This study is about auditors’ role as regulatory intermediaries in the international accounting standard-setting process. Drawing from the socio-legal literature, we use a theoretical framework combining the Regulator-Intermediary-Target (RIT) model and the legal endogeneity theory that sheds light on auditors’ role in fostering the emergence of an agreed-upon meaning of a standard. While standards are open to different possible interpretations at implementation stage, we argue that standard-setting is a critical step at which a significant part of standard’s meaning is locked in. Hence the importance of discussions over the substance and wording of standards for parties involved in the due process. We investigate auditors’ support to their clients engaging in such discussions leading to the co-construction of the standard’s meaning and thus to the potential endogenization of the standard. For this purpose, the IASB due process is conceptualized as a regulatory conversation (Black, 2002). We use a single case study carried out in the office of one large accounting firm. Our examination focuses on discussions between the IASB and telecommunications industry representatives around the draft IFRS 15 on revenue recognition, as depicted by the latter’s auditors. We find that auditors from the firm’s in-house consulting network play a pivotal role in assisting field auditors and their clients engaging with the IASB while preserving the firm’s reputation. Taken as a whole, our findings suggest that auditors played a pivotal role as intermediaries between the IASB (the regulator) and the targets (Telco firms) and as such contributed to the partial endogenization of the draft IFRS 15. We discuss the implications of our findings for conceptualizing auditor’s role in accounting standard-setting.

Because of their complexity and principle-based nature, the creation of International Financial Reporting Standards (IFRS) engendered significant uncertainty that modified the order of things within large accounting firms. This motivated them to establish Professional Practice Function (PPF) units to try to ensure a credible degree of consistency in applying IFRS across a wide range of financial reports at the international level. We study backstage dynamics surrounding a PPF national unit in one of the Big Four firms. We focus on the rise of the PPF as an expert-based control device within the firm, and the role PPF members play as knowledge brokers to interpret IFRS. Our investigation is carried out through ethnographic fieldwork supplemented by interviews with PPF members and field auditors. The analysis brings forward some of the organizational dynamics surrounding PPF members' efforts to establish their credibility as intermediaries both hierarchically, between administrative partners and field auditors, and epistemically, between the unifying logic of IFRS and auditees' financial reporting specifics. Ultimately, our analysis points to the role of the PPF as a gatekeeping or internal control device that mediates between different pools of knowledge to monitor the firm's reputation risk against IFRS implementation challenges. From a legal perspective, our ethnography documents how accounting “law” is made at the firm level and how PPF members strive for consistency – in spite of significant epistemological and organizational challenges. Our ethnography also shows that complex IFRS interpretation issues are not resolved through one person's judgment; instead, the firm's structure surrounding the PPF allows for the constitution of inter-individual judgment that transcends national, sectoral, and (sometimes) organizational boundaries. Finally, we see one important contribution of our work as helping reveal the limits of large conceptual categories such as “auditors”, which tend to downplay the dynamics of convoluted practice relationships.