Open Access Te Herenga Waka-Victoria University of Wellington
thesis_access.pdf (2.59 MB)

An investigation of organisational culture: A case study of Indonesia’s professional accounting firms

Download (2.59 MB)
posted on 2021-11-15, 13:35 authored by Hermawan, Marko Sebira

Existing research on accounting firms has dealt with professional and ethical values, global professional networks, and nation-state organizational cultures, but there have been few studies that scrutinise all factors in a non-Western country such as Indonesia. As a fast-developing country, Indonesia offers a unique set of characteristics: cultural diversity, an emerging and strengthening economy, and exposure to many aspects of business globalisation. This study documents the impact of both global and local values and beliefs (institutions) on audit professionalism and accounting firm cultures.  The objective of this research is to investigate the extent to which Indonesian audit professionalism is influenced by external factors such as norms of Global Professional Networks (the Big 4), Indonesian cultures, political economy and the accounting profession. The organisational, as well as institutional, fields are observed to gain a thorough understanding of norms and values that are socially constructed by auditors within an accounting firm. These dimensions are combined in an institutional analysis, in order to explore all possible influences on beliefs and values of audit professionalism in Indonesia. To meet this research objective, the research question in this thesis is: To what extent do the values of the global professional network, as well as Indonesian national cultures, affect the manifestation of audit professionalism within accounting firms?  A qualitative approach is used, using an ethnographic method. Semi-structured interviews and observations collected the data in two phases. Phase One was a pilot study, for the researcher to make initial observation of current issues in Indonesian accounting. There were twenty participants, ranging from accounting staff from a university and partners from small accounting firms to chairmen from Accounting Associations. Phase Two was conducted in one of the Big-4 firms in Jakarta. Thirty auditors were interviewed and the questions consisted of attitudes and perceptions of audit professionalism in the accounting firm. Observations were made of auditors' behaviour during interviews, work and free time.  To answer the research question, this research employs an institutional logics framework offered by Thornton, Ocasio, and Lounsbury (2012). To enhance the understanding of the cultural’ mix within an organisation, an institutional logics framework enables scrutiny of the multiple logics that are manifest in day-to-day behaviours. These logics are related to six audit professionalism dimensions offered by Kerr, Von Glinow, and Scheriesheim (1977): expertise, autonomy, collegial maintenance of standards, ethics, professional commitment and professional identification. The institutional logic approach allows identification of the ideal types of institutions for an accounting firm in Indonesia, in that the framework may be re-calibrated to accommodate elements that reflect a specific country’s norms and values.  This study found that institutions in Indonesian accounting firms differ from Western institutions which might be observed in similar contexts. The findings also suggest some different institutions compared to those of the model proposed by Thornton et al. (2012). There are four important institutions in the Indonesian accounting: Kekeluargaan, Clients, Indonesian Accounting Professionalism and the Global Professional Networks. Kekeluargaan is considered the fundamental element of Indonesian norms, is influenced by Javanese values of Rukun (harmony) and Respect. The regulatory institutions are strongly influenced by Javanese Bapakism (paternalism) and characterised by a high level of bureaucracy. Indonesian accounting professionalism underpins a norm of promoting Indonesian accounting quality and reputation, while the corporate institutions strongly reflect Western capitalisation and the norms of Global Professional Networks. The extent to which these institutions affect audit professionalism is analysed.  The study concludes that audit professionalism is a set of attitudes and behaviours that can be perceived and actioned differently in different locales, based on different institutional fields. With the significance of the above four Indonesian institutions, the application of Western audit standards creates a distinctive approach in Indonesia. The theoretical contribution emphasises the value of the development of Indonesian institutional fields, particularly in audit firms, while the practical contribution of this study will be toward the ongoing adaptation of audit and accounting standards in Indonesia. Limitations of the study are acknowledged, such as lack of previous qualitative studies in Indonesian audit firms and professionalisation, and cross-sectional data collection. Some suggestions for future research include cross-comparison to other Big-4 accounting firms, both nationally and internationally.


Copyright Date


Date of Award



Te Herenga Waka—Victoria University of Wellington

Rights License

Author Retains Copyright

Degree Discipline


Degree Grantor

Te Herenga Waka—Victoria University of Wellington

Degree Level


Degree Name

Doctor of Philosophy

ANZSRC Type Of Activity code

970115 Expanding Knowledge in Commerce, Management, Tourism and Services

Victoria University of Wellington Item Type

Awarded Doctoral Thesis



Victoria University of Wellington School

School of Accounting and Commercial Law


Baskerville, Rachel; Hopper, Trevor