University - profession partnership in accounting education: the case of Sri Lanka

This paper analyses accounting education in Sri Lanka with particular reference to the university-profession partnership. In terms of the establishment of the Institute of Chartered Accountants in Sri Lanka (ICASL) in 1959, the availability of accounting degree programmes in the university, and the on-going British influence in accounting, one might expect to find a vigorous accountancy profession in place, actively seeking to produce highly competent accounting professionals in adequate numbers suitable for its country's economic needs. However, such a situation would be misplaced. Over the past four decades ICASL has produced only 1800 qualified accountants in a country of 18 million population. Drawing upon a theoretical framework of professional accounting education, this paper explains the lack of a proper partnership between the university and the professional body over the last four decades in Sri Lanka, and speculates as to whether ICASL purposely exerts control over the supply of accountants by limiting the membership only to those who complete its own examinations.     

我国会计基础工作改革研究——基于英美法系角度

本文研究了英美法系的代表国家美国、英国与加拿大会计的基本特征,提出完善我国会计基础工作的相关建议.研究发现,英美法系国家会计的共同特征是,“真实与公允”是会计核算的最基本要求,会计准则的制定高度专业化、职业化,并考虑到了国际财务报告的要求;会计核算和信息披露与企业规模和性质存在相关性;会计人员管理市场化,民间组织在会计市场的资源配置中起到了重要的作用;原始凭证民主管理,没有统一规范的标准样式;内部控制成为法定要求.英美法系国家会计工作的这些经验值得我们吸收借鉴.     

Could Accounting Have Saved Itself from the Antitrust Laws?Revisiting the Antitrust Investigations into the US Accounting Profession 1966–1990

While the role of lobbying in the US public accounting profession has been the subject of several studies, what has not been addressed is the profession's historic reluctance to lobby and the impact this may have had on the profession. This paper provides a case study of public accounting's interaction with government and the need for the profession to articulate the impact of government policies on the practice of accounting. It reviews and assesses the antitrust investigations by the US Justice Department and Federal Trade Commission that led to the repeal of the profession's anticompetitive ethics rules, rules that had governed American public accounting for most of the 20th century. These investigations are often blamed for an increased competitive atmosphere in public accounting that prioritized growth and profitability over quality in attest services. Using records obtained from Freedom of Information Act requests and archival sources, I attempt to reconstruct the US Government's motivations and the efforts of the American Institute of CPAs. I find a troubling lack of understanding of the audit profession by executive branch regulators and Congress and a reticence by the American Institute of Certified Public Accountants to advocate for the profession that led to what many observers see as a profound misapplication of the antitrust laws. While this study deals only with the US, similar regulatory changes took place in Canada, the UK, Australia, and New Zealand.     

The impact of accounting standards convergence on Chinese firms’ overseas mergers and acquisitions

This paper investigates how accounting standards (AS) convergence influences Chinese firms’ overseas mergers and acquisitions (M&As) and shows that this convergence significantly promotes Chinese firms’ overseas M&As. Specifically, we find that both the probability of success and the value of transactions increases significantly in countries that implemented International Financial Reporting Standards (IFRS) prior to 2007. These results suggest that accounting standards (AS) convergence can improve the comparability of accounting information between China and other countries that have adopted IFRS. Moreover, we find that the impact of accounting standards (AS) convergence on state-owned enterprise (SOE) acquirers is weak. These findings demonstrate that accounting standards (AS) convergence can facilitate Chinese firms’ overseas M&As by improving the comparability of accounting information between China and target countries.     

Recent developments in the accounting profession in New Zealand: A case of deprofessionalization?

The international accounting literature is replete with references to the importance of professionalization of accounting in its development. While professionalization of accounting is progressing at a rapid rate in many developing countries, the recent developments in some western industrialized countries seem to suggest a different trend. This paper proposes to investigate these developments and provide a critical analysis focusing on one western industrialized country (i.e., New Zealand).Evidence is provided in the paper to show that (a) the boundaries between accountancy and other occupations are becoming increasingly blurred; (b) the dominance of accounting controls in organizations is being challenged; (c) the profession does not control access to accounting knowledge; and (d) the profession is unable to prevent government intervention in the areas of work standards, and bureaucratic controls in the work place. The paper argues that the recent changes in the accounting profession in New Zealand suggest a trend towards deprofessionalization.     

Towards a Theory of Cultural Influence on the Development of Accounting Systems Internationally

Research has shown that accounting follows different patterns in different parts of the world. There have been claims that national systems are determined by environmental factors. In this context, cultural factors have not been fully considered. This paper proposes four hypotheses on the relationship between identified cultural characteristics and the development of accounting systems, the regulation of the accounting profession and attitudes towards financial management and disclosure. The hypotheses are not operationalized, and empirical tests have not been carried out. They are proposed here as a first step in the development of a theory of cultural influence on the development of accounting systems.     

Modern slavery and the accounting profession

This first paper in the Special Issue on “Modern slavery and the accounting profession” considers how various branches and functions of the accounting profession in business operations and supply chains are implicated by the move to end modern slavery. Accounting has always been involved with slavery practices. When slavery was legal, accounting focused on reporting slaves as assets and expenses in the accounts. In these more humane times, now that ownership of slaves is illegal, the accounting profession has different functional responsibilities towards modern slavery. These include external reporting in line with and above and beyond requirements of legislation; internal management accounting to build awareness and support planning, control and decision making to reduce modern slavery risk and look for opportunities from mitigation; and audit and assurance to ensure credibility of claims made by business. The papers presented in this Special Issue touch upon some of the key aspects of the connection between modern slavery and management control systems, corporate disclosures and the historical role of professional auditors/the accounting profession, but much remains to be achieved in the research agenda ahead.     

The changing genderization of the accounting workforce in the US, 1930-90

The accounting profession in 1930 was predominantly a male workforce. By 1990, the gender composition of accounting had changed dramatically. Women, who in 1930 had represented only 10 per cent of the accounting workforce, now represented over 50 per cent of the workforce and earned 53 per cent of the accounting degrees. Increases in the aggregate workforce were not accompanied by subsequent proportional increases in participation at the upper-management levels of accounting firms. Thus, what occurred was a stratified regenderization of the aggregate workforce rather than an overall regenderization of the accounting profession. This paper delineates the historical, cultural, legal, economic and educational forces that led to this changing genderization.     

The role and impact of professional accountancy associations on accounting education research: An international study

This paper explores the relative influence of the accounting academy and accountancy professional associations in the debate concerning the profile and quality of accounting education research. This research analyses 13 semi-structured interviews undertaken with members of key accounting professional associations in Australia, New Zealand (ANZ) and the United Kingdom and Ireland (UKI). The paper makes a theoretical contribution by the novel application of the institutional logics theory to the literature concerning professional accounting associations (PAAs) demonstrating the dominant commercial logic of the education function and the more traditional fiduciary logic of the technical function. The research finds that the primary stakeholders in the professional accounting curriculum development model are the PAAs and employers, whilst the accounting academy is relatively absent. The relative independence of the education and research and technical functions within PAAs is also identified: academic research and technical activity has little influence on professional education and vice versa. However, PAAs’ funding of academic research is common across all four countries for brand recognition and in some instances to influence policy rather than informing the professional curriculum.     

Reporting accountant appointments and accounting restatements: Evidence from UK private companies

In recent years, regulators have exempted an increasing number of companies from the requirement to appoint auditors, yet little is known about the role of the accounting profession in preparing and validating the financial statements of unaudited companies. In this paper, we examine empirically the factors associated with the appointment of reporting accountants. We then provide novel evidence on whether unaudited UK small private companies are less likely to restate their annual accounts when they have been prepared by an external accountancy firm (i.e., a reporting accountant). Based on a cross sectional analysis of a large sample of small private unaudited UK companies, we find that, in accordance with the ‘confirmation hypothesis’, larger companies that voluntarily disclose more financial information are more likely to appoint a reporting accountant. We also find that the accounts of companies with a reporting accountant are significantly less likely to be restated than those without. This result is more pronounced for companies disclosing more financial information and for those employing a larger accounting firm. Given the dwindling number of private companies opting for audits, our findings contribute to debates on the role of the accounting profession in enhancing private company financial reporting quality.     

'Publishing your private affairs to the world': corporate financial disclosures in the UK 1900-24

The main intention of this paper is to consider the disclosure practices of quoted UK companies during an important period of change in financial accounting practice, the first quarter of the twentieth century. The paper focuses in particular on levels of disclosure, as indicated by the volume of information provided, and on more qualitative aspects of disclosure practice. Our knowledge of the patterns of disclosure practices over time is deficient, despite the work of a number of accounting historians, and is based upon a limited amount of primary evidence. The paper reviews current perspectives on the corporate financial disclosures of the period, provides new evidence on disclosure practices in the form of an analysis and comparison of the published and internal records of thirty quoted companies operating in four major industrial sectors in the UK during the period 1900-24 and draws some conclusions.     

Parallels between US and UK cost accountancy in the World War I era

Both the US and UK governments attempted desperate measures during World War I in an effort to maintain wartime production levels of necessary commodities and to allow for their economical purchase by the military. Loft (1986a, 1986b, 1990) has studied the British experience in depth, concluding that UK cost accountancy 'came into the light' as a result. It might be expected that similar developments would have occurred in America with the activities of the War Industries Board. In both countries, national associations were established in the immediate aftermath of the war to promote the professional standing of cost accountants. This paper utilizes archival materials in an effort to investigate whether US cost accountancy was developing more sophisticated costing techniques as Loft has claimed for the UK, or whether practitioners in this country were left 'still cursing the darkness'. Our findings suggest that cost accountancy developed in parallel fashion in both countries. US and UK cost accounting professionalism was dominated by the presence of leading financial accounting practitioners, and in both countries the movement towards more sophisticated costing techniques was gradual rather than dramatic.     

Transforming identities: Accounting professionals and the transition to motherhood

This paper investigates the relationship between the experience of motherhood and employment within the UK accounting profession, by examining the oral history narratives of a small group of accountants who have recently become mothers and returned to work. Drawing from contemporary theories on identity, it considers how individuals make sense of the different social identities of accountant and mother, and to what extent social, institutional and cultural factors shape and restrict the ways in which the self is experienced. It also explores the implications for both the self and the accounting profession of interconnections and juxtapositions between the ostensibly private sphere of the home and the public sphere of employment. It suggests that as the identities of mother and accountant are entwined, they undertake a process of redefinition and transformation of the self.     

Working on the Railroad: Public Accounting Talent in the United States—The Case of Haskins & Sells (Now Deloitte)

Nineteenth century US railroads were the first ‘big businesses’ and had profound influence on society. This paper addresses one source of talent for the early US public accounting profession—railroads. Following the end of the US Civil War (1861–65), industrial expansion was a revolutionary experience, with large trusts appearing in the wake of the railroad's maturing influence on the development of a vast continental economy. Accounting practice also was impacted by railroads. For example, the development of annual reports, income measurement, the standardization of reporting by regulators, developing fixed and variable cost, and throughput concepts for capital intensive business—all were related to the railroads. This paper focuses on a significant link between the emerging public accounting profession and the railroads by examining how an early major US public accounting firm relied upon accounting skill developed within railroads as an important source of talent. Arguably, talent is the most important resource of a professional firm. While it is a commonly held view that the immigration of UK accountants in the late nineteenth century was the source of public accounting talent, this paper provides evidence of a competing explanation—the sourcing of talent from a firm (Haskins & Sells) that continues to the present day as Deloitte. Key leadership and personnel of that time gained their experience while working on the domestic railroads.     

The influences of Confucianism, Feng Shui and Buddhism in Chinese accounting history

This paper attempts to examine the influences of Confucianism, Feng Shui and Buddhism on the evolution of Chinese accounting before recent accounting reforms commencing in the 1980s. Chinese cultural variables (e.g. Confucianism, Taoism, Buddhism, etc.) have been widely utilized in studying Chinese accounting systems, the accounting profession and the evolution of Chinese accounting techniques. However, the literature has not taken into account the traditional Chinese Feng Shui belief, which was broadly considered as the most important part of Chinese traditional culture. There is much evidence to show that Chinese accounting development was not only influenced by Confucianism, Taoism and Buddhism, but also by the prevalence of Feng Shui belief in ancient China over thousands of years. This paper first discusses the concepts of culture and describes Confucianism, Feng Shui and Buddhism in China, and then examines the influences of Confucianism, Feng Shui and Buddhism on the evolution of Chinese accounting. The influences discussed are those on bookkeeping methods, accounting information, accounting profession/accountants, regulating and standardizing accounting practice, government accounting and private-sector accounting respectively. This paper also identifies some areas for future research in Chinese accounting history and culture.     

Judicial interpretation of the will of the state: A Hegelian perspective in the context of taxation

This paper draws upon Hegelian dialectic theory to understand the nature of the interrelationship between state, taxpayer, and the accounting profession. The paper proposes that this has been reconstructed from one founded upon neo-Kantian liberalism towards one in which components of political and civil society are co-opted by the state to minimize tax avoidance. Empirical evidence in the form of general anti-avoidance rules, court decisions, and judicial statements is provided to illuminate a process of fundamental redefinition of the roles of the judiciary and the accounting profession vis a vis the state. One of the principal functions of critical accounting theory is to question the political legitimacy of regimes of accounting; the implications of this redefinition are hypothesized in terms of this function, critiquing the changing relationship between the state and the taxpayer in the context of tax policy. The paper theorizes the consequences of this process for the accounting profession.     

Overseas equity analysis by UK analysts and fund managers

This paper examines how UK-based analysts and fund managers cope with international differences in financial reporting systems when analysing overseas equities. This subject has become increasingly important given the internationalisation and institutionalisation of equity markets. Our results indicate that there is a substantial reliance on sources other than the annual report by both groups when analysing overseas companies. We also find considerable variation in the approach to analysing equities internationally. In particular, we find evidence that there is greater reliance on alternative sources to accounting information (such as other foreign analysts) in countries characterised as having weak equity markets. Finally, we examine the coping mechanisms that analysts and fund managers employ when analysing overseas securities, including reliance on locally based analysts, use of non-accounting information, use of more familiar accounting standards and re-stating accounts to a more familiar basis.     

On the global acceptance of IAS/IFRS accounting standards: The logic and implications of the principles-based system

The widespread acceptance of International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) makes it timely to examine their technical determinants as well as their implications for the accounting profession and the process of accounting harmonization. In this respect, we suggest that the principles-based approach to the standards and its inner flexibility enables the application of IAS/IFRS to countries with diverse accounting traditions and varying institutional conditions. Furthermore, the principles-based approach involves major changes in the expertise held by accountants and, hence, in their educational background, training programs, and in the organizational and business models of accounting firms. Finally, we submit that the standards set by the IAS/IFRS constitute a step forward in the process of accounting harmonization, although there is still far to go in the comparability of accounting measures across countries and regions.     

Beyond the boring grey: The construction of the colourful accountant

The accounting profession has long laboured under the weight of the stigma of the accounting stereotype. This unappealing persona may pose a potential problem for recruitment into the profession. How is the gregarious graduate to be tempted into the tentacles of the dull and the dreary? Drawing on Goffman's work on stigma and impression management, this paper examines the recruitment literature of the ‘big four’ accounting firms and six of the professional institutes in an attempt to unravel the techniques deployed by the profession to camouflage the spectre of the stereotype. The investigation reveals how the recruitment discourse, an important stage in the process of professional socialization, is used to construct an image of the trendy and fun loving accountant. Through text and image, a carefully orchestrated campaign of impression management casts aside the boring bookkeeper in favour of an altogether more colourful characterisation.     

Political Influence and Coexistence of a Uniform Accounting System and Accounting Standards: Recent Developments in China

This article investigates the role of political influence, as well as accounting tradition and the equity market, in China's recent changes in accounting regulation. We find that the Chinese government, in part self-motivated and in part under external pressure, has been active in developing accounting standards in harmony with international accounting standards. However, it has retained a uniform accounting system in the Enterprise Accounting System issued in 2000 to accommodate the special circumstances of a transforming government, strong state-ownership, a weak accounting profession, a weak and imperfect equity market, and the inertial effect of accounting tradition and cultural factors. This article also contributes to existing models of accounting system classification by illustrating the need for considering political influence as a factor that affects the rate of transition towards full implementation of international accounting standards.