Essay on "Accounting the Most Effective Means of Achieving"

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Accounting the Most Effective Means of Achieving Accountability in Organizations

The term "accountability" can best be defined by Roberts and Scapens (1985) in the following manner: "Accountability in its broadest sense simply refers to the giving and demanding of reasons for conduct" (Roberts, 1991, P. 4). When connecting 'accountability' to accounting, they continue to observe that "accounting institutionalizes the notion of accountability; it institutionalizes the rights of some people to hold others to account for their actions" (ibid.), and that accounting, therefore, reflects social values, norms, conventions, and expectaitions. Accounting, in this sense, is a value system that binds its own ideologies on society.

The role of accounting as manifesting a subjective and control-implementing discipline has long been realized. What this essay seeks to do is determine whether accounting is the discipline that is best suited to wresting control over organizations and people, or whether it should be replaced by another model more objective (perhaps) and more responsible and effective in achieving accountability. This essay aims to explore the subjectivity and bounds of the power claimed by accounting, and then proceeds to question whether an alternate form of expression could be found that would be more upright and partial in its dominion.

Accounting: A Constructivist Enterprise

Accounting is a discipline that is in flux, i.e. It is in constant momentum of evolution or development shaped by variables of the surrounding culture and environment. it, therefore, is not only changeable, but also capable of being changed.

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Accounting, Miller and O'Leary (1987) argue, could be understood within Foucault's equation of human knowledge = power. The human science (accounting included) exerts certain power over human individuals robbing them of certain aspects of their autonomy.

In this manner, accounting can be seen as a constructivist enterprise in that it serves to construct a particular field of visibility, i.e. constructing its domain in a certain way so that we see it from a particular angle rather than from one or other perspectives. Certain aspects of their territory are emphasized whilst others are ignored (Lehman, 2005). For instance, questions of wastage and efficiency are a point in case, or corporate accounts that publicize industrial actions such as "acquisitions, downsizing, spin-offs, globalization, increased market share, new and innovative technologies, outsourcing and the reduction of labor costs through relocating manufacturing facilities" (Miller and O'Leary, 1987, p. 239) whilst ignoring other issues, such as inveterate wastage of goods and reckless pollution. These issues would detract from that which the organization wishes to promote, and, therefore, they are ignored. As Chwastiak and Young (2005) point out, monthly or annual records only play on optimistic factors and elements of success. They ignore the phenomenon of the unbalanced distribution of wealth that consequents in global starving, violence, and death; it is their own corporate actions that are largely responsible for these factors and more -- such as environmental pollution and poisoning of food with pesticides, nonetheless the accounting records of these corporations ignore these phenomena. They are either rationalized or shunted onto others -- society as a whole -- rather than onto themselves.

The organization, through its language of 'accountability' imposes certain perspectives whilst eliminating or attenuating others (See also Armstrong, 2002). From the nineteenth century onwards, members of the profession hedged themselves with a whole structure of calculative norms and standards that stood between them and the worker (and, certainly, between the lay person) obstructing the enterprise and obfuscating it. This process attributed accounting with a certain domination. Eventually, the power of the discipline, like Dracula, transitioned from the boss to the machine i.e. To the hieroglyphics and conventions of accounting placing an inhibiting influence on the very individuals who operated within the discipline.

Concluded Miller and O'Leary (1987):

Accounting can no longer be regarded as a neutral and objective process. It comes rather to be viewed as an important part of a network of power relations, which are built into the very fabric of organizational and social life. (p. 240)

The Language of Accounting and Scientific Management

Accounting theory and practice had been well in place by the 1930s. The norms and conventions, including the vocabulary, started creeping up around that time. Vocabulary included phrases such as "the standard cost," "the variance analysis," "the budget," and "budgetary control." Norms and conventions were put in place. Standard cost and budgeting pinpointed a set of responsibilities to the discipline, and the individual actor received his reputation according to how well he operated in conjunction to the discipline. Standard costing and budgeting, therefore, became innovations that defined the individual's expertise vis-a-vis the field. This form of making all individuals accountable soon manifested itself as a form of social power -- 'domination' to use Foucault's vocabulary.

Individuals were described according to the norms of standard costing and budgeting -- this delineated and asserted perimeters around his contribution to society. Statistical deviations from the norm placed individuals within certain parameters and also introduced social controls (such as eugenics, mental hygiene, and mental testing) to induce them to fit to 'contributive' and 'efficient' norms. It was in this way that accounting indirectly served as instrument of socio-political maneuvering and control. The great craze of efficiency was also denoted in one of the foremost philosophies of that period, William James' pragmatism. Efficiency soon became imbued with ideological context too. Poverty and destitution represented losses for society as a whole. By defining people within constructs of 'efficiency' and promoting that efficiency, social welfare and society as a whole could be improved. Enter scientific management that defined individuals and resources as worthy of existence or not depending upon their efficiency.

It was the discipline of 'scientific management - accounting historians unanimously agree -- that introduced the concept of standard costing into the accounting literature. In Principles of Scientific Management, F.W. Taylor proposed that scientific management would take upon itself the task of replacing vagueness and other acts of human imagination and chaos with exact scientific knowledge of the extent of the wastes caused by human inaptitude and folly, and it would set itself the task of their systematic elimination. Other scientific managers came to similar conclusions and voiced identical sentiments. Harrison, for instance, modifier of cost accounting practices, opined that cost accounting had failed to achieve its purpose. The mission of accounting, as he saw it, was to direct the management's attention to preventable inefficiencies so that steps could be taken to prevent and eliminate these (Bryer, 2006).

It was due to strenuous endeavors by scientific managers such as Harrison and others that standard costing became the means by which both workers and employers could be controlled and manipulated to achieve better work. It was the goad that pulled them in line and pupated them making them accountable to deep questions of responsibility. Money shaped them into a machine or a homogenous, undistinguished organism and budgeting and standard costing served as the lens through which individuals were perceived. Individuals became perceived in terms of rationality and efficiency, and it was the discipline of accounting, shaped by scientific management, that constricted humans into the perspective and, by doing so, foisted dominion over them.

As Agryris (1952) (in Young 2006) later asserted, accounting as a discipline depersonalized humans. He compared it to:

Hav[ing] reached the ultimate state of dwelling within an electronic tube and emerging only to shake a mechanical finger at erring human beings (Argris, 1952, foreword, in, p.582).

Agryris (1952) drew attention to the fact that different groups of people (such as "budget people," "factory supervisors" and "employees" or "factory people") had diverse perspectives on budgeting, and that accounting had pinned a negative construction on humans that was not necessarily correct. In other words, accounting could be seen as a constructivist discipline and as a way of inserting pressure on a hapless population.

The Behavioral Conception of Accounting

A behavioral conception of accounting soon came into existence, where Devine (1960), for instance, would argue that individuals are "caught in its thread of control" and that "accountants seem to have waded through their relationships to the intricate psychological network of human activity with a heavy-handed crudity that is beyond belief" (Miller & O'Leary, 1987, p. 258). Reform was demanded with the insistence that authority be re-transferred from a mathematical discipline to individuals themselves.

The budget may set organizational objectives but it is after all created by a coalition of people, and the discipline should be subsumed by "economic man," rather than force people into the strictures of the budget.

What we have here, then, is a reversion from the objective of the person being worked on and squeezed into the format of a more effective and efficient tool to the 'firm' being demoted to the instrument of the person. Accounting had usurped norms and conventions to twist that individual to its standards. These were to reflect an increased level of efficiency and, by so doing, to increase output and productivity. Employer and social body alike were, thereby, to become more efficient and society was a whole would increase… READ MORE

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Quoted Instructions for "Accounting the Most Effective Means of Achieving" Assignment:

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This module is assessed through coursework (100%)

QUESTION

Is accounting the most effective means of achieving accountability in organizations? Make use of the course materials in your answer.

Further advice on each of these questions will be given in the classes.

Assignment guidance

The following points may help you to produce a good piece of work:

*****¢ You must address the question asked and not try to re-define, or *****'twist it round*****', to allow you to write about something else. *****'Not answering the question*****' will result in a significant loss of marks. You are asked to make use of the course materials ***** this will help prevent you from answering a different question!

*****¢ Your essay must be properly referenced:

o only sources referred to specifically in the text of your answer should be included in the bibliography;

o all sources (including those for any numeric examples used) should be acknowledged;

o there should be no references in your answer to sources which are not in your bibliography BUT if you have not consulted the reference directly yourself you should indicate in the text of your answer the secondary source from which is comes. It is this secondary source which should be in your bibliography.

*****¢ Listing a reference in the bibliography does not make it acceptable to copy sections of the book into your answer. You must summarise the points in your own words. Plagiarism is regarded as a most serious instance of academic misconduct and is dealt with accordingly.

*****¢ Being asked to discuss something is not the same as being asked to list things. A discussion will consider alternative points of view and your own thinking and evaluation should be apparent in the discussion of the topic.

*****¢ It is expected that you will consult academic and professional journals as well as textbooks. Many textbooks cover much the same information and you are only duplicating this when you consult numerous different textbooks. Textbooks tend not to have very up to date content and journal sources are vital for this.

Please see your programme handbook for more guidance and for more information on grading criteria, but if you are unsure about anything use my office hours to get more help.

GUIDELINES FOR WRITING ESSAYS

Below are a few tips about writing essays.

Criteria for a good essay:

*****¢ Evidence of reading beyond standard textbooks and lecture notes.

*****¢ Coherent, comprehensive, and reflective critique of existing ideas and literature.

*****¢ Accurate understanding of key concepts and ideas.

*****¢ Imagination and originality.

*****¢ Clear development of the argument(s) contained in the essay. The essay should flow in a way that enables any reader to follow the argument(s) and see how the various points made are being used to answer the question.

For example, when you write your essay, consider the following points:

*****¢ Before you write your essay, work out on paper a detailed outline of your argument.

*****¢ In the essay introduction, you should set out your main themes and intentions: describe the issue you are addressing, identify its main components, and indicate what you are going to do in the body of your essay.

*****¢ Break down your arguments into main parts - use this as a basis of your essay that will then be divided up into several sections (you may want to have a section title for each section).

*****¢ Build up your argument point-by-point, section-by-section, so that you develop a picture that slowly develops in the reader*****s mind.

*****¢ Always try to put yourself in the position of a critical reader, ask yourself how s/he would react to your essay, how s/he would understand it, be persuaded by it.

*****¢ Do not simply describe the ideas and literature you*****re dealing with, provide a critical evaluation.

*****¢ Summarise your arguments in conclusion. What is the main significance of what you have been saying?

READING LIST

Course Texts

This module goes beyond the traditional means of teaching accounting (which is to focus on the categories and techniques). Instead, three concepts ***** accountability, representation and control ***** will be used to demonstrate the effects of accounting both within and without organisations.

Blackboard will have copies of the module material prepared for the Distance Learning version of this course ***** this is in lieu of a core text. In addition, for each class, there will one essential reading and some additional readings. All materials are available electronically and are also tied into to the main text. The core readings should always be read before the lecture and you should attempt to answer the questions set for that article.

The key readings are:

Armstrong, P. (2002) *****˜Management, Image and Management Accounting.***** Critical Perspectives on Accounting 13, pp. 281*****295

Bryer, R. (2006) *****˜Accounting and control of the labour process***** Critical Perspectives on Accounting, Volume 17, issue 5. pp 551-598.

Chwastiak, M. & Young, J. J. (2005) *****˜Silences In Annual Reports,***** Critical Perspectives on Accounting 14, 533*****552

Ezzamel, M., Lilley, S. & Willmott, H. (2004) *****˜Accounting representation and the road to commercial salvation.***** Accounting, Organizations and Society 29 pp. 783*****813.

Lehman, G. (2005) *****˜A critical perspective on the harmonisation of accounting in a globalising world.***** Critical Perspectives on Accounting 16 pp.975*****992.

Miller, P. & O*****Leary, T. (1987) *****˜Accounting and the construction of the governable person.***** Accounting, Organizations and Society 12 (3) pp. 235-265

Young, J. J. (2006) *****˜Making up Users.***** Accounting, Organizations and Society, 31 (1) pp. 579-600.

For the seminars, the key readings are:

McSweeney, B. (1997) *****The Unbearable Ambiguity of Accounting***** Accounting, Organizations and Society, 22(7), pp. 691-712.

Roberts, J. (1991) *****˜The Possibilities of Accountability*****, Accounting, Organizations and Society, 16(4) pp. 355-368.

In addition, we shall be using some accounting notes which will largely be drawn from http://www.bized.ac.uk/learn/accounting/index.htm). Bized has been chosen instead of a text because it is reasonably accessible and attempts to avoid unnecessary jargon. It also provides a series of interactive examples and other resources we can draw upon. It is not perfect and you may feel that it does not explain particular aspects of the subject very well and certainly it is not remotely critical (whereas this course is entirely!). However, some students may wish to use a textbook instead and the one that I suggest is McLaney, E and. Atrill, P. Accounting: an Introduction, Prentice-Hall, 2002. You may wish to buy your own copy but several copies are in both the short loan and general lending library. However, this text is also used for the undergraduate accounting modules and at certain times the texts will be under considerable demand.

There are several other accounting textbooks in the library: all have their own strengths and weaknesses and, although covering similar territory, will often explain accounting principles in different ways. If you are finding Bized or McLaney and Atrill confusing, it may be worth seeing what other authors have to say. The books which are most likely to be of use are Arnold, Hope, Southworth and Kirkham*****s Financial Accounting and Dyson*****s Accounting for non-accounting students but do try others. You will also find that some of the web materials that you will be directed towards will also prove helpful in explaining key points.

Finally, we shall be on occasion be working with the financial statements and reports of companies. The classes will be mainly using the statements of Sainsbury*****s, Marks & Spencers and Tesco. When I am illustrating a point, I will bring selected items up on screen but you may find it useful on occasion to look at copies of the full items. They are available over the Internet at:

http://www.tesco.com

http://www.sainsburys.co.uk/

http://www.marks-and-spencer.co.uk/

Even if you do not print out a copy, you should take time to look at these statements, and use the knowledge that you have gained in the classes to increase your appreciation of their use.

Additional Readings

A substantial list of relevant readings is available on Blackboard, including direct links to the specific articles. The following reading list offers some suggestions for general additional reading ***** but this list is not exhaustive and you should feel free to discover your own references from professional and academic journals. Other sources of a generally high standard that often publish material relevant to this module include the British Accounting Review and The Accounting, Auditing and Accountability Journal.

I have included the text that I co-wrote with Simon Lilley and Paulo Amaral. It does cover accountability and representation in some detail (and to a more limited extent, control) but is not particularly ***** towards accounting. This text is used in Simon*****s module option on managing technology and so, if you are planning to do that module too, I would recommend buying this text.

Lilley, S., Lightfoot, G. & Amaral M. N. P. (2004) Representing Organisation: Knowledge, Management and the Information Age, Oxford: Oxford University Press. (If you do buy this, make sure you order the paperback edition.)

Accounting Standards Board, (1999) Statement of Principles for Financial Reporting

Anderson, M & Edwards, J. R. (1998) A conceptual framework for Financial Reporting ACCA Student Newsletter January 1998 (Short Loan Ref: x20896)

Argyris, C. (1953) Human Problems with Budgets Harvard Business Review, Jan-Feb

Ashton, D., Hopper, T., Scapens, R.W. (eds) (1995) Issues in Management Accounting Prentice Hall , 2nd ed

Becker, S. and Green, D. (1962) Budgeting and Employee Behaviour Journal of Business October Appendix II pp392-402 (Short Loan Ref: x21181)

Blake, J. (1997) Accounting Standards, Pitman, 6th ed

Colwyn Jones, T. (1995) Accounting and the Enterprise, Routledge

Cosserat, G. (1994) An Introduction to Agency Theory, ACCA Student Newsletter December 1994 (Short Loan Ref: x20863)

Fama, E.F. & Jensen, M.C (1983) Separation of Ownership and Control Journal of Law and Economics Vol 26 Part 2 (Short Loan Ref x20650)

Glautier, M W E and Underdown, B. (1997) Accounting Theory and Practice, Pitman, 6th ed

Griffiths, I, (1995) New Creative Accounting, Macmillan

Hope, J. & Fraser, R. (1999) Beyond Budgeting Management Accounting January 1999

Hopwood, A.G. & Miller, P. (eds.) (1994) Accounting as Social and Institutional Practice Cambridge University Press

Hopwood, A. (1974) Accounting and Human Behaviour Accountancy Age Books

Horngren, C. T. and Foster, G. (1987) Cost Accounting: A Managerial Emphasis (6th ed) Prentice Hall

Inman, M. L. (1992) Towards a Conceptual Basis for Accounting ACCA Student Newsletter June 1992 (Short Loan Ref: x20895)

Kennedy, A. & Dugdale, D. (1999) Getting the most from Budgeting Management Accounting February 1999

McCosker, P. (1998) Making More Sense of Financial Accounts through Ratio Analysis ACCA Student Newsletter June 1998 (Short Loan Ref: x20894)

McMonnies, P. (ed) (1988) Making Corporate Reports Valuable ICAS and Kogan Page

Nobes, C, (1992) Introduction to Financial Accounting, International Business Press, 4th ed

Page, M (1991) Now is the time to be more critical, Accountancy, October 1991

Page, M (1992) Turn again Professor Whittington, Accountancy February 1992

Perks, R. W. (1993) Accounting and Society, Chapman and Hall

Reid, W. and Myddleton D R, (1996) The Meaning of Company Accounts, Gower Press, 6th ed

Ryan, B, (1995) Strategic Accounting for Management, Dryden Press

Simon, J. (1998a) Creative Accounting in the Balance Sheet ACCA Student Newsletter April 1998 (Short Loan Ref: x20893)

Simon, J. (1998b) Why do Companies use Creative Accounting? ACCA Student Newsletter May 1998 (Short Loan Ref: x20897)

Sizer, J, ( 1989) An Insight into Management Accounting, Penguin, 3rd ed

Smith, T. (1992) Accounting for Growth Century Business

Watts, R. L. and Zimmerman, J. L. (1986) Positive Accounting Theory, Prentice Hall

Whittington, G. (1991) Good Stewardship and the ASB*****s Objectives, Accountancy November

*****

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