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A recurring feature of the Australian corporate scene has been a cycle of booms and collapses. This, in turn, has been accompanied by a recurring cycle of regulatory failure, regulatory reform. In the wake of regulatory failure, it has not been uncommon for criticism to be directed towards accounting and the accountancy profession for the unexpectedness of some corporate failures. This criticism, in general, arises because the audited financial statements of the companies concerned have indicated the companies were profitable and well-managed. Subsequent investigation invariably has shown that the companies were, in fact, incurring losses and often faced severe liquidity problems. Reforms are invariably instituted to prevent a recurrence of such unexpected financial disasters. However, when the next inevitable economic collapse occurs, it is usually found that the reforms put in place after the last collapse were inadequate. This paper offers a reason why this inevitable regulatory failure, regulatory reform cycle persists. In particular, the paper argues that accountancy is an autopoietic system and as such, any changes, reforms, within the system are directed towards adapting and maintaining the autopoietic state. Such change may appear to be radical but, in fact, it is limited because the preservation of autopoiesis requires a continuous cycle of conversation, communication, conversation and compatibility within the structures of the system and between the system and it environment.

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