The history of the gender division of labour in Britain: Reflections on “‘herstory’ in accounting: The first eighty years”

This article surveys the empirical research on the gender division of labour in Britain since pre-industrial times, seeking in particular to relate it to the history of the professions, which have been relatively little studied in this regard. It argues that industrialization brought about a less dramatic change in gender roles than is often believed. Neither simple economic nor simple biological explanations, or the influence of “domestic ideology”, can adequately explain continuing gender divisions.It relates the empirical data to the current state of feminist theory arguing that the “reserve army of labour” theory is not supported by the evidence, nor indeed is any existing body of theory. Rather a combination of theoretical perspectives, including those which incorporate male prejudice, must be used if we are to understand the long persistence of gender inequality in the workplace.     

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.     

“A deficient performance”: The regulation of the train operating companies in Britain's privatised railway system

This paper focuses on the performance and regulation of the train operating companies in Britain's privatised railway system. It places regulation in context by examining rail privatisation, with particular scrutiny given to the theory and practice of the franchising process which established these companies. The record of the regulatory authority is assessed up to the announcement in 2004 of its planned abolition. This assessment employs critical financial analysis, and draws on non-financial performance indicators, in order to examine the extent to which it achieved its five main objectives: increasing the number of rail passengers; managing franchises in the interests of passengers; encouraging efficiency and economy in the provision of passenger rail services; encouraging investment in rail services; and securing a progressive improvement in the quality of rail services. The paper concludes that the regulatory authority's performance was “deficient” as it only achieved the first of these objectives. It places this failure in context by highlighting the fundamental problem—the flawed concept of fragmenting and privatising a loss-making rail industry in the interests of British capitalism. The “stronger” regulation envisaged by the Blair Government is revealed as a smoke screen behind which there is a continuing transfer of wealth from taxpayers to the owners and providers of capital.     

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 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.     

British central government and “the mercantile system of double entry” bookkeeping: a study of ideological conflict

The study examines the contest between rival interests following the Treasury's decision to explore the potential of “the mercantile system of double entry” bookkeeping as the basis for recording and reporting the financial affairs of British central government. At the heart of the ensuing dispute was an ideological conflict between individuals representing the competing interests of the aristocracy and those of the new capitalist classes. The battleground was whether the mercantile system of double entry should be designed to reflect the “old society” priorities of stewardship, patronage and personal accountability or “new society” pressure for a business framework judged capable of achieving “cheap and efficient government”.     

Towards an understanding of the phases of goodwill accounting in four Western capitalist countries: From stakeholder model to shareholder model

The objective of this paper is to illustrate that the change in shareholders’ attitude towards firms (from stakeholder model to shareholder model) influences the accounting treatments of goodwill. Our study is based on four countries (Great Britain, the United States, Germany, and France) and covers more than a century, starting in 1880. We explain that all these countries have gone through four identified phases of goodwill accounting, classified as (1) “static” (immediate or rapid expensing), (2) “weakened static” (write-off against equity), (3) “dynamic” (recognition with amortization over a long period) and (4) “actuarial” (recognition without amortization but with impairment if necessary). We contribute several new features to the existing literature on goodwill: our study (1) is international and comparative, (2) spans more than a century, (3) uses the stakeholder/shareholder models to explain the evolution in goodwill treatment in the four countries studied. More precisely, it relates a balance sheet theory, which distinguishes four phases in accounting treatment for goodwill, to the shift from a stakeholder model to a shareholder model, which leads to the preference for short-term rather than long-term profit, (4) contributes to the debate on whether accounting rules simply reflect or arguably help to produce the general trend towards the shareholder model, (5) demonstrates a “one-way” evolution of goodwill treatment in the four countries studied, towards the actuarial phase.     

Financialized accounts: Share buy-backs, mark to market and holding the financial line in the S&P 500

In recent years the US corporate sector has deployed more cash from operations to finance the repurchase of outstanding share capital for treasury stock. Shares repurchased for treasury stock can help flatter earnings per share, fund senior management share option compensation schemes and finance corporate acquisitions. In financialized accounts these are now significant transactions which, it is argued, serve the financial interests of managers and investors.The US Financial Accounting Standards Board (FASB) is now demanding a “greater use of fair value measurements in financial statements” with the result that share options and corporate acquisitions will be “marked to market”. This will force a financialized ratchet because managers in the S&P 500 will need step up cash extraction if they are to hold the financial line.     

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.     

Slow track, fast track, and the “Galactic Club”

Discoveries in the physical and biological sciences suggest that intelligence is widely distributed throughout the universe. Before long, either we will decide that these discoveries have pointed us towards a false conclusion, or we will obtain undeniable evidence of extraterrestrial life. After finding one extraterrestrial society, we are likely to discover others and, in this manner, become a part of the “Galactic Club”. Following the “slow track”, an initial encounter will lead to accelerated search efforts that will put us in touch, one by one, with additional societies. Following the “fast track”, our initial contact will be with an affiliate of the Galactic Club, and this society will give us instant access to other members. The physical constraints imposed by interstellar distances, coupled with our understanding of large social systems, suggest that the Galactic Club will be large, stable, slow-paced, and exert only loose control over its members. The two tracks have different implications for managing initial contact, protecting our security, knowledge transfer, handling culture change, and preserving our identity.     

A “matching auction” for targets with heterogeneous bidders

When potential bidders for a target firm are heterogeneous, standard auction methods for selling the firm are not optimal, as they treat the bidders symmetrically. In a two-bidder contest, one way to discriminate against the stronger bidder is to impose an order of moves. A simple “matching auction” can achieve this objective, in which the “strong” bidder is asked to make a first and final offer, and the other bidder is asked to match this bid. We consider two sources of bidder heterogeneity in a common-value setting: differences in initial toeholds, and asymmetric effects of the bidders' private signals on value. The matching auction results in a higher expected selling price than the standard auctions when the asymmetry is sufficiently large. Other properties of the matching auction are discussed.     

The impact of foreign board membership on firm value

This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). Using a sample of firms with headquarters in Norway or Sweden the study indicates a significantly higher value for firms that have outsider Anglo-American board member(s), after a variety of firm-specific and corporate governance related factors have been controlled for. We argue that this superior performance reflects the fact that these companies have successfully broken away from a partly segmented domestic capital market by “importing” an Anglo-American corporate governance system. Such an “import” signals a willingness on the part of the firm to expose itself to improved corporate governance and enhances its reputation in the financial market.     

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.     

IMag[in]ing annual reports

Visual images are integral elements within corporate annual reports. Yet, these visual images have been largely ignored in accounting research. We begin to explore the significance of selected visual images appearing in U.S. annual reports during the late 1980s and early 1990s. Our intent is not to produce a general survey of images, but rather to offer different “ways of seeing” images and through these “ways of seeing” to encourage a critical dialogue that focuses upon the representational, ideological and constitutive role of images in annual reports. Our first way of seeing views the image as transparently conveying an intended corporate message. The second way of seeing draws upon neo-Marxist aesthetic literature and considers the ways in which images in annual reports may be mined for their ideological content and may also reveal society's deep structures of social classification, institutional forms and relationships. Finally, we employ critical postmodernist art theory to see images in terms of their constitutive role in creating different types of human subjectivities and realities. We argue that this way of seeing creates the potential for new voices to be heard and the possibility to subvert the dualisms typical of the totalizing theories of modernity.     

“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.     

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.     

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.     

Tax Compliance and Rank Dependent Expected Utility

Formulating the classic Allingham and Sandmo [1972] tax compliance problem under Rank Dependent Expected Utility (RDEU) provides a simple explanation for the “excess” level of full compliance observed in empirical studies, which standard Expected Utility (EU) theory is unable to explain. RDEU provides a compelling answer to this puzzle, without the need for the moral sentiments or stigma arguments that have recently been advanced in the literature. Formally, we show that the threshold audit probability or penalty rate at which full compliance becomes optimal for the decisionmaker are significantly lower under RDEU axiomatics than in the EU case, and that the optimal level of underreporting is lower under RDEU. Numerical simulations using various parameterizations of the probability weighting function illustrate the large quantitative differences between the two models, while a simulation of underreporting rates in the US over the past 50 years shows how RDEU can go some way towards explaining the tax-compliance puzzle.JEL Classification No.: D81, H26     

Accounting for “negative salvage”

Many businesses are overlooking a current cost of operation which should be matched against current revenues. This cost, really a bundle of related cost items, is incurred at the end of an asset's useful life. In the public utility sector the general term ascribed to this cost element is “negative salvage”. In this note some current examples of negative salvage are identified and some of the causes of negative salvage are discussed. The introduction of negative salvage into the classroom discussion of depreciation provides an interesting new example of the matching/allocation problem.