“Awareness of the Influences of
Accounting on Society among
Accounting Students and Professionals”
By Anne Neline van VlietS1883151
University of Groningen Faculty of Economics and Business
MSc Accountancy & Controlling
July 12, 2016
Supervisor: Prof. dr. ir. P.M.G. van Veen-Dirks RC
Co-assessor: Dr. M.P. van der Steen Word count: 12.901
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Abstract
This paper shows a first attempt to measure the awareness amongst accounting students and professionals of the influences of accounting on society. A review of the literature showed that accounting has the following limitations: it is perspective based, and constructs reality. Because of the latter accounting influences society. These influences of accounting are classified based on what they influence, namely people; institutions; environment, including society, the economy and the natural world; and decision-making. Based on interview data of twelve semi-structured interviews, held with accounting students and professionals, a four-point scale to measure awareness was constructed. The interview data was analysed on topics concerning the limitations and influences of accounting. The results show that accounting students and professionals are aware of the purposes of accounting, but awareness of the unintended influences of accounting on society and of the limitations of accounting is slight. Based on the results the researcher argues that the accounting education curriculum should be enhanced.
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Contents
1 Introduction ... 3 2 Theory ... 6 2.1 Awareness ... 6 2.2 Accounting Influences ... 7 2.3 Summary ... 16 3 Methodology ... 17 4 Results ... 20 4.1 Awareness of Limitations ... 204.2 Awareness of the Influence of Accounting on Society ... 23
4.3 Participant Differences ... 26
4.4 Other Topics Discussed during the Interviews ... 30
5 Discussion ... 34
6 Conclusion ... 36
Appendix A – Informed Consent ... 38
Appendix B – Interview Structure ... 40
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1 Introduction
Since the start of the analysis of the various roles of accounting in society during the 1980s, the performative characteristics of accounting, and the way it constructs reality have been of interest to many scholars (Walker, 2016). In order to understand the influences of accounting on society, I will revisit those scholars, and describe how accounting can construct reality.
Accounting is used to represent reality, to give a true and fair view of an entity. Critical scholars have argued that accounting is through representing reality, also constructing reality (Francis, 1990; Morgan, 1988). Morgan (1988) show that there are two limitations central to accounting. When accountants are making a representation of reality, they always do this from a particular perspective, based on the values and assumptions underpinning the accounting practices used. This leads to the second limitation, namely that accounting is not only representing reality, but also constructing reality.
Morgan explains that accounting represents the world in a unidimensional way, highlighting
quantifiable aspects of reality, while ignoring those that are not. The representation depends on what can be measured, and what is chosen to be measured. Because most representations use a numerical view, the representations are perceived as objective images of reality (Morgan, 1988). Since decision-making is based on these representations, the decisions are shaped by “values and perspectives underpinning the accounting principles used” (Morgan, 1988, p.484).
How accounting influences reality is shown in an essay by Hines (1988), she describes the following: accountants measure data and communicate information. Once communicated, the information will be used by people as a basis upon which they act. The basis for action, the information, depends on what is measured, and how it is measured. The image constructed based on those decisions is often seen as the full image of reality, a true and fair view of reality. However, accounting practices and their underlying assumptions have an influence on the image, so our view of reality depends on accounting information. Accounting information is based and structured upon the ideas we have of reality, and by acting upon the accounting information, the ideas become real. By communicating reality, we
construct reality (Hines, 1988).
A similar point of view is taken by Francis (1990), who argues that accounting, through
communicating information about a subject, can change things in the world. This view is supported by Revellino & Mouritsen (2015), they argue that accounting information is not only a record of reality, but it induces action, which will influence the world.
Other scholars have explained the constructing characteristics of accounting through actor-network theory (ANT). Central to this branch of research is the idea that everything consists of heterogeneous networks, which consist of human and non-human parts. According to ANT, actors and networks are
4 the same things, because all actors consist of networks, and networks always form actors (Law, 1992). According to performativity non-human actors, networks consisting of non-human parts, can have agency, like human actors (Boedker, 2010). These non-human actors cannot intend to act rationally, whereas human actors can intend to act rationally (Minnaar, Vosselman, van Veen-Dirks, & Zahir-ul-Hassan, Working Paper). Since accounting is a non-human actor, a network, it can perform agency, and thus can construct reality (Law, 1992), and make humans act. Accounting thus plays a role “in knowledge mediation and fact fabrication (Boedker, 2010, p. 601).”
It is important that the accounting profession recognizes these characteristics, because the information provided by the profession influences reality and society (Morgan, 1988). According to Morgan (1988, p. 477) accountants often don’t recognize that accounting constructs reality, but “see
themselves as engaged in an objective, value-free, technical enterprise, representing reality “as is”.” Awareness of the influences of accounting on society is important, because they could harm people and the planet.
That accounting professionals might be lacking awareness of the influences of accounting on society is not surprising, since the focus of accounting education is nowadays, as it was from the start, on technical skills. For over a century both practitioners and academicians have called for reform in accounting education, because technical knowledge is seen to be inadequate as the basis of accounting education, and this is not reflected in the accounting curriculum (Merino, 2006). The three major concerns with accounting education focusing on technical skills are the “emphasis on rote and/or shallow learning,” the insufficient encouragement of “intellectual and/or ethical development” along with the “lack of critical intellectual independence,” and the “inappropriate preparation for
employment” (Gray & Collison, 2002, p. 813-814). Gray & Collison (2002) argue that the focus on technical skills in accounting education leads to the formation of uncritical minds. Boyce, Greer, Blair & Davids (2012) show that education does not focus attention on examining accounting as a social, ethical, cultural and political phenomenon. These concerns would suggest that accounting students and professionals might be unaware of the constructing characteristics of accounting, and the influences of accounting on society.
Based on research on ethical reasoning, it seems of interest to include both students and professionals in this research project. Ponemon (1990; 1992) found an association “between the auditors [sic] hierarchical position in their firm and their capacity for ethical reasoning. The capacity increases in the staff and supervisory levels and then decreases in the manager and partner ranks” (1990, p.191). In later research he finds corroborating evidence, and also finds that ethical reasoning amongst manager and partners ranks is more homogeneous (Ponemon, 1992).
If socialization within accounting firms shapes the moral reasoning of auditors, other forms of cognitive development might be influenced as well, such as the awareness of the influences of
5 accounting on society. This paper includes both students and professionals, to establish whether the business environment influences the awareness over time. Since auditors and controllers work in different types of environments, both professional groups have been interviewed.
As explained in this section accounting constructs reality, and thus influences society. Also, it could be the case that through an educational focus on technical skills, students and professionals are unaware of these influences. Although relevant, the awareness of the influence of accounting on society has not been studied yet. The rest of this thesis will thus focus on the following research question:
To what extent are accounting students and professionals aware of the influences of accounting on society?
In the next section theory on awareness and the influences of accounting on society will be discussed. In the third section the methodology is present, followed by the results in the fourth section. The results are discussed in the section thereafter. The conclusion, including limitations and further research opportunities are presented in the sixth section.
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2 Theory
In order to investigate the level of awareness of the influences of accounting on society amongst accounting students and professionals, a theoretical study of awareness and the influences of accounting is necessary. In the first section awareness is explained, the second section devotes attention to the influences of accounting, and the last section summarises the chapter.
2.1 Awareness
Accounting scholars have measured the ethical awareness of accounting students and professionals (Cohen, Pant, & Sharp, 1998; Cohen, Pant, & Sharp, 1996; Ponemon, 1990; Ponemon, 1992). Ethical awareness is tested through a test of the level of ethical development shown by the subject. According to those researchers, the type of moral reasoning is depended on the level of moral development. The more developed a subject is, the more aware the subject is of ethical implications of certain situations. Ethical awareness is tested in these cases through a series of vignettes, short stories on cases with ethical components, and a list of scales concerning these vignettes (Cohen et al., 1996, Appendix). The level of awareness depends on the type of moral reasoning enacted by the subject. Being ethically aware, thus means to be aware of the ethical components in decision-making.
Unlike the theories of moral development, no theory on the development of awareness of the influences of accounting has been created. In order to form a measurement tool, we turn to the definition of awareness. To be aware means to know of something, to feel, experience or notice something, and to know and understand what is happening in the world around you. Someone is aware when he or she has or shows realization, perception or knowledge of something.1
Other research fields have given attention to awareness, while limited literature is available on this in the field of accounting research, thus we now look into some of that literature. In the
psycholinguistics literature two methods for awareness testing are used, comprehension/judgment tasks and production tasks (Carlisle & Nomanbhoy, 1993). An example of comprehension/judgment task can be found on Youtube. In this video, of two teams passing a ball2, spectators are asked to
count how many times the white team has passed the ball. Afterwards the spectators are asked whether they saw the moonwalking bear passing the screen. The experiment tests whether they saw something they were not looking for.
In the journal Consciousness and Cognition, attention is focused onto the issue of, amongst others, consciousness.3 Consciousness is “the quality or state of being aware.”4 In this area of literature,
researchers distinguish between subjective and objective measures to test conscious awareness. The
1 http://www.merriam-webster.com/dictionary/awareness 2 https://youtu.be/Ahg6qcgoay4
3 http://www.journals.elsevier.com/consciousness-and-cognition 4 http://www.merriam-webster.com/dictionary/consciousness
7 subjective scales can either be confidence ratings, where the subjects express their certainty about their judgment, or perceptual awareness scales, where subjects express the level of awareness of the stimuli. The objective measures can either focus on identification or recognition of the stimuli (Wierzchoń, Paulewicz, Asanowicz, Timmermans, & Cleeremans, 2014).
2.2 Accounting Influences
Since no framework of the influences of accounting on society is available, the researcher has reviewed the scientific literature on the influences of accounting on society. The initial search for literature was done using Google Scholar and SmartCat, based on keyword search and snowballing. The majority of the articles found during the initial search were found in Accounting, Organizations and Society (hereafter AOS). Other journals that provided a significant part of the articles found were Critical Perspectives on Accounting and Accounting, Auditing & Accountability Journal. That so many articles were found in AOS makes sense, because, as Walker (2016) mentions, “[t]he journal has consistently declared its commitment to exploring the social dimensions of the discipline and to encouraging new thinking, research and action on accounting and society.”
A systematic search was conducted on all volumes of AOS, from the start of publishing in 1976 till the volume published in April 2016. Based on paper abstracts an assessment was made by the
researcher whether articles were relevant for this review. Assessment of the abstracts of other journals was not in the scope of this research.
The influences found in the literature had a number of relevant characteristics. The influences of accounting on society can be intentional, such as when accounting is used according to the definition of the AICPA, “accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature about economic entities that is intended to be useful in making economic decisions, in making resolved choices among alternative course of action (Riahi-Belkaoui, 2004).” The intentional influences of accounting are referred to as the traditional view of accounting. The influences could be unintentional as well, when decision making is influenced by accounting, for example because accounting provides a limited image of reality.
The influences of accounting could be positive or negative. The use of accounting and auditing can provide assurance and legitimacy, which enables people to invest, and thus enables economic growth. Accounting can have a negative impact on people, because accounting stimulates the treatment of human beings as subjects.
The influences also differ on which part of society they influence. It is chosen here to construct a framework based on the parts of society a certain influence affects. This classification is chosen because it enabled a comprehensive framework of all influences found in the literature. The
8 influence institutions; influence our environment, consisting of society, the economy and the natural world; or influence decision making.
Figure 1: Framework of the Influences of Accounting on Society
In the following subsections the influences that were found in the literature will be explained in more detail. The order is based on the framework.
2.2.1 Influences on People
Although all influences ultimately influence people, the topics grouped here are directly influencing people, and the treatment of people.
World View
Accounting is guided by accounting logic, which shapes the way the world is evaluated, mainly in a quantitative matter, and thus how people evaluate organisations and see the world (Broadbent, 1998). Through this accounting logic, accounting can “potentially, at least, partially shape organizational and social values, concerns and modes of operation, and their consequences” (Hopwood, 1987, p. 67). Belkaoui (1978) argues that accounting is a language, and that this language shapes the perception and behaviour of the users of accounting. According to Dent (1991) accounting shapes our meanings. It can influence symbols, rituals and language, and it determines what we give significance to. Tian & Zhou (2015) find that accounting information shapes the perception of the consumer, and can
influence purchase decisions. According to Ezzamel, Willmot & Worthington (2008) the use of accounting has given priority to the shareholder value creation. The use of accounting has stimulated the shareholder view of an organisation as the dominant view of organisations. Morgan (1988) also argues that because accountants usually work from the perspective of the shareholders, this influences
Influences of
Accounting on
Society
Influences on
People
Influences on
Institutions
Influences on the
Environment
Society
Economy
Natural
World
Influences on
Decision-Making
9 the view we have of companies, and how we perceive the purpose of companies. Sikka (2015) says that “[t]he worldviews embedded within accounting practices prioritise the interests of capital and have little regard for the interests of labour or the state (p. 47).” This view portrays wage and tax payments as costs. This leads to a world view that supports the erosion of the share of income available for labour and the state.
Women
According to Tinker and Neimark (1987) accounting supported the subordination of women under capitalism, because “annual reports may contribute to a general “world view” that aids social appropriation and domination (p. 71).” The annual reports of General Motors represented the view that female labour could be used in times of crises, but in time of labour surplus the women were expected to retreat from the labour market. In order to keep women occupied in the household, accounting was introduced in the domestic sphere (Walker, 2003). Accounting was said to professionalise and liberate women in the household, however it actually reinforced the gender divisions, and “diverted attention from career building outside the home (Walker, 2003, p. 743).” A theoretical framework for the relationship between accounting and the gendered workplace was introduced by Carmona & Ezzamel (2016). Based on the framework they call for future research on how accounting produced gender division in the workplace, and how accounting techniques reaffirm existing gender divisions.
Objectification
Since accounting information is an imperfect image of reality, people, when portrayed by accounting information, are stripped of their human characteristics and made into objects. According to Hopwood (1987) the “processes of objectification” are “implicit in the accounting art (p. 67).”
On North American slave plantations, the owners kept accounting records. These accounting records included the capitalization of human capital. The slaves were valued, as were their outputs and the transaction of slaves was recorded. The use of accounting information converted the individual humans into objective categories. The accounting for slaves took place like any other long term asset, without reflection on the human characteristics of these ‘assets’. As Fleischman & Tyson (2004) describe it: “In essence, accounting was used to convert qualitative human attributes into a limited number of discrete categories (age, sex, color) that could be differentiated and monetized in order to facilitate commercial slave trading (p. 393).” The use of these accounting practices thus converted human qualities into dehumanized numbers. Through this dehumanization accounting practices reinforced the social relationships practiced on the plantations. Accounting had a “role in the commoditization, objectification, and dehumanization of an entire class of people (Fleischman & Tyson, 2004, p. 376).”
10 Accounting was used during the holocaust to disguise what happened in the concentration camps (Funnell, 1998). In the records kept by the Nazis the Jews “became just another cargo to be
marshalled, loaded, costed and moved (p. 448).” The Nazis tried to keep the elimination of the Jews a secret, and used accounting as a disguise, as Funnell describes: “Accounting was part of this network of euphemisms and disguises to mask from the inmates, the German public and the world the
eradication of an entire group of people (p. 450).” To do so, the people were stripped of their human properties, and depicted in numbers, which lacked a representation of the underlying, original circumstances of the people being depicted. This made it difficult to see past the numbers, and ask questions about the origin of the numbers (Funnell, 1998). Besides as a tool to disguise, accounting was also used to make cost-benefit analyses concerning the captives. The Nazis estimated that the most profitable useful life of a labourer was nine months. The Nazis also used cost-benefit analysis to compare two methods of killing children. Based on their calculations they decided not to gas the children before burning their bodies, in order to safe 10 cents per child (Lippman & Wilson, 2007). A less extreme example of objectification is given by Hopwood (1994), he reminds us that we have started to speak of human resources, and what we can do with it, instead of thinking of these resources as human beings. A similar example is given by Graham (2010), he describes how accounting divides citizens into categories, and makes them subject to particular retirement programs. The individual is objectified as a worker, saver, and pensioner. Walker (2008) shows that accounting has the power to (re)construct identities. This process can lead to the stigmatisation of a particular population group.
2.2.2 Influences on Institutions
An institution is ‘a significant practice, relationship, or organization in a society or culture.’5 In this
section the influences of accounting on institutions will be discussed. Information and Control Systems
Information and control systems are used for score-keeping, attention directing, goal setting, evaluation, problem solving, and contingent reward allocations (Cammann, 1976; Simon, 1954). Besides these functional effects, information and control systems also have dysfunctional effects, such as resistance and defensiveness. The effects of control systems in guiding behaviour depends on the context of the control system (Cammann, 1976). Dyckman (1981) shows that an accounting system can lead to a potential reduction in initiative. Gordon, Rhode & Merchant (1977) find that the
disclosure of human resource accounting information has a negative effect on performance and group relations. The use of accounting information also influences the behaviour of management (Cohen & Pant, 1989). According to Bariff & Galbraith (1978) the design of the information system affects the distribution and redistribution of intra-organisational power. Recently Bol, Kramer & Maas (2016) show that managers differentiate more between employees in subjective performance evaluation,
11 when the information provided by the accounting system is more accurate, but only if there is
transparency about the evaluation outcomes. The design of the control system can thus influence the subjective performance evaluation by managers. Recent research also found evidence for a higher employee performance when a combination of compensation-based controls and feedback controls are implemented (Christ, Emett, Tayler, & Wood, 2016).
Power Distribution & Order
The design of information systems affects the distribution of intra-organisational power, as mentioned above (Bariff & Galbraith, 1978). Likewise Boedker & Chua (2013) argued that accounting
technologies are designed and used to affect people, in order to generate action. Accounting is an affective technology, and can be used to distribute power (see also Hopwood & Miller (1994)). Accounting also has the ability to exercise political power, Covaleski & Dirsmith (1986) show that in health care organisations, people from higher ranks prevented people from lower ranks to gain power, through the provision of inadequate information. In the 12th century the distribution of economic,
military and political power was based on the accounting infrastructure (Jones, 2010). Governments and other institutions use accounting information as disciplinary power to control financial
organisations and financial regulation (Young, 1995). This is corroborated by Neu, Ocampo Gomez, Graham & Heinke (2006), who find that the World Bank uses accounting information and accounting practices to exercise power over the parties that lend money from them. The introduction of standard costing and budgeting in the early years of the last century lead to the ability to manage people more efficiently. These accounting techniques enabled managers to make a human being into a governable person (Miller & O'leary, 1987).
Accounting practices are also said to create and stimulate order. The rhetoric of accounting is infused with the conception of order, and through standardisation inherent to the accounting process,
accounting practices create and stimulate order (Hopwood, 1987). Accounting practices also have the capacity to order through time and space. Accounting is used to enhance surveillance and to increase discipline. Accounting practices for example influence the layout of production facilities (Carmona, Ezzamel, & Gutiérrez, 2002). The construction of order gives accounting performative power (Ezzamel, 2012).
Since most of the accounting research follows a functional perspective, scholars are reinforcing the status quo. Current social, economic and political order is not questioned by these scholars.
Acceptation of this functionalist ideology reinforces the power of the powerful (Baker & Bettner, 1997; Hopper & Powell, 1985).
12 Enterprise Form
Accounting regimes can influence enterprise forms. For example, accounting was used during the conglomerate movement, to legitimate mergers. Accounting thus facilitated the institutionalization of conglomerations (Nelson Espeland & Hirsch, 1990; Zald, 1986).
Regulation
When new markets emerge, accounting has to adjust to those markets, new ways of understanding costs might be necessary (Preston & Vesey, 2008). The use of new accounting techniques can impact on regulation concerning the innovative markets. Preston and Vesey show how accounting is not only reflecting regulation, but also has influence on the shape of regulation.
2.2.3 Influence on the Environment
Accounting influences our environment, it affects society, the economy and the natural world. Those influences are explained here in more detail.
Assurance & Legitimacy
Traditionally audits are seen to produce assurance. Financial statements are regarded more reliable after an audit, and this increases the efficiency of the financial markets (Power, 2003). Audits mitigate agency problems, through the production of reliable information, and thus the efficient flow of human and financial capital is facilitated (Bushman & Smith, 2001). The audit of accounting information also provides legitimacy for organisations, social accounting can help to create corporate legitimacy (Killian & O'Regan, 2016).
Standardisation
Accounting systems cannot represent the full complexity of our world. In order to use accounting systems, it is necessary to define what information is necessary and to standardise information (Ijiri & Kelly, 1980). The need for standardised information, led to the construction of the standard body (Jeacle, 2003). The use of accounting systems also impacted the standardisation of health care. To use accounting systems in a hospital setting, costs need to be comparable. Thus, classification systems were created, to be able to categorize costs. This eventually influenced the organisational practice in these settings, and thus the use of accounting information led to the standardisation of the hospital (Llewellyn & Northcott, 2005).
Making Things Auditable
Since accounting cannot resemble the complex world in its entirety, for a domain to be made auditable, an environment of measurable facts has to be created (Power, 1996). This process of making things auditable changes the activity that is being audited. Organisations can during this process internalise the values of the audit process (Pentland, 2000).
13 Culture
Like the influence on costs and the quality of provided care in healthcare organisations, accounting also has its influence on the corporate culture in organisations, for example healthcare organisations. Broadbent (1998) argues that accounting has its inadequacies, because teachers and clinicians find the accounting applied in their organisations is intrusive. Morgan (1988) argues that accounting shapes reality through the “introduction of rigorous financial controls” (p. 482). These controls affect the culture of an organisation. Accounting affects corporate culture, things that can’t be or are not measured by accounting lose their significance, and things that can be measured are given more importance. This influences for example how much time clinicians can spent on patients, and how much information they have to record (Broadbent, 1998).
Fraud & Corruption
Although auditors are not responsible for detecting fraud, they do audit the accounting information for any material misstatements. Through the use of auditing and accounting systems, the possibilities for fraud are limited, and thus accounting has influenced fraud (Dooley, 2002; Humphrey, Turley, & Moizer, 1993). Accounting is also used to fight against corruption (Everett, Neu, & Rahaman, 2007). On the other hand, accounting can also enable corruption (Neu, Everett, Rahaman, & Martinez, 2013). Mitchell, Sikka & Willmot (1998) show how accounting provides the ability to disguise the origin of money.
Environment
Traditional accounting practices are based on the perfect market assumption, that all effects of any activity are reflected in the price system. However, only first order effects are taken into account in traditional accounting practices. Gambling (1976) states that accounting techniques have a too narrow view, the accounting analysis is only focused on economic interests, and neglects social and
behavioural issues. Ullmann (1976) corroborates that traditional accounting practices are designed to focus purely on profit-maximization, and thus do not leave room for the evaluation of other effects, such as environmental degradation. Environmentalists have criticized the traditional economic way of thinking, whilst the interest of life and the planet are not incorporated in the decision making progress (Gray, 1992). As Gray describes, economists are trying to maximise so many things that should be minimized in the interest of life and the planet. For more recent research into this issue see Hopwood (2009). Cooper and Sherer (1984) argue that through the focus on shareholder interest, research on designing accounting systems that can improve social welfare is neglected. Accounting practices “favour specific interests in society and disadvantage others (p. 208).”
Capitalism
Accounting, through double entry bookkeeping, made it possible to calculate profit. Sombart (1967) and Winjum (1971) argued that double entry bookkeeping was the initiator of modern capitalism, by
14 making it possible to rationally strive for profit, and people changed their attitude towards economic life. Funnell & Robertson (2011) and Robertson & Funnel (2012) disagree because capitalism was already rising in sixteenth century Holland, before Italian double entry bookkeeping was commonly used in business. So whether accounting initiated capitalism is debatable, see also Hopper & Powell, Weber (2002), and Bryer (2000). Pacioli, the writer of the first known book on accounting, did reveal his concerns with the profit motive, Fischer (2000) shows that Pacioli knew that double entry
bookkeeping could lead to an unrestrained profit motive. Pacioli stated that everyone for himself should consider whether the profits are lawful and reasonable. A contrasting opinion is expressed by Primeaux & Stieber (1994), they argue that striving for profit maximization is ethically the right thing to do for business.
Economic Consequences
Different accounting practices and standards can have different economic consequences. An
accounting technique can have distributional and organisational consequences (Arnold, 1991). When the Financial Accounting Standards board issued the Statement of Financial Accounting Standard 106, this led to a reduction in health care benefits for employees. The construction of retiree health benefit was addressed as an accounting liability, the use of this type of discourse led eventually to the reduction in health benefits (Arnold & Oakes, 1998). Hogler, Hunt III & Wilson (1996) show that workers and labour groups were denied a voice from the discussion concerning the standard, which eventually led to the reduction in employee benefits.
Distribution of Income
Accounting calculations and discourses determine the distribution of income. Accounting practices “prioritise the interests of capital over labour and the state and have systematically eroded labour’s share of the gross domestic product (Sikka, 2015, p. 46).” This led to more income inequality, and also lowered economic activity during the crisis. This in conjunction with lower tax payments, made it harder for the state to reflate the economy, and for the world to recover from the economic crisis (Sikka, 2015). See also Marx (1970), Tribe (1978), Tinker (1980) and Hatherly (2013).
Crisis
Besides the distribution of income, accounting also influenced the crisis through fair value accounting and the adoption of economic rationalities. Laux & Leuz (2009) argue that fair value accounting is not responsible for the crisis, nor is it just the messenger. Fair value accounting has deepened the financial crisis, because marking assets to market during the financial crisis resulted in a downward spiral (Laux & Leuz, 2009). Through the adoption of financial economic rationalities by the accounting profession, the investment in fictitious capital became extreme (C. Cooper, 2015). Fictitious capital is an investment based on expected returns, it thus is capital that does not create value, only human labour can create value. The investment in fictitious capital influenced the crisis.
15 Equity Cost of Capital
Information disclosure results in lower transaction costs, and lower estimation risk. This results in lower equity cost of capital and thus higher value. However, when companies increase social disclosure, their cost of capital rises (Richardson & Welker, 2001).
2.2.4 Decision-making
Accounting is used in the budgeting process, to facilitate and enable the process of the distribution of resources to achieve organisational objectives (Covaleski & Dirsmith, 1986). Budgeting is also used to control activities in lower levels of an organisation. Accounting information might however not resemble the complexity of organisations (Covaleski & Dirsmith, 1983). Morgan (1988) argued that accounting information is uni-dimensional, and decisions are thus made based on partial information. This might lead to neglecting the broader implications of a decision (Morgan, 1988). The use of accounting logic has had its influence on health care. According to Jos de Blok, director of Buurtzorg, a home care organisation in the Netherlands, this has led to more costs and worse care, instead of the more efficient care that was the goal (Akkerman, 2016).
The decision to close a coal mine in the eighties in the UK was based on accounting information, broader consequences, such as the payment of unemployment benefits were not taken into account. Eventually the decision had a negative impact on the government, which was the owner of the coal mine (Morgan, 1988). Another example of disastrous decision making is given by Preston & Oakes (2001). They describe how the representation of the real of the Navajo was used to force agricultural and economic decisions upon these Native Americans with disastrous outcomes. The representation of the real did not encompass the voice of the Navajo, nor did it resemble their culture, resulting in decisions that did not deliver. Ford used a cost-benefit analysis, called ‘Fatalities Associated with Crash-Induced Fuel Leakage and Fires’ to decide not to call back the Ford Pinto, because the call-back would not be cost-effective for society. The calculation was based on the cost of deaths, injuries and burned cars, the amounts of which were based on figures used by the federal government of the USA at that time. Based on accounting information the decision was made to let people burn to death, instead of repairing the cars and trucks for USD 11 each (Hoffman, 1984).
Accounting Information as Arguments
According to Broadbent (1998) accounting is used to communicate, and can be used by particular parties to convince others. Accounting information is used as a means to legitimize activities, or to rationalize past behaviour. (D. J. Cooper & Sherer, 1984, p. 223). According to Amernic (1985) accounting information is also used as arguments in bargaining processes. See also Owen & Lloyd (1985), and Arnold & Hammond (1994).
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2.3 Summary
In the introduction we saw that accounting information is an unidimensional representation of reality, because the information is always perspective based and depends on values and assumptions
underlying the accounting practices. Since accounting measures and communicates information, and it influences the image it represents, accounting has the power to make humans act and as such to construct reality. Morgan (1988) argued that accountants often are unaware of these characteristics, this seems plausible, since accounting education is focused on technical skills from the start.
Accountants might not know of these characteristics and the influences thereof or do not realize that they exist. In order to measure the awareness of accounting students and professionals, a framework of the influences of accounting on society was made based on the existing literature. This framework shows that accounting can influence society in many different ways, it influences human beings, their perceptions and treatment, institutions, such as power distribution, order, and regulation, our
environment, our society, the economy and the natural world, and the way we make decisions. The following chapter will introduce how awareness of those influences can be measured.
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3 Methodology
In this chapter the methodology of the empirical part of this research project is discussed. First the method of choice will be discussed. Second, the number of interviews and descriptive statistics are discussed. Thereafter the interview content is discussed. The chapter concludes with information on the way the interviews were analysed.
Since no literature on the assessment of the awareness of the influence of accounting on society amongst accounting students and professionals is available to the researcher, it is not clear how to assess the level of awareness. Research from other research fields and on ethical awareness within the accounting research could not intuitively be applied to test the awareness of accounting influences. This explorative research thus used semi-structured interviews, since this would provide rich information but also some comparability among the interviews.
Twelve interviews were conducted and lasted between 30-60 minutes each. The interviews were recorded and transcribed. Since socialization within accounting firms influences moral reasoning (Ponemon, 1992), socialization could influence other forms of cognitive development, such as the ability to perceive the influences of accounting on society. Interviews were conducted with students and accounting professionals working as controller or CFO and auditors, to see whether there is any differentiation between the student and professional group. The number of years of experience could influence to what extent the socialization process took place, and thus it was tried to have a good variation in years of experience. Since the working environment and work task between auditors and controllers are reasonably different, both of these groups of professionals are interviewed. As far as possible it was tried to establish a good variation in gender, since men and women vary in many aspects. No particular difference between men and women was however expected. More detailed descriptive statistics are given below in Figure 2.
18 Descriptive statistics
Gender 8 male
4 female
Professional status 4 student
4 auditor
4 controller or CFO
Age category 9 20-30 years
1 30-40 years 2 40-50 years Highest finished education 5 BSc
5 MSc
1 Qualified Controller
1 Executive Master of Accountancy
Years of experience 4 0 years
4 0-5 years 2 5-10 years 2 10-20 years
Figure 2: Descriptive statistics of interview sample
To test the level of awareness of accounting students and professionals of the influences of accounting on society, a combination of a production task and comprehension/judgment task is used. The
participants were first asked what limitations and influences they experience, as part of the production task. Thereafter participants were asked more specific questions, which lean towards a
comprehension/judgment task. In line with Carlisle and Nomanbhoy (1993) the responses on the production task are considered to be more accurate. The interviews were semi-structured to allow probing, to control the potential bias from the researcher and to give the interviewee the possibility to share insights that were not found in the literature. For sake of comparability a number of topics were discussed with every participant. The informed consent was sent to the participants before the
interview took place, it contains a description of the research and two questions for the interviewee to think about beforehand. The two questions concerned whether the interviewee was aware of any limitations of accounting and how accounting influenced society according to the interviewee. In Appendix A the informed consent is reproduced, in Appendix B the interview questions are rendered. After the interviews were transcribed, manual content analysis was used. The analysis consists of two parts, a quantitative approach using a four-point scale and a qualitative analysis of the results. During the interviews and the transcription thereof, I noticed that the participants differed in whether they immediately mentioned influences, picked up an influence fast after a slight suggestion, needed more suggestion or an example to recognize the influence, or they did not recognize the influence at all.
19 This led to the construction of a scale, similar to the scale used by Sandberg et al. (2013). The scale of Sandberg et al. contains four points, namely ‘no experience’, ‘a brief glimpse’, ‘an almost clear experience’ and ‘a clear experience.’ Since the object concerning the awareness is different, the scale is modified to fit the current project. The four points on the scale are called ‘immediately mentioned’, the participant mentioned the characteristic or influence without any reference of the interviewer; ‘immediately recognized’, the participant recognized the characteristic or influence after reference of the interviewer; ‘recognized after suggestion’, the participant recognized the characteristic or
influence after a suggestion was given by the interviewer, in the form of an example; and ‘not recognized’, the participant denied the characteristic or influence after a suggestion was given by the interviewer. For each participant their answers were scaled on the four point scale per topic. Particular interest was given to immediate mentioning of any of the limitations discussed by Morgan (1988), or any influence of accounting on society other than from the traditional view, without reference of the interviewer. The qualitative analysis considered the content of the answers given by the participants. When participants made statements on other topics then asked for these were also recorded. The qualitative analysis was used to compare answers of the participants, to find patterns and to investigate what participants focused on and what examples they gave.
20
4 Results
This chapter will discuss the results from the in-depth interviews. The results of the quantitative and qualitative analysis are given alongside each other. First, the awareness of the limitations, which are described in the introduction, is discussed. Then attention is drawn to the awareness of the influences of accounting on society, following the order of the theory section on the influences of accounting. Thirdly, we focus on participant differences. The chapter ends with a section on other topics discussed during the interviews.
4.1 Awareness of Limitations
Chart 1 depicts the results of the interviews per discussed topic. For each topic the number of
participants either mentioning, recognizing, recognizing after suggestion or not recognizing is shown.
Chart 1: Awareness Level per Topic
Participants were asked to think about the limitations of accounting before the interview. According to the research community accounting is limited because it is perspective based, and thus subjective, and constructs reality. During the interview the interviewer asked the participants what the limitations of accounting are, according to them. Of the twelve participants only three mentioned either the perspective based view of accounting, the subjectivity of accounting or the incomplete image of reality, without any reference from the interviewer. Auditor 4 thinks accounting is open to
interpretation, and thus perspective based. He said: “Sometimes it is too susceptible to interpretation.” 0 2 4 6 8 10 12 N u m b er o f P ar ticip an ts Topics
Awareness Level
21 The auditor believes that regulation should be improved in order to limit the subjectivity of
accounting information. This might mean that although the auditor is aware of the subjectivity of accounting, he does not recognize that the limitations is unavoidable within the current accounting system. Student 3 brought up that IFRS only focuses on financial reporting, but should contain sustainability, according to her. Although this might not be the objective of the IFRS, this remark shows that the student was aware of the incomplete image of reality given by financial reporting. Controller 1 mentioned that the image depicted in the annual report cannot represent the company to its full extent, but he denied that this was a limitation of accounting.
Other limitations mentioned by the participants mainly concerned the use of accounting techniques, and not the inherent limitations introduced in the introduction. One participant, Student 2, mentioned that the accounting techniques did not have limitations themselves. According to her however auditing is falling short because it cannot provide full confidence in financial statements. Student 3 agrees on this point and states that fraud is left undiscovered. Three participants mentioned the commercial relationship between the company being audited and the auditor harming independency and integrity. Student 1 mentioned that financial reporting is difficult to read. Four participants, Student 4, Controller 2, Controller 3 and Auditor 1, mention the lacking audit quality and the limited oversight thereof. Two participants, both auditors, stated that quality nowadays is not falling short. According to the CFO, auditors focus too much on facts and are only hedging themselves against the risk of misstatements. What all these limitations have in common is that they focus on the limitations of audits, auditors and the audit quality. One participant, Controller 1, mentioned a limitation that did not solely concern auditing, according to him, accounting is limited because it focuses on the past, instead of on the future.
After the limitations were discussed, more detailed, and thus suggestive, questions were asked. These questions concerned the objectivity of accounting information, accounting being perspective based and the incomplete image of reality depicted by accounting. The answers to those questions are discussed here.
Subjectivity
Only one participant, Auditor 4, mentioned without reference from the interviewer that accounting is open for interpretation and perspective based, and thus subjective. He however also mentioned that the annual report can be objective. Seven other participants thought that external accounting
information is objective. These participants however also confirmed that accounting can be debatable, and regulation leaves some freedom of interpretation, management has some discretion and a
company can steer accounting information, at least to some extent. For example, Student 4 realizes that some parts of accounting are subjective. He however did believe that the information given in the
22 annual report is objective. Later on during the interview, the participant changed his statement and said that it is not ‘super objective.’
Student 2 mentioned that the fact that accounting is based on human action, so the product cannot be objective. Controller 3 also thought that accounting information is subjective, he however does think that the information gives a truthful image of reality. The CFO also thought that financial reporting gives a truthful image. According to Auditor 2 management has discretion, but the information is consistent.
Concerning this topic, participants thus expressed conflicting opinions, some of them did believe in the objectivity of accounting, however also believed that accounting depends on the preparer, is sometimes debatable and that a company can steer the accounting information. Chart 1 also shows that two participants denied the subjectivity of accounting entirely.
Perspective Based
Participants were asked whether accounting information depends on who prepares the information. Everyone recognized that accounting is perspective based, however almost half only did so after the interviewer suggested how accounting could be influenced by the preparer. The two participants who earlier on denied subjectivity, but did agree accounting is perspective based, are both auditor.
Auditor 4, as mentioned before, immediately mentioned that accounting is perspective based. The other auditors immediately recognized that accounting is perspective based. Five of the participants mentioned that accounting is perspective based because of the merits involved in an audit, and the organisation might try to steer the accounting information. Other reasons for accounting to be perspective based which are mentioned are the personal characteristics of the person recording the information, the way information is recorded and the foundations these are based on. Controller 3 said that he thinks that accounting is perspective based, because: “everyone interprets data in a different way probably anyway. So you should report clearly how you want it to be, the definition." According to Controller 3 the definition of accounting measures could improve the objectivity of accounting information. Student 4 thought that accounting information is independent after an audit, he however conflicted his statement several times.
Incomplete Image
The participants were asked whether accounting information gives, according to them, a complete image of reality. Most of the participant initially thought that accounting information is complete. In general the participants understood the term complete, in the sense in which accountants use the term completeness. After further questioning however, most of them recognized that accounting
information is a complete image of the financial situation of an organisation. Controller 3 mentioned that it lacks transparency. According to the CFO and Controller 1 it is really hard for large companies to establish a truthful image of reality. Several participants mentioned that non-financial information
23 is left out purposely by some parties. As depicted in Chart 1, in the end only one participant, an auditor, remained the opinion that accounting information provides a complete image of reality. One participant mentioned that the quantitative characteristics of accounting limits the image given by accounting information, Student 2 said that “you can of course never report the entirety of reality in numbers.”
4.2 Awareness of the Influence of Accounting on Society
After the discussion of the limitations of accounting, the participants were asked if and how
accounting influenced society. First the reactions on the initial question are discussed. Thereafter the answers on more suggestive questions are discussed.
All participants mentioned at least one positive influence of the use of audits. These included the provision of assurance, the possibility to hold management accountable, improved capital allocation and the efficiency of the economic markets, control on the actions of organisations, control on the use of tax expenditures, and the control on fraud. Four participants, three students and one controller, also mentioned immediately how accounting can be used internally to control an organisation, improve decision making, and use accounting as a tool.
Three participants also mentioned other influences, which are not the purpose of accounting. According to Auditor 4 the provision of assurance impacts the entire society, because without it, it would influence the economy, and thus everyone. He also mentioned the influence of accounting on our world view, according to Auditor 4 “everything in society is about money.” Another participant mentioned how accounting can influence our world view as well, Controller 1 said: “you notice that a lot of people are enormously influenced by the manner in which, for example economic growth, is communicated.” Student 2 mentioned that accounting influences people because it enables us to measure things. Accounting also influences reality, according to her, because it determines where we spent money on, for example in health care it determines how the available budget is spent.
There were also participants who denied that accounting has much influence. According to Controller 3 lay people are not influenced much, because they are not involved with accounting directly. This view was shared by Auditor 3. According to the CFO the influence of accounting on society is limited, “because accounting depends on testing or measuring.” Participants also mentioned influences on society that were not influences of accounting on society.
Since the interviews were semi-structured in two cases some further question on the initial question about limitations took place. Auditor 2 mentioned that accounting information is used to influence investors. The CFO mentioned that GDP should be extended, and should not entirely focus on
24 future through the extension of the assurance practice onto integrated reporting, to do so society should first set standards to test the integrated reporting.
Traditional View
All participants were aware of at least one function of accounting. Thus, the participants were aware of the influences of accounting falling within this traditional view. Most of the participants mentioned the influence of auditing on society. The interviewer noticed that it was quite hard to let the
participants extend their perspective on accounting. Influence on People
Three participants, Student 2, Controller 1 and Auditor 4, immediately mentioned an influence of accounting on people, their initial answers were presented at the beginning of this section. Most of the other participants recognized the influences of accounting on people.
Auditor 3 believes that accounting does not really influence people who are not directly working with accounting. This seems however conflicting, because she does recognize the influence of accounting on culture, on the behaviour of people within an organisation and on the treatment of people. A similar opinion was expressed by Student 3, he thinks that “accounting itself does not really influence an individual.” According to him accounting should not influence individuals in case accounting is in line with the applicable standards. He conflicts this statement by saying that accounting can influence people within organisations, it could make employees more competitive, but other unintentional changes in behaviour are also possible. Student 2, Student 4, Controller 1, Controller 2, Controller 3, Auditor 1 and Auditor 2 also recognized how accounting information systems can influence employee behaviour.
The following influences were also mentioned by the participants. Accounting information can influence the reality of employees (Student 2, Student 4, and Controller 2). Registration of accounting information can be a burden (Student 2, CFO, and Controller 2). It can stimulate the creation of financial functions (Student 2). The ability to measure things enables the possibility to take decisions based on measurable things, this can influence people through the way they are held responsible for their actions and performance (Student 2, Auditor 4). Registration of check-in and check-out of employees can influence those employees (Controller 2). Accounting establishes a range within which employees should operate, which creates structure and order in the workplace (Auditor 4).
The discussion of the influence of accounting on people let the participants focus more on the
influence of accounting within organisations. Through these more specific questions participants were guided in broadening their perspective of accounting and the influences thereof. Student 1 stated that he before the interview ‘never really thought of’ the influences of accounting on people.
25 Influence on World View
Auditor 4 and Controller 1 immediately mentioned the influence of accounting on our world view, as explained above. Two participants denied the influence of accounting on our world view (CFO and Auditor 3). Overall it was often mentioned how people were stimulated to strive for profit, efficiency and economic growth, and that welfare is given more significance than well-being (Student 1, Student 2, Student 3, Student 4, Controller 2, Controller 3, and Auditor 4). Auditor 4 explained that people tend to compare themselves, and welfare is easily compared to others, and thus this gains significance. Student 2 argued that the use of accounting makes it a norm to record everything and to judge upon the information that is recorded. Controller 1 and Auditor 2 mentioned that the sensible laymen cannot fully understand financial information that is being communicated, thus they are unable to challenge this information. This might lead to an undisputed acceptance of the information. Influence on the Treatment of People
The participants recognized the influence of accounting on the treatment of people, half of the
participants however needed an example to recognize the influence. Many participants recognized that accounting influenced the treatment of people, because it drives the treatment of people along the lines of what is measurable (Student 1, Student 2, Student 4, CFO, Controller 3, Auditor 1, Auditor 2, Auditor 4). This leads to an impersonal treatment, where individual situations are not taken into account (Student 2, Student 4, Controller 3, Auditor 1, Auditor 2 and Auditor 4). Auditor 2 mentioned: "I think so too, if you are so focused on numbers and what is going on, well you will ignore the personal context to a certain extent." This has led to less room for personal development according to Student 4. Student 3 recognizes these influences of accounting on the treatment of people, but denies the negative influences thereof to a great extent. According to the CFO it is a choice of top management how you treat your employees, accounting is not leading in this decision. He states that in the company he works for, they consciously chose to take individual situations into account, and to depart from a more formal treatment based on performance measurements. Controller 2 agreed with the CFO on this point, and said that management should take into account what the numbers mean, and not only judge based on the numbers solely. Controller 1 mentioned that we should beware for the objectification of people within the health care system. The patients are part of a production process, these processes are analysed using accounting tools, and it is according to Controller 1 important to keep the human aspects in mind.
Influence on Culture
As depicted in Chart 1, none of the participants mentioned the influence on culture without reference from the researcher, most of them immediately recognized the influence. Since the influence on people was discussed just before culture, many participants referred to the influence of performance measurement systems on culture. According to the participants culture could become more
26 4). Student 2 explains that what you measure does not only influence how people work and behave, but also what they think is normal. Auditor 2 and Auditor 3 mentioned that monitoring influences culture. Student 1 mentioned that the use of more concrete, quantitative goals can make a culture less focused on the social, and more on factual representations of performance. Auditor 2 mentioned that the use of accounting information can make an organisation tougher, more formal and less personal. According to the CFO the increase of the use of accounting influences the culture within the
organisation, he said that the culture became more formal and more hierarchical. Auditor 4 supported this view, and said that accounting can structure an organisation, and make organisations more hierarchical. Controller 2 did expect accounting to influence culture, but could not give an example of such an influence.
Influence on Fraud
Half of the participant were aware of the influence of accounting on fraud, considering the
diminishing effects on fraud. The other half immediately recognized this influence. The number of fraudulent actions is reduced through organisational design (Student 4, CFO, Controller 1, Controller 2, Controller 3, Auditor 1, Auditor 3, and Auditor 4). Auditor 2 and Auditor 4 also mention the effects of audits on fraud, according to them fraud can be identified during an audit, which decreases the number of fraud incidents undiscovered. Most participants also recognized that accounting can provide opportunities for fraud and the possibility to hide fraud within accounting information. Some of them mentioned that people will always look for another way to work around standards (Student 1, Student 4, Auditor 1, and Auditor 4). It was also mentioned that accounting can be used to hide fraud, for example Student 3 mentioned: “Yes, I once read an article about fraud being helped by accounting things. So, with certain tricks, they could hide it in such a way that it couldn't be found by
accounting.” This view was also supported by Student 2, Student 4, Controller 1, Controller 2, Controller 3, Auditor 2, and Auditor 4. According to the CFO accounting techniques do not provide opportunities for fraud.
4.3 Participant Differences
In this section the differences between the awareness levels of the participants will be shown. Chart 2 and Table 1, depicted below, show how awareness differed between participants. For each awareness level it is shown how many topics the participants respectively immediately mentioned, immediately recognized, recognized after suggestion or did not recognize.
Participants at least immediately mentioned one limitation or influence of accounting, hereafter called topics. At most participants immediately mentioned four topics (Controller 1, Auditor 4). Participants also at least immediately recognized one topic, and at most immediately recognized eight topics. Student 2 immediately mentioned two topics, and immediately recognized eight topics, with a total of ten topics discussed, this means that Student 2 was amongst the most aware participants. Controller 1,
27 who immediately mentioned four topics, immediately recognized six topics, and thus can be
considered as slightly more aware than Student 2. All other participants at least needed some suggestion, or did not recognize all influences. The maximum number of topics a participant needed suggestion for was six (Controller 2, Controller 3). The maximum number of topics not recognized by a participant was four (Auditor 3).
Individual differences thus were quite big, from most aware ranging from immediately mentioning four topics and immediately recognizing the other six, to immediately mentioning only one topic and not recognizing four topics.
Chart 2: Differences in awareness levels
Minimum Maximum Median Average
Immediately mentioned 1 4 2 2,166667
Immediately recognized 1 8 3,5 4,166667
Recognized after suggestion 0 6 3 3
Not recognized 0 4 0 0,666667
Table 1: Differences in awareness levels
In order to explain differences between participants, further analysis was conducted considering professional status, age, experience, and gender. In Chart 3, depicted below, the awareness level per participant group is highlighted. Accounting professionals immediately mention slightly more topics than students. And controllers recognize influences faster and more often than auditors. Students mention or recognize all influences. Students however might be more easily persuaded by the example of the researcher, and might be more willing to admit the certain influence of accounting, because of the authority of the researcher. This argument is corroborated by a statement of Student 3: “Now you ask it, I think, ‘yes, logical,’ but, if I knew it before, I don’t think I really thought about it before.” The number of topics that are not recognized by auditors is higher than those not recognized
0 1 2 3 4 5 6 7 8 9 Immediately mentioned Immediately recognized Recognized after suggestion Not recognized N u m b er o f Top ics
Individual Differences
28 by controllers. This might be due to the limited perspective of the auditors that were interviewed. The auditors considered mainly influences of auditing, instead of the influences of the whole accounting spectrum. This argument is supported by a statement of Auditor 2: “Well, this is off course a bit broader, and accounting, well, you can see that from my answers, everyone tends to focus on their own job […]. You have, that is the image you have of it, but it is interesting to think about society every now and then.” Controllers, working within companies, are faced with a wider spectrum of accounting tools on a day to day basis, and also have to support auditors during the audit process. The controllers overall initially focused on other accounting influences, but showed awareness of the influences of audits as well.
Chart 3: Awareness per participant group
In Chart 4, depicted below, the relationship between age and awareness level is shown. Participants were grouped in four groups. The age group between 20 and 30 was split into two, because of the number of participants within this group was the highest, and differentiation might be of interest. The age group 31 till 40 seems to differ from the other age groups most prominently. Since there is only one participant in that age group, the difference does not lead to a proposition. Further, this research does not show any probable relationship between age and awareness.
0 1 2 3 4 5
Students Auditors Controllers
Av era ge n u m b er o f t o p ics
Awareness per Participant Group
Immediately mentioned Immediately recognized Recognized after suggestion Not recognized
29
Chart 4: Awareness per age group
Chart 5 below depicts the relationship between years of experience and awareness level. Participants with 0 years experiences are all students. The group with 1-5 years of experiences consists of one controller and three auditors. Within the 6-10 years of experience group are one auditor and one controller. The last group consists of the CFO and one controller. The reason why students might seem more aware overall, because they recognize all topics, is already mentioned in the part on professional status. It seems that professionals with 6-10 years are overall more aware than the professionals with less experience. Experience could aid professionals to understand the limitations of accounting and the influences of accounting on society. Auditor 2 explains that accounting is thought as if it is black and white, and not much interpretation is involved, however after working in practice for a few years she noticed that “it isn't black and white.” It seems however that awareness is falling with experience as well.
0 1 2 3 4 5 6 7 20-25 26-30 31-40 41-50 Av era ge n u m b er o f t o p ics
Age
Immediately mentioned Immediately recognized Recognized after suggestion Not recognized
30
Chart 5: Awareness per years of experience
The last relationship based on the descriptive statistics performed was between gender and the different awareness scales. Female participants seem to not recognize on average more topics, but to recognize topics sooner than male participants. The results could be clouded by the composition of the gender groups. In general the female participants have less experience than the male participants, and the group does not include controllers or CFOs.
Chart 6: Awareness and gender
4.4 Other Topics Discussed during the Interviews
The following topics were discussed with some or all participants. First limitations and influences of accounting is discussed. Thereafter the evaluation and opinion on education of the participants will be discussed. 0 1 2 3 4 5 0 1-5 6-10 11-20 Av era ge n u m b er o f t o p ics
Experience
Immediately mentioned Immediately recognized Recognized after suggestion Not recognized
0 1 2 3 4 5 6 Female Male Av era ge n u m b er o f t o p ics
Gender
Immediately mentioned Immediately recognized Recognized after suggestion Not recognized
