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Article
Publication date: 1 April 2010

D. Coetsee

Accounting theorists agree that no comprehensive theory of accounting has yet been developed. In the absence of such a theory, the question arises whether sufficient…

Abstract

Accounting theorists agree that no comprehensive theory of accounting has yet been developed. In the absence of such a theory, the question arises whether sufficient accounting principles are created through accounting research. This article acknowledges that accounting principles are not solely the result of academic research and that current accounting practice through its standard‐setting process contributes far more to the development of accounting principles. Hence the role that accounting theory and research should play in developing accounting principles is a vital academic question. The discussion in the article focuses on the normative and descriptive (or the more modern positivistic) approach to the development of accounting theory, the positivistic nature of mainstream accounting research, a possible decision‐useful theory of accounting and the role of interpretative and critical research. All of these developments are beneficial to accounting since they open up accounting to a diversity of research approaches that will collectively improve the status of accounting research and possibly accounting theory. The role that these developments fulfil in creating appropriate accounting principles, however, is debatable.

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Article
Publication date: 23 March 2012

Nihel Chabrak

Since the late 1970s, research in accounting has been colonized by positive accounting theory (PAT) despite strong claims that it is fundamentally flawed in terms of…

Abstract

Purpose

Since the late 1970s, research in accounting has been colonized by positive accounting theory (PAT) despite strong claims that it is fundamentally flawed in terms of epistemology and methodology. This paper aims to offer new insights to PAT by critically examining its basic tenets.

Design/methodology/approach

The paper subjects the language of the Rochester School to a deconstruction that is a transformational reading. This uncovers rhetorical operations and unveils hidden associations with other texts and ideas.

Findings

A new interpretation of the Rochester School discourse is provided. To afford scientific credibility to deregulation within the accounting field, Watts and Zimmerman used supplements and missing links to enhance the authority of PAT. They placed supplements inside their texts to provide a misleading image of PAT. These supplements rest on von Hayek's long‐term shaping blueprint to defeat apostles of the welfare state. Yet, to set PAT apart from normative theories that Watts and Zimmerman claimed were contaminated by value judgments, they made no reference in their text to the tight links between the Rochester School and the libertarian project initiated by von Hayek.

Research limitations/implications

Any reading of PAT cannot present the infinite play of meaning that is possible within a text. Deconstruction involves a commitment to on‐going, eternal questioning.

Originality/value

The paper provides evidence of the relation between PAT and the neoliberal (libertarian) project of von Hayek. PAT is viewed as part of the institutional infrastructure and ideological apparatus that legitimates the hegemony of markets.

Details

Accounting, Auditing & Accountability Journal, vol. 25 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

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Article
Publication date: 26 August 2014

Mohamed A. Omran and Ahmed M. El-Galfy

The purpose of this paper is to provide an extensive and critical overview of the theoretical perspectives used in the accounting disclosure literature including economic…

Abstract

Purpose

The purpose of this paper is to provide an extensive and critical overview of the theoretical perspectives used in the accounting disclosure literature including economic theories, political and social theories.

Design/methodology/approach

The paper reviews and discusses in details the positive accounting theory (PAT), agency theory, signalling theory, political economy theory (PET), stakeholder theory, legitimacy theory and contingency theory to identify the situations suit each of these perspectives.

Findings

The main finding shows that there is no universal theory applicable for all situations or societies. For example, PAT is probably used when a corporation believes that its primary responsibility is to use its resources and engage in activities designed to maximise its profits. On the other hand, the PET seems to better explain why some corporations appear to respond to government or public pressure for information about their social impact. The agency theory provides the required framework to evaluate accounting choices and disclosure decisions in market-based studies. While the legitimacy theory seems to be more suitable for multinational corporations working in developed/democratic countries, the stakeholder theory seems to be most suitable for multinational corporations working in developing/dictator countries; whereas a corporation can manage its stakeholders. The contingency theory supports our main finding that different theories are required for different situations, as it clearly indicates that management's preferences of reporting practices are related to the nature of environmental and organisational constraints rather than their relative income effects.

Originality/value

The paper contributes to the limited body of literature concerning the accounting disclosure theories and to identify the main theoretical perspective that can be used in the accounting disclosure research.

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Article
Publication date: 1 March 1995

Nicholas C. Mangos and Neil R. Lewis

The lack of explicit consideration in positive accounting studiesof managers and their social environment leads to a failure to analysethe social factors that influence…

Abstract

The lack of explicit consideration in positive accounting studies of managers and their social environment leads to a failure to analyse the social factors that influence managers′ accounting choices. Argues that based on a socio‐economic paradigm, consideration should be given to a socio‐economic consideration of the relationship between corporate social reporting and managers′ selection of accounting practices. Criticizes a purely economic approach to understanding and analysing motives managers may have in choosing accounting policy. Social responsibility reporting is suggested as a corporate social response to influences on managers and their choice of accounting policy. In analysing prior research which has empirically tested the relationship between social responsibility reporting and reported financial performance, a potential relationship between reported financial performance and accounting policy choice is identified and developed. This contributes to socio‐economic research by expanding positive accounting theory to include explicit social variables.

Details

Accounting, Auditing & Accountability Journal, vol. 8 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 1 August 2002

Craig Deegan

This paper serves as an introduction to this special issue of Accounting, Auditing & Accountability Journal; an issue which embraces themes associated with social and…

Abstract

This paper serves as an introduction to this special issue of Accounting, Auditing & Accountability Journal; an issue which embraces themes associated with social and environmental reporting (SAR) and its role in maintaining or creating organisational legitimacy. In an effort to place this research in context the paper begins by making reference to contemporary trends occurring in social and environmental accounting research generally, and this is then followed by an overview of some of the many research questions which are currently being addressed in the area. Understanding motivations for disclosure is shown to be one of the issues attracting considerable research attention, and the desire to legitimise an organisation’s operations is in turn shown to be one of the many possible motivations. The role of legitimacy theory in explaining managers’ decisions is then discussed and it is emphasised that legitimacy theory, as it is currently used, must still be considered to be a relatively under‐developed theory of managerial behaviour. Nevertheless, it is argued that the theory provides useful insights. Finally, the paper indicates how the other papers in this issue of AAAJ contribute to the ongoing development of legitimacy theory in SAR research.

Details

Accounting, Auditing & Accountability Journal, vol. 15 no. 3
Type: Research Article
ISSN: 0951-3574

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Book part
Publication date: 10 December 2013

Anna Pistoni and Lucrezia Songini

This chapter intends to contribute to the debate on the determinants of corporate social responsibility (CSR) and their impact on performance measurement and communication…

Abstract

Purpose

This chapter intends to contribute to the debate on the determinants of corporate social responsibility (CSR) and their impact on performance measurement and communication systems. It aims at analyzing the relationship between the reasons why firms adopt CSR and the importance given to voluntary CSR disclosure.

Methodology

Two main categories of CSR determinants have been identified: the external ones, coming from the environment outside the firm, and the internal determinants, which are linked to some specific characteristics of the enterprise and to the objectives it pursues.

The analyzed sample consists of 120 large Italian manufacturing and nonmanufacturing enterprises. The research hypotheses concerning the relationship between external and internal determinants of CSR and CSR disclosure were verified using an independent sample t-test, evaluating the equal variances of clusters using the Levene’s test.

Findings

Main results point out that in companies giving importance to CSR disclosure, the internal drivers are more relevant than the external ones in determining the attitude toward CSR. Among the internal determinants, drivers related to company and management values and ethics are quite relevant.

Research limitations

This study is subject to the limitations that generally apply to cross-sectional survey-based research.

Originality/Value of chapter

Our research findings show that legitimacy theory represents the most relevant theory in explaining CSR disclosure practices of Italian large firms, as well as the operational implementation of stakeholder theory, such as stakeholder management. On the contrary, institutional theory only partially explains CSR disclosure, with respect to the pressures coming from financial markets.

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Book part
Publication date: 16 December 2009

Rob Gray, Dave Owen and Carol Adams

This chapter is a speculative examination of the way in which theory is used in the social accounting literature. It is intended as an initial guide for those approaching…

Abstract

This chapter is a speculative examination of the way in which theory is used in the social accounting literature. It is intended as an initial guide for those approaching the area for the first time; it is intended as a map for those in the field who would like to adopt a bigger picture for their work and it is intended as a wake-up call to those of us stuck in unconscious ruts. The chapter's departure point is the recognition that social accounting requires a reasonably sophisticated awareness of theory – not least because the subject matter itself is so contentious and conditional. The chapter's ambitions are to encourage a more evaluative and policy-based approach to the subject matter of social accounting; to offer a pedagogic basis to help others make some sense of theory in social accounting and to seek to empower and liberate social accounting scholars by assisting the range of their theorising. Social accounting scholars tend to approach the area with concerns and desires for liberation and possibility. Theory can help articulate those concerns and can support and encourage that desire. Above all, the chapter is explicitly partial, speculative and tentative, and it is not a formal or informed attempt to produce a theory of theories in social accounting. To articulate a range of the possible theories, we offer a simple heuristic through which we may navigate our way through the soup of concepts and perceptions that can blend into a potential infinity of ways of looking and seeing. We hope to encourage diversity and speculation rather than narrowness and alleged certainty.

Details

Sustainability, Environmental Performance and Disclosures
Type: Book
ISBN: 978-1-84950-765-3

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Article
Publication date: 9 July 2018

Aji Dedi Mulawarman and Ari Kamayanti

The purpose of this study is to shed light on how accounting, which has been recognised as a contributor to the modernity problem, has been influenced by secular…

Abstract

Purpose

The purpose of this study is to shed light on how accounting, which has been recognised as a contributor to the modernity problem, has been influenced by secular anthropology, which hinges on the concept of “self”. Based on Akbar S. Ahmed’s concept of Islamic Anthropology, Islamic Accounting Anthropology (IAA) is proposed as an answer to shift the accounting paradigm.

Design/methodology/approach

A case study in Indonesia was conducted by studying the development of the nation’s Shariah accounting from the perspective of diffusionism as an approach to anthropology. Following the constructivist tradition, IAA, which rejects the Social Darwinism notion of the superiority of the West over the East as the basis of the evolution of civilisation, is used as tool to realise Islamic norms through synchronic-diachronic study, constructing an accounting concept and invoking accounting transformation through accounting education.

Findings

This study finds that accounting has been greatly affected by secular Western culture through education and educators as agents that find their legitimation in country policies. Standard setters have also taken the same stance by siding with the capital market. By proposing IAA, it is hoped that Islam will replace the concept of “self-interest” as the faith of accounting and promote welfare for the ummah.

Research limitations/implications

The problem of modernisation lies in the newfound faith of self-interest. In accounting, self-interest is ingrained in accounting theories such as Positive Accounting Theory, Entity Theory and Agency Theory, and thus accounting has become a tool to support neoliberal society. IAA will help produce accounting that is rooted in local wisdom and necessity yet very much embedded in Islamic values.

Practical implications

IAA suggests that accounting education must be geared towards anthropology detached from the Orientalism-secularism concept. This shift can be accomplished by integrating IAA into the accounting education curriculum.

Social implications

Based on IAA, accounting practices can be designed under the guidance of the Quran and result using a synchronic-diachronic approach. By changing the ontological view through accounting education, accounting can drive societal consciousness towards the welfare of society instead of self-happiness.

Originality/value

Islamic accounting and anthropology are two subjects that are rarely discussed concurrently.

Details

Journal of Islamic Accounting and Business Research, vol. 9 no. 4
Type: Research Article
ISSN: 1759-0817

Keywords

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Article
Publication date: 1 August 1995

Sara Ann Reiter

Investigates two issues raised by D.C. Moore: the apparent failureof critical accounting theory to launch and sustain a critical programmeand relative lack of critical…

Abstract

Investigates two issues raised by D.C. Moore: the apparent failure of critical accounting theory to launch and sustain a critical programme and relative lack of critical accounting activity in the USA. These concerns are related in that radicalization and change of one′s own academic discipline would seem to be one of the highest‐priority political activities to be undertaken by critical theorists. Offers feminist economics as an example of a critical social theory that meets Moore′s four criteria for successful criteria endeavour and is applicable to accounting research. Compares the feminist economic critique with critiques of accounting by Cooper, and by Shearer and Arrington, based on the French feminist philosophers. The two approaches differ in goals and politics. Suggests that the experience of feminist economics in reforming economics also provides insights into the slow growth of critical accounting theory in the USA.

Details

Accounting, Auditing & Accountability Journal, vol. 8 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

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Article
Publication date: 1 February 2016

Khaled Samaha and Hichem Khlif

The purpose of this paper is to review a synthesis of theories and empirical studies dealing with the adoption of and compliance with IFRS in developing countries in an…

Abstract

Purpose

The purpose of this paper is to review a synthesis of theories and empirical studies dealing with the adoption of and compliance with IFRS in developing countries in an attempt to provide directions for future research.

Design/methodology/approach

The review focusses on four main streams including: first, the motives for IFRS adoption; second, corporate characteristics and the degree of compliance with IFRS; third, the economic consequences of IFRS adoption and finally; fourth, the use of regulation as an enforcement mechanism to monitor compliance with IFRS. The authors review empirical studies specifically devoted to developing countries.

Findings

Regarding the first stream relating to IFRS adoption, the macroeconomic decision of adopting IFRS in developing countries can be justified by two main theories which are: the economic theory of network (Katz and Shapiro, 1985) and isomorphism (DiMaggio and Powell, 1991), however, empirical evidence in developing countries to confirm these theories is limited. Regarding the second stream relating to corporate characteristics and the degree of compliance with IFRS, the authors find that the results are mixed. Regarding the third stream relating to the economic consequences of IFRS adoption, it seems that the evidence is still limited in developing countries especially with respect to the impact of IFRS adoption on foreign direct investment, cost of equity capital and earnings management. Regarding the fourth and final stream in relation to regulation, enforcement and compliance with IFRS, the authors find that research is very limited. It was evidenced in the very few research studies conducted, that global disclosure standards are optimal only if compliance is monitored and enforced by efficient institutions.

Practical implications

The author’s study attempts to provide a foundational knowledge resource that will inform practitioners, researchers and regulators in developing countries about the relevance of the different theories that exist in the accounting literature to explain the adoption of and compliance with IFRS.

Originality/value

Compared to developed countries, the four streams outlined remain under-researched in developing countries. Therefore, researchers should examine these topics in developing countries to inform practitioners, regulators and the capital market about the effects of adopting IFRS and their relevance to developing countries. In addition, researchers should embark on identifying new theories to explain the adoption of and compliance with IFRS in developing countries that take into consideration the socioeconomic culture of these settings.

Details

Journal of Accounting in Emerging Economies, vol. 6 no. 1
Type: Research Article
ISSN: 2042-1168

Keywords

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