Doctor of Philosophy
Department of Accountancy
Cooper, Kathie, Domination, autopoiesis and regulatory failure: the accountancy connection, Doctor of Philosophy thesis, Department of Accountancy, University of Wollongong, 1994. https://ro.uow.edu.au/theses/1003
Early professional accountancy associations justified their applications for incorporation by Royal Charter or under relevant legislation on the premise that the public interest would be served if work of an accounting nature was restricted to those with the requisite knowledge and skill. A claim to specialised knowledge and skill was used by the profession to achieve hegemonic domination of not only accounting practice but also the determination of appropriate accounting practices or accounting standards. The success of the Australian accountancy profession in achieving its objective is evident in its domination of the promulgation of approved accounting standards that have the force of law.
However, an examination of unexpected corporate failures or the reporting of losses on activities previously disclosed as profitable, suggest the profession's domination of accounting has not necessarily served the public interest Accounting standards and practices have been shown to be deficient in that the flexibility in their application has been used by corporate management in some instances, to create an impression through the financial statements that companies were well-managed and profitable. The reality, often revealed by investigators in the wake of corporate collapse, is that some of these companies have consistently reported profits when, in fact, they have been unprofitable for a number of years prior to collapse.
This study offers an explanation of the profession's propensity to promote indetermination in accounting practice through the promulgation of flexible and vague accounting standards. In particular, this study maintains that flexible accounting standards and practices are a result of the profession's need to ensure its autonomy not only in the practice of accountancy but also domination of the determination of appropriate accounting practice. This requires maintaining alliances and structural coupling between the profession and business interests.
The theoretical framework adopted for purposes of analysing the manner in which the profession originally attained and has since maintained hegemonic domination of accountancy is based on a translation model of power incorporating the concept of autopoiesis. The study provides an overview of the professionalisation of accountancy, in particular, the development of its knowledge base that was then used to justify its claim to domination in the public interest. Some notable unexpected Australian corporate failures are used to demonstrate that the public interest m a y not have been served because flexibility in accounting practice have been utilised to mislead users of financial statements. The development of the standard dealing with accounting for foreign currency transactions and translations is used to demonstrate that standard setting is as much political as technical. The study maintains that the indetermination that characterises accounting standards and practices are a defence mechanism aimed at ensuring the survival of accounting as an autopoietic system.