Showing papers in "Accounting Organizations and Society in 1988"
TL;DR: Castaneda as mentioned in this paper explained that he possessed a certain knowledge that he had learned from a teacher, a "benefactor" as he called him, who had directed him in a kind of apprenticeship, but he warned me that I would have to make a very deep commitment and that the training was long and arduous.
Abstract: At first I saw Don Juan simply as a rather peculiar man who knew a great deal…but the people…believed that he had some sort of “secret knowledge”, that he was a “brujo”. The Spanish word brujo means, in English…sorcerer. It connotes essentially a person who has extraordinary…powers.
I had known Don Juan for a whole year before he took me into his confidence. One day he explained that he possessed a certain knowledge that he had learned from a teacher, a “benefactor” as he called him, who had directed him in a kind of apprenticeship. Don Juan had, in turn, chosen me to serve as his apprentice, but he warned me that I would have to make a very deep commitment and that the training was long and arduous…
My field notes disclose the subjective version of what I perceived while undergoing the experience. That version is presented here…
My field notes also reveal the content of Don Juan's system of beliefs. I have condensed long pages of questions and answers between Don Juan and myself in order to avoid reproducing the repetitiveness of conversation…(The Teachings of Don Juan: A Yaqui Way of Knowledge, Carlos Castaneda, 1970, pp. 14, 24, 25).
1,071 citations
TL;DR: The authors argue that accounting should be approached as a form of "dialogue" through which accountants can construct, "read" and probe situations in a variety of ways, and argue that the idea of objectivity in accounting is largely a myth, which stands in the way of interesting future developments in the discipline.
Abstract: Accountants often see themselves as objective appraisers of reality, representing reality “as is”. This paper takes a different view, arguing that accountants typically construct reality in limited and one-sided ways. It shows that the idea of objectivity in accounting is largely a myth, and one which stands in the way of interesting future developments in the discipline. The paper develops an alternative perspective on the nature of the accounting process, building on insights regarding the interpretive and metaphorical nature of accounting, and arguing that accounting should be approached as a form of “dialogue” through which accountants can construct, “read” and probe situations in a variety of ways.
482 citations
TL;DR: In this paper, the authors focus on the genesis of the new managerialism in US business and factories in the nineteenth century and re-examine the published histories of the US armories and the railroads.
Abstract: We focus on the genesis of the new managerialism in US business and factories in the nineteenth century and re-examine the published histories of the US armories and the railroads We trace the influence in both arenas of the engineering/military graduates from the US Military Academy at West Point, who represent and reproduce the meticulous “grammatocentric” and “panoptic” system for human accountability introduced there in the years after 1817 Our overall concern is to re-analyse apparently economic-rational changes in accounting and accountability in a wider frame which explains their development as aspects of a general shift in power-knowledge relations—a shift which Foucault characterised as the development of disciplinary power and which we argue originated in elite educational institutions We propose further examination (or re-examination) of the original accounting and administrative records relating to the armories and the railroads in order to establish the precise process of historical change
432 citations
TL;DR: In this paper, the authors use agency theory as a convenient vehicle for incorporating ethics in discussions of accounting, using a series of instructive parables concerning the systems consequences of unreservedly opportunistic behavior.
Abstract: Agency theory provides a series of instructive parables concerning the systems consequences of unreservedly opportunistic behavior. Due to a mutual lack of trust, some otherwise mutually beneficial exchanges do not take place. And, even when exchanges do take place, there are dead-weight losses due to monitoring costs and inefficient risk sharing. Therefore, in ex ante terms, everyone may be better off if they mutually agree to restrain their opportunistic behavior. Unfortunately, by its very nature, opportunistic behavior is not readily observed. Thus, an agreement (i.e. ethical code) to abstain from opportunistic behavior cannot be effectively enforced by external rewards or sanctions; instead, the sanctions for unethical behavior must be internalized. Hopefully, this article will stimulate ideas for incorporating ethics in discussions of accounting, using agency theory as a convenient vehicle.
311 citations
TL;DR: In this paper, the authors describe a field study directed at assessing the usefulness of such a perspective on budgeting by examining the nature of the budgetary process between a major state university and its state government.
Abstract: Within accounting, an emerging perspective has held that budgeting is complicit in the creation of a social reality. Seen in such terms, budgetary dialogue is one manner in which societal expectations are expressed, thereby transforming contemporary organizations. Further, it is argued that organizational practice must specifically embody and reproduce these societal expectations in order for the organization to exist. This paper describes a field study directed at assessing the usefulness of such a perspective on budgeting by examining the nature of the budgetary process between a major state university and its state government.
309 citations
TL;DR: In this paper, a model is developed to show how role ambiguity acts as an intervening variable in the link between participation and outcome criteria, and empirical results indicate that budgetary participation acts indirectly, via role ambiguity, to influence job satisfaction and performance.
Abstract: The results of studies into the effects of participative budgeting have been equivocal. This study seeks to explain the process by which participation in budget setting affects managers' performance and job satisfaction. A model is developed to show how role ambiguity acts as an intervening variable in the link between participation and outcome criteria. Empirical results indicate that budgetary participation acts indirectly, via role ambiguity, to influence job satisfaction and performance.
273 citations
TL;DR: The authors conducted an exploratory study comparing the perceptions of management control systems (MCS) which are held by U.S. and Japanese workers and found that Japanese workers are more aware of the presence of the controls as their American counterparts.
Abstract: This paper reports the results of an exploratory study comparing the perceptions of management control systems (MCS) which are held by U.S. and Japanese workers. It is argued that because of the shared values and norms present in the Japanese culture and the valuation of cooperation by that culture, the bureaucratic procedures will be fewer in Japanese firms. However, it is hypothesized that the Japanese workers will be as aware of the presence of the controls as their U.S. counterparts. Thus, the less bureaucratic MCS's will be perceived to be as explicit by Japanese workers as the more bureaucratic MCS is by U.S. workers. Subject to all the caveats for exploratory research, the findings are encouraging to those who argue that culture affects control.
229 citations
TL;DR: In this paper, an explanatory model of budgetary biasing at the individual level and an organizational model for budgetary bias is presented. And the authors make use of this model to increase the understanding of budget biasing behavior.
Abstract: The purpose of this study is to increase the understanding of budgetary biasing behaviour. The findings are of both a theoretical and empirical nature. The theoretical results provide a framework containing two major parts: an explanatory model of budgetary biasing at the individual level, and an organizational model for budgetary biasing. In the empirical part of the study an attempt is made to test the usability of the framework in a relatively large firm with several profit-centers. Biasing action is found to be a result of an interplay of various inter-related factors. Overall, the framework is considered to provide a valid basis for trying to understand and interpret the budgetary biasing behaviour in the firm studied.
226 citations
TL;DR: In this paper, the authors proposed truth-inducing pay schemes that provide incentives for accurately communicating private information and maximizing performance and reported an experiment demonstrating that, when a (conventional) truthinducing scheme is introduced, slack decreases for risk-neutral subjects but not for risk averse subjects.
Abstract: An incentive problem in participative budgeting occurs when a worker has private information about factors that influence his or her performance and the pay scheme is budget- or standard-based. This information, if communicated accurately by the worker, may be valuable to a manager for planning and control purposes. However, the worker has an incentive to bias its communication such that a relatively easy standard is set, thereby creating slack. To alleviate this problem, analytical research has proposed truth-inducing pay schemes that provide incentives for accurately communicating private information and maximizing performance. A conventional assumption underlying these schemes is worker risk neutrality, despite the wide-spread belief that risk aversion is more typical in organizational settings. This paper reports an experiment demonstrating that, when a (conventional) truth-inducing scheme is introduced, slack decreases for risk-neutral subjects but not for risk-averse subjects.
194 citations
TL;DR: The major objective of this research was to study the effects of information load and diversity on decision quality in a structured decision task and the results showed a number of interesting interactions between variables.
Abstract: The major objective of this research was to study the effects of information load and diversity on decision quality in a structured decision task. The concept of information load was subdivided into the concepts of (1) quantity of repeated dimensions and (2) quantity of different dimensions. The latter concept was called information diversity. Two other independent variables studied were task learning and decision experience. Decision quality was operationalized to decision accuracy and time. It was hypothesized that the relationship between the quantity of repeated dimensions and accuracy would be an inverted U curve, and that repeated dimensions and time would produce a U curve. The initial rise in the accuracy curve and fall in the time curve did not occur in the results but the remainder of the curves were largely supported. There were exceptions, however, that require further investigation. It was further hypothesized that higher diversity would result in lower accuracy and higher time, and that higher learning and experience would both result in higher accuracy and lower time. These hypotheses were also largely supported by the results. Again there were exceptions that require clarification. The results also showed a number of interesting interactions between variables. The practical implications of these findings for accounting and information systems were outlined.
151 citations
TL;DR: The authors empirically examined the effect of budget participation on managerial performance using a contingency theory approach and found that participation in the budgeting process by managers who reported a more favourable attitude or motivation, was associated with improved performance; whereas participation by managers exhibiting a less favourable attitude and motivation, were associated with hampered performance, supporting the fundamental argument that an organization may be better off following a budgeting style (participative or non-participative) that is congruent with its employee attitude.
Abstract: This study empirically examined the effect of budget participation on managerial performance using a contingency theory approach. Contingent variables investigated included managerial attitude (towards their job and company) and motivation (to work). The results indicated that both variables moderated the effect of budget participation. Specifically, participation in the budgeting process by managers who reported a more favourable attitude or motivation, was associated with improved performance; whereas participation by managers exhibiting a less favourable attitude or motivation, was associated with hampered performance. These results support the fundamental argument that an organization may be better off following a budgeting style (participative or non-participative) that is congruent with its employee attitude and motivation.
TL;DR: In this article, the authors report the results of an empirical study of the interaction between national and organizational cultures at the firm level using Hofstede's Value Survey Module, the concept of culture was operationalized in six accounting firms in The Netherlands.
Abstract: This paper reports the results of an empirical study of the interaction between national and organizational cultures at the firm level. Using Hofstede's Value Survey Module, the concept of culture was operationalized in six accounting firms in The Netherlands. Three of these firms were local offices of international “Big Eight” accounting firms with a strong U.S.-orientation in their organizational philosophies and policies, whereas the other three firms were Dutch in origin and organization. All six firms work virtually entirely with Dutch employees. We were specifically interested in any influences of the U.S. culture upon the Big Eight firms. For two Hofstede's four cultural dimensions, i.e. Uncertainty Avoidance and Masculinity, significant effects of the U.S. culture upon the organizational cultures of the Big Eight firms were found. Further analysis showed that these results may rather be due to (self-)selection than to socialization mechanisms.
TL;DR: In this paper, the authors present a case study of health service resource allocation as a basis for exploring how organizational members come to understand the meanings and implications of accounting change within the enterprise.
Abstract: This paper presents a case study of health service resource allocation as a basis for exploring how organizational members come to understand the meanings and implications of accounting change within the enterprise. The analysis describes how the significance of a new calculative process emerges over time, during which accounting both shapes and is in turn shaped by organizational reality. The paper concludes with a discussion of the interplay between the rhetoric and reality of accounting, reviewing the ways in which, as an expressive order, accounting provides a language for discourse, rules for guiding action and a way of establishing legitimacy in an institutionalised organization.
TL;DR: In this article, a descriptive study of the socially responsible mutual funds currently existing in the U.S.A. is presented, showing that managers of these funds employ very similar procedures for evaluating firms with social criteria, although there was no one social criterion used unanimously.
Abstract: This paper provides the results of a descriptive study of the socially responsible mutual funds currently existing in the U.S.A. Managers of these funds employ very similar procedures for evaluating firms with social criteria, although there was no one social criterion used unanimously. Sources of social information used varied widely from fund to fund with data provided by firms being the most frequently used. Managers believe a higher priority should be given to requiring public disclosure of data already being produced for limited distribution, e.g. EEO data.
TL;DR: In this paper, the authors use agency theory and transaction cost theory to point out the dangers of Panglossian theorizing, arguing that theories are materialistically grounded in social conflict, as intellectual terrains on which social interests struggle to re-present and control their reality.
Abstract: Dr. Pangloss's comment about, “the best of all possible worlds”, is widely remembered, but what we tend to forget is how unpleasant his world really is. Candide's life is marred by pillage, murder, rape, war, torture and natural disasters. The only relief Voltaire provides Candide after each disaster is a bizzare re-iteration of Pangloss's absurd refrain that, “this must be the best of all possible worlds”. Voltaire's Candide warns us about scholarly self-deception and wishful thinking. This warning extends to theorizing about large organizations and corporate accountability: that monopolistic and oligopolistic elements may be underplayed: that the disciplining effect of market competition may be overrated; that managerial self-aggrandizement may be idealized as entrepreneurial heroics, and that research may be trivialized in the quest for objective results and tractable theories. This paper uses Agency Theory and Transaction Cost Theory to spell out the dangers of Panglossian theorizing. It rejects the notion that theories are dispassionate reflections of reality; instead, it views them as materialistically grounded in social conflict — as intellectual terrains on which social interests struggle to re -present and control their realities. In focussing on Agency and Transactional Cost Theory, three types of re-presentational distortion are considered here: those emanating from failing to acknowledge the constituitive potential of theorizing (stressing instead its natural and law-like character); those arising from overstating the empirical validity of theories, and those emerging from neglecting the interests that benefit from research. The implications of the paper are analogous to lessons that Voltaire teaches us through Dr. Pangloss: we may pay a high price if we listen to “simplifying assumptions” and “analytic approaches” of the Pangloss's of accounting thought. Their intellectual pollyannaism frequently promotes social causes that, after some reflection, we might prefer to dissociate ourselves from. Only by explicating the social underpinnings of accounting practices — contemporaneously and historically — and by investigating the social allegiances of different forms of theorizing, do we give ourselves the opportunity of such social self-awareness.
TL;DR: In this article, a longitudinal field survey was undertaken to investigate the effects of occupational reality shock on organizational commitment attitudes, intentions, and behavior of professional accountants, and the results portrayed reality shock as having a significant, asymmetrical impact on the work-related attitudes and intentions of accountants employed in both organizational settings.
Abstract: A longitudinal field survey was undertaken to investigate the effects of occupational reality shock on the organizational commitment attitudes, intentions, and behavior of professional accountants. Comparative data was collected over a one year period from a sample of accountants employed in the controller's division of a large (Fortune 100) industrial firm and from a sample of accountants employed by a “Big Eight” public accounting firm. The results portray reality shock as having a significant, asymmetrical impact on the work-related attitudes, intentions, and to a lesser extent behavior of accountants employed in both organizational settings.
TL;DR: In this article, the authors develop a theory of the transfer pricing process and deduce hypotheses from the theory, and develop an understanding of the strategic, organizational and transactional conditions under which transfer pricing (and related control) issues arise, and the organizational processes used to implement intra-firm transfers of products and to determine transfer prices.
Abstract: Understanding the transfer pricing issue as it arises in large decentralized firms is important, because it represents a pervasive problem in the design of managerial accounting and control systems in complex organizations. This paper draws on the growing literature on the economics of internal organization to develop an understanding of the strategic, organizational and transactional conditions under which transfer pricing (and related control) issues arise, and the organizational processes used to implement intra-firm transfers of products and to determine transfer prices. The objective of the paper is to develop a theory of the transfer pricing process and to deduce hypotheses from the theory.
TL;DR: The kind of new technology that has been installed in advanced industrial production at an increasing rateover the last few years sets a new stage for the development of management accounting as mentioned in this paper...
Abstract: The kind of new technology that has been installed in advanced industrial production at an increasing rateover the last few years sets a new stage for the development of management accounting. Flex ...
TL;DR: In this paper, the authors investigate situations where an accounting system is expected to be in operation but is not, and the investigation of such voids is likely to greatly enhance the understanding of the nature and function of accounting, both in its presence and in its absence.
Abstract: Accounting researchers are preoccupied with the study of extant accounting systems with the result that they do not question situations where an accounting system is expected to be in operation but is not. The investigation of such voids is likely to greatly enhance the understanding of the nature and function of accounting, both in its presence and in its absence.
TL;DR: In this article, the authors assess the information search and evaluation behavior of professional and non-professional financial analysts during the analysis of an initial public offering of an equity security, using a process tracing technique.
Abstract: This study assesses the information search and evaluation behavior of professional and non-professional financial analysts. These groups were analyzed because they are demonstrably interested in financial analysis. The study compares problem-solving behavior during the analysis of an initial public offering of an equity security, using a process tracing technique. General results of the study suggest that professionals tend to treat data in different ways to non-professionals. Principal differences include strategy selection, weights attached to data and final conclusions. However, professionals also seem to use different data than that generally proposed in fundamental analysis texts.
TL;DR: Watts and Zimmerman's Positive Accounting Theory (Englewood cliffs, NJ: Prentice-Hall, 1986) celebrated the growth of "scientific" accounting research in the U.S.A. and the intellectual progress it has made as mentioned in this paper.
Abstract: Watts & Zimmerman's Positive Accounting Theory (Englewood Cliffs, NJ: Prentice-Hall, 1986) celebrates the growth of “scientific” accounting research in the U.S.A. and the intellectual progress it has made. The extent to which this sort of research does follow the precepts of empiricist philosophies of science, however, is a matter of some debate. Moreover, the coherence and applicability of the methodological rules Watts & Zimmerman claim to follow is questionable. In particular, the Popperian research programme is of doubtful utility for accounting researchers. Particular characteristics of social phenomena also raise doubts about the feasibility of engineering models for theory-based social technologies. These doubts about the epistemological and practical value of “positive accounting theory” lead to an alternative, sociological. explanation of its growth and institutionalisation in academic accounting research.
TL;DR: In this article, two models of the relationship between the structure of professional knowledge and the professions' access to social rewards are tested based on data on the accounting professions of 28 countries and the results support Larson's "cognitive exclusiveness" theory which suggests that the professions gain rewards by standardizing their knowledge and institutionalizing the training of practitioners within universities, while simultaneously maintaining autonomy in practice.
Abstract: Two models of the relationship between the structure of professional knowledge and the professions' access to social rewards are tested based on data on the accounting professions of 28 countries. The results support Larson's ( The Rise of Professionalism , Berkeley: University of California Press, 1977) “cognitive exclusiveness' theory which suggests that the professions gain rewards by standardizing their knowledge and institutionalizing the training of practitioners within universities, while simultaneously maintaining autonomy in practice.
TL;DR: The authors provided an introduction to the role of accounting in China, its regulatory environment, Chinese accounting methods and recent attempts to improve the conceptual understanding of Chinese accounting in the West, and tried to relate the technical nature of accounting to its specific socio-economic context.
Abstract: Recognising that relatively little is known of Chinese accounting in the West, this article aims to provide an introduction to the role of accounting in China, its regulatory environment, Chinese accounting methods and recent attempts to improve the conceptual understanding of accounting in China. Throughout the description and analysis, attempts are made to relate the technical nature of Chinese accounting to its specific socio-economic context.
TL;DR: The authors employed an experiment with varying information sets: prior working papers, current year information and "scenario" (summarized prior year information) to design a substantive audit program for a case where changes in the client's environment dictated additional procedures.
Abstract: There has been significant concern in auditing about the effects of relying on prior working papers in planning audit procedures (“anchoring”). This study employed an experiment with varying information sets: prior working papers, current year information and “scenario” (summarized prior year information). Practicing auditors were asked to design a substantive audit program for a case where changes in the client's environment dictated additional procedures. A consensus program from three partners was used as a bench-mark. Experimental groups were about equally adaptive to the changing environment. However, auditors provided with prior working papers demonstrated lower efficiency. The scenario group exhibited both high relative effectiveness and efficiency, while current information subjects displayed the lowest overall level of performance.
TL;DR: In this paper, a critical re-analysis of Haried's own data is presented, showing that the structure within which accounting meaning is held is, largely, consistent with the seminal work of Osgood et al. (1957); and, measured meaning of accounting concepts within that structure is consistent with expectations.
Abstract: The process of communication between preparers and users of accounting information involves, in part, the sharing of meaning between those parties. Using the framework of Osgood et al. ( The Measurement of Meaning , University of Illinois Press, 1957), Haried [The Semantic Dimensions of Financial Reports, Journal of Accounting Research (1972) pp. 367–391, and Measurement of Meaning in Financial Reports, Journal of Accounting Research (1973) pp. 117–145] provided a first attempt at the ‘measurement of meaning’ in accounting. Haried found that the structure within which meaning in accounting was held was different to the standard structure proposed by Osgood et al . (1957). Based on the results of measurements of meaning within this structure, Haried (1973) concluded that such measurements were not particularly relevant to accounting research. The present paper presents a critical re-analysis of Haried's (1973) own data. The results are inconsistent with Haried's and show that (1) the structure within which accounting meaning is held is, largely, consistent with the seminal work of Osgood et al . (1957); and, (2) the measured meaning of accounting concepts within that structure is consistent with expectations.
TL;DR: In this article, the authors report an experiment on the role of internal accounting variables in performance-incentive contracts, where subjects in the experiment interacted as competing employers and workers over a series of contracting periods.
Abstract: The purpose of this paper is to report an experiment on the role of internal accounting variables in performance-incentive contracts. Unlike the previous behavioral studies in the area, subjects in the experiment interacted as competing employers and workers over a series of contracting periods. This procedure made it possible to examine the process by which accounting-based performance-incentive contracts were produced under conditions of information asymmetry and state uncertainty, as well as providing new tests that replicated the previous studies.
TL;DR: In this paper, the authors examine hypothesized relationships between the structure orientation of public accounting firms and client earnings announcement dates, expressed in terms of “early” vs. “late”.
Abstract: The organizational theory and sociology literatures have long been concerned with the concept of structure, both as a dependent and an independent variable. Relatively recently, auditing researchers have found that public accounting firms differ in the degree of structure their audit technologies exhibit, and that the voting pattern of the Auditing Standards Board appears to be influenced by its members' firm affiliations with respect to their structure orientation. To date, however, the influence of accounting firm structure on client financial reporting characteristics has not been to subjected study. The purpose of this article is to examine hypothesized relationships between the structure orientation of public accounting firms and client earnings announcement dates, expressed in terms of “early” vs “late”. In addition, the impact of the nature of information conveyed, expressed in terms of surprise “good news” or “bad news”, is studied. Empirical evidence drawn from the Wall Street Journal Index , COMPUSTAT and a prior classification of Big Eight firm audit technologies with respect to structure, suggests that systematic relationships do exist. Implications for future research and audit practice are discussed.
TL;DR: In this article, the authors analyze changes in organizational control related to changes in an organization's economic situation and argue that tightening managerial control as a typical managerial reaction to decline is illustrated by developments in a Swedish company chosen as a case example.
Abstract: The paper analyzes changes in organizational control related to changes in an organization's economic situation. The thesis of tightening managerial control as a typical managerial reaction to decline is illustrated by developments in a Swedish company chosen as a case example. The interpretation challenges explanations indicating objective, causative relationships between organizational economy and organizational control. Instead, the focus is placed on social mechanisms, such as the social attribution of causes and the increased need for legitimation on the part of managers. Control and production subsystems are also seen to be loosely coupled.
TL;DR: The results indicate that both incentive and quality control systems affect performance efficiency, and incentives also had a significant effect on performance effectiveness.
Abstract: This paper reports the results of an experiment that tests the effects of three manufacturing controls—inventory and production (pull vs push), incentives (fixed vs contingent) and quality control (process vs output)— on performance effectiveness and efficiency. The results indicate that both incentive and quality control systems affect performance efficiency, and incentives also had a significant effect on performance effectiveness. We also hypothesized and found a significant interaction of the production/inventory control system and the quality control system on performance effectiveness and efficiency.
TL;DR: In this article, the authors present a broader conception of control, exploring its role within a pluralistic organization, and argue that forces other than senior management can and do shape organizational order.
Abstract: This paper presents a broader conception of control, exploring its role within pluralistic organization. Reconceptualization is necessary because conventional authoritative and consensual versions of the managerial control model fail to take account of autonomous activity. An alternative conception, regarding controlling as causing and attributing control to all sources of stability and change, is needed to recognize that forces other than senior management can and do shape organizational order. Control is not management’s prerogative; organizations are also self-governed through the assumptions, principles and rules underlying their beliefs and behaviours. Control is, thus, a non-cybernetic system encompassing both managerial and autonomous activity. Repositioning the conventional model within a pluralistic framework provides an understanding of why conceptualizing control as the cybernetic implementation of management’s intentions has often obscured rather than illuminated the concept.