Knowledge that Transforms

To facilitate digital corporate reporting and enable computers to ‘read’ accounting information, standard-setters must construct a taxonomy to assign contextual ‘metadata’ that codifies disclosures arising from accounting concepts, standards and practices. But digitalisation poses a problem for corporate reporting. Within internationally accepted accounting practice, ‘principles-based’ standards give companies significant discretion in deciding what they disclose and how they report accounts of their activity. How would the principles-based nature of corporate reporting be influenced by the construction of a taxonomy that seeks to specify all accounting disclosures? Drawing on literature examining the constitutive potential of classification and formal representation, we use our case study of the digitalisation project undertaken by the global standard-setter, the IASB, to understand how digitalisation intervenes on standard-setting and reporting practice despite the intentions of standard-setters. Our results detail how standard-setters sought to minimise the impact of digitalisation by modelling the taxonomy only on disclosures explicitly required by accounting standards. We reveal the circumstances that led the IASB to change its taxonomy design by seeking to capture not only what should be reported (as prescribed in extant accounting standards) but also what was being reported (as prescribed in a new classification called ‘Common Practices’). We analyse the process by which international accounting disclosure practices were judged to be ‘common’, and demonstrate how the ‘Common Practices’ classification was perceived by early users of the taxonomy. When interpreting the IASB’s Common Practices (what is) as disclosure standards (what should be), digitalisation generates a self-validating feedback loop that can generate more homogenous corporate reporting and push International Financial Reporting Standards beyond the principles-based approach they were designed to engender. Although standard-setters became increasingly aware of the influence of the digital (machine-readable) ‘tail’ on the traditional reporting (human-readable) ‘dog’, their attempts to take tighter control of the taxonomy development process strengthened user perceptions that the taxonomy and its ‘Common Practices’ represented an authoritative view of what should be reported. Our results reveal the process by which digital reporting both represents and intervenes in accounting, and how digitalisation impacts key accounting debates. As digitalisation attempts to provide a universal codification of reporting disclosures, it valorises comprehensive machine-friendly disclosure rules over principles, which offer standardised comparability over entity-specific communication. Our study also offers a perspective on the relations between information representation and intervention that moves beyond a study of passive, ‘reactive’ conformance to consider how representations can intervene despite the intentions of those generating the representation. In doing so, we reveal the constitutive potential of digital representations in generating ‘non-passive’ conformance.

To examine how Big Four auditors react to public scrutiny, we explore their evidence at a public inquiry on the Irish banking crisis. We use impression management theory to make sense of this evidence. By extending Goffman to a contemporary auditing context, we mobilize less-researched aspects of his dramaturgical framework. Drawing upon the prior literature, we develop a typology for examining how Big Four auditors impression-manage on a ‘frontstage’. Using meaning-oriented content analysis, we apply our typology to Big Four auditors’ public-inquiry evidence. Our findings indicate that Big Four auditors convey the following four impressions: (1) their hands are clean (i.e., they are not to blame for audit failure); (2) their hands were tied (i.e., they were powerless to prevent audit failure); (3) their work was good; and (4) their intentions are good. We conclude the paper by linking these four impressions to the professional beancounter character, and by considering whether the Big Four’s impression management succeeded in influencing their audience. Identifying impression management by Big Four auditors provides insights into their beliefs, ambitions and concerns, and on how they regard clients, regulators and the general public.

In view of the increasing coronavirus death toll around the globe, centralized governments have been put under the spotlight to account for the deaths in the sovereign states they represent. But could it be a problem if we simply hold governments accountable for deaths by demanding accurate and transparent accounting of the total? Is there a better way to account for deaths in a pandemic without ignoring the pathos of loss and undermining our capacity to act spontaneously? I engage with these questions by looking at how the ethics/politics of death, as two sides of the same coin, affect our understanding of accountability in the time of COVID-19. I distinguish between two types of accountability that correspond to the two meanings of “account for”: “to explain the reason or the cause of something” and “to form part of a total” (Cambridge Dictionary1). The second type of accountability, informed by a Deleuzian ethics of death, is explored through an interpretative case study of accounting for the deaths in Wuhan, where the global pandemic began. It shows that accountability is essentially a freedom-enabled endeavour to account for deaths through our repetition in mourning, which forms part of honouring the dead, the dying and the living. This new configuration implies that a more radical form of accounting is needed in order to appreciate the value of life and be mindful of the socio-psychological costs associated with deaths.

This study investigates who makes partner in Big 4 audit firms. Building on prior qualitative research, we conduct the first large scale study using archival data to examine the incremental importance of different individual auditor characteristics for making partner. For our analyses, we collect information on German auditors from a business-oriented social network site. We conduct a longitudinal analysis for a cohort of Big 4 senior managers and directors to identify determinants of making partner. We find that economic capital, social capital, and institutionalized cultural capital matter for making partner. Further, we find that female and foreign auditors are less likely to become partner than their counterparts. In addition, we perform a cross-sectional analysis using a larger sample of auditors to identify the distinct characteristics of Big 4 partners compared to Big 4 senior managers, Big 4 directors, and non-Big 4 partners, and find results consistent with the longitudinal analysis.