ABSTRACT
Auditing firms are categorized in the management literature as professional and knowledge-intensive firms. Auditing firms operate in two different markets at the same time. On the one hand, they operate in the market of the services they provide. On the other hand, they act in the market for professional workforce. Balancing the tension between these two markets is achieved by means of the firm’s economic and organizational structures. The management of professional service firms requires to achieve a balance between these markets and structures. An alternative theoretical perspective with which to look at auditing firms is the institutional-constructivist view. Organizational identity has a critical role for the firm because it provides clues for action, interpretation and conduct. In knowledge-intensive firms, performance highly depends on the expertise of individuals, which is exceptional and valuable and dominates common knowledge. Knowledge-intensive firms may adopt alternative strategies of knowledge management.
