For nearly 17 years now, this website you’re reading has been meticulously documenting the accounting profession, Big 4 in particular and often through the lens of younger staff coming through the ranks or millennial professionals (who were the younger staff coming through the ranks back when we started). In that time, we’ve seen trends come and go. We saw dress codes get more casual. We saw tattoos go from shameful secret to “meh, as long as you don’t have a giant Monster logo across your throat it’s fine.” We saw remote work come (and go 😢). We watched as “never quit during busy season!” went from a hard-and-fast rule to an ancient mantra uttered by public accountants of a long gone era but not law. We’ve seen offshoring go from a mere percent of total Big 4 work to a widespread phenomenon that is completely eroding the early-career training gauntlet. That last factor oddly didn’t rate nary a mention in the academic paper we’re about to share but we think it’s one of the primary factors driving the Big 4 deterioration the paper describes.
We saw this article “The great power shift inside accounting firms” on Canadian Accountant but it was first published here by Queens University in Ontario. The relevant bit:
We tend to view changes in corporate culture through the lens of leadership or organizational behaviour. But, often, shifts in the labour market, societal shocks or disruptive technology can play an even greater role in shaping the rules and quirks of a workplace.
The accounting profession provides an excellent case study. Big accounting firms — like Deloitte, PwC, EY or KPMG in Canada — have long been considered finishing schools that don’t just employ people but fundamentally reshape them into a particular type of professional. Sure, the hours are intense, the hierarchy is structured and the culture carries high expectations of performance. In return, though, you earn a pathway to partnership and a credential that opens doors.
But the conditions that enable this system are eroding, says Bertrand Malsch, PWC/Tom O’Neill Professor of Accounting at Smith School of Business. “Accounting firms are increasingly seen less as elite, all-consuming career destinations, and more as comparable to other large organizations — offering solid opportunities but without the same expectation of personal sacrifice,” he says.
There is a lot in the 24-page paper “Losing Control: The Erosion of Disciplinary and Pastoral Power in Accounting Firms” authored by Malsch, Oriane Couchoux, and Laurence Daoust. We know you guys barely have the patience to slog through 700 words so we’ll pull just two juicy sections. First, this one on how auditors effectively brainwash themselves and each other:
The literature to date has clearly established that becoming an auditor, and more specifically, entering the professional environment of large accounting firms, is not simply a career choice for individuals but also involves a profound transformation of the self. This transformation has been conceptualized through the Foucauldian lens as a disciplinary process exerted on auditors through various technologies of power, such as performance measures, norms of conduct, and hierarchical judgments. Together, these disciplinary mechanisms shape the professional auditor early in their career, fostering a commitment to prioritizing professional goals over personal life (Covaleski et al. 1998).
Auditors internalize overwork as the norm as a result of socialization and repeated exposure to excessive workloads, which solidifies the belief that long hours and unwavering commitment are essential for professional success (Coffey 1994; Anderson-Gough et al. 2001; Lupu and Empson 2015). First, the collective nature of audit work means that individual time is not entirely personal—it is a shared resource dedicated to serving the team and the firm (Lupu and Rokka 2022).
Deserting one’s colleagues during critical periods is perceived as a serious breach of professional ethics. This perception reinforces a culture in which auditors practice self-abnegation in service to the organization and accept long, grueling hours as an unavoidable norm (Beau and Jerman 2022). Second, auditors are expected to maintain constant visibility, both in the workplace and at firm-sponsored social events. This presenteeism imperative means that leisure and personal time are severely compressed, as auditors are expected not only to work excessive hours but also to actively participate in firm-organized gatherings (Anderson-Gough et al. 2001). The blurring of professional and personal boundaries further entrenches the overwork culture, making resistance or disengagement by auditors both professionally and socially risky.
What is remarkable about this transformative disciplinary process is that it is not explicitly articulated through rules or regulations as formal obligations. Instead, the above behavioral standards are implicitly communicated to auditors through a variety of discourses, practices, and reward mechanisms (Dirsmith et al. 2015). These mechanisms include time management tools (Coffey 1994), billing arrangements (Anderson-Gough et al. 2001; Ladva and Andrew 2014), and promotion systems (Beau 2018; Kornberger et al. 2011). Firms’ disciplinary power is thus not explicitly, coercively imposed on individuals but is instead adopted by auditors, who apply themselves to meet moral and social obligations that align with firms’ professional expectations (McPhail 1999). Notably, this process can begin while auditors are still students, before they are even formally employed by the firms (Daoust 2020; Gebreiter 2020).
Perhaps sending 60-70% of the audit offshore is part of the reason why this system of peer pressure and personal responsibility is crumbling? Or maybe it’s the rescinding perks you swore would be forever and constant rounds of layoffs? Expecting manager-level performance out of college kids the minute they walk through the door?
Alright, second and last section. This one discusses recruiting. Keep in mind they submitted this paper back in 2023, right as attrition started to climb due to the job market and people started sticking around longer because they couldn’t or didn’t want to jump:
First, a dominant theme in our interviews is the apparent shift in the balance of power within recruitment processes. While firms traditionally had the advantage of carefully selecting individuals from a large pool of candidates (Daoust 2020; Gebreiter 2020), they now struggle to attract and filter top talent.
One partner described this shift as follows:
You used to have 300 applications, you’d pick 60. Now you probably have 100 applications, and you need 60. And sometimes you can go to a university where you really want to have about eight people and you have nine applications. The demand isn’t there anymore, so by default there’s definitely a lot less skimming. (Partner 7)
With fewer candidates to choose from, the traditional process of “skimming” for top recruits is disappearing, forcing firms to hire nearly all applicants just to meet their staffing needs, regardless of how these candidates were evaluated and ranked during the recruitment process: “Before, it was like you had to have this, this, and this [on your resume]—you had to meet all the criteria and check all the boxes. But now … judging by the staff we’re getting, it seems like we’ve removed three or four boxes to hire more people” (Staff 12). By eliminating some of these required “boxes,” the auditors entering firms today are, from the outset, less aligned with the traditional ideal candidate profile.
This shift in recruitment dynamics appears to be a recent development. While historically, Big 4 firms were considered
employers of choice, the prestige associated with a Big 4 job seems to have faded:We’re so short on people that it seems like anyone can join [the firm]. … It’s not as glamorous as it used to be … so they hire anybody, so there’s less of a barrier to entry, so you feel less special being here. (Manager 1)
The Big 4, when I was going through recruiting my first year, it seemed like people wanted to go there. Now on campus it seems like they’re having a hard time recruiting, they’re making offers to more people. And pay-wise there’s clearly a gap with any other job in any field. So, it definitely builds up a bad rep[utation]. (Staff 3)
The above quotes collectively illustrate how the default auditor emerges as a consequence of declining selectivity and shifting perceptions of Big 4 employment. These trends not only alter the composition of the workforce but also affect how auditors perceive their own professional identity, seeing themselves less as members of an elite institution and more as employees in a firm that is struggling to attract talent.
Beyond the recruitment challenges faced by accounting firms, retaining auditors has also become increasingly difficult. While high turnover rates in the profession are well documented (Nouri and Parker 2020), our participants emphasized that the situation has worsened: “People leave even faster than they were leaving before” (Manager 6). As a consequence, P&Ms are struggling to maintain the carefully structured pyramid that underpins the firm’s business model. With accelerated departures, the once solid pyramid now resembles “a sick Christmas tree” (Partner 6)—a metaphor that captures the thinning of key talent at various levels and the growing imbalance in workforce distribution.
If you made it this far, I’m so proud of you. If you want to keep going, check out “Losing Control: The Erosion of Disciplinary and Pastoral Power in Accounting Firms” here.
