-
So
rDavid J. Cooper a,, Keith Robson b
a School of Business, University of Alberta, Edmonton, Alta.,
Canada T6G 2R6b CardiV Business School, CardiV University, CardiV,
CF10 3EU Wales, UK
Abstract
This review paper argues that the institutions and sites of
professionalization projects and regulatory processes mat-ter. The
institutions and locations where regulation takes place aVect both
the outcome of the regulatory process and thelegitimacy of the
rules and practices produced. Changes in regulatory processes aVect
opportunities for democratic con-trol and legitimacy. A common
position in the accounting literature is to examine both the
process of professionaliza-tion and accounting and audit regulation
within and around professional associations and related
organizations, such asstandard setting bodies and regulatory
agencies. We argue that professional Wrms are increasingly
important in profes-sionalization and regulatory processes and have
not received the attention that they warrant: an examination of
themulti-national professional service Wrms (currently known as the
Big 4) can enhance an understanding of professionali-zation and
professional regulation. We suggest that these are important sites
where accounting practices are themselvesstandardized and
regulated, where accounting rules and standards are translated into
practice, where professional iden-tities are mediated, formed and
transformed, and where important conceptions of personal,
professional and corporategovernance and management are
transmitted. 2006 Elsevier Ltd. All rights reserved.
Introduction
Accounting rules and accepted practice aVectnot just how
resources are produced and distrib-uted in an economy, but they
aVect what is deemed
and what is deemed to be irrelevant to an organiza-tional
account. The inXuences on these rules(including how they are
produced, which practicesare recognized and what is seen to matter)
and theprocesses by which these rules are seen as
legiti-Accounting, Organizations and
Accounting, professions and of professio0361-3682/$ - see front
matter 2006 Elsevier Ltd. All rights
reservedoi:10.1016/j.aos.2006.03.003
organizationally and socially rational and valuable,
* Corresponding author. Fax: +1 780 492 3325.E-mail addresses:
[email protected] (D.J. Cooper),
[email protected] (K. Robson).ciety 31 (2006) 415444
www.elsevier.com/locate/aos
egulation: Locating the sitesnalizationd.
mate, have been important areas of accountingresearch. A
signiWcant emphasis has been on therole of accountants themselves
in producing rulesand determining the practices of calculation
andaccountability. Research on accountants and their
-
a416 D.J. Cooper, K. Robson / Accounting, Org
professional associations addresses how and whyaccounting and
accountants have become a power-ful social and economic force in
society, and howand why they have been imbued with such inXu-ence
and status. In short, research on the account-ing profession and
its regulatory practices isimportant for understanding modern
society.
The sites of professionalization projects and reg-ulatory
processes also matter (Martinez Lucio &MacKenzie, 2004). The
agencies where regulationtakes place aVect both the outcome of the
regula-tory process and the legitimacy of the rules andpractices
produced. Changes in regulatory organiza-tions (e.g., from
professional committees controlledby accountants to standard
setting bodies con-trolled by quangos or government agencies to
transnational agencies controlled by large corporations,including
private accounting Wrms) aVect opportu-nities for democratic
control and legitimacy. Sincethe 1980, we have seen a shift in
institutional justiW-cations such that accounting regulatory
institutionsappear to have greater legitimacy if they facilitateand
support capital markets (Engelen, 2002) ratherthan state agencies,
who may be interested in sup-porting other social groups and
institutions.
Professionalization processes are also inXu-enced by their
institutional alignment. How practi-tioners come to see themselves,
their identity asindividual, public sector, or corporate
accountantsand auditors, and what this means in terms of
theirallegiances and concerns, inter-relate with regula-tory
processes and impacts how rules are opera-tionalized. Accountants
working in industry have adiVerent sense of their responsibilities
than thoseworking in large Wrms, who again have diVerentvalues than
those who work in smaller publicoYces or those in the public,
voluntary or commu-nity sectors (Hastings & Hinings, 1970). How
pro-fessional organizations make claims to speciWcactivities and
expertise, and the nature of theclaims they make, are also
inXuenced by their his-tories, allegiances and struggles with other
occupa-tions and economic institutions. If auditors seetheir role
as being to serve their managerial clients(rather than, for
example, the public or investors),then this aVects what they regard
as legitimate anduseful knowledge, and what the appropriate
actions should be if they discover fraud or corrup-nizations and
Society 31 (2006) 415444
tion; if accountants oVer tax avoidance schemes,then they are
likely to favour and promote tax pol-icies which favour their
clients.
In the Wrst two sections of this paper, prior workon
professionalization and on accounting regula-tion is reviewed, with
an emphasis on what we seeas useful lines of future enquiry in an
era ofincreasingly dispersed processes of professionaliza-tion and
modes of regulation. In accordance withour view that there are
other important sites andinstitutions for the regulation of
accounting prac-tice, and the construction and legitimation of
theaccounting professional, in the third section of thispaper we
argue for increased examination ofaccounting Wrms, and how this can
enhance anunderstanding of professionalization and profes-sional
regulation. We focus on one crucial site: themulti-national
business (professional) serviceWrms (currently known as the Big
4).1 These areimportant sites where accounting practices
emerge,become standardized and regulated, whereaccounting rules and
standards are translated intopractice, and where professional
identities aremediated, formed and transformed. A focus onWrms also
means that we can work with theassumption that these Wrms are
motivated by proWtand capital accumulation, and we can avoid
whatare often distracting debates about whetheraccountants and
professional organizations areconcerned with the public interest
(MacIntosh &Shearer, 2000). While questions of how
publicinterest and professional vision are deWned andunderstood by
accountants are indeed important(Fogarty, RadcliVe, & Campbell,
2006; Willmott,Cooper, & Puxty, 1993), recognition of the
proWtmotive in Wrms enables an analysis that is not pre-occupied
with issues of professional legitimacy andself-understandings.
Before proceeding, there are a few issues to clar-ify. First,
this paper oVers no new empirical mate-rial on the evolution of the
accounting professionor changes in the regulation of practices
and
1 There are other sites that are signiWcant too, such as
localaccounting Wrms, accounting and controller units in large
cor-porations, and accounting and audit units in governments
andinternational organizations, and these should be further
exam-
ined in the future.
-
aD.J. Cooper, K. Robson / Accounting, Org
accountants. In the last thirty years there has beenan almost
continual process of change wherebyprofessional institutions and
regulations are pro-posed, established, modiWed and
implemented.This process forms an important context for thispaper,
but part of our argument is that researchershave focussed on the
empirical detail of the morevisible professional and regulatory
institutions inthis process. So, for example, we do not
discussrecent changes in the regulation of auditors or dis-cussions
about the governance of standard settingagencies. We are more
concerned to suggest newand illuminating ways to understand such
changes.However, as Calhoun argues (1993), abstract theo-rizing
rarely tells us much about the operation ofthe world, or how it
might be transformed, and wethus set this review within existing
empirical workon professions and regulation.
Second, the paper does not aspire to oVer a spe-ciWc theoretical
perspective to organize the diver-sity of research in the area.
Nevertheless, whilethere is no single correct method, there are
distin-guishable methodological strategies appropriate toparticular
questions and subject matters, depend-ing on the nature of the
object of inquiry (Mor-row, 1994, p. 79, emphasis in original).
Much ofour focus can be characterized as an interest in thepower of
accounting, accountants and the account-ing profession, although
power can be conceived ofin diVerent ways (Clegg, 1989; Robson
& Cooper,1989). Issues of regulation and professionalizationcan
be studied through a variety of methods andthere is much to learn
from many social theories,ranging from the classical theories of
Marx andWeber, to the recent explorations of Bourdieu,Foucault and
Latour. We hope this eclecticismdoes not result in more incoherence
than is war-ranted by the state of our knowledge.
This paper has a decidedly Anglo-American ori-entation, which
reXects much of the research litera-ture,2 but begs the question
whether the concept of
2 But see the special issue of Accounting, Auditing
andAccountability Journal (1999) on Organizing the
accountingprofession in Asia, the series of country reviews in
EuropeanAccounting Review, and recent papers such as deBeelde
(2002),Uche (2002) and Sian (2006) that provide accounts of the
devel-opment of the accounting and audit professional bodies
outside
Anglo-Saxon countries.nizations and Society 31 (2006) 415444
417
a profession is understood in the same way outsidethe
Anglo-American world (Friedson, 1986, p. 34;Rueschemeyer, 1989).
This omission relates also toour own lack of knowledge about
accounting out-side Britain and North America and clearly limitsthe
nature of this review. Finally, we use terms likeprofession in a
theoretically liberal way. Clearlythe claims of accountants to be
professional can becontested, as can their understandings of
self-regu-lation. While it is important to explore both theirclaims
for legitimacy and their understandings ofregulation, we do not
here focus on the deWnitionsof terms such as professional,
profession or regula-tion: one weakness of this stance is that it
risksprofessional ideologies and understandings domi-nating those
of the researcher. On the other handwe consider theories of
profession that treat pro-fession and professional as speciWc
constructionsof practice and discourse and there are grounds
forviewing accountants as implicated in the process ofconstruction
and presentation of the professionalself.
The paper is organized in three main sections.The next section
reviews the research on theaccounting profession since the 1970s,
focussing onthe contribution of historical and comparativeanalyzes.
Section three then examines the literatureon accounting regulation,
both the regulation ofaccounting rules (GAAP and standards)
andaccountants (state and self-regulation of the posi-tion of the
accountant). While regulation and pro-fessional issues are treated
as distinct areas ofenquiry, they are no doubt strongly
connected.Indeed in the fourth and Wnal main section, we col-lapse
this distinction. SpeciWcally, by stressing theroles of accounting
Wrms and issues of professionalgovernance, it is argued that
accounting Wrmsshould be seen as an obligatory node in the net-work
of institutions through which regulatory andprofessional processes
operate. Of course, account-ing Wrms, and the multi-national
auditing Wrms inparticular, have not been entirely immune fromstudy
(Habgood, 1994), but research on profes-sions, professionalization
and regulation has toooften occluded the Wrms as signiWcant agents
in theprocess. We conclude by oVering some commentson the enduring
political and cultural value of
studying the accounting profession and regulation.
-
a418 D.J. Cooper, K. Robson / Accounting, Org
The accounting profession and the professionalization
project
Robson and Cooper (1990) present a review ofthe sociological
literature on the accounting profes-sion in the context of the UK
profession. Weargued that most research up to that point hadtaken
for granted accountants claims to be profes-sional, and focussed
rather too much on profes-sional elites. Despite, for example, the
evidence ofall manner of political activity by professional
asso-ciations (Dwyer & Roberts, 2004; Walker, 2000),too many
early studies were prepared to accept theprofessions articulation
of a public interest pur-pose as an explanatory account of the
professional-ization process. Just as Sacks (1983) had done forthe
literature on the sociology of professions moregenerally, our
review emphasized the atheoretical orfunctionalist nature of much
research on theaccounting profession. Since then there have been
anumber of studies that have attempted to workwithin interesting
and useful approaches to under-standing the professional project
(Larson, 1977;Macdonald, 1995; Leicht & Fennell, 2001) and
thecontinuing evolution of professional bodies. Manysuch studies
have concentrated on the establish-ment of the professional bodies
(Greenwood, Sud-daby, & Hinings, 2002), their relation with the
state,and their eVorts in the process of professionaliza-tion, that
is occupations becoming accepted as pro-fessional (Richardson,
1987).
Yet research on the formation of professionalassociations in a
number of countries (e.g., Chua &Poullaos, 1993, 2002; Walker,
1995, 2004) has notbeen neglected. The focus has been on the
strategiesof early accountants to diVerentiate their craft fromthat
of other occupations (notably lawyers), to cre-ate barriers to
entry, and to restrict the market fortheir services. Many have
taken on a neo-Weberianframework related to the quest for
occupationalclosure (Walker & Shackleton, 1995, 1998). What
ismost striking has been the shift away from the tra-ditional,
often very carefully executed, studies ofthe accounting profession
which examine singleprofessional institutions with little social
and eco-nomic contextualization (Carey, 1969, 1970; Jones,1981;
Kedslie, 1990; Lee, 1997; Stacey, 1954)
towards more comparative analysis, illustratingnizations and
Society 31 (2006) 415444
speciWc theoretical themes, and often drawing ontraditional
archival work (Macdonald, 1984; Will-mott, 1986) or extending it
(Poullaos, 1994; Walker,1988, 1995, 2004). The more recent
historicalresearch on professions has reacted to Burrages(1990)
caustic remark that:
historians focussed on the creation, and thedomestic aVairs, of
the corporate aVairs of particu-lar professions and therefore
tended to concentrateon the elite of the profession and the issues
thatcame to the attention of their governing bodies.They rarely
sought to study the working practiceof the rank and Wle members of
the profession,rarely referred to other professions, rarely
soughtto relate changes in the profession to changes inthe wider
society and rarely therefore found anyreason to criticize the
profession. Their main taskwas to recount the success story of
responsibleleaders coping with the problems that faced
theprofession (pp. 56).
While there has been some attention byaccounting historians to
failures as well as suc-cesses, and some social contextualization,
Bur-rages comment sometimes still seems a reasonablesummary of too
much of the historical work on theformation of the accounting
profession. Further,the implications of this scholarly work are
notalways clear: what is often unstated are the waysthe formation
attempts of British and Americanprofessional bodies in the late
nineteenth and earlytwentieth century continue to have resonance
forunderstanding the continuing evolution of theseinstitutions in
the 21st century, or the likely strate-gies available to
accountants in other parts of theworld who are attempting to create
a professionalbody, or others trying to resist such attempts.
It is encouraging that historical analysis andscholarship is now
being applied to study speciWcthemes in professionalization. We
identify fourthemes that seem to have reinvigorated research onthe
accounting profession: the role of the profes-sion in imperialism
and colonization, comparativeanalysis of the systems of
professions, focussing oninter-professional and occupational
rivalry, theexamination of the inter-play between
commercial-ization and professionalization, and the emergence
of an interest in the marginalized in the story of the
-
aD.J. Cooper, K. Robson / Accounting, Org
development of the accounting profession. Eachprovides
interesting theoretical and empiricalobservations, and that may
indeed be suYcientgrounds for continued work in this area.
Thesedevelopments have continuing promise for under-standing future
professional developments in anera of neo-liberalism and
globalization since theymove away from a focus on professional
bodiesand instead focus on the discursive and materialpractices of
accountants and locate accounting asan industry and as a contested
terrain within themodern economy.
Imperialism and professions
Following the seminal work of Johnson (John-son, 1972, 1973,
1977; Johnson & Caygill, 1971),there has been a rising interest
in the role of theaccounting profession in imperialism. Much of
thework is historical, examining the role of the Britishstate and
the British profession in setting upaccounting associations in its
former colonies.Chua and Poullaos (1998, 2002), MacDonald
andRichardson (2004) and Carnegie and Edwards(2001) have looked at
the formation of accountingassociations in settler colonies (such
as Australia,Canada and South Africa) and Annisette (2000)and Bakre
(2005, 2006) has examined non-settlercolonies (Trinidad and Tobago
and Jamaica,respectively). Caramanis (1999, 2002) studies
con-temporary imperialism, examining the role of theUS and the OECD
in frustrating the eVorts ofGreek accountants to retain and regain
theirmonopoly of statutory auditing. Studies of theaccounting
profession in imperialism seem ofenduring value, since they trace
the role ofaccounting profession in helping to constitute spe-ciWc
views of nationhood (Dyball, Poullaos, &Chua, forthcoming),
facilitating the spread ofinternational capital and communicating
forms ofaccounting and management knowledge. More-over, the
historical studies illustrate the role of set-tlers and indigenous
elites in the creation of anaccounting profession. For example,
Caramanis(2005) demonstrates how the Greek professionemerged out of
contests between modernising andtraditional local elites. These
studies also indicate
how fears of contamination of social standing innizations and
Society 31 (2006) 415444 419
the home country discouraged elite Britishaccounting
associations from converting theirsocial capital into economic
capital, in terms ofgrowth of membership overseas. Elite UK
associa-tions did not want to support the development ofindigenous
accountants, but would help their ownexpatriate members to obtain
practise rights (Chua& Poullaos, 2002).
A related issue, explored by both Annisette(1999) and Briston
and Kedslie (1997), is the role ofeducation and examining bodies in
the spread ofaccounting knowledge, particularly that based
uponBritish accountinga more subtle, although proba-bly no less
coercive inXuence than the direct formsof colonial inXuence on
embryonic professionalbodies. These studies help us understand
currentdevelopments in the global spread of accountingknowledge,
and the inter-connection between edu-cation and the pursuit of
practice rights as mecha-nisms for expanding the global market
power ofaccountants from Anglo-American countries.3
In addition, the relation between the UK pro-fession and the
embryonic US profession has beenexamined by Previts and Merino
(1998) and Mir-anti (1990). US accounting seems to have been
cru-cially aVected by the spread of British capitalinvestment,
particularly in terms of the spread tothe US of UK Wrms and the
spread of a view ofaccounting rules based on laissez faire, the
market,self-regulation and individual rights (e.g., Allen
&McDermott, 1993). However, the professionalbodies themselves,
and professional education andcodes of conduct, arose out of a
complex inter-playof British expatriates and locals, with many of
thelatter being seen by the former as ungentlemanly,and
consequently likely to bring the embryonic USprofession into
disrepute (Preston, Cooper, Scarb-rough, & Chilton, 1995). Here
we see the role ofethnicity and class in the development of US
pro-fessional bodies, issues that have been a centralfeature of the
development of accounting bodies inmany countries (Annisette, 2003;
Dezaley, 1995;Walker, 2002). For example, Richardson (1987)examines
the historical, inter-professional rivalryin a Canadian context,
where Scottish accountants
3 We are grateful to Anne Loft and Caroline Aggestam for
drawing our attention to these issues.
-
a420 D.J. Cooper, K. Robson / Accounting, Org
saw themselves as more competent, of higher socialstanding, and
more trustworthy than accountantsfrom other ethnic backgrounds.
These inter-connections between competence,ethnicity and social
class continue to be played outin many jurisdictions in disputes
over the monop-oly of the audit function. It would be very
valuableif these issues could be explored across jurisdic-tions.
For example, how is professional work, andindeed competence and
skill, constructed andreproduced across countries. It would be
valuableto learn more about the development of accoun-tancy in
Japan, India and China. Similarly, itwould be useful to examine
developments betweenimperial powers where accounting does not
seemto be as central a part of economic management(Germany, Italy
and Spain) and their former colo-nies (such as Mexico, North Africa
and easternEurope). Johnson (1982) begins to explore
thepeculiarities of the British system of professions,but much more
can be done about the potentiallyvariable roles that accounting
plays in speciWc ver-sions of capitalism. We return to this issue
when weconsider accounting regulation, especially in termsof
national styles or systems of regulation.
Inter-professional relations
Research on the issue of inter-professionalrivalry and disputes
about the control of work(especially monopoly rights to speciWc
markets)has been invigorated, and extended, by inXuentialwork on
systems of professions (Abbott, 1988).Abbotts analysis centres on
the development ofprofessions in terms of inter-occupational
competi-tion about their expertise and struggles for controlof
markets. It encourages another form of compar-ative research: not
just how accounting has devel-oped in comparison to developments in
otherprofessions (see Johnson, 1972), but how it devel-oped in
relation to other occupations.
On the former issuehow the professionaliza-tion of accounting
diVers from that of lawyers, engi-neers, actuaries and so onthere
is still clearlymuch valuable work to be done. An instructive
illus-tration about how accountants drew on the experi-ence and
reputation of lawyers in the eVorts to
obtain a Royal Charter can be found in Abel-Smithnizations and
Society 31 (2006) 415444
and Stevens (1967) and Fielding and Portwood(1980). Less evident
are studies of how accountingdevelops in relation to other
occupations. Here wehave in mind both the competition and
cooperationbetween professional bodies in accounting and
law(Sugarman, 1995; Walker, 2004), actuaries, consult-ing
(especially information systems), and personalWnancial advisors
(RadcliVe, Cooper, & Robson,1994). The Big Four business
advisory Wrms havenow incorporated many of these occupations
withineach of their organizations, but that does not endquestions
among professional bodies about multi-disciplinary practices, the
ethics of professionalpractice and claims to competence (Dezalay
&Garth, 2004; Suddaby & Greenwood, 2001). Thus,there are
disputes between lawyers and accountantsabout who has competence in
speciWc areas of taxa-tion planning. Which occupational group is
domi-nant varies from country to country, and betweendiVerent forms
of tax advise (for example, comparetransfer pricing advise and
advise on the legal struc-ture of subsidiaries and joint ventures).
And, asKurunmaki (2004) has shown for medical profes-sionals, the
outcome of such struggles can result notsimply in one occupation
winning at the expense ofanother, but the possibility of hybridized
profes-sions and new occupations.
Professional bodies are often heavily involved inturf wars
between occupations, and this can befought not just in terms of
rights to practice in spe-ciWc domains (notably over taxation and
insol-vency) but also in terms of educational credentialsand
requirements. For example, professional bod-ies and accounting Wrms
have been required to setup quasi-autonomous regulatory mechanisms
toensure that accountants have the expertise andlegal authority to
provide clients with investmentadvise (RadcliVe et al., 1994).
These requirementshave also altered the nature of the
professionalbodies themselves, and their relations with
accoun-tants and accounting Wrms. That is, professionalbodies take
on more a role as monitor and regula-tor of their member
non-accounting services. Thiscan put them in a seemingly
paradoxical situationof controlling and disciplining members in
order topresent themselves as acting in the public interest,yet
also trying to promote the profession in com-
petition with other occupations.
-
aD.J. Cooper, K. Robson / Accounting, Org
In general, what is at stake here is not only thesocial
construction of expertise (Gendron, Cooper,& Townley, 2006) and
inter-professional (andoccupational) rivalry, but also how markets
arediVerentially constructed, who is seen to be a legiti-mate
supplier, what the form of service might be,which occupational
groups beneWt, and who is seento be the client (Dezalay &
Garth, 1996, 2004;Dezaley & Sugarman, 1995). For example,
Floodand Skordaki (1993) show that the way in whichcorporate
insolvencies are managed depends notjust on which professional
groups are involved andin control, but also in which jurisdictions
theseactors learned their craft. Thus, the story is notabout a zero
sum battle between professions, butabout the interactions between
occupations (Deza-ley, 1995; Dezalay & Garth, 2004;
Sugarman,1995). People who think of themselves as eitherlawyers,
accountants, management consultants,actuaries, or engineers,
typically deWne their workand expertise in relation to one another.
That iswhy multi-disciplinary Wrms (Covaleski, Dirsmith,&
Rittenberg, 2003; McVea, 2002; Suddaby, 2000;Suddaby, Cooper, &
Greenwood, 2005), oVer afruitful site for examining how
inter-occupationalrivalries and the division of labour between
groupsgets played out in practice. Further, the sort ofadvice
oVered, the services provided, and the waymarkets are structured,
are aVected by who areseen to be legitimate actors in the
system.
The marginalized and marginalization in the professionalization
project
There has been an increasing focus on groupsof accountants who
have not been included inmost studies of accounting professionals,
workerswhose presence in the professionalization ofaccounting has
been largely ignored in conven-tional historical studies of the
profession. Peoplesuch as clerks, women and black people
areimportant in an analysis of professional formationas they
indicate how the boundaries of theaccounting profession are
constructed and re-con-structedwhich groups are excluded and
whichallowed to participate as legitimate accountants.Studies of
the marginalized are also important
because they recognize excluded groups. Theynizations and
Society 31 (2006) 415444 421
indicate how boundary work (processes of exclu-sion and
inclusion), class, gender and race impor-tant elements in
constructing systems of prestige,closure and distinction (Bourdieu,
1984). Thus arelevant line of research is to examine processes
ofexclusion and marginalization, and thereby obtainan understanding
of not only the development ofa profession, but also how it gains
privilege andstatus, and why its services (such as audit or
man-agement consulting) are accorded social and eco-nomic
value.
Loft (1988, 1990, 1994) and Kirkham and Loft(1993) explicitly
focus on non-elite accountants,notably bookkeeping and cost clerks,
in profes-sional formation. Instead of examining great menand
prestigious Wrms and institutions, theseresearchers explore how
low-status workers wereable to form their own professional body,
forexample by allying themselves with elite accoun-tants and
auditors. In one sense, Lofts work canbe seen as an extension to
traditional histories con-cerned with the formation of professional
bodies,but its achievement, subsequently echoed by oth-ers, is also
to provide a voice to marginalizedgroups (Hammond, 1997, 2002).
Witz (1992) introduced the idea of discursivestrategies to
explain the link between ideology andthe closure practices of
professions. She discussesthe exclusionary strategies of
professional men,identifying those who are ineligible or alleged
notto possess the appropriate qualities, as well as thestrategies
excluded groups adopt to form their ownoccupational groupings, such
as accounting techni-cians or bookkeepers. In this context,
Lehman(1992) examined the role of women in accounting:her research
in Russia showed how accountingclerks, who were predominantly
women, used todo much of the accounting work in the formerSoviet
Union, but with the introduction of theWestern accounting model,
and the multi-nationalaccounting Wrms, senior positions in
accountingcame to be held by men. Similarly, Hammond(1997, 2002)
and Hammond and Streeter (1994)explored the struggles of
AfricanAmericans inNorth American accounting,4 providing not
just
4 A parallel study of the experience of Maori women is found
in McNicholas, Humphries, and Gallhofer (2004).
-
a422 D.J. Cooper, K. Robson / Accounting, Org
the stories of exclusion and perseverance in theface of extreme
prejudice, but also an analysis ofthe way in which the experience
of black pioneersin accounting reproduces a view in the black
com-munity that accounting is not for them: the occu-pation not
being regarded as a sensible path ofupward mobility and movement
for African-Americans. One implication worth exploring iswhether
the marginalization of accounting as anoccupation for African
Americans is associatedwith a marginalization of Wnancial
calculation andaccounting techniques in organizations created
byblack entrepreneurs.
Cooper and Taylor (2000) bring women andworking class people
together in their study of thework practices of accounting clerks,
and show howBravermans (1974) analysis of the labour process,and
his emphasis on de-skilling, remain applicableto the analysis of
contemporary accounting work.They criticize conventional studies of
the account-ing profession precisely because such studies
seede-skilling as inappropriate for understanding thework of
professionals, where the intangible orjudgmental components of
their work is empha-sized. In contrast, Cooper and Taylor show the
rel-evance of labour process analysis to understandthe devaluation
of their skills, their loss of abilityto use their skills and the
loss of autonomy formiddle and junior accountants. They clearly
showthe importance of studying marginalized groups ininterpreting
the development of accounting andthe accounting profession, and the
value of exam-ining the professional project of accountants
inrelation to class, gender and race.
Commercialization and professionalization
Hanlons work on the role of accountants in thelabour process of
modern capitalism has the con-siderable virtue of raising often
neglected ques-tions about the profession as a business thatpursues
proWt, and one that shifts its activitiesdepending on the speciWc
form that capital accu-mulation takes in diVerent places and times
(Han-lon, 1994, 1996, 1997). He discusses the labourprocess of
accountants and accounting Wrms inmajor metropolitan (and Wnancial)
centres, nota-
bly London and New York. Hanlon contrasts thenizations and
Society 31 (2006) 415444
life chances and allegiances of accountants in theoYces of the
major accounting Wrms in these cen-tres with the experiences,
aspirations and types ofwork conducted by accountants in these
sameWrms in Ireland, which he deWnes as semi-periphe-ral in
relation to these centres. He argues that theBig 4 accounting Wrms
are dominated by the oYceslocated in the metropolitan centres of
Wnance, thatthis domination results in a strong commercialethic
within these Wrms, and those accountants inperipheral oYces who
wish to get on in theirWrm must adopt the values of
commercialization.We will discuss his examination of the Wrms
them-selves later, but here it is worth stressing someother
important themes which he raises.5
Hanlon (1994) resurrects an important elementin the sociology of
professions, namely a concernwith the implications of
professionalization for ananalysis of power and the division of
labour insociety. He suggests that many accountants arepart of the
service class and are often in marginal-ized activities which are
threatened by automationand low wage competition. He argues that
theaccounting profession is segmented such that thereis a small
elite of accountants who act as the agentsof capital, and who
obtain very great rewards fortheir eVorts, and the mass, comprising
junioraccountants, bookkeepers and others at theperiphery (often
women or new immigrants) whocan be seen as working class. The mass
of accoun-tants have poor working conditions, for examplelow pay,
oppressive control systems, threats ofautomation and increasing
part time work (Tinker& Koutsaumadi, 1997). Hanlon suggests
that theinternal dynamic of multi-national accountingWrms explains
how the feudal values of accoun-tants (gentlemanly attitudes and
aristocratic andpaternalistic values) are transformed into the
com-mercial values of the large corporation, in which
5 Hanlon (1994), has been criticized for the gaps between
histheory and empirical evidence (Sikka & Willmott, 1997) and
ac-cused of paying insuYcient attention to the speciWc practicesand
strategies of commercialization (Dezaley, 1997; Suddaby
&Greenwood, 2001). While these criticisms have merit, our
viewis that they indicate avenues for future research rather than
alack of validity for his arguments. His book oVers an
importantform of analysis, to which his empirical evidence
unfortunately
cannot do justice.
-
aD.J. Cooper, K. Robson / Accounting, Org
proWtability and contribution to the growth ofcapital are
dominant. In eVect, he oVers a mecha-nism to explain how
professions move from atrustee logic to a commercial one (Brint,
1994).Professional virtues (or a trustee logic) including aconcern
with the public interest, have been seen asa curious carry over of
feudal practices into thecapitalist era (MacIntosh & Shearer,
2000; Perkin,1989).
There has always been segmentation and strati-Wcation (Jacobs,
2003; Walker, 2002) in the occu-pation of accountants in all manner
of ways, notjust hierarchically in large Wrms (i.e., between
part-ners and junior staV), but also between those whowork within
and outside metropolitan centres ofcapital, and those who work in
the public or pri-vate sectors (Robson & Cooper, 1990). These
seg-mentations have been overlaid by gender, ethnicand other
divisions. Johnson (1977) also discussesaccountants as a segmented
occupation, but placestheir activities in relation to the sorts of
knowledgeand skills deployed (technical, modiWable knowl-edge of
junior and peripheral accountants andbookkeepers in contrast to the
indeterminate, non-programmable knowledge of the elite).
While Hanlons work usefully recognizes therole of Wrms in
commercialization, much of the lit-erature on the accounting
profession and commer-cialization has emphasized the role of
professionalbodies. Robson, Willmott, Cooper, and Puxty(1994) is an
extensive exploration of the ways inwhich British professional
bodies articulated anincreasingly commercial role for their
members(notably in relation to selling Wnancial services
andexpanding or protecting the practice and regulatoryrights of
British accountants), and how this inter-acted with their claims to
be professional and act-ing in the public interest. RadcliVe et al.
(1994)takes the analysis further by pointing out that theUK
professional bodies worked hard to constructthemselves, at least
discursively, as enterprisingorganizations. Finally, Hanlon (1998)
has extendedthe argument about commercialization, by pointingout
that the attempt to be enterprising can resultin serious cleavages
in the service class. Pursuit ofcommercialism and a view of
professional organi-zations as enterprising enables Hanlon to
return to
his argument about the proletarianisation, and per-nizations and
Society 31 (2006) 415444 423
haps even the political radicalization, of largegroups of
marginalized accountants who yearn fora return to what they may see
as the golden age ofprofessionalism (BriloV, 1990), although it is
seenby others as a fantasy of nostalgia (MacIntosh &Shearer,
2000; Tinker, 2005).
Debates about the commercialization ofaccounting have been
intensiWed since the series ofaccounting scandals and the demise of
ArthurAndersen. Mitchell and Sikka (2004), ZeV (2003a,2003b) and
Wyatt (2004) claim that the commer-cialization of the Big Four went
too far, and thatregulatory structures need to be set in place to
curbpast excesses. Such debates emphasize the impor-tance of
further examining the practices of accoun-tants and auditors, and
not relying on thediscursive claims of professional associations
andleaders of the industry that they are indeed profes-sional
(Simmons & Neu, 1997). We suspect thatresearchers would be well
advised to go beyond thedualistic debates about commercialization
andprofessionalism and examine what it means for thepractices of
accountants to talk in terms of com-mercialization, being
businesslike, enterprising andmodern. For example, it would be
useful to exam-ine whether claims to gentlemanly and profes-sional
values might be a strategy to be commercial.Appeals to such forms
of social and cultural capi-tal can be an eVective strategy for
professionals indeveloping their business and being
proWtable(Cooper, Hinings, Greenwood, & Brown, 1996).Rather
than reproducing a conception that com-mercialization may be
antithetical to professionali-zation, studies of accounting and
audit practiceswill beneWt from examining the work practices
andclient relations of professional organizations (Wrmsand
associations), a theme to which we return insection three, and in
particular how claims to becommercial and professional are
selectively used insuch organizations (Alvesson & Krreman,
2004).
This section has highlighted a number of veryvaluable lines of
research on accounting as a pro-fession and on accountants as
professionals. Wewish to emphasize that broadening the
researchagenda involves locating the accounting professionin its
context. While current research often focuseson historical
analyzes, we believe there is also
important work to be done in analyzing current
-
a424 D.J. Cooper, K. Robson / Accounting, Org
developments, relating to the roles of the account-ing
profession in imperialism, colonialism, exclu-sions and
commercialization. Such research mightalso examine how these roles
feed back on devel-opments in the profession, as well as the
practicesof powerful sites in accounting labour,
notablymulti-national accounting Wrms. Before moving tofurther
discussion of accountants as professionals,we explore another theme
highlighted by recentdebates about the commercialization of
account-ing. To observers like ZeV, Sikka, BriloV andWyatt, an
important solution to many of the scan-dals that have undermined
accountants claims tobeing professional, is to regulate accountants
andaccounting practices; reliance on the market andself-regulation
is no longer seen as adequate toprotect the public or investors.
Section threeaddresses some of the more important debates
andresearch about accounting and regulation.
Accounting and regulation
The literature on accounting regulation is vast,using a number
of diVerent theoretical approachesand focussing on a variety of
diVerent dimensionsof regulation. Much of the conventional
literaturetreats accounting regulation as an exercise inapplied
economics and applies public choice the-ory to accounting public
policy (Benston, 1973;Stigler, 1971; Watts & Zimmerman, 1978).
Whilethis is well covered in journals like Journal ofAccounting and
Public Policy and Journal ofAccounting and Economics, it is
intriguing thatpublic choice theory has not been extensivelyadopted
by specialists in political science. We sharethe view that public
choice economics is toorestricted in its conceptions of politics,
too orientedto an individualistic conception of society and
pol-itics, too neglectful of the power of large organiza-tions and
groups, and too partisan in its approachto deregulation (Alford
& Friedland, 1985; March& Olsen, 1989; Strange, 1996).
Tinker (1984) andOkcabol and Tinker (1993) highlight some of
theproblems of applying public choice theory toaccounting
regulation.
In this section we examine two streams of
research about accounting regulation. The Wrst isnizations and
Society 31 (2006) 415444
on accounting standard settingthe process bywhich accounting
rules are developed andchangedwhich has been very extensively
studied,but which recently seems to have passed a little outof
fashion. The second stream concerns the regula-tion of accounting
more broadlywhat aVects thechanging position and role of accounting
in soci-ety. Our lens for examining this second streamrelies
heavily on work with our colleagues, TonyLowe, the late Tony Puxty,
and Hugh Willmott(e.g., Puxty, Willmott, Cooper, & Lowe, 1987),
butwith important clariWcations, and adopting a moreconstructivist
approach.
The politics of standard setting
Since Gerboth (1973), ZeV (1972), Lowe andTinker (1977),
Burchell, Clubb, Hopwood, Hughes,and Nahapiet (1980), Burchell,
Clubb, and Hop-wood (1985), there has been an increasing interestin
locating accounting in relation to politics andthe state, and to
see accounting as an importantpolitical institution. These studies
reXected, andhelped to make sense of, signiWcant social
develop-ments. Amongst the most notable developments,the 1970s saw
the rise of new regulatory structuresof accounting practice, and
increased concern by avariety of states in accounting rules and
rule mak-ing (Robson, 1991, 1992; ZeV, 1978). The mergermovement
and the consolidation of capital in theUS and UK highlighted the
Xexibility of account-ing statements, and was one reason for the
statesinterest in the regulation of accounting rules(BriloV, 1972;
Robson, 1991; Stamp & Marley,1970). The proWt crisis of the
1970s and the prob-lem of capital maintenance in a period of
rapidlyrising prices, increased the interest of both the stateand
business in accounting rules for proWt determi-nation, and the link
between accounting calcula-tions, deindustrialization and large
scale capitalXows (Bryer & Brignall, 1986). As Miller
(1991)shows, the welfare state was keen to intervene inindustry
through accounting measures and tech-niques in order to improve the
eYciency of busi-ness. Similarly, concerns about oil company
proWtsand possible price gouging in the US lead to Con-gressional
examinations of the possibilities of uni-
form, or at least standardized, Wnancial reporting
-
aD.J. Cooper, K. Robson / Accounting, Org
(US Congress House, 1976). The state took anincreased interest
in accounting standards, seeingthem as an important element of
industrial andWnancial policy.
Two points are worth making in this regard.First, historical
studies as diverse as ZeV (1972),Loft (1994), Miranti (1986) and
Previts and Merino(1998) show that, the state in
Anglo-Americancountries has had a longstanding involvement withthe
development of accounting rules, practices andwhat constitutes a
profession. State agencies helpedto create a demand for general
Wnancial manage-ment services, particularly within regulated
Wrms(Jones, 1981). They also provided a legal monopolyover audit
and bankruptcy for members of speciWcoccupations. However, state
involvement intensi-Wed in the 1960s and 1970s as Anglo-American
eco-nomic performance declined. Secondly, while thestate has had a
long standing involvement in creat-ing and sustaining the monopoly
for audit workand in specifying who is a competent auditor, it
isonly recently that state interest has extended to thedetail of
audit procedures, which have typicallybeen constructed as more
technical than account-ing rules (Moonitz, 1974), and been left to
theaccounting profession, especially the larger Wrms.Challenges to
the new audit technologies used bythe large Wrms (Cullinan &
Sutton, 2002) haveescalated more recently since the demise of
ArthurAndersen. Regulatory agencies such as the ECand SEC have
taken an interest in how audit prac-tices are used to produce
assurance. Concurrently,there are increasing concerns about the
spread ofaccounting and auditing logic in ever wider spheresof life
(Power, 1997; Power, Laughlin, & Cooper,2003; Strathern,
2000).
As the state became involved more explicitly instandard setting,
so the research community, echo-ing practitioners enrolled in the
process, started tosee the process as political (Horngren,
1973;Stamp, 1985; ZeV, 1978), some even arguing thatthe states
involvement amounted to interference(Solomons, 1978). The speciWcs
of who is involvedin accounting regulation, and who is viewed
asinterfering, varies over time and between jurisdic-tions. In the
UK and USA, the complaints werealso concerned about the involvement
of industry,
and this complaint has become more intense innizations and
Society 31 (2006) 415444 425
recent years, articulated both by standard setters,state agents
and academics (Hendriksen, 1998). Theaccounting profession is also
seen as acting asspokespersons for powerful clients (Levitt,
2001).Standard setting is now recognized by practitionersand
academics as involving power, where power isconceived as involving
explicit conXict: one partyor group getting another group to do
somethingthat they would not otherwise want to do.
The research into the politics of standard set-ting reXected not
just these social and economicdevelopments, but also this view of
power asinvolving overt conXict. Studies by Hope and Gray(1982),
Hussein and Ketz (1980), Newman (1981),Lowe, Puxty, and Laughlin
(1983), Sutton (1984),Watts and Zimmerman (1978), McKee,
Williams,and Frasier (1991) and McKee, Bell, and Boats-man (1984)
examined who was involved in thedevelopment of a particular
accounting rule or reg-ulation, who appears to have inXuenced the
out-come, or how veto power may occur. Booth andCocks (1990) and
Walker and Robinson (1993)reviewed much of this literature,
pointing out thelimited insight oVered when research shares
thepopular, practitioner conception of power, asinvolving conXict
over interests. Robson and Coo-per (1989) take the argument further
by question-ing the implication of such studiesthat power
issocially diVuse, depending on which groups gettheir way in
speciWc circumstances:
Studies of the accounting standards setting pro-cess have
recognized that it is a political processand have concentrated on
studies of key deci-sions, namely speciWc standards. Because no
singleindividual or group seems to explicitly dominateacross a
range of standards (Haring, 1979), eventhough it may be possible to
identify powerfulindividuals and groups for a speciWc standard,
itis implied that the standard setting process is plu-ralist. The
focus on explicit decisions and anindividualistic approach (there
is no coherentapproach to what constitutes a group) means thatmany
possibilities for power (e.g., the control of theagenda and shared
perceptions) cannot be identi-Wed (1989, p. 86).
No such pluralist conclusion is warranted since
a multiplicity of interest groups competing over
-
a426 D.J. Cooper, K. Robson / Accounting, Org
diverse interests cannot be extrapolated to an argu-ment that
the groups arent connected by a similar-ity of outlook, for example
about the legitimatepurposes of Wrms and the existing distribution
ofproperty rights (Tinker, 1984).
Yet while there are good reasons to point out thelimitations of
studies that rely on common senseand practitioner conceptions of
inXuence andpower, perhaps we have gone too far in neglectingto
study the overt use of power in standard setting,both relating to
accounting and audit rules. Itseems that, with some exceptions
(Hogler, Hunt, &Wilson, 1996; Robson, 1991, 1992; Young,
1994,1996) studies of the politics and process of account-ing
standard setting have declined, even thoughthere seems much to be
learned about mechanismsof inXuence and the reasons for speciWc
regulatoryoutcomes (Young, 2003). It would be foolish toneglect
what Lukes (1974) referred to as the Wrstdimension of power, that
is overt conXicts of inter-ests in determining the nature of
speciWc account-ing standards, just because there are
moresophisticated conceptions of power. There havebeen a series of
revelations by standard setters thatpoint to the signiWcance of
multi-national compa-nies, industry lobby groups and employer
organiza-tions, such as the Business Roundtable in the US,
ininXuencing accounting and audit rules. The lobby-ing over the
treatment of employee stock options isan obvious recent example of
overt conXict in stan-dard setting (Hendriksen, 1998).
While Robson (1992) is right to point out thatthe concept of
interests can be over-used in ana-lyzing the development of rules,
the crucial pointhe makes is that researchers should carefully
tracethe link between interests and outcomes. He dem-onstrates how
this might be done in his study ofthe development of an R&D
study in the UK.Extending his observation, Susela (1999), in astudy
of a goodwill standard in Malaysia, suggeststhat interests be
understood as a discursiveresource, which draws on social,
historical and eco-nomic understandings that actors have about
theirposition in society, and which determines theirview of what
are appropriate problems and solu-tions. Another way of
understanding this point isto suggest that there is much of value
in going
beyond the simple, economic self-interest assump-nizations and
Society 31 (2006) 415444
tions adopted by the agency approach to standardsetting (Watts
& Zimmerman, 1978), and studyingstandard setting as a complex
process (Loweet al., 1983). Research is needed into how actorsmake
sense of, and operationalize, what theybelieve to be their
interests.
Studies of overt conXict in standard setting arerelatively
straightforward to conduct, providedthat relevant documentation is
accessible toresearchers. Many of the formal standard settingbodies
now have rules providing for disclosure ofmeetings and submissions.
Of course, the availabil-ity of empirical materials can lead to
over conW-dence in their signiWcance; much of the importantwork of
standard setters takes place informally, isunwritten, and likely
involves only a few people(Stamp, 1985). Further, focussing on
standard set-ting and the negotiations and politics associatedwith
speciWc accounting rules can lead to a seriousneglect of more
systematic, institutional similari-ties in the structure, form and
assumed purposes ofaccounting and audit rules. That is why
studiesapplying what Lukes refers to as the Wrst dimen-sion of
power ought to be augmented with ana-lyzes which attend to other
power dimensions:agenda building and the systemic and
pervasiveforms of structural and ideological power.
What is much harder to establish is how theagenda for accounting
rules get determined, andwhat are seen to be appropriate or
feasible rules.One interesting attempt by Young (1994) used
thenotion of a regulatory space to explain the choiceof agenda
items on the FASB: the choice ofagenda items is conceived as a
result of a garbagecan of organizational decision making. Her
workhas been extended by MacDonald and Richard-son (2004). A
related study also conceived theFASBs Emerging Issues Task Force as
a garbagecan and showed how its decisions are made by acombination
of decision processes (Mezias &Scarseletta, 1994). By
emphasizing the decisionprocesses in standard setting bodies, an
intriguingapproach to accounting rule making is opened up(March
& Olsen, 1989; Mouritsen, 1994). Thestandard setting agenda,
both internationally andfor most of the developed economies, has
increas-ingly been articulated in terms of the user
(Young, forthcoming), and this understanding has
-
aD.J. Cooper, K. Robson / Accounting, Org
become institutionalized. Further, the concernwith the user has
increasingly been narrowed toinclude only one type of user, the
investor andaccounting regulation has mutated into a concernwith
her decision making and protection. Thisnaturalization suggests the
dominance of a pro-capital orientation for those who are involved
inaccounting rule making. As Cooper and Sherer(1984) demonstrate,
the general economic welfarefor a society as a whole is unlikely to
be achievedby the single minded pursuit of shareholder inter-ests.
Yet there is now little discussion of therequirements of other
groups in society, such asemployees or consumer groups, for
reliable Wnan-cial information for their purposes, or how
idealssuch as organizational and corporate accountabil-ity might be
usefully conceived and implemented(Gray, 2002).
The marginalization of the interests and con-cerns of other
corporate stakeholders has consider-ably narrowed the scope of
research on accountingstandard setting and rule making. Engelen
(2002)examines the functional and moral basis of whathe refers to
as shareholderism, an idealized Amer-ican model of shareholder
rights and action that isspreading in many countries. Together with
othercommentators, such as Lazonick and OSullivan(2000), Engelen
demonstrates that shareholderismis not as irresistible as its
proponents might wish,and is not necessarily superior to other
varieties ofcapitalism. It would be valuable for research
onaccounting standard setting to explore possibilitiesfor
alternative rationales for accounting rules, suchas enhancing
organizational democracy, worker orconsumer welfare, or
environmental sustainability.
The ideology of shareholderism seems to pervademany modern
states, even though it might bethought that they have some concern
for groupsother than shareholders and issues of investor
pro-tection. Arnold and Oakes (1998) examined theimpact of the
passage of Statement of FinancialAccounting Standard No. 106 on
retiree health ben-eWts in relation to the reduction in employee
wealth.Although it was possible to view these reductions aseconomic
costs that businesses were attempting toavoid and to conceive of
accounting standards asdesigned to protect employee rights, the
standard
was legitimated as necessary to recognize unex-nizations and
Society 31 (2006) 415444 427
pected liabilities. These liabilities were conceived
asthreatening the survival of corporations, rather than,for
example, as damaging the wealth of sharehold-ers. Tinker and Ghicas
(1993) point out a similar dis-interestedness when corporations
appropriated theiremployees pension funds after corporate lobbying
tochange accounting rules. These studies highlightthe importance of
expert ideologies, taken-for-granted thinking and metaphors in
understandingaccounting institutions, regulation and the impactsof
standard setting. Complaints about the pre-occu-pation of
accounting regulators with investors aremet with views that
naturalize the involvement ofthe accounting profession in rule
making, whilst de-naturalizing the involvement of non-investor
stake-holders (Hogler et al., 1996; Young, 1996, 2001,2003).
When we turn to examine some of the assump-tions of literature
on the politics of standard set-ting, several potentially value
lines of researchopen up. Most of the literature on accounting
reg-ulation, and particularly that which examines thepolitics of
standard setting, is based on a heroicassumption: that rules
constrain the reportingpractices of organizations, that rules
fundamen-tally aVect how GAAP and auditing is practiced.Yet
managers and auditors have a great deal ofdiscretion as to how
rules are enacted. First, thevoluminous earnings management
literature (e.g.,Fields, Lys, & Vincent, 2001; Schipper, 1989)
sug-gests that corporate managers can manipulatetheir companys
reported Wnancial results throughdiscretionary accruals management,
and may do soin order, for example, to maximize their own
sala-ries, stock options, bonuses or other contracts.While the
focus has often been on the manipula-tion of accruals (Healy &
Whalen, 1999), recentcontroversies in the high-tech and e-business
sec-tors have shown that earnings management alsoinvolves issues of
revenue recognition.
The literature on intra-method accountingchoice also suggests
that managers and auditorshave considerable discretion in applying
rules. Forexample, Lilien and Pastena conclude, based ontheir
examination of diVerences in application ofthe rules for
recognizing research and developmentexpenditures in the oil and gas
industry, that our
results show that the choice of speciWc procedures
-
a428 D.J. Cooper, K. Robson / Accounting, Org
within an accounting method [rules] can have amaterial eVect on
net income, retained earnings andasset balances (1981, p. 701).
Similarly, research onwhether Wrms actually comply with
accountingstandards and rules (Shah, 1996; Styles, 1999), sug-gests
that many rules are treated as if they are dis-cretionary. And it
would seem that this applies alsoto regulatory bodies. Bedard
(2001) indicates thatthe disciplinary procedures of accounting
associa-tions may be subject to considerable discretion
andinterpretation. Fogarty, Zucca, Meonske, andKirch (1997) shows
that at least one state regula-tory body seems to ignore many of
the require-ments for practice review.
Taken together, these observations suggest theimportance of
studying the interpretation andimplementation of rules.
Conventionally under-stood in terms of negotiation, research into
theinterpretation and implementation of accountingrules would
beneWt from an expansion of the con-ceptualization of negotiation
and greater contextu-alization of inter-organizational
inter-action. Thisis an avenue of research that has good potential
forunderstanding regulation and involves, inter alia,examining
decision processes and negotiation pos-tures within accounting Wrms
around the meaningand implications of speciWc accounting and
auditrules (Barrett, Cooper, & Jamal, 2005).
We would thus wish to encourage research onhow, and to what
extent, managers and auditorsuse rules to produce the results they
want, or con-versely, how far speciWc rules actually limit
discre-tion. Broadening the research agenda involvesexamining not
only the development of accountingrules, but also how they are
interpreted, imple-mented and audited and the impact of the
locationof the interpreter. It is time to go beyond
simpleexplanations for accounting choices, which typi-cally focus
on the impact on managers bonuses,and examine the role of corporate
and industry his-tory, the structures of markets, spatial and
tempo-ral location, the incentive structures of auditors, thesocial
and cultural capital of the Weld, as well aseconomic interests, in
aVecting how accountingrules and standards are used. The concept of
regu-lation within accounting research has typicallyequated
regulation with standard setting, but
there are many other issues at stake. For example,nizations and
Society 31 (2006) 415444
these might involve inter-organizational negotia-tion between
large organizations (corporations andaudit Wrms), perhaps involving
lawyers, accoun-tants, and managers. Gibbins, Richardson,
andWaterhouse (1990) provide a useful start in study-ing corporate
disclosure decisions, and althoughthis work has now been extended
to inter-organiza-tional relations (Gibbins, Salterio, & Webb,
2001),their approach relies on individualistic conceptionsof
negotiation. More detailed and contextualizedWeld or case studies
of processes of interpretation,negotiation and bargaining would be
helpful inunderstanding the way regulations are used (Beat-tie,
Fearnley, & Brandt, 2001).
Accounting regulation in its organizational and social
context
Our colleagues, Tony Lowe, Tony Puxty, andHugh Willmott, and
ourselves originally studiedaccounting regulation because we were
interestedin the relationship between accounting and capital-ist
states concerned with implementing various ver-sions of
neo-liberalism, re-assessing the role ofprofessionals in rule
formation, and experimentingwith varieties of regulation. Many
researchers wereaware of the increasing links between the UK
stateand the British accounting profession, and theinter-relation
between the two (e.g., Burchell et al.,1985, 1980; Sikka &
Willmott, 1995). Their studiesraised questions as to how the
professions claimsto expertise and self-regulation could be linked
todemocracy, in the sense that non-state regulatoryorganizations
could undermine public accountabil-ity (at least through
legislative authorities). Study-ing accounting regulation in a
comparative manner(Puxty et al., 1987) oVered the opportunity to
con-trast regulatory systems in advanced capitalist soci-eties. Our
expectation was that such comparisonswould help not just to
highlight diVerences thatwere the result of varying national
histories andcultures,6 but would also help to identify
common-alities across capitalist countries. We were attentiveto the
location of regulatory activities (e.g., in vari-
6 A tendency to celebrate variation had been a characteristicof
much traditional international accounting to that point (for
example, Gray, 1988; Nair & Frank, 1980; Nobes, 1987).
-
aD.J. Cooper, K. Robson / Accounting, Org
ous state agencies, capital market bodies, profes-sional
associations, or some hybrid) and how thespeciWc location might
aVect regulatory outcomesand the possibilities for the democratic
control andaccountability of the rules produced. Discussing
theaccounting profession, we stated:
It is only when the formation and development ofinstitutions and
practices of accounting regulationare theorized as an outcome as
well as a medium ofadvanced capitalist structures of economic
andpolitical relationships that it becomes evident thatthe very
presence of an organized professiondepends upon the presence of
other organisingprinciples (Puxty et al., 1987, p. 279).
The framework focuses on the principlesthrough which social
order is achieved, and hasproven to be fairly inXuential (e.g.,
Hao, 1999).Although the principles of dispersed
competition,hierarchical control and spontaneous solidarityhave
been widely discussed in political science (seeAlford &
Friedland, 1985; Polanyi, 1944) asinforming how regulation is
achieved in modernsocieties, they had not been discussed in
relation tohow accounting is regulated. While research onaccounting
regulation has been inXuenced byagency and transaction cost
economics, whichargues that social order is achieved through
theapplication of either the principle of hierarchicalcontrol or
the principle of dispersed competition,we drew on a third
principlethat of spontaneoussolidarityto recognize the crucial role
of trust,sense of community and belongingas a crucialdimension of
social order.7
While the framework has sometimes beenreferred to as
corporatist, in retrospect this label
7 Indeed, Halliday and Carruthers (1996), in their study of
theintroduction of an insolvency act in England, reinforce a
pointmade earlier by Merino and Neimark (1982) and Merino andMayper
(2001) in the slightly diVerent context of the creation ofthe SEC
and the US system of accounting regulation, that suchregulations
are often about trying to achieve trust and conW-dence in markets.
Recent regulatory reforms in North Americaand Europe likewise
stress the importance of restoring trust inaccounting and markets.
Restoring trust often involves identify-ing scapegoats for past
wrongdoing and this may help to ex-plain what some commentators
have referred to as the lynching
of Arthur Andersen and Co. (Morrison, 2004).nizations and
Society 31 (2006) 415444 429
is somewhat confusing since our purpose wasalways more than
analyzing corporatism (Cooper,Puxty, Lowe, & Willmott, 1989).
It is referring toprinciples of order, that is the logics of action
thatinform people and regulatory systems, and thedynamic inter-play
between them. Thus, speciWcinstitutions operate with a mix of these
principles.That is, markets rely on trust and laws to operate,and
bureaucracies require allegiance and commit-ment when the rules
dont seem to work, or Wt aspeciWc circumstance. Further, we
stressed not justthe inter-dependence of these principles, but
alsotheir internal contradictions, suggesting that con-tradictions
within as well as between the three log-ics explains the dynamics
of constant change intheir respective roles in accounting
regulation. Theargument in Willmott, Puxty, Robson, Cooper,and Lowe
(1992) attempted to be more consistent,hoping thereby to dispel any
implication that, forexample, professions operate, even
predominantly,on the principle of spontaneous solidarity andtrust,
or that markets operate only on the principleof competition. The
initial confusion lead to somecriticisms of Puxty et al. (1987),
which are dissi-pated when the focus is on principles, not
speciWcorganizations (such as the state, the profession andstock
exchanges). Thus Richardson (1989) suggeststhat Gramscis (1971)
theory of hegemonyimproves our analysis of the dynamics of
profes-sional regulation, and we now turn to elaboratingaccounting
regulation in the context of the mate-rial and hegemonic
foundations of capital accumu-lation.
While there is much talk of the context ofaccounting, rarely is
this context explicitly theo-rized. The Puxty et al. (1987)
framework insistedthat the three principles of order operate in
capital-ist societies, where the underlying logic is
capitalaccumulation and the logic of accumulationexplains the basic
similarity of all systems ofaccounting regulation in advanced
capitalist coun-tries. In insisting on the crucial role of capital
accu-mulation, we were implicitly following at least partof the
regulation approach of Aglietta, Lipietzand colleagues (Aglietta,
1979; Jessop, 1990; Lipi-etz, 1986). A regulation approach stresses
thatany system of regulationincluding audit rules,
qualiWcation of auditors, accounting standards, or
-
a430 D.J. Cooper, K. Robson / Accounting, Org
practice rights- operates within the context of asystem of
accumulation.
There are several ways of thinking about sys-tems of capital
accumulation, beyond the tradi-tional Marxist conception, which
focuses ongeneral features of capital accumulation. Forexample,
Jessop (2002) distinguishes between Key-nesian welfare and
Schumpeterian competitionstates and Whitley (2000) discusses
diVerent busi-ness systems based on geographic regions.
Thevarieties of capitalism approach (Hall & Soskice,2001) has
considerable potential to make sense ofchanges in the role of
accounting in the regulationof diVerent capitalist economies.
Alongside acontinuing concern with accounting rules, GAAPand
organizational governance, accounting proce-dures and accountants
themselves have becomeincreasingly involved in the rationalization
andformalization of many areas of life and auditinghas become a
signiWcant mentality in social andeconomic management (Power et
al., 2003). DiVer-ent contexts are thus associated with diVerent
con-ceptions of what it means to be regulated, andvarying
accounting practices are important in theregulation of diVerent
varieties of capitalism.
The regulation approach and an emphasis oncapital accumulation
should not, however, blind usto the potential fragmentation and
perhaps evendisorganization (Lash & Urry, 1987) not only ofthe
state, but also many regulatory systems (Coo-per, Puxty, Robson,
& Willmott, 1996). Manystates have shifted towards a series of
co-ordinatedsemi-autonomous agencies and alliances with stateand
non-state organizations. Rose and Miller(1992) point out how the
capitalist liberal stateoperates in diVuse ways, across multiple
institu-tions. Similarly, Miller (1990) emphasizes account-ing as
an assemblage of calculating activities andthereby reminds us that
the deWnitions and bound-aries of accounting itself shift with
changes in thestate and other regulatory activities.
Foucaultsconcerns with governmentality (1991) oVers a pro-ductive
way to understand the fragmentation ofthe three systems of
regulation we have been dis-cussing. Studies of accounting
regulation from agovernmentality perspective not only illuminatethe
way that accounting constrains and enables
such changes in capital accumulation but alsonizations and
Society 31 (2006) 415444
sensitises us to how the boundaries of what isaccounting itself
shift.
Regulation and the international accounting arena
The prominence of international regimes ofaccounting regulation
is partly the result of theincreasing Wnancialization and
inter-connectionof the advanced economies, and the crucial role
ofWnancial Xows, which dominate, by several ordersof magnitude,
Xows of goods and services. Thisexpansion in Wnancial Xows both
assists and ispredicated upon consistent regimes of
accountingdisclosure. Thus international organizations suchas the
IASB, WTO and IFAC have become moresalient, and are worthy of
further serious and sus-tained study. Wallace (1990) is a useful
Wrstattempt to examine the IASB, written by aninsider who returned
to academic life, but therehave been signiWcant changes to that
organizationsince then (Kwok & Sharp, 2005). There have
alsobeen proposals to create an internationalaccounting
qualiWcation, to enable professionalsto operate without practise
restrictions aroundthe world. Covaleski et al. (2003) examine the
riseand fall of the XYZ designation and what its pro-posals would
have meant for the regulation ofpractice rights and jurisdictional
conXicts betweenprofessional bodies and Wrms. In addition,
thedominant economic power, the USA, has thoughIOSCO, taken more
interest in the internationali-zation of capital markets, seeking
to become thedominant world player both for companies seek-ing to
raise capital, and those governments seek-ing to privatise state
enterprises. The consequencehas been that international regimes of
regulation,in accounting as well as in other domains, aredominated
by US interests and values (Rahman,1998).
In stressing the increasing role of global andinternational
systems of regulation, it is importantto avoid adopting the myth
(Hirst & Thompson,1996) that national systems of regulation, or
thenation state, are obsoleteHegarty (1997) comesclose to this
conclusion in his insiders account ofinternational accounting
regulation. However, asKapstein (1994) and others have argued,
nation
states, particularly those with large economies and
-
aD.J. Cooper, K. Robson / Accounting, Org
the power to opt out of international agreements(Kaldor, 2004),
remain signiWcant, if not moreimportant, agents of regulation as
the internationaleconomy grows. This is particularly the case if
anational state wishes to pursue its own, indepen-dent, path of
development, such as Malaysia hastried to do since the 1997 Asian
meltdown. More-over, state inXuence has been extended by
theemergence of international non-governmentalorganizations (NGOs)
as well as by the growth ofinternational governmental
organizations, IGOs(Boli & Thomas, 1990; Drori, 2006). These
regula-tory bodies serve as carriers for global culturalmodels of
governance, performance and account-ability via accounting and
auditing practices (Tri-antaWllou, 2004). Issues of regulation are
as muchabout will as about authority and capacity to regu-late
(Meiksins Woods, 1997). Arnold and Sikka(2001) is particularly
instructive in making thispoint. Their study of the relative
willingness ofnational regulators to discipline the failed
bank,BCCI, is an excellent model of how future work onaccounting
regulation might proceed.
While global governance might seem remote,the proliferation of
both non-Governmental Orga-nizations (such as the IASB and WTO) and
Gov-ernment networks (such as IOSCO), have hadprofound eVects upon
the co-ordination ofaccounting (and other) policies and
regulations. Assuch, it now scarcely possible to discuss
seriously,for example, the work of the IASB, IFAC, ASB,FASB, IOSCO
or the EU in the Weld of accountingregulations without considering
the complex ofalliances, agreements and accords that now
existsbetween these agencies on various accounting andauditing
matters, and how these agreements andalliances aVect implementation
in speciWc jurisdic-tions (Robson, Humphrey, & Loft, 2005).
Whilstthe importance of accounting regulations in
theinternationalization of policy regimes (Jessop,1997) is now
almost a clich, many studies at theinternational level tend to
focus upon one particu-lar international institution or standard:
muchless attention is give the polycentric, network orco-ordinated
character of regulation work andthe complex of relations between
national agencies(Caramanis, 1999, 2002). Further, as Graham
and
Neu (2003) argue, insuYcient research been con-nizations and
Society 31 (2006) 415444 431
ducted on the work of non-accounting institu-tions such as the
OECD, WTO, World Bank andIMF in the cultural normalization and
transmis-sion of Wnancial accounting practices. Neu,Ocampo Gomez,
Graham, and Heincke (forth-coming) show how accounting is central
in WorldBank attempts to reform educational practices andsystems in
Central America. Arnold (2005) is alsoan excellent example of the
research that can bedone, although her study of the WTO and
negotia-tions over regulations about the practice rights
ofaccountants focuses on just one NGO. Little atten-tion yet been
given the work of the Big Four Wrmsin the establishment of policy,
the staYng of theseagencies or the enactment and enforcement
ofinternational regulations, nor has much researchexamined whether
the relationships of the BigFirms to NGOs and government networks
con-tinue to be mediated through the national profes-sional
associations, or whether these bodies arenow eVectively by-passed
by the Big Four (Sud-daby et al., 2005).
Observers like Cox (1993) and Strange (1996)argue that
globalization has restructured relationsbetween the state and
capital, so that nationalstates become coordination vehicles for
transmit-ting global market discipline into domestic econo-mies.
Parallel arguments can be made aboutaccounting regulationthat
national systems ofaccounting standard setting become one
mecha-nism by which states attempt to restructure theireconomies,
and discipline their labour. Indeed,Rahmans study (1998) of how the
United Nationshas shifted from a concern with policing
multi-nationals, to facilitating their expansion and help-ing them
discipline workers, is a useful examina-tion of the way
international agencies restructurethe international economy.
Further, as Catchpowleand Cooper (1998) show for South Africa, even
socalled progressive states use multi-nationalaccounting Wrms to
help privatise their economiesand re-structure their government
administration.So, the Big Four Wrms are increasing playing a
roleas an advisor to states and NGOs. They oVer ideasand techniques
to regulate the economywhichbrings us to our Wnal theme: the
(neglected) role ofprofessional Wrms in understanding processes
of
professionalization and regulation.
-
a432 D.J. Cooper, K. Robson / Accounting, Org
Accounting Wrms as key actors in professionalization and
regulation
Accounting Wrms (even if the Big Four nolonger call themselves
such) are everywhere(Catchpowle & Cooper, 1998; Catchpowle,
Coo-per, & Wright, 2004). Our interest in broadeningthe
research agenda includes recognizing the roleof accounting Wrms in
shifting elements of regula-tion. We are less interested in the
pervasiveness orscale of these Wrms, however great that may be,but
are concerned to stress their centrality in pro-cesses of
professionalization, regulation and thedivision of labour in
society (Hanlon, 1994).Expanding the agenda involves research on
theprocesses of regulation and a re-conceptualizationof what
regulation means. For example, we wouldencourage further work on
the regulation of theself and actor subjectivity, (rather than the
con-ventional focus upon professional self-regula-tion), and the
role of the audit Wrms in dispersingand promoting dominant notions
of management,organization, performance and agency (Meyer
&Jepperson, 2000; TriantaWllou, 2004). To this end,in this
section we review contemporary researchinto the Wrm context and
appeal for a greater linkbetween studies of accounting
professionalizationand regulation, and the activities of the
profes-sional Wrms.
The professional Wrms and the construction of
professionalization
In discussing areas of research on the account-ing profession,
we have thus far omitted an emerg-ing area of current studyhow
accounting Wrmsare central to processes of professionalization.
Inthis section we emphasize the links betweenaccounting Wrms and
the production of profes-sional identity and regulation. The
production ofprofessional identity and regulation includes
whatconstitutes good advice and who is the client foraccounting
services. As such, it extends to the waypeople are constructed by
accounting and accoun-tants as calculating, competitive and
accountableobjects (Miller & OLeary, 1987, 1994) as well asthe
belief in the objectivity and value of quantiWca-
tion and hierarchy (Porter, 1994; Power, 1997;nizations and
Society 31 (2006) 415444
Power et al., 2003). Accounting Wrms play a centralrole in these
constructions.
There have, of course, been a series of Wrm histo-ries, perhaps
the most notable of which are Jones(1981) and Allen and McDermott
(1993). Thesehave oVered Wrm chronologies, focussing on
greatleaders and key events. They do not oVer muchinsight into the
role of Wrms in professionalization,although they often point to
the role senior partnershave played in professional organizations
(e.g., Mat-thews, Anderson, & Edwards, 1998). However,
morerecently, detailed studies, typically based on longterm,
ethnographic research, explore the construc-tion of the
professional within accounting Wrms(CoVey, 1993, 1994; Covaleski,
Dirsmith, Heian, &Samuel, 1998; Dirsmith, Heian, &
Covaleski, 1997;Grey, 1994, 1998; Hanlon, 1994, 1996, 1999).
Build-ing on more general studies of socialization in Wrms(Fogarty,
1992), they show that professionalization,and what it means to
self-identify as a professional,is largely constructed within
accounting Wrms(Anderson-Gough, Grey, & Robson, 1998). We
nowknow a great deal more about how accountants livetheir daily
lives and enact professionalism, at leastin large multi-national
accounting Wrms.
From these studies we appreciate how themeaning of being a
professional is seen primarilyas a way of behaving: accountants
view the idea ofprofessional as referring to ways of acting,
partic-ularly in front of clients. Attention is given to mat-ters
of appearance, dress sense, and personalgrooming (CoVey, 1993).
Relatedly, appearance interms of ways of talking and writing are
important.Time management, eagerness and other forms ofovert
commitment also mark the aspirant profes-sional (Anderson-Gough,
Grey, & Robson, 2001;CoVey, 1994).
Thus far much of this work has focussed onpartners or on junior
accountants; there is some-thing of a gap in our knowledge of
middle manag-ers in accounting Wrms and those working
outsideprofessional oYces. And, to follow up earlier com-ments
about marginalized groups, we know all tolittle about how the
identity of workers such asaccounting clerks and technicians is
produced inrelation to both professional and non-profes-sional
staV. Anderson-Gough, Grey, and Robson
(2005) consider how processes of socialization and
-
aD.J. Cooper, K. Robson / Accounting, Org
identity construction connect to issues of genderbalance and the
gendering of large Wrms. Dirsmithet al. (1997) and Dirsmith and
Covaleski (1985)have focussed on partners and aspiring
seniormanagers in large accounting Wrms, exploring therelative
roles of informal systems such as mentor-ing, and the more formal
systems such as MBO, inproducing conceptions of what a professional
isand does. Perhaps unsurprisingly, interacting withthe client in a
business like manner seems to be theprimary characteristic of the
accountants theystudied: Anderson-Gough, Grey, and Robson(2000)
demonstrate how the focus on the client isproduced in trainee
accountants, and Hanlon(1994) has linked this to the growing
commerciali-zation of professional service Wrms.
The emerging focus upon subjectivity and iden-tity within
professional service Wrms often draws-upon the work of Foucault. As
Grey (1994, 1998)and Covaleski et al. (1998) show, the mechanismsof
individuation within audit Wrms operate in partthrough appraisal
and performance evaluationprocesses. Anderson-Gough et al. (2000)
indicatehow the processes of organizational discourse,such as the
use of clich and appropriate lan-guage, construct disciplinary
conceptions of theindividual auditor who is deemed to be the
rightstuV.
At the organizational level, Cooper, Green-wood, Hinings, and
Brown (1998) discuss how pro-fessionalization interacts with
nationalism in largeaccounting Wrms. While the focus was on
invest-ment decisions within the Wrm, it is apparent thatthe
identity of senior partners is tied closelywith the prestige and
power of their own countryand the professional bodies within them.
Further,Cooper et al. (1996) show how professionalism isunderstood
in corporate law Wrms, where returningclient calls, looking busy,
and being well organizedare seen as important traits. Our
observation isthat similar, if more commercialized and
bureau-cratized understandings, pervade major account-ing Wrms. In
literally hundreds of interviews in the1990s, in many countries and
large accountingWrms, we never heard an accountant refer to
thepublic interest, and when issues of client manage-ment are
discussed, the concern expressed in
accounting Wrms is usually in terms of providingnizations and
Society 31 (2006) 415444 433
client service and Wnding opportunities for cross-selling. At
least in law Wrms, client managementsystems seem to be focussed on
avoiding conXictsof interest! Studying accounting Wrms is likely
toprovide considerable insight into how the profes-sion operates,
and how both its own understand-ings, and those of its clients, are
changing.
Finally, building upon their earlier work onprofessional
identity, Anderson-Gough, Grey, andRobson (2002) examine the UK
accounting profes-sion in terms of the fragmentation of its
profes-sional bodies and the diversiWcation of its marketsand link
this to their Wndings about the profes-sional socialization of
accounting trainees in theUK. Arguing that the practices, norms and
beliefsof accounting professionals are both a mediumand outcome of
their institutional conWguration(2002, p. 23), they link conduct
and context byelaborating the linkages that exist between themanner
in which accounting trainees are socializedand acculturated in
their Wrms, and how the insti-tutions of the accountancy profession
in the UKare thereby produced and re-produced.
The professional Wrms and accounting regulation
Multi-national accounting Wrms are centrallyinvolved in
regulation. This extends from theirinvolvement in the standard
setting process, whereeven if partners have to give up their
partnerships(as required by the FASB), their attitudes andbusiness
connections assure that these Wrms haveconsiderable inXuence, both
nationally and inter-nationally, to participation in professional
com-mittees and groups, to their involvement in howparticular
versions of globalization are spreadaround the world (Caramanis,
2002). Greenwood,Rose, Brown, Cooper, and Hinings (1999) discusshow
particular conceptions of what is good man-agement are spread
around the world by the BigFour, and how these Wrms are linked to
interna-tional systems of regulation, promoting privatisa-tion,
Xexible manufacturing, and trade liberalisationmore generally (see
also Neu, Ocampo Gomez,Garca Ponce de Len, & Flores Zepeda,
2002).Neu and his colleagues are beginning to showhow the advise of
accounting Wrms aVects educa-
tional reform in many countries as well as how
-
a434 D.J. Cooper, K. Robson / Accounting, Org
governments deal with indigenous peoples (Neu &Heincke,
2003; Neu & Therrien, 2003). And there issome evidence that
these linkages include theactive involvement of the Big Four in
internationallending agencies, such as the World Bank (Arnold&
Cooper, 1999), who then recommend the ser-vices of these Wrms to
audit and advise on develop-ment projects.
Accountant or auditor subjectivity also raiseswider questions
concerning the role of Wrms in theemergence and dissemination of
notions of agency.As noted above, concepts of regulation and
gover-nance are highly interdependent, if not identical, inliberal
democracies, and regulation now embracesa multiplicity of sites,
agencies and practices, manyof which contribute to a regulation of
the selfthrough their eVects upon subjectivity and identity.In a
case study of the development of an account-ing standard for
R&D, Robson et al. (1994) explic-itly linked the development of
the revision to thestandard to broader programmes of the
regulation/governance of science and technology in the UK.Changes
to the UK standard were intended tostimulate activity among British
managers andWrms towards research and innovation.
The power-eVects of Wnancial and manage-ment accounting
practices have increasinglyreceived study not only within audit
Wrms, but alsoin corporations, public sector organizations and
inthe home (Llewellyn & Walker, 2000; Walker,1998). There is
much further work to be done toexamine the part that the Big Four
professionalservice Wrms play in diVusing concepts of
eYcientorganization and rational behaviour, not simply interms of
the promotion of audit technologies(Power, 2003) or accounting (and
management)fads and fashions (Armstrong, 2002; Jones &
Dug-dale, 2002), but in terms of naturalizing particularconceptions
of management in multiple sectorsand economies (Gendron et al.,
2006; RadcliVe,1998). This takes us beyond the work of the Wrmsas
auditors or account preparers, towards anexamination of the array
of management servicesthat Big Four Wrms provide.
Discussions of corporate and public sector gov-ernance and
regulation now inhabit a discourse inwhich terms such as
transparency, account-
ability, performance and responsibility arenizations and Society
31 (2006) 415444
increasingly deWned through accounting conceptsand practices.
Transparency is linked to Wnancialdisclosure and, to the extent
that corporations candemonstrate Wnancial transparency in
accordancewith accounting standards and regulations, thenthey are
accorded legitimacy. As Everett and Neu(2000) have detailed,
accountability for the envi-ronment is now translated into the
terms and cate-gories of an environmental accounting. Theysuggest
that the intersection of ecological andsocial realms is ignored and
issues of social justiceare eVectively erased (2000, p. 5).
Research isbeginning to highlight the processes throughwhich
accounting helps deWne areas of politicaland social concern not
previously viewed inaccountants terms. This translation of
multipleissues to accounting issues (Power et al., 2003)now gives
enormous inXuence to accounting Wrmsin many areas of the regulation
of economic andpolitical life. Many of these regulatory
practicesand institutions have been removed from arenasfor
political or democratic legitima