Boundaries of transformation: Race, compliance, and identity work in South Africa’s Big Four accounting firms

Employing a conceptualization of identity work as ‘boundary work’ from organizational theory, this paper contributes to research examining how the Big Four audit firms attempt to legitimize their behavior, preserve their reputation, and grow their influence in capital markets. The South African post-apartheid socio-political context, together with recent regulatory pressures placed on the Big Four to demonstrate ‘true’ and ‘genuine’ racial transformation, provides an opportune setting to explore the behavior of the Big Four. On matters of race and racism, research is limited by the highly contested nature of the topic and the fact that dialogue surrounding race is usually guarded, informal, and thereby opaque. Yet, in South Africa, the government has refined over the years an intricate legislated ‘scorecard’ for organizations (especially corporates) to ‘measure’ their racial equity performance. This system is given considerable prominence in public and corporate affairs; indeed, it is ‘an accounting mechanism’ for establishing social legitimacy in matters of race. Through a discourse analysis of parliamentary debate and regulatory communications, we showcase the ‘institutional entrepreneurialism’ of the Big Four. Applying Critical Race Theory, our interpretation highlights unintended consequences and paradoxes which are created when race equity is ‘measured’ and ‘performance’ is determined by what is effectively a compliance-based accounting system. We argue that such a system hinders rather than promotes constructive conversation and hides, intentionally or unintentionally, the perspectives needed to achieve a truly transformed ‘culture’ of inclusive opportunity, trust, and respect. We also provide a further example of the Big Four representing themselves as paragons of virtue, ‘agents of transformational change’, in such a manner as to convey the idea that racial equity cannot be achieved in the local profession without their valiant efforts. Such rhetoric again shows how the Big Four represent the two dominant institutional logics of commercialism and professionalism as complementary, not conflicting, or contradictory.