Showing papers in "Accounting Organizations and Society in 1991"
TL;DR: In this paper, it is argued that hierarchical forms of accountability, in which accounting currently plays a central role, serve to produce and reproduce an individualized sense of self; a sense of the self as essentially solitary and singular, nervously preoccupied with how one is seen.
Abstract: The concern of this paper is to extend the critique of accounting through an exploration of the more inclusive concept of accountability. The paper begins by stating the positive effects upon the individual of being held accountable, and then goes on to explore how different forms of accountability produce different senses of our self and our relationship to others. It is argued that hierarchical forms of accountability, in which accounting currently plays a central role, serve to produce and reproduce an individualized sense of self; a sense of the self as essentially solitary and singular, nervously preoccupied with how one is seen. These effects are contrasted with what are described as socializing forms of accountability which flourish in the informal spaces of organizations and which confirm self in a way that emphasizes the interdependence of self and others. The tensions and interdependencies between these two forms of accountability are then explored. It is argued that contemporary organizational accountability is constructed around an untenable and destructive split of ethical and strategic concerns to the detriment of both. The search for the possibilities of accountability should be oriented to the reconciliation of this divide.
699 citations
TL;DR: A review essay by as discussed by the authors explores the relation between quantification and democratic government and argues that democratic power is calculated power, calculating power, and requiring citizens who calculate about power, arguing that there is an intrinsic relation between political problematizations and attempts to make them calculate through numerical technologies.
Abstract: This review essay considers the relations between quantification and democratic government. Previous studies have demonstrated that the relation between numbers and politics is mutually constitutive: the exercise of politics depends upon numbers; acts of social quantification are politicized; our images of political life are shaped by the realities that statistics appear to disclose. The essay explores the specific links between democracy , as a mentality of government and a technology of rule, and quantification, numeracy and statistics. It argues that democratic power is calculated power, calculating power and requiring citizens who calculate about power. The essay considers the links between the promulgation of numeracy in eighteenth-century U.S. and programmes to produce a certain type of disciplined subjectivity in citizens. Some aspects of the history of the census are examined to demonstrate the ways in which the exercise of democratic government in the nineteenth century came to be seen as dependent upon statistical knowledge and the role that the census had in “making up” the polity of a democratic nation. It examines the case of National Income Accounting in the context of an argument that there is an intrinsic relation between political problematizations and attempts to make them calculate through numerical technologies. And it considers the ways in which neo-liberal mentalities of government depend upon the existence of a public habitat of numbers, upon a population of actors who calculate and upon an expertise of number. Democracy, in its modern mass liberal forms, requires numerate and calculating citizens, numericized civic discourse and a numericized programmatics of government.
653 citations
TL;DR: The authors report a longitudinal field study of organizational change, tracing out the way in which new accounting practices were implicated in an emergent reconstruction of the organization's culture, and find that accounting is implicated in organizations' cultures.
Abstract: Organizations have long been known to have cultural properties. A more recent innovation is the study of organizations as cultures: systems of knowledge, beliefs and values in which action and artifact are vested with expressive qualities. We know little about the way in which accounting is implicated in organizations' cultures. This paper reports a longitudinal field study of organizational change, tracing out the way in which new accounting practices were implicated in an emergent reconstruction of the organization's culture.
596 citations
TL;DR: Latour et al. as discussed by the authors developed the concept of the arena as being dependent upon a process of translation and elaborated the process through a study of the genesis of the standard setting programme in the U.K.
Abstract: The study of the relationship between accounting and social change has entered the agenda of accounting research. Adopting the mode of analysis of Burchell et al. (Accounting, Organizations and Society (1985) pp. 381–414), this paper develops the concept of the arena as being dependent upon a process of translation (Latour, B., Science in Action, 1987). The process of translation is elaborated through a study of the genesis of the standard setting programme in the U.K.
319 citations
TL;DR: The new accounting history is located in relation to changes in the discipline of history itself, and is held to have implications for the current burgeoning of interest in field studies of accounting.
Abstract: Over the last decade accounting history has changed significantly. This change entails both a pluralization of the methodologies and a change in the position of history within the discipline of accounting. The extent of this change is held to entitle us to speak of the “new accounting history” as a loose assemblage of diverse research questions and issues. It involves attention to a variety of agents and agencies, the conditions of possibility of transformations in accounting knowledge and practice, the institutional forces that shape actions and outcomes and the rationales that set out the objects and objectives of accounting. The new accounting history is located in relation to changes in the discipline of history itself, and is held to have implications for the current burgeoning of interest in “field studies” of accounting.
317 citations
TL;DR: In this article, an interpretative framework and data collected through interviews was used to explore the social ambivalence in public accounting firms and suggest that the undiscussability of the cost/quality dilemma is translated into ethical ambiguity, resulting in individualized reconciliations of the dilemma.
Abstract: Public accounting firms face an inherent dilemma, wherein conflicting cost and quality goals are create a setting where social ambivalence thrives. This paper explores this dilemma, using an interpretative framework and data collected through interviews. The results suggest that, rather than directly addressing this dilemma, audit firms promote an attitude of compromise within individual audit staff members. This compromise, though, is never openly discussed, hence in Argyris' words ( Accounting, Organizations and Society (1977) pp. 113–123), a double bind exists within the control system: the undiscussable remains undiscussable. Blending auditor comments with related research, it is suggested that the social ambivalence, through undiscussability, is translated into ethical ambivalence (Jansen & von Glinow, Academy of Management Review (1985) pp. 814–822), resulting in individualized reconciliations of the cost/quality dilemma. The discussion ends with implications for research and practice.
282 citations
TL;DR: This paper reported the results of a study which re-examines Brownell & Hirst's result ( Journal of Accounting Research, Spring 1982), showing that budget participation and budget emphasis in evaluation should be aligned, would hold only where task uncertainty was low.
Abstract: This paper reports the results of a study which re-examines Brownell & Hirst ( Journal of Accounting Research , Autumn 1986). In that study, it was hypothesized that Brownell's result ( Journal of Accounting Research , Spring 1982), showing that budget participation and budget emphasis in evaluation should be aligned, would hold only where task uncertainty was low. With managerial performance as the criterion, Brownell & Hirst were unable to find support for the hypothesis. This study incorporates variations in measurement and sampling and finds results which provide strong support for Brownell & Hirst's hypothesis.
278 citations
TL;DR: In this paper, the authors argue that the most significant exception to this neat model of accounting innovation is the development of discounted cash flow (DCF) procedures as a tool for management in the 1950s.
Abstract: It has recently been stated that innovations in management accounting have been the preserve of practitioners, and that these innovations which began in the nineteenth century had more or less halted by 1925 (Johnson, H. T. & Kaplan, R. S., Relevance Lost: The Rise and Fall of Management Accounting (Boston, MA: Harvard Business School Press, 1987)). The most significant exception to this neat model of accounting innovation is held to be the development of discounted cash flow (DCF) procedures as a tool for management in the 1950s. This exception is explained away as an aberration in an otherwise smooth process. It consists, so it is argued, of academics striving for relevance rather than practitioners innovating in the face of practical problems. This paper explores this supposedly aberrant moment of innovation from a different perspective to that of Johnson and Kaplan, and for a particular context. The boundaries of the processes of innovation are drawn differently and more widely, to include various agencies, arguments and mechanisms through which DCF techniques were promoted in the U.K. in the 1960s. The world of the practitioner or the academic is not accorded an a priori explanatory privilege, and the promotion of DCF techniques in the U.K. is interpreted as involving much more than “academics striving for relevance”. Four concepts are suggested as possible ways of posing further questions about the processes of accounting innovation: problematizations, programmes, translation, and action at a distance. The paper seeks to show how concerns about investment decisions within firms came to be posed in terms of a general problematization of economic growth, and how a translatability came to be established between programmes for improving economic growth, and the use of DCF techniques for individual investment decisions. Action at a distance is the term that is used to characterize the possibility of one entity becoming a centre capable of exerting influence over others through such mechanisms. In the context of a political culture which sought economic growth yet wished to avoid direct intervention in the decisions of private enterprise and the nationalized industries, these issues are argued to have attained a particular significance. DCF techniques made it possible for government to seek to act at a distance on the economy without intruding within the private sphere of managerial decisions. Considered together, and for the case of DCF in the U.K. in the 1960s, an examination of these processes is considered to significantly modify the counterposing of practitioners innovating within firms, versus academics striving for relevance. Accounting innovation is argued to occur “beyond the enterprise” as well as within it.
274 citations
TL;DR: In this article, a philosophy of praxis or practical reflexivity that recognizes the arbitrariness of signification, yet retains a rational basis for warranting social (accounting) practice is presented.
Abstract: Can we accept the arbitrariness of signification — speaking, writing, and other symbolic forms — without jettisoning the quest for a rational authority for adjudicating validity claims? This paper outlines a philosophy of praxis or practical reflexivity that recognizes the arbitrariness of signification, yet pari passu, retains a rational basis for warranting social (accounting) practice. The paper begins by critiquing David Solomons' concept of Representation Faithfulness—a quintessential correspondence theory of accounting knowledge—and proceeds to outline a philosophical alternative of praxis or practical reflexivity. For the latter, truth is not merely a scholastic or technical artifact, but an element that is unavoidably integral to social action. We inevitably make the world mean; practical reflexivity seeks to warrant our actions in terms of heightening social contradictions, as a means of developing the historical and social context.
251 citations
TL;DR: The functional failure of the FASB's Conceptual Framework is attributed to the fact that it is elaborated around a highly problematic conception of the relationship between financial accounting and economic reality.
Abstract: This paper addresses the functional failure of the FASB's Conceptual Framework. It suggests that the reason for the problems encountered by the FASB in its CF project (and those encountered in other CF projects), is that the FASB CF is elaborated around a highly problematic conception of the relationship between financial accounting and economic reality. The CF involves a process of mundane reasoning around a central incorrigible proposition of our society, that social reality exists objectively and intersubjectively. This paper draws on anthropology to show that this assumption of a concrete, objective social reality is a product of everyday reasoning such as that of the FASB members. A comparison of the FASB's reasoning about economic reality, with the reasoning of the African Azande about their poison oracle reality, shows how those two realities are both socially maintained by the same process of commonsense reasoning. A number of important implications follow which extend beyond CFs and financial accounting practices. These implications relate to the essential culture and value-dependency of logic, reasoning and rationality, and have attendant inferences for the potential role of accounting researchers in influencing society rather than merely participating in the legitimizing and reproduction of the status quo .
235 citations
TL;DR: In this article, the authors argue that the extent to which individuals will behave in an "administratively" rational manner and wittingly or unwittingly match the use of control strategies to organizational contextual variables will depend on whether they identify with the organization as a system.
Abstract: Researchers have used contingency theory to argue that organizations perform more effectively if structures and control systems are designed to match contextual variables. The ‘fit’ hypotheses developed in the organization and management control literatures to test this theory have generally assumed the existence of a unifying set of organization goals and that individual behaviour can be directed towards the achievement of these goals. Management control systems, such as budgeting, have been similarly conceptualized. This paper argues that the extent to which individuals will behave in an ‘administratively’ rational manner and wittingly or unwittingly match the use of control strategies to organizational contextual variables will depend on whether they identify with the organization as a system. The paper tests the three-way interaction between task uncertainty, budget use and system goal orientation. The empirical analysis based on a sample of 192 subunit managers in four large Australian not-for-profit hospitals provides results to support the hypothesis developed.
TL;DR: In this article, the authors outline the central themes for an ethnographic study of the professional accountancy examination process and present a preliminary critique of professional examination process on two levels: a relatively modest functional critique and a more ambitious critique of ideology.
Abstract: This essay outlines the central themes for an ethnographic study of the professional accountancy examination process. The nature of professional expertise and a justification of the ethnographic perspective are developed to locate the central narrative. A preliminary critique of the professional examination process is advanced on two levels: a relatively modest functional critique and a more ambitious critique of ideology based on the work of Habermas. The complexity of subjectivity remains a theoretical challenge to any comprehensive ethnography in this area.
TL;DR: In this paper, the authors provide a direct test of the effects of national culture and management control system on manufacturing performance, and the results are consistent with cultural individualism and management controls having independent, but not interactive, effects.
Abstract: The increasing dominance of Asian manufacturing firms in the global economy has raised an important issue: whether these firms’ superior manufacturing performance is caused by their management control systems, the national culture of their employees, or the interaction of these two factors. This experimental study provides a direct test of the effects of national culture and management control system on manufacturing performance. The dimension of national culture studied was individualism ( vs collectivism ) because this work-related attribute has been noted as a major difference between Asian and Western cultures. In turn, the focus on cultural individualism motivated a study of two aspects of management controls: work flow interdependence and pay interdependence. The results are consistent with cultural individualism and management controls having independent, but not interactive, effects on manufacturing performance. The potential implications of these findings and suggestions for future research are discussed.
TL;DR: Empirical evidence is provided to support the normative argument that Japanese companies following a zero defect quality strategy have modified their management control systems to encourage the continuous quality improvements that are key to this strategy.
Abstract: Normative theory suggests that management control systems should be designed to complement management's objectives and strategies. Few empirical studies, however, have focused on how management control systems have been modified to complement new manufacturing techniques, such as total quality control and zero defect strategies. This study relates quality strategies with the management control information provided for quality in 26 Japanese automotive and consumer electronics firms. Quality strategy was measured by a set of eight attitude questions addressing whether the managers adhered to a traditional economic conference level (ECL) quality management strategy or a “zero defect” quality management strategy. The relationship of quality strategy to the type and frequency of quality goal and feedback information was then measured. The results indicate that the management control systems supporting a zero defect quality strategy are more likely to include regular goal-setting and more frequent feedback relating to quality than those supporting an ECL quality strategy. Widespread use of quality cost targets and feedback is also related to a zero defect strategy. The results provide empirical evidence to support the normative argument that Japanese companies following a zero defect quality strategy have modified their management control systems to encourage the continuous quality improvements that are key to this strategy.
TL;DR: In this article, the authors argue that the task of accountants is to provide information as free bias as possible that will be useful to decision makers who may be concerned with social and economic issues.
Abstract: This paper takes the position that the task of accountants is to provide information as free bias as possible that will be useful to decision makers (possibly including accountants themselves) who may be concerned with social and economic issues. Though accountants may sometimes fail to achieve the faithful representation of economic phenomena, that should be their goal. In developing this argument, the paper criticizes Radical Accounting, as represented by Tony Tinker's Paper Prophets , and others who assert that accounting policies should be chosen for their supposedly desirable economic consequences rather than for their capacity to depict relevant phenomena faithfully. Like journalists, accountants should report the news, not make it. Neutrality in accounting may not always be easy to secure, but without it the credibility of accounting is endangered.
TL;DR: In this paper, a theoretical analysis of the conflict-enhancing potential of accounting reports in a crisis situation is presented, and an illustration is provided through an analysis of developments in Germany up to the aftermath of the First World War.
Abstract: Accounting reports have been depicted in the literature as ideological, conflict-resolving practices in capitalistic society. Employing insights from critical theory, this theme is developed in the present analysis through a theorizing of the conflict-enhancing potential of accounting, particularly in a crisis situation. Accounting is understood to possess an aura in the context of the hegemony of capitalist society which, on its transformation, can engender consequences disturbing rather than stabilizing for a prevalent capitalistic order. An illustration is provided through an analysis of developments in Germany up to the aftermath of the First World War. The awareness created by the theoretical analysis hopefully serves to enhance the social analysis of accounting.
TL;DR: In this paper, the authors reveal that the chartered accountants' economic domination was challenged as being contrary to prevailing social and political philosophy and by employing a critical analysis of professional privilege, and that the CA monopoly was publicly defended by assuming a "functionalist" interpretation of the role of professions in society.
Abstract: From 1854 to 1880 Scottish chartered accountants achieved a monopoly of practice founded on the unique acquisition of the credentials “CA”. After 1880 their economic domination was formally challenged by two organizations of aspirant professionals. This paper reveals that the chartered monopoly was challenged as being contrary to prevailing social and political philosophy and by employing a “critical” analysis of professional privilege. It is shown that the CA monopoly was publicly defended by assuming a “functionalist” interpretation of the role of professions in society and was protected with the assistance of superior resources, linkages with the legal profession and contemporary political circumstances.
TL;DR: This article used a multi-period experiment to test the effects of a truth-inducing (TI) pay scheme suggested by the analytical literature, and a ratchet in standard-setting, on these subordinate choices.
Abstract: A widely recognized problem in planning and control is motivating subordinates both to maximize performance and to truthfully reveal their performance expectations. This study uses a multiperiod experiment to test the purported effects of a truth-inducing (TI) pay scheme suggested by the analytical literature, and a ratchet in standard-setting, on these subordinate choices. When the superior lacked information on subordinates' performance capability, subjects who self-set standards under the TI scheme inserted significantly less slack than those who did so under an alternate pay scheme which lacked the truth-introducing property. Howevers, as information became available on subordinates' past performance, imposing a ratchet was just as effective in reducing budgetary slack. The results also supported the prediction that a ratchet reduced the extent of standard overfulfilment.
TL;DR: In this paper, the authors present a review of the literature on feedback in management accounting, focusing on the psychological closeness, credibility and power of feedback sources, the sign, frequency and type of feedback messages, and individual differences of locus of control and self-esteem.
Abstract: While feedback has been viewed as a central component of an organization's management accounting and control system, much of the research on system design has not explicitly considered the behavioural consequences of providing organizational members with feedback. In order to redress this situation, this paper reviews some of the research conducted in psychology, as well as related work in accounting, in order to identify future research opportunities. In particular, issues relating to (a) the psychological closeness, credibility and power of feedback sources, (b) the sign, frequency and type of feedback messages, and (c) the individual differences of locus of control and self-esteem, are discussed. In the case of sources of feedback, particular attention is paid to the interpersonal relationships betweeen superiors and subordinates and between managers and accountants. Furthermore, the review of the literature reveals that the feedback phenomenon is a complex one. Thus it is argued that care must be exercised in making both predictions about the impact of feedback and general statements about feedback effectiveness. In order to place the complexity in perspective, a contingency view is taken and the relevance of certain contingency factors, when investigating the behavioural consequences of feedback in accounting settings, is discussed. Finally, several avenues for future research into feedback in management accounting are identified and described.
TL;DR: In this paper, the role of trust and the ways in which trust is created within the prospectus process is explored and the theoretical analysis provided deconstructs the contract as the original event and points to the limitations of traditional accounting analyses in understanding economic exchange.
Abstract: This study explores the role of trust and the ways in which trust is created within the prospectus process. It is argued that trust is a necessary condition for economic exchange and that trust must exist prior to contracting. The theoretical analysis provided deconstructs the contract as the original event and points to the limitations of traditional accounting analyses in understanding economic exchange. In addition, examples from the prospectus process are used to illustrate how some of the capital market institutions and institutional practices that we observe create and recreate the trust necessary for exchange.
TL;DR: In this paper, the authors assess the use of the linguistic model within accounting discourse and the related interest in rhetorical formulations and present a re-analysis of the "foundations of accounting" associated with the name of Luca Pacioli in the late Middle Ages.
Abstract: This paper critically assesses the use of the linguistic model within accounting discourse and the related interest in rhetorical formulations. It involves a re-analysis of the “foundations of accounting” associated with the name of Luca Pacioli in the late Middle Ages. The discussion concentrates upon the institutional matrix in which accounting emerged in the sixteenth century. In particular it stresses the role of three crucial institutions; the Church, the pedagogic appratuses and the publishing house. Along with the more fully explored role of the commercial organisations during the period, these institutions provided the contours in which we can understand how and why accounting in its particular modern form emerged.
TL;DR: In this paper, the authors explore the functioning of accounting in the social, economic and political contexts surrounding the financing of the early U.K. railways and explore an alternative explanation implied by a comment by Marx in volume 3, of Capital, that these events were elements of a "great railway swindle" in which accounting was deeply implicated.
Abstract: This paper explores the functioning of accounting in the social, economic and political contexts surrounding the financing of the early U.K. railways. The conventional view of economic historians is that the early U.K. railways were financed by an irrational stock market “mania”, followed by the inevitable crash in which many of the initial investors were ruined. Here we explore an alternative explanation implied by a comment by Marx in volume 3, of Capital (1981), that these events were elements of a “great railway swindle” in which accounting was deeply implicated. Marx provides no direct support for his statement. However, the history of the early U.K. railways has been extensively researched. This work is re-examined to assess the a priori validity of the “swindle hypothesis”. Its acceptance would have important implications for accepted views of the nature of capitalism and accounting in the mid-nineteenth century. According to economic historians, the “mania” was a product of laissez faire capitalism. According to accounting historians, the notorious manipulations of railway accounts during and after the “mania” were the consequence of a lack of “generally accepted accounting principles”. However, according to the swindle hypothesis, the “mania” and its afterwath were the product of a rational and rapacious social hierarchy, for whom accounting was simply a tool to be manipulated. The paper concludes that while there is a need for more research, the hypothesis is sufficiently consistent with the evidence available to be firmly on the agenda of accounting history.
TL;DR: In this article, it is suggested that fairness under accountability and fairness in distribution stem from different ethical frameworks and different, though complementary, assumptions about society, and some preliminary suggestions are then made as to how a communitarian perspective might be introduced alongside a predominantly individualistic one in accounting.
Abstract: This paper comments on what appear to be more basic concerns underlying Williams' article (Williams, P. F., The Legitimate Concern with Fairness, Accounting, Organizations and Society (1987) pp. 169–179). It is suggested that fairness under accountability and fairness in distribution stem from different ethical frameworks and different, though complementary, assumptions about society. Some preliminary suggestions are then made as to how a communitarian perspective might be introduced alongside a predominantly individualistic one in accounting.
TL;DR: The Critical Legal Studies movement (or CLS) in American academic law was introduced to accounting audiences and surveys Critical Accounting from the perspective of its larger, older, more fully articulated, more radical and more divisive legal cousin this article.
Abstract: It is now time, after a decade of development, to take stock of the growing, varied, interdisciplinary Critical Accounting movement appearing in the pages of Accounting, Organizations and Society and elsewhere throughout the 1980s. Critical Accounting bears remarkable resemblance to the highly important Critical Legal Studies movement (or CLS) in American academic law. This paper introduces CLS to accounting audiences and surveys Critical Accounting from the perspective of its larger, older, more fully articulated, more radical and more divisive legal cousin. This paper argues that if Critical Accounting continues to share CLS's theoretical and intellectual stance, but not its targeted critical practice and institutional or political stance, Critical Accounting is destined to remain an interesting sidelight rather than a fully articulated theory of accounting. Finally, this paper comments on existing Critical Accounting work from a CLS perspective, and suggests new directions for Critical Accounting as an intellectual movement.
TL;DR: In this article, the role of the mechanistics and organic world theories, along with their corresponding root metaphors and language, in shaping the independent audit with reference to a five-phase field study of how auditors assess inherent risk.
Abstract: Breaking from traditional thought, it has been increasingly argued that the observers of organizational action and the organizations that they observed are inextricably linked rather than independent of one another. Following this position, the world theories adopted and related root metaphors employed by these observers serve as an image of the structural relations that underlie human activities and are thus a mediating factor between the observer and the observed. It is positioned that world theories are not only reflective of reality, but also constitutive of it. This article considers the role of the mechanistics and organic world theories, along with their corresponding root metaphors and language, in shaping the independent audit with reference to a five-phase field study of how auditors assess inherent risk. Implications for research are considered.
TL;DR: In this paper, the authors identify two conditional factors which potentially influence the way managers respond to opportunity cost information: managers' cognitive style and whether or not managers sponsor a project (project sponsorship), and argue that they influence managers' decisions on opportunity costs in situations in which opportunity cost implications are implicit.
Abstract: The incorporation of opportunity cost is stressed in normative approaches to resource allocation decisions. Empirical evidence has revealed a variety of behaviours. A consequence of inappropriate treatment of opportunity costs is an incorrect assessment of the economic consequences of resource allocation decisions. Improved understanding of why some managers treat opportunity costs inappropriately permits identifying situations where the incorrect economic evaluations will lead to sub-optimal resource allocation and therefore provides a basis for remedial action. This study identifies two conditional factors which potentially influence the way managers respond to opportunity cost information. These factors are managers' cognitive style and whether or not managers sponsor a project (project sponsorship), and it is argued that they influence managers' decisions on opportunity costs in situations in which opportunity cost implications are implicit. In particular, the paper proposes, first, that in the absence of project sponsorship, managers with an “intuitive” style of “taking in data” will tend to incorporate opportunity costs in their economic decisions whereas those wiht a “sensation” style will not. Second, it is suggested that because sponsorship encourages managers to ignore negative economic signals (sponsorship bias) any effects of cognitive style will be moderated in conditions where sponsorship is evident. A laboratory experiment with managers as subjects was used to examine these propositions. The results indicated that intuitive managers tended to incorporate opportunity costs in their decisions whereas sensation individuals appeared to focus more on the directness of the relationship between expenditure and a project to determine the relevance of the cost. Opportunity cost implications tended not to be identified by the sensation group. Evidence was found that sponsorship moderated the influence of cognitive style on decisions to include opportunity costs.
TL;DR: In this paper, the authors compare the development of accounting norms in different accounting areas and find that accounting norms can explain differences in accounting norms between countries that could be explained by reference to cultural traits.
Abstract: If culture is seen as a way of life that remains viable by “inculcating in its constituent individuals the cultural bias that justifies it” (Thompson, M., Ellis, R. & Wildavsky, A., Cultural Theory (1990)) then one would expect to find differences in accounting norms between countries that could be explained by reference to cultural traits. Holding the culture variable fixed and comparing the development of accounting norms in different accounting areas could give clues as to what aspects of the cultural context are relevant to accounting regulation. Definitions of the situation, and the kind of arguments used by actors in trying to persuade colleagues about the benefits of a certain type of regulation, could be culturally based. The regulation of three areas of accounting (municipal, financial and management accounting) in Sweden was studied over a period comprising this century to investigate these themes. State intervention, most likely in times of disorder may, it seems, be avoided or minimized through intensified debate and the formulation of accounting norms. When a messenger exists who shows that a solution is possible, together with an association of individuals and a representative expertise that form a sounding board for the debate, accounting finds a role through regulation. Academics arrive late to legitimize already accepted principles. Given an acceptable norm, compliance can be expected in due time. The state may grow stronger by not intervening.
TL;DR: In this paper, a case study of the Canadian institutional environment is used to illustrate the interrelationships among security regulations, the accounting profession, and stock market regulations along with the embedding of other trust mechanisms within institutional practices.
Abstract: This study considers the institutions and institutional mechanisms that produce the trust necessary for the new stock issue process to work. A case study of the Canadian institutional environment is used to illustrate the interrelationships among (1) security regulations, (2) the accounting profession, and (3) stock market regulations along with the embedding of other trust mechanisms within institutional practices. The theory and analysis explicitly considers what is usually taken-for-granted in capital market studies. In addition, the study highlights some of the unintended consequences that may result from the institutional production of trust and the presence of multiple trust-producing institutions.
TL;DR: The relationship between the number of employees in a firm, their rank, and the level of professionalism among firm members is evaluated in 19 accounting firms, involving 325 accountants engaged in public practice as discussed by the authors.
Abstract: The relationship between the number of employees in a firm, their rank, and the level of professionalism among firm members is evaluated in 19 accounting firms, involving 325 accountants engaged in public practice. Professionalism is measured using five individual traits plus a composite. Results indicate that one trait (i.e. a belief that the profession provides a service to society) and the composite were inversely related to firm size. Rank or position in the firm hierarchy demonstrated an even stronger, independent effect on three professionalism traits and the composite, with higher member rank associated with higher levels of professionalism. Issues related to the future study of professionalism among accountants are discussed.
TL;DR: Weber's work is shown to provide a meaningful framework for examining accounting practices in their socio-historical context as discussed by the authors, and these previous layers of analysis are shown to situate the examination of important tensions within the analysis of organizations generally and accounting practices more specifically.
Abstract: Weber's work is shown to provide a meaningful framework for examining accounting practices in their socio-historical context. We argue that Weber's writings suggests three analytic layers within which to situate the study of the relations of accounting to organizations and society. First, we discuss the configuration of institutional features of society facilitating the development of capitalism, the corporate enterprise, and accounting practices. Next, we consider the historical dynamics following from the tensions between formal and substantive rationalities as they apply to these institutional foundations. Third, these previous layers of analysis are shown to situate the examination of important tensions within the analysis of organizations generally and accounting practices more specifically. Weber's framework suggests that although accounting practices may be considered analytically rational, their substantive rationality and the rationality of organizational operations are only understood as rational in their socio-historical context.