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Action at a distance: Accounting inscriptions and corporate governance of a public sector bank in a developing country

Athula Ekanayake (Department of Business Finance, Faculty of Management, University of Peradeniya, Peradeniya, Sri Lanka)

Asian Review of Accounting

ISSN: 1321-7348

Article publication date: 5 February 2018

870

Abstract

Purpose

By using Latour’s notion of “action at a distance” (Latour, 1987), the purpose of this paper is to examine the ways in which the government acts at a distance to achieve corporate governance of public sector banks, and the extent to which accounting enables such actions of the government.

Design/methodology/approach

This study follows the qualitative research approach and adopts the case study research method. A major public sector bank in Sri Lanka was selected as the case organization for this study. Data were gathered from semi-structured interviews with organizational participants and document study.

Findings

The study provides evidence to suggest that inscriptions produced through four areas of accounting, namely external reporting, external auditing, management accounting and internal auditing, have the capacity to develop strong explanations enabling action at a distance and good corporate governance in the case organization. The study also provides evidence to show how the role of accounting in long-distance control and corporate governance in the case organization is influenced by various contextual factors. In particular, the study finds that undue government interference over the case organization to gain the long-distance control have resulted in deteriorating the level of corporate governance.

Research limitations/implications

The findings support the literature that examines the accounting in its social context.

Practical implications

The findings suggest that actors should be allowed to operate independently, particularly without political expedience and undue influences from pressure groups, which ensure effective utilization of accounting inscriptions by the actors in long-distance control as well as good corporate governance of public sector banks.

Originality/value

Although research into accounting in public sector organizations has gained considerable importance in recent times, those studies examining public sector banks are still lacking. The paper aims to fill this gap.

Keywords

Acknowledgements

The author is grateful to Sujatha Perera, a former Associate Professor of Accounting in the Department of Accounting and Corporate Governance at Macquarie University, Sydney, Australia and Hector Perera, an Emeritus Professor of Accounting, for their valuable comments.

Citation

Ekanayake, A. (2018), "Action at a distance: Accounting inscriptions and corporate governance of a public sector bank in a developing country", Asian Review of Accounting, Vol. 26 No. 1, pp. 39-61. https://doi.org/10.1108/ARA-03-2017-0053

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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