Inside Accounting: The Sociology of Financial Reporting and Auditing

Based on a study covering a one-year financial reporting cycle at a commercial subsidiary of a renowned scientific research organization, "Inside Accounting" examines how accountants and non-accounting managers construct their company's earnings. Addressing issues in both internal management accounting, such as budgeting, performance evaluation, and control, as well as external financial accounting, such as book keeping, monthly/ year end accounts and auditing, David Leung focuses on how people classify transactions, make professional judgments and use computer software for accounting, and prepare for and facilitate the auditing process. In tackling these questions, this revelatory book also addresses accountancy training, the impact of people's affiliations to the accounting profession or other professions on their accounting and on their perceptions of financial statements. Other contingent or contextual factors that influence the choice of accounting method, like time pressure, reward structures, management authority and institutions are also considered here.The author is himself an experienced accountant and highly qualified scientific and social researcher. He has used the concept of 'ethnoaccountancy' whereby his research employs an innovative blend of theory and practice that redresses the imbalance in relation to ethnographic studies of financial accounting, as compared to management accounting. The result helps close the gap between the academic curriculum and the experiences of practitioners. It also answers accusations that writers of academic books give insufficient attention to societal issues and that orthodox accounting research is of little relevance to and largely ignored by accounting practitioners.From the research described in this book, David Leung concludes that no act of accounting classification is ever indefeasibly correct; that the accounting community's institutions and authority are central to the accounting process and to the 'truth and fairness' of accounting numbers; that accounting training involves extensive use of learning by doing; and that both accountants and non-accounting managers have goals and interests that often result in no better than 'good enough' accounting. This book will appeal to both accounting and finance professionals and academics in finance, as well as to sociologists and academic researchers interested in research methods and science studies.