Corporate social responsibility as a legitimacy maintenance strategy in the professional accountancy firm

This paper investigates how accountancy firms use corporate social responsibility (CSR) as a device to maintain legitimacy with key constituents. It explores who these constituents (audiences) are for their CSR actions and the strategies they use to maintain legitimacy with these audiences. Interview-based evidence from 18 large accountancy firms in the United Kingdom (UK) identifies the main CSR constituents as: clients and potential clients of the firm; graduates as potential entrants to the industry; internal audiences represented by the firms' staff and partners; and other external audiences constructed as members of those local communities in which the firm operate. In the largest firms, maintaining pragmatic legitimacy with some client, graduate and internal audiences is frequently dependent on the development of moral legitimacy established with other external constituents (communities). Consequently, the typologies of legitimacy developed are largely pragmatic, the most ephemeral and most easily attained form, rather than something that is enduring, embedded and taken-for-granted.     

Student career aspirations and perceptions: The case of Israeli accounting students

The study investigates changes in Israeli accounting students' career aspirations during their course of studies, and the relationship between these and their perceptions of professional accountancy firms. We employed a cross-sectional analysis of students across consecutive educational levels from the first year to the end of their formal education. We assumed that revealed differences between the accounting student cohorts, in terms of their perceptions of professional accountancy firms and their career aspirations, could be interpreted as reflecting changes over time in students' attitudes. Results from the sample show that accounting student' aspirations to pursue a career with a professional accountancy firm decline significantly between the first and postgraduate years, while their desire to work in the business sector increases. The results show the same trend with regard to the student's positive perceptions of the above firms as future workplaces. Non-parametric tests demonstrate significant relationships between students' career aspirations and their perceptions of professional accountancy firms. We suggest that the change in students' perceptions and aspirations is a symptom of something similar to a ‘reality shock’, and that it results from the students' exposure to the accounting profession. Professional accountancy firms need to implement innovative policies to meet the challenge.     

Financing UK democracy: a stocktake of 20 years of political donations disclosure

Political donations in the UK have been subject to comprehensive disclosure since 2001. We study the data produced as part of this disclosure policy to evaluate the role of private and public political finance over time. Total political donations have grown by nearly 250 per cent since 2001, reaching over £100 million in real terms for the first time in 2019. This increase has been driven by donations from private individuals, who now account for approximately 60 per cent of donations in election years compared to 40–50 per cent up to the late 2010s. Furthermore, ‘super-donors’ (those contributing more than £100,000) have been a prominent driver of the rise, increasing their own share from approximately 31 per cent in 2017 to 45 per cent in 2019. We also show that private donations to the Labour Party fell sharply in the final stages of Jeremy Corbyn's leadership. These trends have benefited the Conservative Party, leading to a historic donation gap between the two main parties emerging circa 2019. We calculate that this gap between parties now stands at approximately £27 million compared to a historic average of £8–£10 million. This gap remains even after considering publicly funded ‘Short’ money provided to the opposition, which aims to increase competitive balance in the UK's democratic system.     

The contributions of Alexander Thomas Niven and John Ballantine Niven to the international history of modern public accountancy

This study examines the historical contributions to public accountancy of two Scottish Chartered Accountants. Alexander Thomas Niven was a charter member of the Society of Accountants in Edinburgh in 1854. and founded the Scottish public accountancy firm of A T Niven and Company in 1859. His son, John Ballantine Niven, became a Society member in 1893, co-founded the American public accountancy firm of Touche, Niven and Company in 1900, and was elected President of the American Institute of Accountants in 1924. The professional careers of both men are analysed in the context of a researched genealogy of the Niven family over two centuries in Scotland and the US. The analysis reveals the potential impact of successive generations of the Niven family in Scotland on the professional careers of Alexander Thomas Niven and John Ballantine Niven, and the significance of the latter's emigration to the development of the American profession. The historical contributions of both men are discussed within the context of specific economic and social factors over a considerable period of time. The conclusions of the study are that each Niven career was more than the sum of the events of a defined lifetime, and that the transfer of public accountancy knowledge through the emigration of John Ballantine Niven was a vital ingredient in the maturation of the American profession.     

The economic costs and benefits of UK defence exports

This study examines the economic costs and benefits to the UK of a 50 per cent cut in UK defence exports from the average level of 1998 and 1999. The net impact on the government budget is estimated to be an ongoing loss of between around £40 million and £100 million a year: around 0.2–0.4 per cent of the total UK defence budget. In addition, there is estimated to be a one‐off net adjustment cost, spread over five years, of between £0.9 billion and £1.4 billion. A further more speculative adjustment cost (estimated at around £1.1 billion) could result if the loss of income associated with the ‘terms‐of‐trade£ effect were also included. In terms of the wider debate about defence exports, the results of this study suggest first that the economic effects of the reduction in defence exports are relatively small and largely one‐off, and secondly that the balance of arguments about UK defence exports should be determined mainly by non‐economic factors.     

AUDITOR LIABILITY: THE OTHER SIDE OF THE DEBATE

The auditing industry claims to be an unfair victim of lawsuits and has deployed its considerable economic and political muscle in a campaign to secure further liability concessions. Amongst other things, it seeks to replace “joint and several liability” of partnerships with “full proportional liability”, a “cap” on auditor liability and a statutory right to negotiate liability limits with company directors. This paper challenges the evidence and the arguments advanced by the UK auditing industry. It argues that there is little convincing argument to support that industry's claims. On the contrary, ordinary stakeholders are relatively powerless to take action against negligent auditors. It is noted that most of the major lawsuits are by one accountancy firm against another. The UK auditing industry already enjoys considerable privileges, such as incorporation and “contributory negligence”, a form of modified proportional liability. Despite these privileges, the industry has shunned public accountability. It is holding the UK public to ransom by threats of locating its operations in offshore islands. Scholars are urged to develop alternative public policy options and analysis.     

The impact of board size on firm performance: evidence from the UK

We examine the impact of board size on firm performance for a large sample of 2746 UK listed firms over 1981–2002. The UK provides an interesting institutional setting, because UK boards play a weak monitoring role and therefore any negative effect of large board size is likely to reflect the malfunction of the board's advisory rather than monitoring role. We find that board size has a strong negative impact on profitability, Tobin's Q and share returns. This result is robust across econometric models that control for different types of endogeneity. We find no evidence that firm characteristics that determine board size in the UK lead to a more positive board size–firm performance relation. In contrast, we find that the negative relation is strongest for large firms, which tend to have larger boards. Overall, our evidence supports the argument that problems of poor communication and decision-making undermine the effectiveness of large boards.     

Women and the prospects for partnership in professional accountancy firms

This paper examines three possible reasons (stereotypical discrimination, structural obstacles and employee's preferences) for the lack of women partners in professional accountancy firms in Australia, UK and New Zealand. Data are collected from an experimental survey and interviews of current partners. Whilst women's perceived preferences and organisational structural barriers contributed strongly to the lack of women partners in all sizes of firms, traditional stereotypical discrimination against women at the partnership decision point was only displayed in metropolitan large non‐Big 4 firms, and it is suggested that this is related to intense competitive pressure and a constrained partnership resource.     

The Pricing of Initial Offerings of Privatised Companies on the London Stock Exchange

This paper investigates UK privatisation issues as initial public offerings (IPOs) of equities on the International Stock Exchange (London). Excess returns on such issues are compared with private sector initial public offerings. The results, which are unaffected by firm size and underwriting commission, indicate that, on an ex post basis, the issues provide excess returns above those of private sector firms on average by about 31% over a 32-week period. None of the existing theories of underpricing of IPOs is consistent with our results which imply wealth transfer to those who acquired the shares in privatised issues. After-market pricing was, however, found to be consistent with secondary market efficiency.     

Competence-based Approaches to the Assessment of Professional Accountancy Training Work Experience Requirements: The ICAS Experience

Most professional accountancy bodies' qualification processes encompass three components: a prescribed programme of professional education, some form of work experience, and a formal final examination to determine professional competence. The International Federation of Accountants (IFAC) suggests that purely theoretical and knowledge-based education does not meet the needs of all employers. Thus professional bodies are encouraged to find ways to deliver and assess relevant competences in the most appropriate manner. Despite educationalists suggesting that performance measurements based on direct observation within the work place are more effective at measuring competences than traditional paper-based examinations, assessment strategies within the accountancy domain remain conservative. The Institute of Chartered Accountants of Scotland (ICAS) was one of the first professional bodies to introduce a competency-based approach to work based assessment in 1999 and subsequently undertook a review of the process in 2004. The data collected for the review was undertaken by way of a questionnaire to authorized training offices, in-depth interviews with employers, and discussions which emanated from a Working Party which included internal ICAS employees, an academic and a representative from a large accountancy firm. This paper presents the findings of the review, discusses the pertinent issues in relation to work based assessment and outlines the changes that were made to the competency-based approach adopted by ICAS. It concludes with recommendations for future practice.     

The Government As Venture Capitalist: Organisational Structure and Contract Design in Germany's Privatisation Process

This paper examines the role that organisation structure and contract design played in resolving economic and political problems that arose during Germany's privatisation process. We find that German officials structured organizations and contracts in a way that made credible the government's commitment to rapid privatisation. This credibility served to protect the process from political and social opposition. In addition, it enabled Germany to attract talented private sector managers to its privatisation effort. This began with the establishment of an independent privatisation agency, the Treuhand. It culminated with the creation of another set of independent organisations called Management KGs, to which the Treuhand outsourced part of its restructuring, management and privatisation work. The Treuhand provided funding to this effort, thus serving as a kind of venture capitalist.     

Bridging the Gap: Engaging in Scholarship with Accountancy Employers to Enhance Understanding of Skills Development and Employability

Abstract

This paper reports on the author's experiences of working with accountancy employers to develop a deeper understanding of skills development and employability in the accountancy profession. It notes that while there is a well-developed literature that examines skills development amongst university accounting students, there is also evidence of a gap between skills development in the university setting and the reported experiences of new entrants into the accountancy profession. The paper examines the nature of this gap and attempts to bridge it, using the experiences of working together with employers. The evidence from this study is that accountancy employers seek new recruits with the capacity to establish professional credibility amongst colleagues and clients through their attitudes and behaviours, something subtly different from much of the literature, which focuses on the importance of discrete generic skills.     

Accountancy on the periphery: the profession in Exeter to 1939

This paper presents an historical case study of the accountancy profession in the English cathedral city and county town of Exeter. Inter alia, it examines the idea that the formation of professional accountancy bodies served not only to enhance the collective economic status and social mobility of their members but also, in the case of a city like Exeter located on the periphery of the UK, to enhance their geographical mobility. The emphases of the paper are on the growth in the numbers of accountants, migration of accountants (both within the UK and overseas), and the overlapping 'jurisdictions' of accountants with other professions. Exeter's experience is compared and contrasted with that of the UK as a whole and suggestions are made for further research. The paper includes data on professional accountants qualifying in and/or working in Exeter from the late 1870s to the outbreak of the World War II in 1939.     

The restructuring and privatisation of the electricity distribution and supply businesses in England and Wales: a social cost‐benefit analysis

In December 1990, the 12 regional electricity companies — responsible for the distribution and supply of electricity in England and Wales — were privatised. For the first few years following privatisation, real prices, profits and costs in the industry rose. Following two Price Control Reviews, prices have now fallen sharply and there have been substantial reductions in costs and more recently in profits. This paper attempts to conduct a social cost–benefit analysis of the privatisation by examining actual and predicted falls in costs over the period to 2005. We conclude that the privatisation did yield significant net benefits but that these were unevenly distributed across time and groups in society. Relative to our preferred counterfactual, consumers experience slightly lower prices and the government gains £5 billion in sale proceeds and net taxes. However, consumers begin to gain only from 2000.     

Women accountants: Is the grass greener outside the profession?

Studies of professional accountancy firms have indicated a complex process of internal socialisation which shapes the professional and organisational identities of the chartered accountants working within them. These processes have acted as a mechanism for excluding women, hindering their progress and facilitating their exit. Previous evidence suggests that women leave professional accountancy firms in order to accommodate more flexibility, experience less pressure, achieve consistency of hours and hence attain a better work/life balance.In this paper we seek to examine whether the gendered work practices of professional accountancy firms influence female choice to seek alternative employment outside the professional accountancy firm environment. Specifically the paper seeks to answer two research questions (1) why and when do women leave professional accountancy firms? (2) is the working environment outside professional accountancy firms less gendered?Data was collected by means of a postal questionnaire distributed in 2005 to women who had qualified in the years 1990–1995 (n = 1022). Responses were received from 370 women, of whom 100 were employed with professional accountancy firms and 270 employed within industry. In depth interviews were also conducted with 7 partners in professional accountancy firms and 6 women who had left the professional accountancy environment to pursue employment elsewhere.Whilst there was evidence that professional accountancy firms continue to reflect gendered working norms practices, rather than compound the dominant view, this study suggests that the primary reason women leave professional accountancy firms is to seek more interesting work as opposed to obtaining more flexibility in their working lives. In addition, the experiences of the women, the working patterns, and rates of progression were similar irrespective of employment type.     

Beyond Sandler: Risk tolerance and the UK investment deficit

The Sandler report of 2002 found a £27bn shortfall in the UK nation's savings. The report highlights the industry changes necessary for citizens to increase investment for their future and thus reduce this deficit. The mass of this investment activity will take place through high street financial services organisations. Sandler suggests changes in industry-wide structure and practice which will lead to macro changes in generic consumer behaviour. This paper suggests that the marketing departments in financial services organisations can go beyond this and harness ‘risk tolerance’ as a segmentation variable to alter behaviour on a more targeted, micro level. It is suggested that this practice could have an even more profound effect than that envisaged by Sandler. In support of this postulate, this paper presents the results of a research programme into segmentation by risk tolerance within a UK retail financial services organisation.     

Students' experiences of learning in a third-year management accounting class: Evidence from New Zealand

An extensive body of literature in higher education (for example, Marton and Säljö, 1984; Prosser and Trigwell, 1999) explores learning from the perspectives of students. Säljö (1979) formed the basis of Sharma's (1997) first study exploring accountancy students' conceptions of learning. Using an open-ended questionnaire administered to third-year management accounting students, this paper investigates accountancy students' conceptions of learning, and extends Sharma's (1997) study by examining the relationship between conceptions of and approaches to learning, and more specifically students' contextual experiences of learning in lectures and tutorials. Findings indicate that, while some students seek understanding as an outcome of their learning, the majority perceive learning quantitatively in terms of knowledge acquisition, reproduction and application. A new classification of the locus of responsibility for learning as perceived by students suggests that a more distributed concept of responsibility might result in enhanced learning outcomes.     

Computers BITE accounting education

The recent establishment of the £20 million Teaching and Learning Technology Programme by the Universities' Funding Council in the UK provides one of the largest boosts for IT and education since PLATO (in the USA) and NDPCAL (in the UK). This note describes the BITE project which is part of the above programme and highlights some of the problems that have affected both the development and evaluation of accounting courseware in the past. By using a strong interdisciplinary team of software, educational and subject specialists, the project hopes to overcome some or all of these problems.     

Accounting for privatisation in Africa? Reflections from a critical interdisciplinary perspective

The interrelation of privatisation and accounting constitutes a wide-ranging focus for research that is attractive from a critical theoretical and interdisciplinary perspective. A number of studies may be considered part of this focus in holding themselves out as types of evaluation of – or as an accounting, or accountability, for – privatisation. For us, the evaluation of privatisation programmes is properly a concern of critical accounting research and of those interested in the development of more holistic forms of accounting and auditing for appraisal, such as is envisaged in forms of social accounting and social auditing. Indeed the assessment of privatisation has been deemed within the ambit of the social audit movement. Privatisation in Africa is controversial. In today's context it is often integral to the particular form of the globalisation process and carries related ambiguities. Apparently something of a panacea for its advocates, it is problem-ridden for its critics. How should we account for privatisation in Africa? We promote the delineation of a holistic accounting evaluation model by reflecting on a critical review of research constituting accounts of privatisation in Africa. Of course such research, to the extent that it is holistic or comprehensive, would include attention to the mobilisation in context of various accountings as well as related practices of governance at micro- and macro-levels—in turn reflecting the sense in which accounting, along with related systems of governance, is pervasive in privatisation processes. While we find strengths in the research analysed and acknowledge its contribution, we point to deficiencies and gaps from a critical theoretical and interdisciplinary perspective. These gaps and deficiencies delimit policy discourse and praxis vis-à-vis privatisation in Africa and beyond. They also point to a more holistic accounting model of appraisal. We acknowledge the particularities of Africa, and indeed of the differing nations, cultures and regions of Africa, but also suggest the model's relevance not only for African contexts but beyond.     

UK immigrants and the foundation of the US public accountancy profession

Building on a previous study (Lee, 1997) describing the case of Edinburgh chartered accountants, the current study observes 394 chartered and incorporated accountants who migrated to the US by the end of 1914. The data are reported in the context of an emerging US public accountancy profession, and the purpose of the paper is to document the migration and its place in the development of American public accountancy. A comparison is made with 112 unqualified emigrants from the UK to the US who became public accountants there by the end of 1914. This contrast provides a means of discovering subsets of the migrant group with respect to preemigration backgrounds and post-immigration careers of 506 men. Comparisons are also made of differences within defined subsets of the qualified migrant group. Data were collected from available UK and US sources. These were then aggregated in a manner that permits a coherent picture to emerge of the immigrants as public accountants in the US at the end of the nineteenth and beginning of the twentieth centuries. The analyses reveal that the immigrant group was relatively small, and that the immigrants succeeded in their careers to differing degrees. A sizeable proportion returned to the UK or moved on to another host country. Of those that remained in the US, most had productive if unexceptional lives, typically in public accountancy. A few men became leaders of US public accountancy institutions and firms. A small minority achieved senior positions in industry and commerce. It is argued that the influence of UK accountants on US accounting and auditing went beyond the documented successes of specific individuals and firms. The paper is therefore more than the typical history of prominent US accountants and firms of the past.