China Science

In 1920 the Shanghai Bankers Association launched an initiative to standardize Chinese bank accounting classification and terminology, which in 1924 led to the first standard terminology that was gradually adopted by all Chinese banks. This paper examines that neglected experience by employing a framework informed by Pierre Bourdieu’s theory of practice. We delineate the relations among foreign banks, Chinese modern banks, and native banks in the field of Chinese banking; explore the habitus of modern bankers that motivated the standardization initiative; and analyze how the initiative accrued cultural capital and social legitimacy to modern bankers and how social actors’ interaction with the state determined the interaction among them, resulting in the domination of modern banks in the field and the domination of the state over the field.

Yin XuaEmail:yxu@odu.edu?Xiaoqun Xub
[a]Department of Accounting, Old Dominion University, Norfolk, VA 23529, USA;[b]Department of History, Christopher Newport University, Newport News, VA 23606, USA

The focus of this paper is on changing perceptions of accounting in different times and in different cultural contexts, with the special emphasis on the issues of gender. The material used is a combination of fiction and research results, and the scope of analysis extends from the end of the 18th century in Central Europe through the birth of capitalism in Poland to the contemporary global economy, as portrayed in the novels of Douglas Adams.

Barbara CzarniawskaaEmail:barbara.czarniawska@gri.gu.se
[a]GRI, School of Business, Economics and Law, Gteborg University, Box 600, SE 405 30 Goteborg, Sweden

This study replicated Evans, Heiman-Hoffman and Rau’s (hereafter, EHR) [Evans, J. H., III, Heiman-Hoffman, V. B., & Rau, S. (1994). The accountability demand for information. Journal of Management Accounting Research, 6, 24–42] US study, using Chinese MBA students as participants. The Chinese students acted as owners and selected one of two control systems. One control system requires truthful reporting and the other control system permits the manager to falsify the report. The two systems have the same expected payoff to the owner if the owner believes that the manager will always lie when given the opportunity. If the owner believes that there is any probability that the manager will tell the truth, then the more Lenient System has the higher expected payoff. We compared the US versus Chinese control system choices, and examined whether the Chinese owner-participants would be willing to sacrifice wealth to get accountability. The results indicate that a significant proportion of Chinese participants do have an accountability demand for information, and that this proportion is at least as high as that of the US participants in EHR.

Jacob G. Birnberga?Vicky B. HoffmanaEmail:VickyHoffman@katz.pitt.edu?Susana Yuenb
[a]Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA 15260, United States;[b]School of Accounting and Finance, The Hong Kong Polytechnic University, Hung Hum, Kowloon, Hong Kong

We study the impact of activity-based costing (ABC) on adoption of world-class manufacturing (WCM) practices and plant performance. In contrast to earlier research that estimates the direct impact of ABC on plant performance, we develop an alternative research model to study the role of world-class manufacturing practices as a mediator of the impact of ABC. Analysis of data from a large cross-sectional sample of US manufacturing plants indicates that ABC has no significant direct impact on plant performance, as measured by improvements in unit manufacturing costs, cycle time, and product quality. We find, however, that WCM practices completely mediate the positive impact of ABC on plant performance, and thus advanced manufacturing capabilities represent a critical missing link in understanding the overall impact of ABC. Our results provide a different conceptual lens to evaluate the relationship between ABC adoption and plant performance, and suggest that ABC adoption by itself does not improve plant performance.

Rajiv D. BankeraEmail:banker@temple.edu?Indranil R. BardhanbEmail:bardhan@utdallas.edu?Tai-Yuan ChencEmail:acty@ust.hk
[a]Fox School of Business, Temple University, 1810 N. 13th Street, Philadelphia, PA 19122, USA;[b]The University of Texas at Dallas, School of Management, SM 41, 2601 N. Floyd Road, Richardson, TX 75083-0688, USA;[c]School of Business and Management, Hong Kong University of Science and Technology, Clearwater Bay, Kowloon, Hong Kong, China

Methodological debates in accounting frequently emphasise the distinction between objective and subjective research. A growing body of interpretive management accounting studies, often based on fieldwork, is continuing to develop approaches that seek to overcome that distinction by exploring the various ways in which accounting can become part of the contexts in which it operates.

Thomas AhrensaEmail:Thomas.Ahrens@wbs.ac.uk
[a]Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom

This paper analyses interpretive research in management accounting from the perspective of naturalistic philosophy of science. We focus on the relation of interpretive research to the subjective/objective dichotomy appearing in the methodological literature of the social sciences. In management accounting research, it is often routinely assumed that interpretive studies, following the reasoning by Burrell and Morgan [Burrell, G., & Morgan. G. (1979). Sociological paradigms and organisational analysis. London: Heinemann], are based on subjectivism only. The major purpose of this paper is to give flesh to the existing debates around the nature of interpretive research with the help of in depth analysis of one example of such research in management accounting. Since abstract and general philosophical arguments are often used merely to cloud more relevant case specific issues concerning the focus of explanation and the nature of empirical evidence offered, our analysis aims at providing conceptual tools for articulating with greater precision what is being asserted in a given study. The specific target of the examination is the interpretive study by Dent [Dent, J. F. (1991). Accounting and organisational cultures: A field study of the emergence of a new organisational reality. Accounting, Organisations and Society, 16, 693–703], which is one of the highly appreciated and extensively quoted pieces of research picked from the interpretive management accounting literature. Our analysis indicates that though there certainly are, and needs to be, unique subjectivist features in interpretive studies as compared to more ‘objectivist’ approaches, there are also important similarities, and that the view of sociological paradigms as necessarily mutually exclusive does not hold water. Hence interpretive research straddles between paradigms. As we argue that interpretive studies, in addition to including subjectivist elements, also encompass objectivist features, we invert the typical social theory critique of ‘scientific’ (management) accounting research that it cannot be an objective ‘mirror of reality’ by claiming that interpretive studies cannot be exclusively subjectivist and still they remain theoretically relevant. Our philosophically tuned analysis explicates how concepts from different paradigms, such as interpretations, understanding meanings, and causality, can successfully co-exist and co-operate within a single study.

Marja-Liisa Kakkuri-Knuuttilaa?Kari LukkabEmail:kari.lukka@tse.fi?Jaakko Kuorikoskic
[a]Helsinki School of Economics, Runeberginkatu 22-24, FI-00100 Helsinki, Finland;[b]Turku School of Economics, Rehtorinpellonkatu 3, FI-20500 Turku, Finland;[c]University of Helsinki, Department of Social and Moral Philosophy, P.O. Box 33, FI-00014 Helsingin yliopisto, Finland

In this exploratory field study, I test the relative and incremental information content of two non-financial performance measures compared to financial performance measures for future financial performance. The proprietary database used is from the contracts of the managers of 27 responsibility centers of a large Dutch service firm. Three years of monthly observations are used for the analysis.The accounting literature is ambiguous about whether non-financial measures have relative or incremental information content, or both, beyond lagged financial measures for future financial performance. Although it is often stated that non-financial performance measures are better indicators for future financial performance than lagged financial performance, the empirical accounting research evaluates the incremental contribution of non-financial measures beyond lagged financial measures.I find that in my research context the two non-financial measures absence frequency and on-time delivery do not have more relative information content than lagged financial measures. However, the non-financial measures have incremental information content beyond the lagged financial measures for both future costs and future revenues. In addition, the individual non-financial measures have different lags for costs and revenues.

Eelke WiersmaaEmail:EWiersma@feweb.vu.nl
[a]Vrije Universiteit Amsterdam, Department of Accounting, De Boelelaan 1105, Room 2A-72, NL-1081 HV, Amsterdam, Netherlands

Because public accounting is a regulated practice, the profession actively manages its relationship with the state. While prior studies have analyzed the profession’s efforts to shape its regulatory environment, few studies have examined the profession’s pointed attempts to influence a specific regulatory policy that affects the practice of auditing in the United States. Drawing on extant theories of regulation and political economy, this study investigates the rationality and effectiveness of political action committee (PAC) contributions paid to members of the US Congress by the US public accounting profession during the policy formulation period of the Sarbanes–Oxley Act of 2002. Based on the results of empirical tests, we conclude that the US profession strategically manages its relationship with the federal government, in part, through direct involvement in the financing of political campaigns. Furthermore, the profession’s pattern of contributions implies an ideologically conservative as well as a professional regulatory motivation for providing financial support to federal legislators. Thus, although the US profession continues to proclaim the primacy of its public interest orientation, it does not appear to be politically neutral when attempting to influence public policy.

Steven ThornburgaEmail:sthornburg@wsu.edu?Robin W. RobertsbEmail:rroberts@bus.ucf.edu
[a]Department of Accounting, College of Business, Washington State University, Pullman, WA, USA;[b]Kenneth G. Dixon School of Accounting, University of Central Florida, Orlando, FL 32816, USA