Publication date: April 2013
Source:Accounting, Organizations and Society, Volume 38, Issue 3
Author(s): Jill F. Solomon , Aris Solomon , Nathan L. Joseph , Simon D. Norton
This paper explores the nature of private social and environmental reporting (SER). From interviews with UK institutional investors, we show that both investors and investees employ Goffmanesque, staged impression management as a means of creating and disseminating a dual myth of social and environmental accountability. The interviewees’ utterances unveil private meetings imbued with theatrical verbal and physical impression management. Most of the time, the investors’ shared awareness of reality belongs to a Goffmanesque frame whereby they accept no intentionality, misrepresentation or fabrication, believing instead that the ‘performers’ (investees) are not intending to deceive them. A shared perception that social and environmental considerations are subordinated to financial issues renders private SER an empty encounter characterised as a relationship-building exercise with seldom any impact on investment decision-making. Investors spoke of occasional instances of fabrication but these were insufficient to break the frame of dual myth creation. They only identified a handful of instances where intentional misrepresentation had been significant enough to alter their reality and behaviour. Only in the most extreme cases of fabrication and lying did the staged meeting break frame and become a genuine occasion of accountability, where investors demanded greater transparency, further meetings and at the extreme, divested shares. We conclude that the frontstage, ritualistic impression management in private SER is inconsistent with backstage activities within financial institutions where private financial reporting is prioritised. The investors appeared to be in a double bind whereby they devoted resources to private SER but were simultaneously aware that these efforts may be at best subordinated, at worst ignored, rendering private SER a predominantly cosmetic, theatrical and empty exercise.
Publication date: July 2012
Source:Accounting, Organizations and Society, Volume 37, Issue 5
Author(s): Jeffrey Robertson , Warwick Funnell
Capitalism’s profound effect on society has encouraged economic and accounting historians to hypothesise about the importance of double entry bookkeeping to its development. According to Sombart the continual reinvestment of the profits earned depended on the existence of a capitalist form of double-entry bookkeeping that would allow investors and managers to measure the return on investments as a means of making rational business decisions. More recently, with particular reference to the English East-India Company Bryer has argued that the adoption of the capitalist form of double-entry bookkeeping was essential to resolving the social conflict between investing capitalist classes that arose with the rise of industrial capitalism in England in the late 17th and 18th centuries by providing the means to calculate the rate of return on socialised capital. This paper widens the historical context of these debates to The Netherlands in the early 17th century by examining accounting practices of the Dutch East-India Company, the epitome of modern capitalism in motives, organization and funding. It establishes that, although the 17th century Dutch were pre-eminent in Europe in their knowledge of the capitalist form of double-entry bookkeeping, at no time during the period covered by the first charter (1602–1623) of the Dutch East-India Company, or thereafter, did the domestic operations of the Company use this form of bookkeeping across all chambers. This meant that the investors did not have the necessary information that would have allowed them to calculate the return on their investments. Indeed, the Company’s investors neither expected nor demanded information to calculate the return on their investments and, hence, double-entry bookkeeping was not a necessary condition for Dutch capitalism in the manner suggested by Sombart, Weber and Bryer. Instead, the form which capitalism developed in The Netherlands recognised the social and economic impact of its unique geography which produced a society characterised by a monetary economy, a long tradition of joint ownership, and a free market for assets and capital rights.
Publication date: Available online 31 August 2012
Source:Accounting, Organizations and Society
Author(s): Michael Power
‘Fraud risk’ is ontologically different from fraud. Fraud itself is a disruptive event; fraud risk can and must be governed. This essay draws on Foucault’s concept of an apparatus (dispositif) to explain the emergence of this difference. The analysis begins with a concrete case and explicates the history of fraud risk which flows through a specific organizational setting. First, it is claimed that fraud risk must be understood in relation to the broader historicity of risk in which risk expands its reach as an organizing practice category. Second, it is argued that the diverse elements of the fraud risk apparatus – words, laws, best practice guides, risk maps, websites, compliance officers, text books, regulatory judgments and many more – have a trajectory of formation. This trajectory begins with auditing and expands into risk management, regulation and security more generally. Fraud risk management emerges as a highly articulated, transnational web of ideas and procedures which frame the future within present organizational actions, and which intensify the responsibility of senior managers. Overall, the paper challenges the common sense idea that the present shape of fraud risk management is a functional necessity demanded by fraud events. The purpose is to display the historically contingent regime of truth for speaking about fraud, risk and responsibility in organizations. The paper suggests that this ‘regime of truth’ consists in a form of managerial and regulatory knowledge with a ‘grammar’ governing rules for talking about and acting on risky subjects and organizations. The rise of ‘fraud risk’ management and its prominent position within the field of corporate governance in the 21st century is emblematic of an ongoing neoliberal project of individualization and responsibilization.
Publication date: Available online 3 September 2012
Source:Accounting, Organizations and Society
Author(s): James W. Williams
Among the myriad changes to have impacted the regulation of financial markets in recent years, one of the most significant yet least recognized is the growing role of technology in the regulatory process where it is used to detect emerging problems in the marketplace and guide the enforcement process. Current applications range from surveillance technologies, to datamining and risk profiling tools, to data visualization and graphing programs. Using the term ‘regulatory technologies’, this paper examines in detail two such technologies and assesses not only their benefits and limitations, but also their more subtle role in shaping the very criteria through which financial transactions and market actors are represented, framed, and assessed for their regulatory merit. To the extent that this process hinges on the ability to make distinctions on the grounds of risk, typicality, and appropriateness, these technologies play a critical role in shaping the boundaries of enforcement and thus the scope and depth of the regulatory vision. This is revealed to have significant implications for our understanding of the place of technology in regulation and for the types of questions that must be addressed in discussions of financial governance.
Publication date: January 2013
Source:Accounting, Organizations and Society, Volume 38, Issue 1
Author(s): Michael Daniel Fischer , Ewan Ferlie
This article explores and explains escalating contradictions between two modes of clinical risk management which resisted hybridisation. Drawing on a Foucauldian perspective, these two modes – ethics-orientated and rules-based – are firstly characterised in an original heuristic we develop to analyse clinical risk management systems. Some recent sociologically orientated accounting literature is introduced, exploring interactions between accountability and risk management regimes in corporate and organisational settings; much of this literature suggests these systems are complementary or may easily form hybrids. This theoretical literature is then moved into the related domain of clinical risk management systems, which has been under-explored from this analytic perspective. We note the rise of rules-based clinical risk management in UK mental health services as a distinct logic from ethics-orientated clinical self-regulation. Longitudinal case study data is presented, showing contradiction and escalating contest between ethics-orientated and rules-based systems in a high-commitment mental health setting, triggering a crisis and organisational closure. We explore theoretically why perverse contradictions emerged, rather than complementarity and hybridisation suggested by existing literature. Interactions between local conditions of strong ideological loading, high emotional and personal involvement, and rising rules-based risk management are seen as producing this contest and its dynamics of escalating and intractable conflict. The article contributes to the general literature on interactions between different risk management regimes, and reveals specific aspects arising in clinically based forms of risk management. It concludes by considering some strengths and weaknesses of this Foucauldian framing.
Publication date: August 2012
Source:Accounting, Organizations and Society, Volume 37, Issue 6
Author(s): Alexander Woods
This field study examines whether and how supervisors’ subjective adjustments to objective performance measures are influenced by their prior subjective evaluations of employees. Evaluations were determined entirely subjectively in the sample internal audit organization in 2005. In 2006, the organization introduced a pay-for-performance incentive plan that established four objective measures of audit manager performance. Then, knowing the challenges of objectively measuring manager performance, the organization gave supervisors the discretion, mandate, and training to subjectively adjust each of the objective measures when performance as indicated on the individual measures misrepresented managers’ true performance.Using prior-year subjectively measured performance to proxy for current-year expected performance, empirical evidence documents that upward adjustments are more likely to be made to unexpectedly low individual measures the more supervisors perceive deficiencies in those objective measures. This indicates that supervisors made adjustments to correct deficiencies in the measures (as the organization intended). Independent of this interaction effect, however, unexpectedly low current-year objectively-measured performances are also more likely to be adjusted upward, which indicates supervisors also made current performance consistent with prior performance for reasons other than to improve individual objective measurement. Some of these other reasons are explored. The study highlights how the impact of the implementation of a new performance measurement system depends on the past.
Publication date: April 2013
Source:Accounting, Organizations and Society, Volume 38, Issue 3
Author(s): Wei Chen , Hun-Tong Tan
We conduct an experiment with MBA students where we manipulate whether participants are exposed to an analyst’s name in Stage 1, and whether they are given a cue in Stage 2 about the particular analyst’s prior performance as an All-star analyst. We find that in the absence of a favorable performance cue about the analyst, mere exposure to the analyst’s name enhances perceived analyst credibility, which in turn influences the investors’ earnings estimates. This suggests a benefit to analysts in terms of building credibility merely through media exposure that cannot be explained by performance. In fact, a diagnostic cue such as the analyst’s high prior performance no longer matters to investors once they have prior exposure to the analyst’s name. However, this enhancement of an analyst’s credibility through investors’ prior exposure to his/her name is reversed when the analyst’s forecast turns out to be inaccurate.
Publication date: January 2013
Source:Accounting, Organizations and Society, Volume 38, Issue 1
Author(s): Marcia Annisette , Viswanath Umashanker Trivedi
We study the labour market experiences of immigrant accountants in Canada, to reveal the tensions contradictions and paradoxes embedded in neoliberal globalization. Drawing on themes within pragmatic sociology (Boltanski & Thévenot, [1991] 2006), we argue that globalization has differentially impacted on the moral orders underpinning the identity projects of the Canadian state and the elite sector of the accountancy profession and this has in turn created three paradoxes: paradox of the state, paradox of the market and paradox of place.
