consequences this has for
attempts to establish ISAs as a global connection
device.
Machine dreams
13
The ?rst two centres from which the ISAs began
to be circulated throughout Moskva-Audit were
its Audit Methodology and Audit Quality Control
Departments. Here, initial steps were taken to cre-
ate an administrative system through which the
standards could be rendered operable. The inter-
national auditing standards were to be embedded
in heavily rationalised and formal processes aimed
at the objecti?cation and depersonalisation of
audit expertise. ‘‘Machine dreams’’ (Mirowski,
2002) of modernisation, rooted in ideals of scien-
ti?c control, organisational legibility
14
and techni-
cal e?ciency, accompanied Moskva-Audit’s early
audit standardisation projects.
The Audit Methodology and Audit Quality
Control Departments were created in the mid-
1990s, the period when Moskva-Audit had started
to take on its ?rst bigger audit assignments. Ini-
tially, the Audit Methodology Department was
sta?ed with ?ve people: Yuri Litkov
15
and Alexey
Yakunin who had both previously worked for two
large international accounting ?rms in Moscow;
Elena Lutskaya who had worked for Moskva-
Audit as an auditor since 1992; and two adminis-
trative assistants. The Audit Quality Control
Department was founded in September 1996. Ini-
tially sta?ed with four people, the Department
grew rapidly in the following years. The Audit
Methodology Department and the Audit Quality
Control Department were located at the interface
between the external representation and internal
organisation of audit work. In both departments,
international auditing standards were promoted
as an instrument that could provide the ?rm with
a frame of externally accepted regularity and inter-
nally manageable e?ciency. The standards were
seen as a regulatory tool, through which societal
concerns about due professional care could be pro-
jected into the ?rm and, vice versa, the ?rm’s devo-
tion to modern audit technology could be
communicated to society – in particular clients,
regulators, peers and other international business
partners.
Issues of internal quality assurance and
demands to explicitly demonstrate professional
due care had become all the more pressing for
Russian audit ?rms when – in 1996 – the Central
13
This heading is borrowed from the title of Mirowski (2002).
14
The notion of ‘‘legibility’’ was ?rst developed and used by
Scott (1998). In his work, Scott uses the term to describe
processes of formalisation, categorisation and standardisation,
with the help of which modern states learnt ‘‘to see’’ and
‘‘know’’ their terrain and people. In the context of this paper,
‘‘organisational legibility’’ is used to describe activities of
codi?cation and documentation aimed at making audit activ-
ities ‘‘legible’’, visible and governable, from the standpoint of
the audit organisation.
15
For reasons of con?dentiality, all names have been changed.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 395
Bank stated its concerns about the quality of bank
audits (see e.g. Finansovaya gazeta, 1996, No. 43).
Standardised audit methodology, explicated in
formal rules and procedures, was presented by reg-
ulators, academics and the big audit ?rms as a
mechanism through which the quality and profes-
sionalism of audit activities could be signi?cantly
improved. But as noted earlier, ISAs in isolation
are little more than vague textual documents,
which neither prescribe nor explain what it would
actually mean to use them. Apart from the rela-
tively short working experiences of Litkov and
Yakunin in two of the big international accounting
?rms in Moscow, the people at Moskva-Audit did
not have any knowledge of how the standards had
been applied elsewhere in the world. In any event,
the standards do not form a stable reference sys-
tem. International auditing standards are fre-
quently revised, updated and changed. The
International Auditing and Assurance Standards
Board regularly reviews existing ISAs, removes
old standards and develops new standards.
16
For
the people at Moskva-Audit, the standards repre-
sented a moving target, constantly changing and
therefore not easy to pin down and stabilise within
Moskva-Audit’s own structures. Furthermore, at
that time there did not even exist an o?cially
authorised Russian translation of the ISAs. When
Moskva-Audit began to make use of the stan-
dards, the ?rst translation attempts had only just
begun, and they were not considered very reliable.
One member of Moskva-Audit’s Audit Division
stated in this respect:
I remember that when we began to work [in
auditing], ?rst of all, it was not possible to
?nd the standards in Russian. Some transla-
tions existed, but only in a very fragmented
way. These were terrible translations. It
would have been better if these had not
existed at all. (Interview No. 2, 2002)
The professional association titled the ‘Russian
Collegium of Auditors’ was one of the ?rst groups
that pushed the Russian translation of ISAs. In
the mid-1990s other organisations, such as audit
?rms and academic institutions also began the
process of translating the standards. But it was
only in the year 2000 when these single e?orts
merged into a single, uniform and IFAC-author-
ised translation.
The adoption of the standards was further com-
plicated by developments in the national regu-
latory scene. When Moskva-Audit began the
introduction of the standards, the Russian govern-
ment had also started with the development of a
set of national auditing rules (Danilevsky, 1994).
These rules had been closely modelled on the
International Standards on Auditing, but they
did not constitute literal translations. Danilevsky,
Ostrovsky, and Guttseit (2001, p. 11), three state
servants who were involved in the drafting of the
?rst set of the Russian standards, stated in this
respect:
The underlying principles of ISAs were
almost automatically incorporated in Rus-
sian standards. But, of course, one could
not do without changes and amendments.
[. . .] Localization was sought at the outset,
which manifested itself both in the wording
of the Russian equivalents of ISAs and in
audit rules that do not have ISA prototypes.
When Moskva-Audit began the adoption of the
standards, the national audit rules were still in the
process of being drafted and had not yet been o?-
cially endorsed. But it was expected that they
would become mandatory in the near future.
17
All of these faltering developments disturbed the
16
For example, between 1999 and 2001 the Board had revised
ISA 240 on fraud and error; published a new Auditing Practice
Statement on the audit of derivative ?nancial instruments and
issued two Exposure Drafts with revisions to ISA 700, The
Auditor’s Report on Financial Statements.
17
With the adoption of the federal audit law in August 2001,
national auditing standards have to be followed when conduct-
ing Russian statutory audits. The new national auditing
standards follow closely the text of the international standards,
but they still do not constitute exact one-to-one translations.
The national auditing rules, for example, di?er in terms of
length, detail and added legal requirements. For example, they
include detailed regulations about educational requirements for
auditors, legal rights and obligations of audit ?rms, procedures
for the conclusion of audit contracts and recommendations for
the performance of tax audits (Remizov, 2001, pp. 5–21).
396 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
stability of the standards. On their journey into and
through the Russian auditing world, the ISAs
began to connect up a variety of di?erent contexts
and actors, each of whom accorded them di?ering
importance and interpretations. As a consequence,
the auditing standards became a rather blurred and
multiplied reference point. The people at Moskva-
Audit had to deal with this confusion. They had to
?nd a way through the di?erent interpretations,
Russian translations and governmental regulations
that had been attached to the standards, so that
they might work ‘according to the standards’.
18
Moskva-Audit’s Audit Methodology Depart-
ment tried to deal with the duplication and local
di?erentiation of the standards through a concen-
tration on the similarities of the audit process steps
described. Standards that were speci?c to and
internal to the ?rm were created, in attempts to
fuse the Russian and international rules. Instead
of juxtaposing Russian and international audit
standards, they were re-joined. In the opening
paragraphs of Moskva-Audit’s internal audit stan-
dards, explicit reference was made to both the
international and Russian audit standards. The
internal rules were built on excerpts taken from
both the Russian standards and the international
rules. To emphasise international similarity, all
texts were permeated with Western audit terminol-
ogy. Reference was made to the conduct of ‘‘ana-
lytical procedures’’ [analiticheskie protsedury],
‘‘tests of internal control systems’’ [testy sredstv
vnutrennogo kontrolya], ‘‘levels of audit risk’’
[urovny auditorskogo riska] and ‘‘materiality
thresholds’’ [urovny material’nosti].
Further, the Methodology Department tried to
re-enforce the uniformity of the standards by
embedding them in standardised, machine-like
audit practices. The elusiveness of the standards
was addressed through the establishment of a
well-structured apparatus of formal rules. Audit-
ing became couched in a mathematical language
of planning and control. Excel sheet templates,
for example, were developed to aid the mathemat-
ical modelling of audit risk. Algorithms were
designed to standardise the calculation of materi-
ality levels. And detailed statistical sampling pro-
cedures were set out to formalise the selection of
audit samples.
19
Thus, the standards became
embedded in a very speci?c strategy of rule-follow-
ing. They became implicated in a strategy that
focused on procedural orderliness, accurate docu-
mentation and the formally rational appearance
of audit activities. Litkov, Head of Audit Meth-
odology at Moskva-Audit between 1996 and
2001, described such a formalistic-mathematical
approach to auditing and audit standardisation
in the following way:
Audits should require a minimum of creativ-
ity [judgement] and a maximum of formality.
[. . .] Auditing is only a technology, a process
similar to an assembly line, where specially
drilled [nataskanny] sta? perform a set of
procedures related to a certain algorithm
within short time and to the required quality.
The [audit] process contains a lot of recur-
ring routine elements that can be highly
automated. [. . .] Standards make it possible
to create an e?cient system of coherent pro-
cedures for [such] audit sta? activities.
20
In the auditing literature, the approach that Lit-
kov describes has been described as ‘‘mechanistic’’.
Dirsmith and McAllister (1982), for example, dis-
tinguish between ‘‘mechanistic’’ and ‘‘organic’’
18
For an insightful, more general discussion of the nexus
between accounting, language, culture and thought see Evans’
(2004) analysis of ‘‘Language, Translation and the Problem of
International Accounting Communication’’.
19
It should be noted that such mathematical approaches to
auditing and audit standardisation were prevalent in many
Russian audit ?rms at the time when this ?eld study was carried
out. When people began to rede?ne audit practices in accor-
dance with Western audit models and standards in the early
1990s, much attention was generally given to ‘‘mathematical’’
audit issues, such as statistical audit sampling, the mathematical
modelling of audit risk and calculations of materiality levels.
This interest in the mathematical modelling of auditing is also
re?ected in academic and professional journal articles. Since the
early 1990s, accounting journals, such as ‘‘Bukhgalterskii
uchet’’ [Accounting Review] and ‘‘Auditorskiye Vedomosti’’
[Auditing News] have been publishing a large number of articles
discussing the mathematics of audit risk models, the pros and
cons of di?erent sampling technologies and issues connected to
materiality level calculations.
20
The quote was taken from an article Litkov had published
in 1999.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 397
audit approaches. According to them, mechanistic
audit approaches rely heavily on formalised proce-
dures, whereas unstructured, organic approaches
provide more scope for judgement and individual
practical reasoning. At Moskva-Audit, the mecha-
nistic images of auditing and audit standardisation
were grounded at least in part in the former profes-
sional backgrounds of Litkov and his group,
together with the established traditions of Soviet
scienti?c management and control. Especially in
the 1960s and 1970s, Soviet economic planning
accorded great signi?cance to administrative sci-
ence and mathematical modelling (see e.g. Cony-
ngham, 1982; Thompson & Vidmer, 1983).
Subjects, such as cybernetics and linear program-
ming, were seen as promising approaches through
which, at least in theory, scienti?c control of the
Soviet economy could be achieved (Thompson &
Vidmer, 1983, p. 79). Litkov had obtained a degree
in mathematics and administrative science during
the Soviet period. Before his career as an auditor,
he had worked as a programmer for the Soviet mil-
itary. Yakunin, his colleague, had worked in eco-
nomic planning for one of the Soviet branch
ministries.
21
These experiences reinforced beliefs
that auditing standards could be concretised and
pinned down with the help of a set of well-de?ned
procedures and algorithmic decision tools. As Lit-
kov expressed it in an interview:
I think that it is quite easy for mathemati-
cians and programmers to adapt to the
auditing sphere. For us it is quite easy to deal
with such issues as risk analysis, sampling
technologies, the calculation of materiality
levels etc. [. . .]. Everything which concerns
auditing, well, that doesn’t have any national
cores. That is a technology, a science; you
have plans; you have instruments. (Interview
No. 1, 2001)
The adoption of a mechanistic approach to
auditing and audit standardisation was further
stimulated by the extreme levels of institutional
uncertainty surrounding Moskva-Audit. During
the early 1990s, government as well as non-state
organisations and individuals experimented with
a range of di?erent economic and regulatory mod-
els with the aim of furthering economic and polit-
ical transition. The transition period was a period
in ?ux. Processes of privatisation, liberalisation
and deregulation had moved post-Soviet Russian
society into a state of extreme structural instability
and institutional uncertainty. As Elster et al. put it
(1998, p. 34), society was ‘‘felt to be in a state of
disorder and fragmentation’’. In this context,
excessive proliferation of rules can be seen as the
outcome of the desire for order and stability
(Elster, O?e, & Preuss, 1998). As Litkov described
it in an interview, activities of rule development
became associated with stability and certainty:
Our auditors want to have rules and stan-
dards that describe in detail what they should
do, and what they don’t need to do. The
international standards show you how you
should think. Our [internal] rules show you
how to think and what to do in concrete sit-
uations. [. . .] If I had to show you all our
internal documents, that wouldn’t be just
two or three books, as in the international
?rms, but several cupboards full of paper.
(Interview No. 1, 2001)
As with the international auditing standards,
Moskva-Audit’s internal rules were organised
according to a series of standardised process steps,
beginning with rules on audit planning, the assess-
ment of audit risk, the formulation of audit
engagement letters and then leading on to the col-
lection of audit evidence, the documentation of
audit processes and the formulation of standar-
dised audit reports. In addition, internal audit
manuals, methodical instructions and audit risk
templates were developed to delineate explicit
spheres of audit action.
Codifying compliance
The de?nition and evaluation of compliance
with standards was grounded largely in paper-
work. In this respect, one could say that Mos-
kva-Audit embraced the standards in a way
21
The cases of Litkov and Yakunin are not unique. Many of
the bigger Russian audit ?rms hired former natural scientists,
engineers and state bureaucrats for the development of their
audit methodologies.
398 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
similar to many Western audit ?rms (see e.g.
Power, 1999; Van Maanen & Pentland, 1994).
The basis for matching work to standards became
the collection and storage of standardised ‘‘docu-
mented representations’’ (Gar?nkel, 1967/1999)
of audit work. It was believed that standardised,
documented audit accounts would enable partici-
pants to re-construct past courses of action as
‘‘showcases’’ of proper auditing. On the other
hand, we can observe that the collection and stor-
age of such showcases became embedded in a very
speci?c, locally distinctive way of thinking about
auditing and audit standardisation. New, Wes-
tern-oriented ‘‘form-giving’’ devices (The´venot,
1984) were adopted to aid the planning, control
and documentation of audit work, but the applica-
tion of such Western-oriented routines, to a large
extent, was still rooted in control and management
practices stemming from the Soviet period.
One of the core technologies adopted from
one of the big international accounting ?rms to
aid the operationalisation of international audit-
ing standards took the form of a standardised,
59-page long documentation index. Originally,
the documentation index had been developed
by one of the then Big Five ?rms for their
own internal control and documentation pur-
poses. The documentation index was imported
by Moskva-Audit from a big international ?rm,
not only to aid control but also to demonstrate
international openness and enhance similarity
with Western ?rms. The Western origin of the
index underlined its authoritativeness and alleged
adequacy.
The indexing system compartmentalised the
audit process into sections of audit planning, the
evaluation of audit risk, the auditor’s knowledge
of the audited business, the description of internal
control systems, results of performed audit proce-
dures, etc. Each audit activity was provided with a
number. Under numbers from 1000 to 1199, for
example, activities concerning audit planning were
reported. From 5000 to 5999 the audit of assets
was documented. Indices ranging from 6000 to
6999 were used for reports on the audit of liabili-
ties. Attached to the indices were special instruc-
tions, for example for the determination of audit
risk, and models of working papers.
The indexing system provided the auditors
with a frame of objecti?cation that helped them
establish a predictable, routinised environment
for auditing, an environment that could be
ordered and controlled largely independent of
the speci?cities and complexities of actual audit
objects. In so doing, the indexing system consti-
tuted much more than a neutral, technical device
aiding the production of accurate accounts of
‘‘what happened’’. The indexing system itself
was a central part of a bigger organisational
apparatus of charts, rules, lists and other form-
giving devices that did not just re?ect, but made
it possible to perform work in accordance with
standards.
22
The documents collected and stored
with the help of the indexing system became con-
stitutive of work in accordance with standards in
a way that reinforced Moskva-Audit’s focus on
descriptive accuracy and administrative orderli-
ness. Especially in the early 1990s, at Moskva-
Audit, much attention was paid to the checking
of single operations. The audit tests focused on
detailed transaction testing. In comparison with
Western contexts of audit activity (see e.g. Power,
1999), much less attention was paid to analytical
procedures or the audit of the control systems of
a business.
23
Work in accordance with standards
came to be associated with images of rational
bureaucratic order and formal rule-following.
Emphasis was placed on the disciplinary charac-
ter of audit rules. It was believed that the applica-
tion of standards could be ensured through
enhancing the level of control over individual
practitioners and reducing the scope for individ-
ual judgement. As the Head of the International
Audit Department at Moskva-Audit described it:
The quality of audit work should not depend
on the personality. . . on the person that came
22
The performative role of instruments like the indexing
system is not just a speci?city of our case, but has been
documented elsewhere as well. See e.g. Power (1999) and Van
Maanen and Pentland (1994).
23
The ISAs de?ne analytical procedures as ‘‘evaluations of
?nancial information made by a study of plausible relationships
among both ?nancial and non-?nancial data’’ (IFAC, 2006, p.
228). Tests of control are performed to check ‘‘the operating
e?ectiveness of controls in preventing, or detecting and
correcting, material misstatements’’ (IFAC, 2006, p. 248).
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 399
to work for the organisation. We only have a
great deal of certainty that everything is done
with quality, if a person works in accordance
with standardised programmes. (Interview
No. 6, 2002)
24
Such projects of formal standardisation and
codi?cation were reinforced by the demands of
outside parties. Western agencies, such as the
World Bank or the European Bank for Recon-
struction and Development (EBRD), would only
award audit contracts to ?rms who could explicitly
demonstrate that standardised, publicly visible,
systems of internal quality control had been
installed. Also, Russian regulatory authorities,
when carrying out audit quality controls, were pri-
marily interested in determining whether detailed
administrative procedures had been established
by the audit ?rms. When this case study was con-
ducted, Russian auditors had not been sued for
professional negligence. But observing the court
activities of their international counterparts, Rus-
sian audit ?rms imagined that this could be the
case in the future and therefore saw the establish-
ment of formal controls and documentary mecha-
nisms as an important step in preparing themselves
for such events. As Moskva-Audit’s Deputy Direc-
tor commented in an accounting newsletter in
1999:
Audit rules should become the most impor-
tant argument in the review of court investi-
gations against audit organisations with
respect to allegations of professional
negligence.
25
Parallel to the indexing system, Moskva-Audit’s
Quality Control Department developed a numeri-
cal compliance code.
26
With the help of the code,
expertise was represented in a standardised for-
mat, allowing it to be ranked, compared and eval-
uated. The code consisted of a list of 36 di?erent
criteria which audit quality controllers had to take
into account when assessing compliance. The crite-
ria had been subdivided into three main sections.
The sections focused on the correctness and com-
pleteness of audit work with respect to: audit pro-
cedures performed; audit reports written; and
audit ?les assembled. The control criteria ranged
from general questions asking, for example, for
an overall assessment of the correspondence of
the contents of audit procedures, audit reports
and audit ?les with internal rules and Russian
laws, to more speci?c questions addressing issues
of documentary uniformity and formal accuracy.
Quality controllers had to consider questions such
as: does the structure of the audit report comply
with the structure provided in the standards; are
sentences clearly formulated; is every remark of
the auditors backed up with evidence, e.g. source
documents; does a memorandum on audit plan-
ning exist; has a statement on the independence
of auditors been attached; have materiality levels
been correctly calculated; does the selection of
the audit samples correspond with the ?rm’s inter-
nal sampling rules?
The audit quality controllers ranked the extent
to which each criterion had been met on a scale
from zero (for non-compliance) to one (for 100%
compliance). In the second step, the ranking given
for each criterion was added up to give a total
score. The results were entered into a table. On
the basis of the table, diagrams were created visu-
alising the quality of audit work delivered by each
audit team. Regularly, these diagrams were for-
warded to the director and owner of Moskva-
Audit to inform him about the performance of
24
It should be noted, that such a prescriptive approach to
audit standardisation is not only a Russian speci?city. The
recent ‘‘clarity project’’ of the IAASB (International Audit and
Assurance Standards Board) shows that the auditing profession
in Europe is generally divided about the level of prescription to
be established by auditing standards. As we can read in a recent
article of the journal Accountancy: ‘‘Some take the view that
audit quality is likely to be improved by having detailed
prescriptive standards [. . .]. Others, including the APB [British
Audit Practices Board], favour a more principles-based
approach recognising that many of the key features of good
auditing are dependent on auditor experience and judgement’’
(Grant, 2006, p. 84).
25
For reasons of con?dentiality more precise details about the
source of the quote cannot be disclosed.
26
In the development of internal controls and documentary
mechanisms, the Department based itself largely on ISA 220,
the international standard dealing with ‘‘Quality Control of
Audit Work’’ (IFAC, 2001, pp. 158–162). The compliance code
had been developed by the Quality Control Department from
scratch and, unlike the documentation index, had not been
taken on from other international institutions.
400 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
his workers. In so doing, the codi?cation system
actively helped con?gure compliance. The compli-
ance scores, which stood at the end of each quality
assessment, helped attribute individual acts of
judgment to the outcome of rule-following. They
made it possible for controllers to conceal di?cul-
ties related to processes of quality assessment and
supplied them with a grid that made compliance
legible from the standpoint of the organisation.
To quote Power (1999), the system made compli-
ance with the standards ‘‘auditable’’. It helped
the quality controllers at Moskva-Audit arrive at
a common representation of diverse audit prac-
tices.
27
The control system might have intersected
poorly with the day-to-day realities of audit work.
Nonetheless, it provided an important reference
point that enabled the organisation to embed stan-
dards within its internal regulatory systems, and to
demonstrate to regulatory and other bodies that
audit standards were being realised.
But how far did these dimensions of regulatory
conformity take Moskva-Audit? To what extent
did the ‘‘form-giving’’ devices described above
help turn the international auditing standards
into a connecting device making it possible for
Moskva-Audit to link up with Western audit
worlds? As will be shown in the next section,
although the standards had been turned into a
pervasive, circulating point of reference within
the ?rm, they did not constitute a narrow ‘‘oblig-
atory passage point’’ that could be easily con-
trolled and utilised to generate international
acceptance. According to Latour (1987, p. 150),
‘‘obligatory passage points’’ are constituted by
things, events, persons and activities which people
have to pass if they want to belong to a certain
group of actors (e.g. the accounting profession)
or a speci?c network of activities (e.g. auditing
practices). ‘‘Obligatory passage points’’ refer to
the means and processes by which things, ideas
or standards in our case, are turned into stable,
‘‘indispensable’’ entities (Callon, 1986; Latour,
1987, 1988). In the case of Moskva-Audit,
attempts had been undertaken to incorporate
and stabilise the standards within its audit manu-
als and methodologies, but working with the stan-
dards did not automatically translate into the
?rm becoming de?ned and classi?ed as working
according to international standards. It is this
issue that we now turn to consider.
Struggles for recognition
The indexing system and the compliance code
contributed to the creation and stabilisation of
an administrative control system that reinforced
images of orderliness and regularity. This led to
an increased appearance of internal consistency
and conformity, but it did not automatically bring
about higher external acceptance, especially not at
the international level. At Moskva-Audit, ISAs
had become linked up with very speci?c, localised
strategies of rule-following and ideas of what an
auditing standard is. These were not easily com-
patible with Western, in particular Anglo-Saxon,
ideals of auditing and audit standardisation. What
counted as ‘‘working in accordance with stan-
dards’’ was contested. It was challenged by the dif-
fering beliefs, demands and expectations within
which Moskva-Audit operated. A British audit
partner who had worked for several years in a
large international audit ?rm in Moscow remarked
in this respect:
There is a lot of debate. [. . .] At one end of
the spectrum you have the former Finance
Ministry controllers [revizory] – their view
of internal control is to re-perform every-
thing. If you get the same out of it, you are
probably right. And then you get the other
end of the spectrum, which I guess would
be the Big Five [now Big Four, A.M.] trained
professionals with experience. These two got
such absolutely opposite views of everything,
and yet they are all part of the same profes-
sion. (Interview No. 33, 2001)
Moskva-Audit was operating in a di?erentiated
environment. There existed di?erent views on what
counted as auditing, on how to approach it and
27
The above-mentioned points describe general functions of
grading and performance measurement. For an insightful
analysis of grading practices in schools see Kaltho? (1996).
For a more general discussion of the objectifying qualities of
quanti?cation see Porter (1992).
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 401
what its outcome should be. Views di?ered, for
example, with respect to the detail of regulation
needed to ensure audit quality. Views di?ered also
with respect to the objectives that audits should
serve. On the one hand, auditing and auditing
standards were promoted as a means to enhance
state control and stimulate compliance with Rus-
sian taxation and accounting laws. Such perspec-
tives were especially propagated by the Ministry
of Finance and the Russian taxation authorities
(Danilevsky, 1994; Krikunov, 2001). Here, audit-
ing standards were seen as an instrument of jurid-
ical regulation that could guide state authorities in
the establishment of a coherent system of regula-
tory oversight.
On the other hand, there existed more capital
market-oriented views, which regarded auditing
as a control mechanism that was called upon to
enhance the information content of ?nancial state-
ments for economic decision makers; in particular
private shareholders. Here, ISAs were regarded as
broad principles in need of being grounded in indi-
vidual expert judgement and Anglo-Saxon cultures
of self-regulated professionalism. Such views were
in particular articulated by the big international
accounting ?rms operating in Moscow and multi-
lateral agencies, such as the World Bank, OECD
and EBRD. At Moskva-Audit, the international
auditing standards had become implicated in
faithful, machine-like applications of rules, which
high-ranking members of the big international
accounting ?rms in particular sneered at. As the
following dialogue between two British audit part-
ners who worked for a large international account-
ing ?rm in Moscow illustrates, Western, especially
Anglo-Saxon, audit professionals saw auditing as
something which cannot be learned from a book
or the text of international standards:
Audit Partner 1: How many of them [interna-
tional auditing standards] have you read this
week [audit partner 1 addresses audit partner
2 with a smile]?
Audit Partner 2: I can’t remember. It would
be embarrassing, if I tried to remember what
order they are in.
Audit Partner 1: You know, that just does
not make sense. I could never cite all the
standards by their title. This is something
you just know. [. . .]
Audit Partner 2: You can’t learn auditing.
That is something you got to grow into.
Auditing is a particularly psychology-based
study; you don’t learn that from a book.
Audit Partner 1: A good auditor never looks
at the law; never looks at the standards. He
knows it, it’s in his blood. He drank it from
his mother’s milk as it were. Ahm, law and
regulations all they do is formalise that, but
if the basic culture is not there, then you have
a big problem.
28
No doubt this is an idealised and stereotypical
Anglo-Saxon representation of audit expertise.
Nonetheless, this mirage of audit expertise as
something that needs to be grounded in individual
experience and judgement, rather than adherence
to rules, clashed with post-Soviet ideals of regula-
tion and ?nancial control. This disparity was fur-
ther reinforced by the di?erent accounting worlds
Russian and Anglo-Saxon auditors were operating
in. In contrast to Anglo-Saxon accounting worlds,
Russian accounting was and still is much more
focused on compliance with tax regulations and
government decrees. It is centrally regulated, and
the Chart of Accounts provides detailed guidance
on how to comply with Russian accounting rules
(see e.g. Bakaev, 2001; Kondrakov, 2004). In addi-
tion, we need to take into account that formal
structures travel more quickly than knowledge
and expertise anchored in individual experience
(Drori et al., 2006; Westney, 1987). The formal
texts of the auditing standards may have reached
Russia quickly. But the connecting of worlds is
much more than the arrival of formal standards.
There is further to go before one can say that the
standards exist within an internationally accepted
realm of auditing practice.
28
This dialogue was observed by the author during an
informal meeting where the audit partners discussed the
usefulness of conferences on international accounting and
auditing standards prepared and delivered by Western expatri-
ates to Russian accountants and auditors. The interchange
quoted above was prompted by a comment that the author
made regarding the great popularity of such events.
402 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
The Russian and Western audit worlds did not
exist side by side, on the same horizontal plane.
They were embedded in a hierarchical relationship.
The breakdown of communism within Eastern
Europe, and the attendant de-legitimisation of
Soviet institutional structures, put Western audit
?rms and audit professionals in a position that
allowed them to present themselves as superior
to their Russian counterparts. The supposedly suc-
cessful capitalist societies of Western Europe and
the United States had become important reference
points for what post-communist Russian society
aspired to become (see e.g. Pickles & Smith,
1998). The creation of new market-oriented politi-
cal and economic structures, including the estab-
lishment of commercial auditing, relied to a great
extent on the imitation and transplantation of
Western patterns. This strengthened the position-
ing of Western audit ?rms and professionals in
the Russian audit market, who had knowledge
and experience on their side. By de?nition, their
Russian counterparts were lagging behind.
These continuing di?erences between Russian
and international audit worlds thus placed the spe-
ci?c regulatory traditions and local accountability
styles of the Russian audit world in a curious and
inferior position relative to the actors and agencies
that had entered from the ‘outside’, from the
West.
29
In particular, the presence of the big inter-
national accounting ?rms on the Russian audit
market contributed to the creation of further axes
of local di?erentiation and particularisation. The
international ?rms claimed to be doing ‘‘truer’’
and ‘‘better’’ audits than their Russian counter-
parts on the grounds of their longstanding experi-
ence, worldwide interconnectedness and general
reputation. During interviews that were conducted
with partners from Western audit ?rms, respon-
dents frequently made distinctions between the
kind of audits ‘‘we, the internationals’’ do, and
the kind of audits ‘‘they, the Russians’’ perform.
This depended on a contrast between the ‘‘experi-
enced’’ Western application of international stan-
dards on the one hand, and the ‘‘inexperienced’’
Russian applications on the other. The following
quotes illustrate some of the di?erences that were
ascribed to Russian auditing by Western practitio-
ners. A British senior audit partner who had
worked for several years in a big international ?rm
in Moscow, for example, pointed to the di?erent
levels of experience:
What they are trying to develop in Russia
has taken decades, if not centuries, in the
West. I think there is a pretty genuine inter-
est in looking at how it’s done in the West
and saying ‘We must do this’ or something
like it. But you cannot do it overnight, if
there is no culture of having done this. [. . .]
In the Western world, you have years of
experience. You have thousands of practitio-
ners. Here, you don’t have that. [. . .] What’s
missing is the experience and maybe the com-
mon sense. (Interview No. 32, 2001)
Another senior, but Russian, audit partner who
also worked for a big international ?rm in Mos-
cow emphasised di?erences in professional
approaches:
When talking about Russian audits and inter-
national audits, one needs to be careful to dis-
tinguish between them. If you take the
[Russian and international] audit standards,
in principle, they are not much di?erent from
each other. [. . .] But you ?nd di?erences in
their practical adoption, in the practice of
auditing. [. . .] They [the Russian ?rms], for
example, don’t understand this concept
where, during the audit process, you look at
the ?nancial statements as a whole. For them
only the individual transactions are very
important. (Interview No. 35, 2002)
Looking back on his time in Russia during the
early 1990s, a British ex audit partner, who also
had worked for a large audit ?rm, re?ected more
critically:
Russian auditing grew as a business in the
time I was there. But it was held in very
low esteem when I ?rst went out. It was very
29
Cooper et al. (1998) make a very similar point about the
constitutive e?ects of national stereotyping. Analysing the
behaviour of managers in multinational accounting ?rms, they
aptly illustrate the complex and problematic nature of the idea
of an ‘international’ orientation.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 403
much a pure compliance exercise, nobody
really cared about it. [. . .] And we [the West-
erners] were quite ignorant. (Interview No.
41, 2002)
These quotes are not o?ered as a way of testify-
ing the ‘‘actual’’ realities of Russian auditing.
Whether based on ?rst-hand experience or stereo-
types, in both cases the above remarks re?ect
and contribute to the creation of ‘‘an ideology of
di?erence’’ (Said, 1985), which frustrated the con-
necting potential of the international auditing
standards. Work conducted in accordance with
international standards came to be rooted in divi-
sions of global and local, Western and post-Soviet
audit labour. Discourses about local speci?city
furthered the incorporation of the standards in
hierarchies of expertise that were promulgated by
the big international accounting ?rms and their
networks. As a consequence, practices of Russian
?rms claiming to perform work in accordance with
international auditing standards were de-legiti-
mised. Work in accordance with international
standards came to be marketable only for those
?rms that were already internationally connected
and enjoyed worldwide recognition. Also, Mos-
kva-Audit came to feel the power of the big inter-
national ?rms. For many years, Moskva-Audit’s
audit division stood in the shadow of the activities
of the big Western ?rms. As the following remark
of a senior auditor from April 2001 illustrates, the
area of international auditing was neither a lucra-
tive, nor widely accepted business:
Usually, ISA-audited ?nancial statements
are required by clients who plan to sell shares
abroad, who go for the international mar-
kets. But unfortunately, in these cases the
big international ?rms prevail in the market,
because their stamp counts for much more
than ours does. Because [abroad] nobody
knows what [Moskva-Audit] is. And conse-
quently, if one talks about international
audits, usually the Big Five are chosen.
(Interview No. 6, 2002)
The quote indicates that working with interna-
tional auditing standards had not been enough to
enhance Moskva-Audit’s international acceptance.
The international standards did not ful?l their role
as a mechanism for connecting the ?rm and its cli-
ents with international markets. Or at least they
were insu?cient on their own. To become widely
accepted on an international scale, Moskva-Audit
had to do much more than adopt standards. To
become part of the international audit world,
Moskva-Audit had to ?nd allies who already
enjoyed worldwide acceptance. As Mary Douglas
(1987, p. 59) argues, ‘‘sameness is not a quality
that can be recognised in things themselves; it is
conferred upon elements within a coherent
scheme.’’ Analogies have to be agreed upon. Same-
ness, at least to a large extent, is conferred and
?xed by the institutions that comprise cultural
conventions, shared belief systems, common cog-
nitive schemes and other social and cultural struc-
tures (Douglas, 1987, pp. 45–67). To be widely
recognised and able to overcome local boundaries,
Moskva-Audit needed wider institutional support.
It had to re-connect itself and the standards that it
worked with to the wider sets of ideas, belief sys-
tems and institutional contexts within which the
ISAs had been developed, and through which they
had been propagated in the ?rst place. For Mos-
kva-Audit’s management, this meant it had to cre-
ate further linkages to the international world,
through international cooperation, the achieve-
ment of external accreditation and other interna-
tionally oriented activities.
To achieve this, amongst other things, Moskva-
Audit founded in 1997 the ‘‘Department for inter-
national audit activities’’. For the running of the
international audit department, people were hired
who were ?uent in English, had been trained in
the West or had been enrolled in internationally
recognised training programmes which were
o?ered locally, for example by associations such
as the ACCA (Association of Chartered Certi?ed
Accountants). A de?ning feature of the Depart-
ment became its international accounting expertise.
People had been taken on board who had had
experience with the application of International
Accounting Standards (IAS), American Gener-
ally Accepted Accounting Principles (US-GAAP)
and British Generally Accepted Accounting
Principles (UK-GAAP). One of the main services
that the Department began to o?er consisted in
404 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
reconciliations of Russian ?nancial statements with
US-GAAP or IAS. In addition, members of the
international audit department gave presentations
at internationally oriented accounting and audit
conferences and established close connections with
the International Centre of Accounting Reform
(ICAR) in Moscow, a Western agency which had
been set up to further the reform of accounting
and auditing in Russia.
30
Members of Moskva-
Audit’s international audit department regularly
wrote articles for ICAR’s accounting newsletter
and participated in ICAR’s project of creating an
IFAC-endorsed Russian translation of interna-
tional auditing standards (IFAC, 2000).
With the newly acquired, internationally oriented
accounting expertise, the aggressive marketing of
it and its relations with ICAR, Moskva-Audit
became able to participate successfully in bids for
audit assignments from international agencies,
such as the European Bank for Reconstruction
and Development, World Bank and the subsidiar-
ies of Western multinationals. In addition, it
became actively involved in the conduct of Tacis-
funded
31
accounting and audit reform projects,
usually jointly run by local and international audit
?rms. Initially, these involvements did not bring
much revenue, due to their small size and number,
but they were considered to be very prestigious
and, hence, important for the further develop-
ment of Moskva-Audit’s international reputation.
Through these audit assignments and its active par-
ticipation in accounting and audit reform projects,
Moskva-Audit managed to build more direct con-
tacts with the international, Western audit world
and made itself widely known amongst Western
agencies and organisations operating in Moscow.
But the new international audit department did
not replace Moskva-Audit’s old ‘‘Russian’’ audit
department. Rather, a new world began to be cre-
ated next to the old. With more than 150 members,
Moskva-Audit’s old ‘‘general’’ [obshy]
32
audit
department, which had been founded in 1991, con-
tinued to be the ?rm’s largest department, whereas
the new international audit department, which had
started o? working with seven people, expanded
only to about a dozen members. With the founda-
tion of the international audit department, Mos-
kva-Audit’s audit practice began to become
divided, as did the use of the ?rm’s internal meth-
odological guidelines and compliance codes. Both
departments made reference to international audit-
ing standards and they used the same internal
methodological guidelines, indexing systems and
compliance codes, but they did this in very di?er-
ent ways. The auditing activities became split into
‘‘Russian’’ and ‘‘international’’ audits [russkiye i
mezhdunarodnye audity]. Moskva-Audit’s old
audit department continued to carry out the so-
called Russian audits. These were highly forma-
lised and standardised audits which were overseen
by the Ministry of Finance and primarily aimed at
the checks of compliance with national tax and
accounting regulations. Much emphasis was
placed on formal accuracy and detailed transac-
tion testing. The ways in which materiality levels
were calculated and audit programmes designed
were highly standardised and the quality control
department checked meticulously whether audi-
tors’ working papers complied with the ?rm’s
indexing system, guidelines and methodologies.
30
ICAR had been set up in 1998 by the European Bank for
Reconstruction and Development, the American Chamber of
Commerce, the Foreign Investment Advisory Council and the
British Department for International Development in cooper-
ation with the Russian Institute of Professional Accountants to
provide guidance to the Russian government and other entities
concerned with the transition towards international accounting
and auditing standards.
31
The Tacis Programme Initiative was launched by the
European Commission in 1991. Through the Tacis Programme,
the EU seeks to provide grant-?nanced technical assistance to
countries of Eastern Europe and Central Asia. The Tacis
Programme provides support for projects of institutional, legal
and administrative reform. As a rule, Tacis-funded projects
have to be carried out in consortiums with at least one local
project partner. Between 1991 and 1997 and 1999 and 2005, the
EU had launched 10 di?erent Tacis-funded accounting and
audit reform projects in Russia.
32
In Russia, a distinction is made between general and
specialised audits. Specialised audits are statutory audits carried
out in speci?c service sectors, such as the banking and insurance
industries. General audits are statutory audits carried out in all
other sectors and not subject to sector-speci?c regulations.
Moskva-Audit’s general audit department was responsible for
the conduct of general audits. More specialised audits, such as
bank audits, were carried out in other divisions.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 405
In contrast, the international audit department
became responsible for the conduct of so-called
international audits. Here, ‘‘working according to
international standards’’ became linked to the
application of Western accounting principles (e.g.
IAS or US-GAAP) and the conduct of audits that
were not subjected to any speci?c national regula-
tory authority. More emphasis was placed on indi-
vidual expertise and judgement, than on the
following of detailed rules. Because the auditors
were operating outside the realm of Russian law,
they had more freedom to decide what checks to
carry out. As one senior Russian auditor with an
ACCA quali?cation put it:
You have many requirements and instruc-
tions which you need to follow when carrying
out a Russian [statutory] audit. It is much eas-
ier to audit in accordance with international
standards. [. . .] In a Russian audit you have
to check the enterprise in accordance with
various instructions, which are issued by the
individual regulatory bodies. Checks that fol-
low these instructions take up much time. I
just remember now, that we had to ?ll in all
those forms, which were quite long. Some-
times they were even 10 pages long. [. . .] An
international audit [i.e. an audit of ?nancial
statements prepared in accordance with a
non-Russian accounting framework; A.M.]
gives you more freedom and autonomy [sam-
ostoyatel’nost’]. (Interview No. 4, 2002)
Moskva-Audit’s international audit department
used the ?rm’s indexing system and compliance
codes as a starting point in structuring its work.
But the department was accorded much more free-
dom by the internal quality control division in
deciding on how to follow the internal rules. Much
less standardisation was required in the prepara-
tion of working papers, and auditors had much
more freedom in deciding where the main focus
of the audit should lie. The audit quality control
department adopted a ‘‘comply or explain’’
approach when checking the audit ?les from the
international audit division. Deviations from the
indexing system and compliance codes were
allowed, if the auditors noted down reasons for
these in their working papers.
Between 1997 and 2002, the old audit depart-
ment continued to be Moskva-Audit’s main bread-
winner and pillar in the Russian audit world, but
the new international department was central for
Moskva-Audit’s international presentation. It
made it possible to build up an international client
base and become more directly exposed to Western
accounting and audit expertise. Although the
department remained small in terms of number
of employees, it became an important window
and point of contact to the West.
In 2000, Moskva-Audit’s international e?orts
culminated in the o?cial accreditation of its inter-
national audit department by the World Bank.
Apart from Moskva-Audit, only seven other Rus-
sian audit ?rms managed to become o?cially
accredited by the World Bank as World Bank
auditors. The accreditation was based on a survey
that World Bank employees carried out in more
than 50 Russian audit ?rms during July 2000.
The survey’s aim was to test to what degree the
?rms complied with international standards. The
survey was carried out on the basis of an inspec-
tion of the ?rms’ audit ?les. Speci?c attention
was devoted to the documentation of work pro-
cesses, internal quality control procedures, adher-
ence to independence requirements and the
composition of audit programmes. Further, the
employees’ knowledge of international and US-
American accounting standards was tested. Out
of the 50 ?rms tested, only 11 ?rms, including
the then Big Five accounting ?rms, were consid-
ered to comply with international standards. For
Moskva-Audit, the results of the survey were of
great importance, as accreditation by the World
Bank added enormously to the ?rm’s international
credibility, and helped to consolidate Moskva-
Audit’s network of international support.
But this was still not enough. To become part of
the globally operating audit world, Moskva-Audit
had to ?nd additional allies. Its ISA-compliant
audits were still not marketable on a worldwide
scale. On international stock exchanges, a ?rm like
Moskva-Audit was not able to compete against the
kind of resources and reputation that the large
multinational audit ?rms had. International capi-
tal markets distinguish between audits carried
out by small and medium-sized local ?rms, such
406 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
as Moskva-Audit, and audits carried out by large
multinational audit ?rms – such as PwC, KPMG,
Ernst and Young, Deloitte – or second tier ?rms
such as BDO, Grant Thornton and PKF (see e.g.
Teoh & Wong, 1993). As the study by Wolk,
Michelson, and Wootton (2001) shows, by 1999
smaller accounting ?rms had virtually been elimi-
nated from the NYSE market, and over 98% of
the companies listed on the NYSEhad been audited
by the then Big Five accounting ?rms. Beattie,
Goodacre, and Fearnley (2003) draw a similar
picture for the UK. That is, the Big Five ?rms
audited 82.6% of all companies listed in the UK,
100% of the FTSE 100 ?rms, and 97.8% of the
FTSE 250 ?rms in 2002 (Beattie et al., 2003, p. 257).
After having explored various ways of showing
itself to be ‘western’ or ‘international’, Moskva-
Audit’s management decided in 2001 to apply for
membership in one of the large international audit
networks.
33
At that time, most of Moskva-Audit’s
Russian counterparts had already joined one of
these international audit networks and, as Gen-
dron et al. (2007, p. 105) would put it, anchored
their claims to expertise through their membership
of one of these. For most of these ?rms, member-
ship of these networks had opened up signi?cant
new international business opportunities. Seeing
this, Moskva-Audit now sought to do the same.
In choosing a possible network partner, Moskva-
Audit was looking for a network whose brand
name was already internationally well known and
established. For the ?rm, it was important that
the network would be of considerable size, with
an interesting portfolio of large multinational cli-
ents and good connections to the international reg-
ulatory scene (e.g. through membership in IFAC’s’
‘‘Forum of Firms’’).
34
To attract the attention of
such an audit network, Moskva-Audit hired a mar-
keting manager with international experience and
education (MBA) to present and ‘‘sell’’ Moskva-
Audit’s international orientation, its work force,
methodological rigour, contributions to local audit
reform initiatives and wide-ranging Russian client-
network. Following a series of meetings, talks and
negotiations, in 2002, Moskva-Audit managed to
become fully incorporated into one of the largest
international audit networks. Soon after joining
the network, Moskva-Audit changed its name to
that of the network. It became part of the net-
work’s brand and, thereby, signi?cantly enhanced
its position within the international division of
audit labour.
35
The Director and founder of Mos-
kva-Audit commented on what membership of
the network meant:
Our accession to the international audit net-
work marks a new stage in the development
of our company. We have always emphasised
our commitment to national business and
priorities, but we have never hidden our aspi-
ration to gain access to the world community
and expand the stage of our professional
activity by adding an international dimen-
sion to it. Now we have attained this goal.
[. . .] With the integration into the interna-
tional network we can e?ciently assist our
clients in their entry to the world capital mar-
kets, IPOs or fundraising from Western
?nancial institutions. [. . .] Until recently,
international audit was the exclusive domain
of the Big Four. Now we can make it possi-
ble for our clients to have their IAS-compli-
ant ?nancial statements certi?ed with a
‘‘stamp’’ of an internationally recognised
auditor.
36
33
Examples of such globally operating audit networks are:
BDO International, Grant Thornton and PKF International.
These networks form the world’s second tier of large audit ?rms
after the Big Four.
34
The Forum of Firms (FOF) was launched in January 2001
‘‘to bring together ?rms which perform transnational audits
and involve them more closely with IFAC’s activities in audit
and other assurance-related areas’’ (FOF Constitution, p. 3).
The FOF conducts its business primarily through the Trans-
national Auditors Committee, an IFAC committee whose
members have been nominated by the members of the Forum.
35
Moskva-Audit was not a unique case. By the end of 2003,
most large Russian accounting ?rms had been integrated into
international audit ?rm networks. Examples of such ?rms are:
FBK, who became a member of the PKF network; UNICON,
who became part of the BDO group and Russaudit, who
became a member of Baker Tilly International.
36
The quote was taken from Moskva-Audit’s website in
November 2003. For reasons of con?dentiality, website details
cannot be disclosed.
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 407
Moskva-Audit’s incorporation into the interna-
tional network provided the ?rm with greater
chances of being seen and identi?ed as a ?rm that
is able to provide work in accordance with interna-
tional standards. Inter alia, the membership
enabled Moskva-Audit to register with the US-
American Public Company Accounting Oversight
Board (PCAOB) and to carry out audits for com-
panies listed on the New York Stock Exchange.
Thereby, the ?rm could not only strengthen its
international connections, but also further extend
its already strong position in the local Russian
audit market. Ultimately, Moskva-Audit’s direc-
tor became a member of the network’s interna-
tional council, which allowed the ?rm, for the
?rst time, to explicitly exert in?uence at an interna-
tional level, rather than just react to Western direc-
tives and standards.
What had made it possible for Moskva-Audit
to join the network? Working with international
standards had been a necessary, but by no means
su?cient condition. What had attracted the net-
work’s attention was not only related to Mos-
kva-Audit’s adoption of international standards.
It was also linked to the general reputation that
the ?rm had managed to build up in the Russian
audit market, the recognition it had gained from
the Russian World Bank o?ce, the cooperation
with ICAR, and its contributions to local account-
ing and audit reform projects. In addition, Mos-
kva-Audit had a portfolio of interesting Russian
clients, which it could bring into the network,
and good relations with national regulatory insti-
tutions.
37
Thus, joining the network and becoming
de?ned as ‘‘working in accordance to standards’’
had required much more than investments in form,
organisational structure and audit methodology. It
had also involved hard representational work, the
establishment and cultivation of public relations,
the management of diverse expectations, and the
formation and maintenance of a balanced network
of di?erent local and non-local allies. And with the
joining of the international audit network, ?nally,
Moskva-Audit had begun the process of connect-
ing the multiple and diverse ‘worlds’ of interna-
tional auditing standards.
Discussion and conclusion
To make an audit compliant with international
standards means satisfying multiple conditions. It
depends on much more than ‘proper’ technical
implementation. It is equally linked to a ?rm’s
position within hierarchies of credibility, and its
ability to generate acceptance across many di?er-
ent frames of reference, regulatory contexts, polit-
ical programmes and economic circumstances. For
Moskva-Audit, the decisive step in becoming
recognised as working in accordance with interna-
tional standards was the joining of a large interna-
tional audit network, and the re-naming of the
?rm to that of the network. The ISAs turned out
to be of lower value than the names of the interna-
tional audit groups. The legitimating and market-
ing potential of ISAs had become closely linked to
the names and ranks of already established, large
Western audit ?rms. The application of interna-
tional audit standards on their own did not have
the capacity to constitute an international audit.
International auditing expertise had become the
territory of the big international ?rms, and inter-
national auditing standards had been turned into
an exclusive label for them.
In a way, the ISAs had come to lead a double
existence. On the one hand, the standards had
been propagated as a universally applicable, civil-
ising measure. They had become implicated in
dreams of auditing as a uniform set of procedures,
and desires to create an internationally homoge-
neous whole. In particular, regulatory authorities
and multilateral organisations, such as the World
Bank, the OECD and IFAC, had promoted the
standards as a means of increasing the quality, uni-
formity and international comparability of audit
practice. As a consequence, especially for develop-
ing and transitional economies seeking trans-
national investment and political acceptance,
adherence to international standards came to be
seen as a crucial factor for the establishment of
37
Members of Moskva-Audit, for example, were actively
involved in the work of the Audit Expert Council, which had
been set up by the Ministry of Finance to further the
cooperation between government, audit ?rms and professional
associations.
408 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
international recognition and legitimacy. The ISAs
became regarded as an entry point for modernisa-
tion and achieving equivalence. Underlying their
spread had been universalising and homogenising
semantics of the inclusion of everyone (Meyer
et al., 1997).
On the other hand, the standards had come to
acquire global authority only in a very speci?c
realm. The ISAs had been incorporated in a hier-
archy of credibility led by the large, globally oper-
ating audit networks. The standards had become
involved in strategies of the big international ?rms
seeking to stabilise and protect their occupational
monopoly, for example, with respect to services
provided to companies listed on Western stock
exchanges, such as the New York or London
Stock Exchange. These ?rms had used the rules
to rea?rm their leading market position and cred-
entialise their audit practice. The universality of
the standards had become con?ned to a speci?c
locus. Ideals of audit universalism and interna-
tional standardisation had become attached to a
particular group of audit ?rms and their activities.
Dreams of sameness had become enmeshed in
problems and practices of exclusion. What stan-
dardisers in post-Soviet Russia had considered to
be modern was seen as outdated in the West.
The politics of international entrepreneurial net-
works, to a large extent, had come to determine
the legitimising and connecting potential of the
standards.
Also in the case of Moskva-Audit, adopting
the brand name of an international audit network
had led to higher international institutional recog-
nition than the organisational incorporation of
the standards. To become modern in Western
terms, the management of the audit ?rm had to
establish an explicitly internationally oriented
audit department with a new generation of audi-
tors holding Western accounting quali?cations
and possessing knowledge of Western accounting
rules. The international auditing department pro-
vided Moskva-Audit with the possibility of creat-
ing small, con?ned pockets of reform, which the
?rm could use to reach out to the West and
develop a network of international support
which, ?nally, led to its membership of the inter-
national network.
But Moskva-Audit’s integration into the global
audit network did not lead to a complete dissolu-
tion of local di?erences. On the contrary, the brand
name of the international audit network had made
it possible for Moskva-Audit to achieve both, to
become de?ned as working in accordance with
international standards by the West whilst main-
taining at least some of its local speci?city. Divi-
sions between its Russian audit department
serving the Russian audit market and its interna-
tional auditing department serving international
markets, for example, continued to exist – at least
up to the point when this paper was written. The
joining of the network had made it possible for
Moskva-Audit, and the ISAs respectively, to con-
tinue to inhabit multiple contexts and audit cul-
tures, old and new, local and global, Western and
post-Soviet worlds of audit activity. With the name
of the global audit network local di?erences had
become legitimate and, moreover, internationally
marketable. Joining the international audit net-
work had been important for Moskva-Audit, as it
allowed the ?rm to join the ‘‘world community’’
of audit ?rms. Thereby, the ?rm could signi?cantly
enhance its international reputation, open up new
business opportunities and get closer to the meth-
odologies of internationally established audit
expertise. But equally Moskva-Audit constituted
a strategically important partner for the network.
Through Moskva-Audit’s membership, the net-
work became able to create closer linkages with
the Russian audit world, delineate new spheres of
audit activity and expand its global business terri-
tory. The ‘‘connecting’’ of worlds is the process of
forming such multiple linkages, including the vari-
ous detours and experiments that Moskva-Audit
had to undertake before it could ?nally stabilise
its connections – at least for a while.
In the long run, Moskva-Audit’s integration
into the global audit network may stimulate the
harmonisation of its audit approaches with those
of the other member ?rms of the network. But it
is very unlikely that this will lead to the reproduc-
tion of a monolithic and unitary ‘Western’ audit
culture. As the study by Barrett et al. (2005) has
shown, the homologies that international auditing
standards help to produce, for example in areas of
audit methodologies and process structures, are
A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414 409
always accompanied by di?erence, even at the level
of large international audit networks. These di?er-
ences, inter alia, arise out of the locally speci?c
accounting frameworks, economic interests, politi-
cal contexts and regulatory cultures within which
the auditors and their clients are operating.
From this it follows that processes of audit
standardisation can hardly be closed or ?nalised.
International auditing standards do not have a
clearly bounded existence. Processes of interna-
tional audit standardisation oscillate between
sameness and di?erence, universalism and particu-
larism. They move back and forth between ideas of
cross-national comparability and contexts of local
speci?city. To paraphrase Brunsson (2000), we
have to be careful not to con?ate standardisation
and uniformity. The value and applicability of
ISAs can be strategically renegotiated by those
who claim to work with them, or who try to regu-
late auditing in accordance with them. Although
the adoption of ISAs is often motivated by
attempts to imagine and create auditing as a uni-
form, internationally homogeneous whole, di?er-
ences between the local and non-local, between
the big international and the smaller indigenous
audit ?rms, can never be completely erased. Ideals
of audit universalism and international compara-
bility become enmeshed in, and challenged by, glo-
bal divisions of audit labour, problems and
practices of power and exclusion, and struggles
for intra-professional distinction, which in turn
promote as well as undermine the connecting of
worlds through standards.
International auditing standards constitute a
pervasive, but by no means unequivocal reference
point. The ?rm we investigated tried to stabilise
and concretise international auditing standards,
initially through the establishment of machine-like
internal rule systems and work processes. Although
these rule systems, to some extent, resembled those
of large international ?rms, their creation was not
enough to enhance Moskva-Audit’s international
acceptance. The attractiveness that the standards
came to enjoy was rooted in beliefs that they could
be used as a connecting device to become accepted
by, and integrated into, Western worlds of audit
business. But the integrative power of the stan-
dards was undermined by existing divisions of
audit labour, processes of intra-professional di?er-
entiation, and discrepancies between di?erent local
accounting and accountability cultures. Interna-
tional auditing standards stimulated the produc-
tion of uniform representations of audit work, for
example with respect to written audit reports,
working papers and audit ?les. But this uniformity
alone did not lead to greater acceptance and inter-
national integration.
Hence, one needs to be careful to distinguish
between standard forms of carrying out a process
and standards as an abstract concept, a goal or
benchmark which actors aspire to. In the case of
Moskva-Audit, international auditing standards
were translated into standard forms of carrying
out audit processes, but this did not result in
the transmission of uniform, clearly identi?able
audit ideas. International Standards on Auditing
might have the capability to produce harmony in
form, but they are still far from being able to
increase convergence with respect to professional
approaches, programmes and ethical attitudes to
actual audit work. Whether or not international
auditing standards arrive at a certain place, and
whether or not they are ‘‘successfully’’ translated,
is always prone to debate. ISAs evoke ideas of sim-
ilarity and compatibility, but they do not consti-
tute a universal yardstick against which auditing
practices can be easily measured or compared.
What standardisation means is constantly remade
and traversed. Although international auditing
standards make reference to concrete audit tech-
niques, for example with respect to sampling or
testing procedures, they do not entail very precise
de?nitions of the objectives and outcomes of an
audit.
As this paper has shown, the ambiguity of the
standards is both their strength and their weak-
ness. To be connectable to a variety of di?erent
situations, worlds, dreams and ideals, ISAs neces-
sarily have to maintain a level of abstraction that
can only be made concrete by the users themselves.
The text of the standards is formulated in an
abstract manner, so that it can embrace a variety
of meanings and interpretations and, thereby,
make the standards attractive to a wide range of
people and institutions. On the other hand, the
vagueness of the ISAs makes it di?cult to hold
410 A. Mennicken / Accounting, Organizations and Society 33 (2008) 384–414
them in place. International audit standardisation
agendas are implicated in a range of heterogeneous
interests, mechanisms and instruments which can
undermine their interconnecting and reform-
engendering function. Hence, rather than assum-
ing that ISAs function as carriers of ‘‘best
practice’’, this paper draws attention to the open
and fragile nature of processes of translation and
standardisation. It shows how the standards
became embedded in, and were made to mediate
between, multiple arenas of audit action and repre-
sentation. Studying the micro-processes of audit
standardisation in post-Soviet Russia can help
direct our attention to important issues and prob-
lems connected with the promulgation of Western
audit models and standards and how these depend
on multiple processes of ‘‘connecting worlds’’.
Acknowledgements
This study was ?nancially supported by the
Department of Accounting and Finance at LSE,
the Centre for Analysis of Risk and Regulation
(CARR, also based at LSE), the British Economic
and Social Research Council (Award No.
R42200034280) and a fellowship from the Cli?ord
Barclay Scholarship Fund. The support of these
institutions and foundations is gratefully acknowl-
edged. Further, I would like to thank particularly
Peter Miller for his academic support throughout
this study. I would also like to thank Mike Power,
David Cooper, Anthony Hopwood, Chris Hum-
phrey, Anne Loft, Richard Macve, Signe Vikkelsø
and the two anonymous reviewers for helpful com-
ments on earlier drafts of this paper. Finally,
thanks are due to those auditors, government o?-
cials, consultants, academics and representatives
of professional associations who participated in
my research and allowed me to interview and ob-
serve them.
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