Accounting education,firm training and information technology: a research note

Rapid developments in information technology (IT) have posed many challenges to the accounting profession. In this study we examined what has been done in US colleges by polling auditors' perceptions to investigate whether US accounting firms provide their auditors with more information on current IT topics than colleges do. Also educators in the USA are surveyed to find out what they are planning to do in college courses to ensure that accounting graduates acquire necessary IT knowledge/skills. The results indicate that the entry-level auditors have had significantly more exposure to IT topics while in college than the senior auditors had, which suggests that educators have modified their curricula by incorporating more IT topics into accounting programmes. According to the findings, educators recognize the importance of IT topics, but only a few IT topics can/will be covered in accounting curricula. Implications, limitations, and future research directions of this study are also discussed.     

Awareness of the public versus private accounting divide,and its impact on the career path preference of accounting students

This research assesses what knowledge upper-level accounting students possess about the distinctions between the public and private branches of accounting, as well as the influence such knowledge might have on their accounting branch choice. Overall, the study concluded that, before they were aware of the pros and cons of each career path, students preferred a career in public accounting over private accounting. But upon learning the pros and cons of each career path, however, students showed a slight preference toward private accounting. The study suggests research on accountant personality be supplemented by research on the impact of practical knowledge about private versus public accounting work environments on accounting career choice. It suggests greater importance be placed in accounting education on instilling such knowledge.     

The validity of management control topoi: Towards constructivist pragmatism

For decades, management accounting research paradigms have been in competition without reaching any apparent closure, and struggles to bridge the gap between knowledge and doing [Pfeffer, J., Sutton, R.I., 1999. Knowing what to do is not enough: turning knowledge into action. Calif. Manage. Rev. (Fall), 83–108] have not been successful either. This paper argues that this state of affairs is due to an insufficient understanding of reality, which is rooted in the management accounting paradigms. The paper establishes a concept of reality as an integrated set of conditions for actions and argues that, without such a concept, the issue of validity cannot be addressed: management accounting and control only provide valid results in practice if they incorporate the four aspects of the world of human life—facts, logic, values and communication. On the basis of these aspects, some predominant research paradigms are subsequently analysed and, using a case study, the paper shows how the four dimensions are integrated in the practice of a successful manager. Finally, the paper explains why the integration of the four aspects is always unique and company-specific, forming what is termed topoi.     

Accounting textbooks: Exploring the production of a cultural and political artifact

This paper explores the production of introductory financial accounting textbooks in the UK. Despite being a pervasive pedagogical device (see Brown and Guilding, 1993, Accounting Education: an international journal, 4(2) pp. 211–218), there has been little research carried out which examines the role or contents of textbooks in accounting education. This is a surprising gap in the literature when one considers the numerous concerns that have been expressed regarding the content of accounting education, the values which it projects and the type of student which it produces. Drawing on contemporary research into textbooks, this paper considers accounting textbooks to be ‘cultural artifacts’ which may reflect the cultural, ideological, and political interests of particular groups in society. In this regard, introductory financial textbooks have the potential to reinforce cultural homogeneity through the advancement of shared attitudes. This study is based upon 12 semi-structured interviews with both textbook authors and commissioning editors. Results indicate that the contents of textbooks are the product of complex social and cultural relations. Whilst conflicts and negotiations may characterize the production process, the knowledge that is considered most ‘legitimate’ tends to be mandated, either directly or indirectly, by professional accounting bodies through course accreditation requirements. Furthermore, this knowledge reflects wider cultural issues and assumptions regarding the structure of society and of how it should be organized.     

Accounting relativism: the unstable relationship between income measurement and theories of the firm

The knowledge structures underlying accounting representations are rarely investigated and usually tend to be taken for granted. As a case of the problematic knowledge foundations of accounting, we concentrate on one of the most relevant conceptual underpinnings informing the construction of the accounts—the relationship between theories of the firm, accounting theories, and income measurement. In particular we analyse and compare the ways in which this relationship has been conceived and developed in two theoretical contexts, the Italian tradition of Economia Aziendale and the US entity vs proprietary debate. Various and contradictory approaches to the concept of the firm and income calculation in these two theoretical traditions emerge. Such a conceptual variety is what we refer to as ‘accounting relativism’. This is defined here as the co-existence of different accounting representations and measurements, both of which are not objectively rankable in any conceptual hierarchy, because of the incommensurability of their basic assumptions, i.e. of their knowledge bases. This intrinsically ‘unstable’ character of accounting at a conceptual level is likely to have relevant implications, representing a major source of theoretical variety, as well as a premise for making sense of power uses of accounting within organisational settings. ©     

Undergraduate student research programs: Are they as viable for accounting as they are in science and humanities?

This paper reviews a recent thrust in academia to stimulate more undergraduate research in the USA, including a rapidly growing annual conference. The paper also describes programs in which significant foundation grants have been received to fund undergraduate research projects in the sciences and humanities. In particular, selected humanities students working in teams in a new “Philosophy Lab” are allowed to embark on long-term research projects of their own choosing. Several completed projects are briefly reviewed in this paper.In April 1989, Trinity University hosted the Third National Conference on Undergraduate Research (NCUR) and purposely expanded the scope of the conference to include a broad range of disciplines. At this conference, 632 papers and posters were presented representing the research activities of 873 undergraduate students from 163 institutions. About 40% of the papers were outside the natural sciences and included research in music and literature. Only 13 of those papers were in the area of business administration; none were even submitted by accounting students. In 1990 at Union College, 791 papers were presented; none were submitted by accountants. In 1991 at Cal Tech, the first accounting paper appeared as one of 853 papers presented.This paper suggests a number of obstacles to stimulating and encouraging accounting undergraduates to embark on research endeavours. These impediments are somewhat unique to accounting, and it appears that accounting education programs are lagging in what is being done to break down obstacles in science, pre-med, engineering, humanities, etc. This paper proposes how to overcome these obstacles in accounting. One of the anticipated benefits of accounting student research, apart from the educational and creative value, is the attraction of more and better students seeking creativity opportunities in addition to rote learning of CPA exam requirements. This, in part, might help to counter industry complaints that top students are being turned away from accounting careers nationwide.     

ACCOUNTING MODELS AS AN INQUIRING SYSTEM IN LOCAL GOVERNMENT

Budgetary processes of local governments have been studied a lot, but there seems to be a lack of knowledge on how the accounting systems are actually used and how they fit into these processes . This is the theme of this paper, which is based on studies of local governments in Sweden. The paper is divided into two parts. In the first part there is a discussion of the budgetary process, the accounting system and their interrelationship. Two particular problems are discussed; the first relates to the fact that the accounting system is systematically filtering away what seems to be relevant financial information; and the second is that the accounting system is also very badly adapted to that process of commitments, which is understood to be the budgetary best. In the second part of the paper, it is argued in a normative manner that changes should be made to solve these two problems.     

Critical reflections on research approaches, accounting regulation and the regulation of accounting

The design and choice of research approaches, the nature of accounting regulation and the reactions to these regulations in organisations, involving, in effect, the regulation of accounting, are three themes of considerable importance in accounting research. They are the three themes that have dominated the research agenda of the author throughout his academic career. This paper explores the nature of these three key research themes developing some critical reflections on what has been discovered about each of these themes using the author's sole and joint research and publications as a vehicle for this analysis.     

Accounting and sustainable development: An exploration

As the social and environmental impacts of human activity have become more evident, the role of sustainable development as an organising principle in a variety of policy contexts and over multiple scales has become central. There are, at least, two implications that emerge from this observation. First, morally infused problems that need to be addressed have become more intractable, requiring innovation in our modes of thinking. Second, new spaces have emerged where the academy might explore how knowledge is created, validated and translated (or not) alongside policy and practice settings. One outcome of these trends has been the emergence of a stream of work (sustainability science) which investigates how disciplines might develop knowledge that progresses sustainable development. The aim of this paper, in line with the focus of the special issue, is to explore what possibilities emerge for accounting in light of a sustainability science approach. To achieve this end the paper starts with an exploration of the frustrations expressed in the literature over the perceived lack of progress made by social and environmental accounting towards addressing sustainable development. The paper then introduces sustainability science with the aim of imagining how an accounting for sustainable development might emerge. The paper closes with two illustrations of how a sustainability science approach to accounting could develop.     

The failure of accounting research to improve accounting practice: a problem of theory and lack of communication

There is anecdotal evidence to support the assertion that accounting research, or what is alleged to be research, is of little or no value to the practice of accounting, nor to the development of accounting as an academic discipline. The problem is not that efforts have not been made to conduct research, but rather there is a fundamental flaw in the accounting research process itself.Tricker suggests that the research process can be understood using two models. One is a set of relationships which “feed-forward”. That is, a known theory suggests a hypothesis, which is tested through the accumulation of data. If the hypothesis is proven to be true, it is added to the body of knowledge, enhancing the legitimacy of the underlying theory. The second model is intended to provide “feed-back”. That is, the real world is observed and a model of it is proposed, based on known theory. Data is collected and processed, and the model is refined. When the model is consistent with the real world and known theory, it is added to the body of knowledge. These research models depend on the existence of known theory for their usefulness.The central problem of accounting research is that there is no known theory to use as a reference for creating hypotheses or models to be empirically researched. The absence of theory can be seen in education, practice, and the research literature itself. Practitioners, for example, because of their training and lack of experience with and interest in research tend not to look to research findings to meet their professional needs. Accounting researchers, on the other hand, have created what appears to be a highly advanced research context which, in effect, is an environment dominated by sophisticated methodology, rather than theory. The research basically emulates the hard sciences, which makes its pursuit academically acceptable, but it lacks substance. This explains the failure of accounting research to improve accounting practice.     

Governance,tax and folk tales

This paper develops a particular narratological approach to analyse a common category of narratives: individuals’ accounts of their organization’s context and purpose. In two phases of interview research with 45 senior UK accounting professionals (tax officials, tax advisors to, and tax directors of, multinational companies) we focus on a pivotal period in the governance of UK taxation. We advocate analysing what ordinarily could be called ‘real world’ narratives about this context (‘tax tales’) as if they were folk tales. This approach draws on an influential analysis of folk tales by Propp. Our theoretical contribution is to show how features of strong or dominant plots, of the kind that structure folk tales, also help accounting professionals to make sense of this complex governance environment. This helps us understand personal projects of sense making in a context that is technically, legally and morally complex and has implications for governance, for policy, and for accounting as a professional project.     

Figure it out yourself: financial reporting,accountability and the self-employed

The number of people defined as self-employed has increased dramatically in the United Kingdom during the past 17 years. Many people have interactions, both mandatory and voluntary, with the State which necessitate their providing income information. In order to obtain and use such financial information from the self-employed the authorities must develop and implement income measurement rules and procedures. Despite the growth in financial reporting demands placed upon this growing group, little accounting research has been undertaken. This paper aims to place the self-employed on the accounting research agenda. It considers why they exist as a defined group; what the financial reporting requirements and problems which arise are; what kinds of technical rules exist and the factors which should be considered in their construction; and what factors should be borne in mind in constructing appropriate reporting procedures     

Conservatism, growth, and return on investment

Return on Investment (ROI) is widely regarded as a key measure of firm profitability. The accounting literature has long recognized that ROI will generally not reflect economic profitability, as determined by the internal rate of return (IRR) of a firm’s investment projects. In particular, it has been noted that accounting conservatism may result in an upward bias of ROI, relative to the underlying IRR. We examine both theoretically and empirically the behavior of ROI as a function of two variables: past growth in new investments and accounting conservatism. Higher growth is shown to result in lower levels of ROI provided the accounting is conservative, while the opposite is generally true for liberal accounting policies. Conversely, more conservative accounting will increase ROI provided growth in new investments has been “moderate” over the relevant horizon, while the opposite is true if new investments grew at sufficiently high rates. Taken together, we find that conservatism and growth are “substitutes” in their joint impact on ROI.     

EVA, ACCOUNTING PROFITS, AND CEO TURNOVER: AN EMPIRICAL EXAMINATION, 1985–1994

A growing number of companies use EVA or related measures of economic profits as metrics for corporate planning and executive compensation. Unlike traditional accounting measures of performance, EVA attempts to measure the value that firms create or destroy by subtracting a capital charge from the cash returns they generate on invested capital. For this reason, EVA is seen by its proponents as providing the most reliable year-to-year indicator of a market based performance measure known as market value added, or MVA. Although EVA and MVA have received considerable attention in recent years, there has been little empirical study of these performance measures—and what studies have been produced have provided mixed results. This study joins the debate over EVA vs. conventional accounting measures by asking a different question: Which performance measures do the best job of explaining not only stock returns, but the probability that a CEO will be dismissed for poor performance? Using a sample of 452 firms during the period 1985–1994, the authors report that EVA has a somewhat stronger correlation with stock price performance than conventional accounting measures such as ROE and ROA. But, of greater import, EVA appears to be a considerably more reliable indicator of CEO turnover than conventional accounting measures.     

Back to the Future: The Broadening Accounting Trajectory

Contemporary accounting practice has shown signs of a broadening scope of activities being undertaken both from within and as a service provided to organizations. Based upon a historiographic linking of past and present, this paper examines the past 100 years of broadening professional practice in the discipline as a basis for offering a presentist examination and critique of contemporary accounting education and research opportunities. The scope of what constitutes accounting work is found to have been expanding for over 100 years, becoming increasingly at variance with accountants’ traditional beancounter image. Recent professional accounting association investigations reveal an array of contemporary environmental factors that have accelerated this broadening of the profession’s scope into financial planning, assurance services, strategic, risk, knowledge and change management, and management advisory services. This has called for an expanded accounting skills base which has gained momentum towards the end of the 20^th century. The elements of some of these developing areas of professional work and their implications for contemporary and future education and research are examined.     

Knowledge, limits and boundaries

In this paper the underlying concern is the problem of knowledge. How do we understand the world, what is ‘scientific’ knowledge, and to what extent is this knowledge limited by the fact that the world in which we live is complex? The problems associated with the status of our knowledge of the world have been central to philosophy all along. Here I will focus on the way in which the acknowledgement of complexity transforms some of the traditional conceptions of (especially scientific) knowledge. I will also examine the notions of boundaries and limits, arguing that these notions are not problems we have to get out of the way, but that they are inevitable as soon as we start talking of ‘knowledge’.     

OF MESSINESS, SYSTEMS AND SUSTAINABILITY: TOWARDS A MORE SOCIAL AND ENVIRONMENTAL FINANCE AND ACCOUNTING

This essay is a personal attempt at a re-visitation and re-consideration of a number of the fundamental questions which underlie accounting and finance but which only rarely receive explicit consideration. Social and environmental accounting has been the principal focus of my research interests since I became an academic and the subject was, indeed, the primary reason I became an academic in the first place. A concern with social and environmental accounting automatically forces one to raise basic questions about (what is conventionally thought of as) accounting and finance—its foundations, its purposes, its assumptions. In trying to answer those questions one comes to see all of accounting and finance in different ways—both in terms of what it assumes about the world and what it can potentially do for the world. This paper seeks to clarify some of the ways in which conventional accounting and finance and social and environmental accounting (and finance) can be in harmony. However, the principle purpose of the paper is to suggest that many of our ghettos, our internecine squabbles and our misunderstandings are trivial when compared with the essential question of what we place at the centre of our teaching and scholarship. At the core of accounting and finance is a truly fundamental conflict between sustainability and modern international financial capitalism. Our choices between these are likely to be a great deal more than matters of methodological nicety or intellectual convenience. Social and environmental accounting (and finance) offer a way to recover a moral and productive accounting and finance that places survival of the species at its very heart.     

To tell the truth: A discussion of issues concerning truth and ethics in accounting

Such major scandals as the savings and loan failures in the late 1980s and 1990s, the Enron, Global Crossing, WorldCom and Tyco corporate scandals, Arthur Andersen’s demise, and the current crisis of the financial system have all been linked directly or indirectly to false, misleading, or untruthful accounting. Thus, in a pragmatic sense the question of the veracity of accounting or what it could mean for accounting to be true seems to exist. The assertion of a false or misleading financial report implies some belief that there could exist a true or not-misleading report. Accounting-standard setters have finessed this issue by agreeing that “decision usefulness,” not truth, is financial reporting’s ultimate objective. Over time they have gravitated to a coherence notion of truth to provide rationales for accounting policy. The result has been a serious conflict between the content of financial accounting and the auditing of that content. In this paper we describe this conflict and its consequences and, relying on John McCumber’s work, provide an argument about how accounting scholars and practitioners might begin to think more cogently about what a truthful type of corporate reporting might be. We suggest that accounting-standard setters have too narrowly construed what accounting’s role in democratic society is and how the contradictions of current standard-setting jeopardize the essential professional franchise of accountants, the audit function.     

Internet uses in accounting education: survey results

The authors conducted a survey to determine how, where in the curriculum, and for what purposes accounting educators were using the Internet. The results indicate that pioneering accounting educators generally include Internet-based applications in their courses in order to familiarize students with the Internet, locate current materials to promote in-class discussion, and help with the completion of research projects. The authors report how accounting educators are using the Internet in specific courses and which resources and Web sites are found to be the most useful. The results also indicate that accounting educators experimenting with Internet-based applications in their courses are doing so with very little department or college support and little or no merit or official recognition for their efforts. The paper should be interesting to anyone currently using or contemplating using the Internet in accounting education.