“The everyday accountant and researching his reality”: Further thoughts

It is the contention of this paper that accounting researchers have been dominated in thier research methodology by methods supposedly adopted from the natural sciences. It is argued that it is time that attention was paid to the possible use of radically different “naturalistic” (or “interpretive humanistic”) research approaches in order both to focus research more closely on the concerns of practitioners and to give greater insight into everyday effects of accounting and the practices of accountants themselves.     

“Informing” technologies and the World Bank

The current study examines how the World Bank uses an assemblage of information generation and reporting practices, bounded by accounting/financial expertises, to attempt to influence the practices associated with administering education in Latin America. Starting from the premise that these “informing” technologies make the objects of governance knowable in terms of accounting and financial expertises, we consider how accounting practices embedded within lending agreements enable, translate and regulate behaviour. Focusing on the institutional field(s) of basic education, the study offers an in-depth analysis of 15 World Bank loan agreements from across the region, plus 25 interviews with field participants from a single Latin American country. We examine how the World Bank lending agreements install a variety of informing technologies across a network of agents in Latin America. We propose that such agreements can be viewed as technologies of governance in that they diffuse financial technologies to distant fields, re-structure the habitus of these fields, and serve to reaffirm the expertise of the Bank within these fields. In this way, the World Bank increases its legitimacy with other potential borrower countries and ensures its continuing influence.     

Accounting and the examination: A genealogy of disciplinary power

Historical elaboration of Foucault's concept of “power-knowledge” can explain both the late-medieval developments in accounting technology and why the near-universal adoption of a discourse of accountancy is delayed until the nineteenth century. It is the disciplinary techniques of elite medieval educational institutions—the new universities and their examinations—that generate new power-knowledge relations. These techniques embody forms of textual rewriting (including the new “alphanumeric” system) from which the accounting advances are produced and “control” is formalised. “Double-entry” is an aspect of these rewritings, linked also to the new writing and rewritings of money, especially the bill of exchange. By the eighteenth century accounting technologies are feeding back in a general way into educational practice (e.g. in the deployment of “book-keeping” on pupils) and this culminates in the introduction of the written examination and the mathematical mark. A new regime of “objective” evaluation of total populations, made up of individually “calculable” subjects, is thereby engendered and then extended — apparently first in the U.S. railroads — into modern comprehensive management and financial accounting systems (systems of “accountability” embodying Foucault's “reciprocal hierarchical observation” and “normalising judgement”), while written examinations become used to legitimate the newly autonomous profession of accountancy.     

Discussion of “economic analysis of accountants’ ethical standards: the case of audit opinion shopping”

In his paper, Cushing (Cushing, B.E., (1999). Economics analysis of accountants’ ethical standards: The case of audit opinion shopping. Journal of Accounting and Public Policy 18 (4/5)) argues for an increasing role of “laissez-faire” approaches to professional accounting ethics. To formally present his argument, Cushing (1999) employs a classic auditor–client dispute over a financial reporting issue; the dispute’s resolution is framed within a prisoner’s dilemma game. Three increasingly sophisticated models are used to examine both strict (explicit rules and monitoring) and laissez-faire (moral training and leadership) approaches to induce ethical auditor play within the prisoner’s dilemma game.My comments are an effort to consider if Cushing's (1999) arguments for a laissez-faire approach are practicable. To do this I first relate Cushing's (1999) arguments to the theoretical attributes of a profession. Second, I extend his arguments to include ethical disposition. Two bases of ethical disposition are discussed, moral reasoning theory and the persona of individuals. I conclude that a movement toward a laissez-faire approach to ethics is a strategy the profession should not ignore.     

Towards a critical understanding of accounting: The case of cost accounting in the U.K., 1914–1925

Management accounting is commonly understood to be a set of techniques for collecting and processing useful facts about organisational life. The information obtained is viewed as an objective form of knowledge untaited by social values and ideology; the practitioners as technically skilled professionals whose political and social allegiances have no bearing on their practices. In this paper these views are brought into question through the “genealogical” method of looking in detail at one period in the history of accounting, examining the interplay between knowledge, techniques, institutions and occupational claims. In the period and place chosen — Britain during the First World War and the immediately following years, society was in a state of turmoil and this provides an ideal context for considering one part of the genealogy of management accounting.     

The accounting of interpretations and the interpretation of accounts: The communicative function of “the language of business”

The objectivistic philosophical assumptions which underlie contemporary research in accountancy, as well as economics and elsewhere, are challenged and an interpretive alternative is proposed. A “hermeneutical” view of decision-making is examined, first with regard to science in general, and then concerning the human sciences in particular, and finally with regard to economics. Human decisions are not seen as objective, mechanical or behavioristic but as meaningful utterances of minds, as part of a bidirectional communicative process. That is, scientific decisions, like everyday decisions, are mutually interpretive processes of communication in language. Although it is true that much of mainstream neoclassical economics is incompatible with this interpretive approach, the “Austrian” school can be seen as an interpretive version of neoclassicism. This school of economics indicates a way to understand the communicative function the accounting “language” itself serves in the economic process. The professional judgments made by both accounting researchers and practicing accountants, then, are treated as “matters of interpretation,” but as not, thereby, arbitrary.     

On the Myth of “Anglo-Saxon” Financial Accounting

The term “Anglo-Saxon accounting” (ASA) is used by a number of academic writers on the subject of International Accounting to refer to an approach to financial accounting and reporting that is supposedly common to the UK and Ireland, the USA and other English-speaking countries including Canada, Australia, and New Zealand. While most of the writers we cite as using this term are continental Europeans, they also include an Englishman, J. Flower. The term is typically used to imply not just similar conceptual and technical approaches, but also a hegemonic alliance in the international politics of accounting regulation.This article seeks to establish that ASA in this sense is a myth. We do this first by critically examining four putative commonalities that are frequently attributed to the UK and USA approaches to financial accounting and that form the basis of the myth, and second by indicating the unfeasibility of such a hegemonic alliance within the IASC. A myth may have some factual foundations, but belief in it rests also on bases that are non-factual. So it is with ASA. In particular, analysis of the terms “true and fair view” (TFV) and “fair presentation (FP) in accordance with generally accepted accounting principles (GAAP)” shows that, far from their possessing a semantic equivalence that constitutes a commonality between UK and US financial reporting, their interpretation indicates a profound difference between the UK and US approaches. What UK and US financial reporting have historically shared is a micro- and capital market orientation that lends itself to international accounting regulation in a context of global capital markets. But with such an orientation now being generally accepted internationally, the differences between UK and US financial reporting are taking on an increased significance that this article seeks to highlight.     

The birth of a nation: Accounting and Canada’s first nations, 1860–1900

The 1860–1900 period was both the “birth” of Canada but also the birth and institutionalization of a specific set of social relations between the federal government and First Nations peoples. This study examines the roles played by accounting and funding relations within the process of nation building. Throughout this formative period in Canada’s history, governance was attempted via the introduction of financial legislation and enacted by the Indian Department and agents in the field. As our analysis highlights, legislative initiatives, Indian Department pronouncements and the activities of agents imposed, enlisted and implied a variety of accounting technologies. This study not only explores how the federal government has used accounting/funding mechanisms in the attempt to translate government policy regarding indigenous peoples into practice but also provides a history of the present by examining the historical consequences of these interventions.     

An active learning strategy for the classroom—“who wants to win … some mini chips ahoy?”

Skillfully presenting technical accounting material has been identified as an important dimension of effective teaching [Issues in Accounting Education (1993) 8(2), 436]. Faculty may more effectively present material by modifying the traditional lecture approach to incorporate visual-based instruction and increase student involvement through active learning exercises. One approach to presenting accounting material more effectively is described in this article. A “Who Wants to Win…?” game, similar to that seen on television, is constructed with the instructor in the role of master of ceremonies and one class member, a group, or the entire class in the role of contestants. The method described can be adapted and used to present a variety of accounting topics. Anecdotal evidence from two very different college classroom settings indicates a high level of student enjoyment, increased class participation, and an increased level of advance preparation on the part of the students. While a significant amount of material is presented in a concise, novel, and effective manner, the game provides a relaxed classroom atmosphere for the students and an enjoyable method of presentation for the instructor.     

The structure and progressivity of accounting research: the crisis in the academy revisited

Doubts were raised within the accounting research program in the United States in the late 1980s about its progress and future potential. In this paper, we develop criteria for “good” scientific conversation, which leads to progress (defined as innovation and relevance). The key to this process is critical evaluation of background assumptions. The structure of scientific conversation in accounting and economics, whose theories and practices accountants adopted, are examined. We conclude that structural barriers result in a lack of adequate transformative critique, which contributes to the lack of progress in the accounting research program.     

Examining “The quantified customer”

Accounting has not escaped The Customer's influence in contemporary organizations. Calls have been made for a quantitative knowledge that installs a new calculable space in the name of The Customer. In an organizational setting, a UK sudsidiary of Unilever, the paper traces first the introduction of this quantitative knowledge. The paper examines the order of “The Quantified Customer”, its effects on organizational action, and its disciplinary implications. But this enquiry also uncovers a rival knowledge of The Customer. The resistant local knowledge is mobilized against the new calculable space—changing the trajectory of events.     

The interplay between professional groups, the state and supranational agents: Pax Americana in the age of ‘globalisation'

In response to recent calls for systematic and in-depth studies of the impact of international forces on local accounting practices, discourses and institutions, this essay explores the interconnectedness of national politics with global forces and the ramifications of this interaction for the regulation of accounting and the state–profession relationship. The paper employs Held's (1991) framework [Held, D. (1991). Democracy, the nation-state and the global system. Economy and Society, 20(2), 138–172.] on the role of the nation state in the age of globalisation, extended to encompass insights from the realist paradigm on international politics, to examine the international aspects of an attempt by a group of indigenous auditors in Greece to recapture their monopoly status, following the ‘liberalisation' of the Greek auditing profession in 1992. The paper explores changes in the state–profession relationship in the era of ‘globalisation' and documents the catalystic role of major states (the USA), politico-economic blocks (the EU), and other powerful international actors. It is posited that the politics of international accounting professionalism in the ‘globalisation' era are becoming more polycentric with (lesser) nation-states as merely one level (of diminishing importance) in a complex system of superimposed, overlapping and often competing national and international agencies of governance. The lessons to be learned from the Greek experience seem to be relevant to a number of countries — weaker or more important players in the world economy and politics — as they realign the assemblage of government in accounting and in other domains, in response to the progressive internationalisation of the world economy.     

Professional accounting development in Nigeria: threats from the inside and outside

Over the years several, sometimes conflicting, theories attempting to explain the development of professions have emerged. The “functionalist” and “interactionist” theories have since lost the spotlight to a more critical approach based on the Weberian concept of closure. Limitations in the concept and practice of this neo-Weberain concept have led to suggestions that research into the sociology of professions, should also include historical analyses of professionalism that capture historical specificities with the aim of generating theory that sees beyond “just massive historical variation” [Collins, R. (1990). Changing conceptions in the sociology of the profession. In R. Torstendahl, & M. Burrage, The formation of professions: Knowledge, state and strategy. London: Sage Publications]. Such research should also investigate the structural conditions under which the professionalisation process takes place [Johnson, T. (1977). The profession in the class structure. In R. Scase, Industrial society: Class, cleavage and control. London: George Allen and Unwin.]. In order to achieve this, there is the need to critically study the relationship of the State and the profession [Klegon, D. (1978). The sociology of professions: an emerging perspective. Sociology of Work and Occupations, 5, 3, 259–283.] and to document more extensively, the process, rather than the product, of closure [Chua, W. F., & Paullaos, C. (1993). Rethinking the profession-state dynamic: the case of the Victorian Charter Attempt, 1885–1906, Accounting, Organizations and Society, pp. 128–691; Chua, W. F., & Paullaos, C. (1998). The dynamics of “closure” amidst the construction of market, profession, empire and nationhood: an historical analysis of an Australian Accounting Association. Accounting, Organizations and Society, 23 (2), 155–187; Ramirez, C. (2001). Understanding social closure in its cultural context: accounting practitioners in France (1920–1939), Accounting, Organizations and Society.]. Such is the approach of this article, which focuses on the development of the accounting professions in Nigeria. It critically examines the profession/ State dynamics that have helped shape the outcome of the various episodes in the history of the accounting profession in Nigeria. An important influence in this dynamics is the nature of government in place (i.e. military or civilian).     

Discussion of “The implications of unverifiable fair-value accounting: Evidence from the political economy of goodwill accounting”

Ramanna [2007. The implications of unverifiable fair-value accounting: evidence from the political economy of goodwill accounting, Journal of Accounting and Economics] provides interesting and novel evidence on how firms use contributions from their political action committees (PACs) to members of Congress as a means of lobbying for preferred positions on the two exposure drafts that led to SFAS-141 and SFAS-142. My discussion raises some concerns about his main conclusion: that pooling firms lobbied the FASB to obtain a “fair-value”-based impairment rule to facilitate their ability to manipulate financial statements. I offer a more benign explanation and make some other observations about how this line of research could proceed in the future.     

Institutional theory and accounting rule choice: an analysis of four US state governments' decisions to adopt generally accepted accounting principles

In this study, we use institutional theory to explore how institutional pressures exerted on four state governments (New York, Michigan, Ohio, Delaware) influenced the decision of these governments to adopt or resist the use of generally accepted accounting principles (GAAP) for external financial reporting. We identify resource dependence as a potent form of coercive institutional pressure that was associated with early GAAP adoption. We identify three factors that may lead to initial resistance to institutional pressures for change. First, if accounting bureaucrats are not active in professional associations that promote GAAP adoption, they may miss the educational process that we believe is important to early adoption of GAAP. Second, organizational printing may impede GAAP adoption. Third, powerful interests may impede GAAP if the proposed GAAP legislation is expected to alter the existing power relationships. We found that key accounting bureaucrats in New York and Michigan used “compromise” as an initial strategic response to institutional pressures to adopt GAAP, Ohio's key accounting bureaucrat adopted a “defy” strategy, although the political leadership endorsed an “acquiesce” strategy. While Delaware initially employed a “manipulate”strategy with some success. Delaware did not adopt GAAP for external reporting until a political entrepreneur for GAAP emerged in the early 1990s. Our study suggests that all strategic responses to resist institutional pressures for GAAP adoption will ultimately fail because of the potency of the institutional pressures that result from the well organized professional accounting and governmental institutional fields.     

Bank fragility, “money under the mattress”, and long-run growth: US evidence from the “perfect” Panic of 1893

This paper examines how the US financial crisis of 1893 affected state output growth between 1900 and 1930. The results indicate that a 1% increase in bank instability reduced output growth by 2–5%. A comparison of Nebraska, which had one of the highest bank failure rates, with West Virginia, which did not experience a single bank failure, reveals that disintermediation affected growth through a portfolio change among savers: people simply stopped trusting banks. Time series evidence from newspapers indicates that articles containing the words “money hidden” significantly increase after banking crises, then slowly die out.     

The “new public management” in the 1980s: Variations on a theme

Changes in public sector accounting in a number of OECD countries over the 1980s were central to the rise of the “New Public Management” (NPM) and its associated doctrines of public accountability and organizational best practice. This paper discusses the rise of NPM as an alternative to the tradition of public accountability embodied in progressive-era public administration ideas. It argues that, in spite of allegations of internationalization and the adoption of a new global paradigm in public management, there was considerable variation in the extent to which different OECD countries adopted NPM over the 1980s. It further argues that conventional explanations of the rise of NPM (“Englishness”, party political incumbency, economic performance record and government size) seem hard to sustain even from a relatively brief inspection of such cross-national data as are available, and that an explanation based on initial endowment may give us a different perspective on those changes.     

The accounting of “The Meeting”: Examining calculability within a “Fluid” local space

This study traces events in an empirical setting where a key local space, “The Meeting”, was made calculable. Building on field data from interviews and documentary sources at ABB Industry/Finland, the study theorizes in the interpretive genre, elaborating on the notion of the calculable space. It argues the following: Accounting can be extended into un-formalized and more elusive local spaces – into “fluid” spaces which are not clearly mapped within the organizational hierarchy, and which lie beyond recognized responsibility units or physically distinct cells at the factory floor. By opening visibility into the discretion of these “fluid” local spaces, a tighter alignment between programmatic ideals and real action at the organizational grass-root can be achieved. Self-devised non-financial measurement, mediating local tensions and the interests of “autonomous” actors, becomes the technology of government in this process of normalization – which is, however, not to be acknowledged as being unproblematic.     

Genealogies of calculation

This paper calls firstly for genealogies of calculation, in contrast to traditional accounting history. The term genealogy conveys a focus on the outcomes of the past, rather than a quest for the origins of the present. It is intended to avoid an a priori limiting of the field of study to accounting as it currently exists, or to a particular accounting technique such as double-entry bookkeeping. And it entails an emphasis on the historical contingency of contemporary practices, a concern with the multiple and dispersed surfaces of emergence of disparate practices of economic calculation. Secondly, the paper emphasizes the discursive nature of calculation, the language and vocabularies in which a particular practice is articulated, the ideals attached to certain calculative technologies. Thirdly, the paper stresses the importance of attending to ensembles of practices and rationales that are assembled at various collective levels, rather than with isolated instances of this or that way of accounting. The delineation of the domain of traditional accounting history is illustrated by reference to three sets of issues: the links between double-entry bookkeeping and capitalism in the writings of Weber and Sombart; the links between bookkeeping practice and decision making in the writings of Yamey; and the quest for examples of “early management accounting” in the writings of those such as Edwards and Fleischman & Parker. In contrast to such concerns of accounting history, four genealogies are presented: the promotion of discounted cash-flow techniques for investment decisions in the U.K. in the 1960s; the emergence of costs in the late eighteenth century; the accounting for value added event in Britain in the late 1970s; and the construction of standard costing in the early decades of the twentieth century.