Mahmoud Ezzamel and Keith Robson
This article aims to provide a brief overview of a variety of critical studies in accounting. Each section is concerned with a particular aspect of accounting practice under categories we regarded as the most obvious and accessible for non-accounting management specialists and students. The first section focuses upon accounting calculations between organizations and society – financial reporting practices and the regulation thereof. The second section examines critical studies of intra-organizational accounting calculations – management accounting and control practices. The third section discusses critical research that has studied the organizational and institutional characteristics of the accounting and auditing profession, with particular reference to the professionalization of accounting, the activities of the large auditing and accounting multinational firms, and the everyday socialization of professional accountants.
This article deals primarily with the problem of accounting for the cost of defined-benefit pension schemes in the accounts of the sponsoring company (the employer). This is one of the most controversial issues currently being debated by accounting standard-setters, following the introduction of an innovative standard on the subject, FRS 17, by the UK Accounting Standards Board (ASB). This standard measured the pension-fund deficit or surplus as the difference between the current values of the pension-fund assets and liabilities, and the effects of changes in valuations were to be reported immediately in the Statement of Recognized Gains and Losses (STRGL). The introduction of FRS 17 coincided with: a sharp decline in stock-market prices; a reduction in the value of pension-fund investment; and a revision of actuarial tables to reflect the increased expectation of life, which increased pension-fund liabilities.
The purpose of this article is to examine the relationship between the historical development of accounting, information, and communication systems and business organizations since the late eighteenth century. Its findings are based largely on research conducted by accounting and business historians during the last quarter of the century, a period in which accounting history, once a niche area of research heavily focused on the development of double-entry bookkeeping, has been brought more firmly into the business-history fold. This reflects the work of those historians who have focused their attention on the development of cost/management accounting practices within firms, and the “new” accounting historians who have examined the wider relationship between accounting and the organizations and society within which it is embedded.
Rob Bauer, Roy P. M. M. Hoevenaars, and Tom Steenkamp
Market valuation of assets is a topic that has been discussed for quite some time now, but the valuation of pension contracts including all embedded options is a major challenge for pension fund policy makers. On top of that, pension fund beneficiaries are increasingly demanding more transparency with regard to the exact nature of their pension arrangement, or their pension deal. This article sheds some light on the management of the current and future financial health of a defined-benefit public pension fund. Most funds conduct a so-called Asset Liability Management (ALM) study that investigates the impact of decisions with regard to investment, contribution, and indexation policy on the various stakeholders of the fund (employees, employers, and retired and future generations).
Andrea Mennicken and Michael Power
This chapter explores the role of auditors in systems of corporate governance. The discussion refers to international comparisons, where the changing regulatory, methodological, and institutional dimensions of internal and external auditing are emphasized. The first section takes a look at auditing within a fluid and developing corporate governance space, which provides guarantees regarding internal control quality and financial statement. It then discusses auditing standards and knowledge, and related pressures to direct the quality of the auditing market. Finally, the chapter shows auditing as a powerful model of governance.
Irene S. Rubin and Joanne Kelly
This article examines what reforms have been proposed, what they are intended to accomplish, and how they are working out. The result of the survey and analysis conducted is somewhat messy if informative. The amount and quality of information available in different countries varies enormously. Failed reforms have often been ignored by researchers, biasing the existing reports in a positive direction. Reforms have been in place for different amounts of time in different countries, and some have been only partly implemented, adding to the difficulty of comparing them. Finally, the large number of countries engaged in such reforms has led to some selectivity in the presentation, making the results less than neat. This article then illustrates an interim report on an ongoing set of processes in a limited number of countries, based on the literature and on first-hand observations offered by scholars and practitioners in a number of countries.
Megan S. McDougald and Roston Greenwood
This article studies the rise of management consulting within large accounting firms. It first discusses the history of accounting, and then looks at the rise of management consulting within large accounting firms. It also introduces two tensions that emerged from the growth in these services, namely the tension between consultants and accountants and the risk of ‘client capture’.
Nola Buhr and Rob Gray
This article investigates the nature and detail of environmental management systems. It explores how environmental management systems and the organization's management control systems might (or might not) be brought into harmony. The relationship between environmental management systems, environmental management accounting, and the natural environment are explained. The level of integration between environmental management systems and management control systems depends upon the strategy and objectives of the organization and the status of the environment. As long as win-win opportunities exist, the development and integration of environmental management systems and management control systems is a clear imperative. Full-cost accounting is considerably more demanding than environmental accounting and even more subjective. Despite pessimism (or perhaps it is just realism), one have an abiding belief in the importance of understanding humanity's relationship with the natural environment and the role that environmental management accounting and environmental management systems can play in that relationship.
Brad Potter and Naomi Soderstrom
Company stakeholders have unprecedented access to information about company activities and are looking beyond accounting reports for broader information to better assist their decisions (IIRC, 2011). Integrated reporting (IR) is a reporting framework promoted in recent years that aims to capture the broader social and environmental dimensions of company operations and report the information in meaningful ways. While the intuition behind IR is simple and attractive, debates relating to the practicalities of implementing this “new” form of reporting persist. We use the lens of research on financial and sustainability reporting to explore some challenges faced by IR. We examine a significant body of work conducted over the past three decades that has shaped our understanding of how company reports are interpreted and used. Based on this analysis, we offer insight into the challenges facing IR. These insights can be useful for informing the debate on implementation of this proposed reform.
Professional Structures and Practice Change: institutionalization processesin accounting and strategy
Richard Whittington and Deborah Anderson
This chapter examines the processes by which new management ideas become institutionalized as widely-used management practices in different kinds of profession. It argues that these processes vary according to a profession’s structural degree of social closure, as enforced for instance by tight regulations and strict qualification requirements. Closure also has implications for the relevance of different strands of institutional theory. In closed professions such as accounting, institutionalization processes resemble those predicted by institutional entrepreneurship theory: the emphasis is on the roles of regulators and professional bodies; collaboration amongst change agents; episodic innovation; front-loaded change activity; and isomorphic outcomes. In open professions such as strategy, management fashion theory suggests the importance of prestigious clients and competition, while institutional work theory predicts continuous innovation; intense investment in maintenance activities; and pluralistic outcomes. The chapter argues for the value of comparative studies of professions for future research on the institutionalization of management ideas.