A conceptual framework of accounting policy choice under SSAP 20

Purpose - To provide a framework of accounting policy choice associated with the timing of adoption of the UK Statement of Standard Accounting Practice (SSAP) No. 20, "Foreign Currency Translation". The conceptual framework describes the accounting policy choices that firms face in a setting that is influenced by: their financial characteristics; the flexible foreign exchange rates; and the stock market response to accounting decisions. Design/methodology/approach - Following the positive accounting theory context, this paper puts into a framework the motives and choices of UK firms with regard to the adoption or deferment of the adoption of SSAP 20. The paper utilises the theoretical and empirical findings of previous studies to form and substantiate the conceptual framework. Given the UK foreign exchange setting, the framework identifies the initial stage: lack of regulation and flexibility in financial reporting; the intermediate stage: accounting policy choice; and the final stage: accounting choice and policy review. Findings - There are situations where accounting regulation contrasts with the needs and business objectives of firms and vice-versa. Thus, firms may delay the adoption up to the point where the increase in political costs can just be tolerated. Overall, the study infers that firms might have chosen to defer the adoption of SSAP 20 until they reach a certain corporate goal, or the adverse impact (if any) of the accounting change on firms' financial numbers is minimal. Thus, the determination of the timing of the adoption is a matter which is subject to the objectives of the managers in association with the market and economic conditions. The paper suggests that the flexibility in financial reporting, which may enhance the scope for income-smoothing, can be mitigated by the appropriate standardisation of accounting practice. Research limitations/implications - First, the study encompassed a period when firms and investors were less sophisticated users of financial information. Second, it is difficult to ascertain the decisions that firms would have taken, had the pound appreciated over the period of adoption and had the firms incurred translation losses rather than translation gains. Originality/value - This paper is useful to accounting standards setters, professional accountants, academics and investors. The study can give the accounting standard-setting bodies useful information when they prepare a change in the accounting regulation or set an appropriate date for the implementation of an accounting standard. The paper provides significant insight about the behaviour of firms and the associated impacts of financial markets and regulation on the decision-making process of firms. The framework aims to assist the market and other authorities to reduce information asymmetry and to reinforce the efficiency of the market. © Emerald Group Publishing Limited.

Postsocial relations:towards a performative view of accounting knowledge

This paper discusses the impact and influences of the growth of postsocial relations on accounting practice. Aspects of the growth of knowledge cultures, which have been argued to impact social and organizational arrangements, are discussed. Extending this view to accounting, we see accountants forming a distinctive knowledge culture with their own unique rules of how knowledge is constituted. These rules are embedded in accounting systems and practices. This paper suggests the need to further develop a research program that seeks to investigate accounting practice in local settings. The discussion in the paper is based on views which posit the growth of intimate links with epistemic objects within organizations and society. This paper argues that such ideas lead to an increasing tendency for us to experience the changes in societal relations and social arrangements as a compression of time and space. The paper relates these ideas to developments in the accounting research literature.

Inscribing the organization:representations in dispute between accounting and production

This paper assumes that a primary function of management accounting is the representation of "accounting facts" for purposes such as organizational control. Accountants are able to offer conventional techniques of control, such as standard costing, as a consequence of their ability to deploy accounting representations within managerial and economic models of organizational processes. Accounting competes, at times, with other 'professional' groups, such as production planning or quality management people, in this role of representing the organization to management. The paper develops its arguments around a case illustration of cost accounting set in a low technology manufacturing environment. The research relates to a case organization in which accountants are attempting to establish the reliability of accounting inscriptions of a simple manufacturing process. The case research focuses on the documents, the inscriptions that vie for managements' attention. It is these sometimes messy and inaccurate representations which enable control of complex and heterogeneous activities at a distance. At the end of our site visits we observe quality management systems in the ascendancy over the accountants' standard costing systems. © 2006 Elsevier Ltd. All rights reserved.

Intelligence agents (knowledge management)

Reports some insights into knowledge management (KM) derived from UK one-day workshops with six businesses, three non-profits and one public sector organization. Lists the four questions posed to participants and discusses the themes which emerged, e.g. the need for a KM strategy to make raw information more useable, KM performance measurement etc. Stresses the need for commitment from a top-level champion and a wide range of employees to make this work and identifies three types of solutions for improving KM strategy: technological (e.g. databases and intranets), people (e.g. motivation, retention, training and networking) and processes (e.g. procedural instructions and balancing formal/informal knowledge sharing methods). Finds that accountants and senior managers do not generally see KM as very important but argues that management accountants are suitable knowledge champions who could develop explicit links between KM and organizational performance.

How SME owners’ characteristics influences external advice and access to finance

This paper aims to investigate the linkage between the use of external advice and access to finance for small and medium-sized enterprises (SMEs) in the UK, with particular consideration of differences in personal characteristics: gender, ethnicity and education. The approach adopted for the research is a telephone survey conducted by the Barclays small business research team in late 2005 on behalf of the authors. These data are quantitative in nature and involve a large sample of 400 SMEs with specific questions analysed by gender, ethnicity and education level. The approach adopted is robust and empirically sound and is a long established research methodology. We find that there appears to be a correlation between the provision of external advice and the ability to raise bank finance. Furthermore, there are clear gender, ethnic and educational differentials in the use of particular sources of advice, for example: Gender • men and women are equally likely to use accountants as sources of advice. • men are more likely to use family and friends and solicitors. • women, however, are around twice as likely to access external advice from Business Link and Enterprise Agencies. Ethnicity • family and friends is predominant amongst Asians or black respondents and the other ethnic group, which is also slightly true of accountants and solicitors. • ethnic minority respondents were considerably less likely to use Business Link/ Enterprise Agencies. Education • graduates are most likely to use solicitors and accountants, whilst they are very low users of advice from family and friends and Business Links/Enterprise Agencies. • O level and A level educated respondents predominate in family and friends and Business Link/ Enterprise Agencies.

Cost models for engineering services

This thesis describes the procedure and results from four years research undertaken through the IHD (Interdisciplinary Higher Degrees) Scheme at Aston University in Birmingham, sponsored by the SERC (Science and Engineering Research Council) and Monk Dunstone Associates, Chartered Quantity Surveyors. A stochastic networking technique VERT (Venture Evaluation and Review Technique) was used to model the pre-tender costs of public health, heating ventilating, air-conditioning, fire protection, lifts and electrical installations within office developments. The model enabled the quantity surveyor to analyse, manipulate and explore complex scenarios which previously had defied ready mathematical analysis. The process involved the examination of historical material costs, labour factors and design performance data. Components and installation types were defined and formatted. Data was updated and adjusted using mechanical and electrical pre-tender cost indices and location, selection of contractor, contract sum, height and site condition factors. Ranges of cost, time and performance data were represented by probability density functions and defined by constant, uniform, normal and beta distributions. These variables and a network of the interrelationships between services components provided the framework for analysis. The VERT program, in this particular study, relied upon Monte Carlo simulation to model the uncertainties associated with pre-tender estimates of all possible installations. The computer generated output in the form of relative and cumulative frequency distributions of current element and total services costs, critical path analyses and details of statistical parameters. From this data alternative design solutions were compared, the degree of risk associated with estimates was determined, heuristics were tested and redeveloped, and cost significant items were isolated for closer examination. The resultant models successfully combined cost, time and performance factors and provided the quantity surveyor with an appreciation of the cost ranges associated with the various engineering services design options.

Questioning in simulated accountant-client consultations:exploring implications for ESP teaching

The field of accountancy plays a vital role in the financial health of modern-day economies. It also attracts very large numbers of students, many for whom English is not their first language, who train in a variety of undergraduate and postgraduate programs at English-medium universities. Yet, surprisingly, the discourse of accountants has been under-reported in the ESP literature (Burns & Moore, 2007a). This paper reports research investigating spoken accounting discourse derived from simulated accountant–client consultations. It draws on the work of Drew and Heritage (1992), in which questioning is identified as a key discursive feature in institutional talk, and also the more recent work reported in Heritage and Maynard (2006), in which the complexity of the formulation of questions and responses is revealed in doctor–patient consultations. The paper discusses the use of simulations in cases where access to actual workplace settings by ESP teachers is unattainable, as well as the usefulness of the interactional data these simulations generate. The paper reports a questioning typology, derived from the data, showing six typical question types found in advice-giving simulated encounters in accountant–client taxation-based consultations: information; clarification; client-specified; backchannel; discourse-related; and interpersonal. The paper concludes with a discussion of the implications of this research for ESP teaching.