| Abstract: | The accounting profession in the United States has experienced rapid growth in the past two decades, and growth is likely to continue in the foreseeable future. Although the U.S. Securities and Exchange Commission possesses explicit statutory authority to regulate accounting and financial reporting, the profession is largely self-regulated, an arrangement widely supported by the corporate business community. Yet no single current accounting theory provides a full understanding of these two very basic phenomena. This paper examines organizational models based on contractualism (agency theory and transaction cost analysis), hierarchy (radical) and Fligstein's “organizational fields” conception, and evaluates their application to the accounting process. It is proposed that institutions are central to an understanding of accounting growth and regulation. The essay then offers a theoretical critique based on the internal and external aspects of economic organizations. |
