Year

2008

Degree Name

Doctor of Philosophy

Department

School of Accounting and Finance - Faculty of Commerce

Abstract

After over 150 years of British rule, Hong Kong transferred its sovereignty to the Republic of China in 1997 under the catchcry of “one country, two systems”. The most dominant bank in Hong Kong (1864-present) is the Hongkong and Shanghai Banking Corporation (HSBC). This thesis explains the ensuing impact of the political and cultural change on the disclosures and accountability of HSBC. HSBC’s accounting practices are not independent and self-contained. They are shaped by HSBC’s unique history and culture, and are dependent on societal expectations. Hong Kong became a British colony in 1842. The handover in 1997 brought to the fore differences in expectations and cross-cultural differences between the West and the East. Annual reports were increasingly used by the bank as a tool to legitimate HSBC with respect to societal expectations and maintain its reputation as a reliable “local” bank in Hong Kong. This study demonstrates how a bank uses financial reports politically to ensure survival and sustainability beyond the rhetoric of accountability. The contributions of the thesis are twofold. First, it theoretically develops links between Laughlin’s (1995) Middle Range Thinking (MRT) and Institutional theory (DiMaggio and Powell, 1983). Skeletal theory guides and facilitates the discourse necessary for analyses of political, economic, and social influences on accounting and banking. Secondly, this thesis applies methodology and methods novel to research in banking to enable a contextual understanding of the Asia Pacific regulatory environments. Both qualitative and quantitative methods of investigation are employed. Because of the complexity of the situation of HSBC, an intersubjective approach to theorising is necessary to interrogate historical and cultural impacts. This thesis critiques the “one country, two systems” policy as it applies to the banking sector in Hong Kong. The case study of HSBC demonstrates that some significant events triggered the additional public disclosure in annual reports and public accountability in order for HSBC to legitimate itself to the new Hong Kong order and mainland China expectations. This new approach is valuable in this banking study because it gives a different perspective on acquiring banking knowledge. Blending Middle Range Thinking and Institutional theory is shown to compensate for the deficiencies in both theories.

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Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.