Accountants' Truth: Knowledge and Ethics in the Financial World

Citation

Baskerville, R.F. (2011), "Accountants' Truth: Knowledge and Ethics in the Financial World", Journal of Accounting & Organizational Change, Vol. 7 No. 3, pp. 306-309. https://doi.org/10.1108/18325911111164222

This book by Matthew Gill might be an important book, if one was to judge it by the in‐depth reviews already available to hand. Furthermore, if one wished to evaluate this book based on other reviewer's opinions, it has already received range of positive attention in a diverse set of journals. Emulating the familiar rankings of film critics (based on a 5‐star rating) as a trivial exercise, responses might be as follows;

* * * * * I greatly enjoyed the book and Gill’s analysis, but I did have some concerns about his sample ‐ Joanne Jones, in Administrative Science Quarterly

* * * * Overall, the book provides a very important resource for anyone involved in working with accountants and/or using the results of accounting work in either the government or private sectors. It also sets a very important precedent for future studies of accounting activity as well as the sociology of the financial world in general ‐ David Gilchrist, in the Australian Journal of Public Administration

* * * I wanted much more data and the analysis a sociologist would have written. But that is a narrow disciplinary worry. The advantage of a very small sample is that it allows respondents to become full and complex individuals [. . . ] having chosen respondents very closely grouped in age, gender, professional seniority, and employer, Gill leaves us wondering how far these results generalize ‐ Andrew Abbott, in The Accounting Review

* * * * In this readable, if occasionally challenging, book he utilizes sociological field methods ‐ much like an ethnographer studying an indigenous folk ‐ to uncover the lives of the mysterious tribe of accountants ‐ James Aho, in Business Ethics Quarterly

* * * There are some aspects which are missing or downplayed in Gill’s analysis, such as: the relative lack of discussion of the role of professional firm hierarchies in the decision process, the failure of the interviewees to raise issues related to the over‐riding purpose (useful disclosure) of their work as well as the reliance on it by stakeholders other than “the client,” and the potential impact on their firm’s (and their own) reputation. ‐ Leonard Brooks, in Business Ethics Quarterly

* * * * Although [. . . ] “As a broader study of the function of accounting in the construction of social practices, there are a number of significant gaps and methodological weaknesses in the book’s considerations [. . . ] [it] would provide a valuable contextual reading for advanced level course in financial accounting and theory” ‐ Susan Wild, in Pacific Accounting Review,

* * * It does a good job in criticizing that appearance [of indubitable fact]” of accounting knowledge ‐ Julian Muller, in Organization

* * * The book’s ambition is enormous and yet the writing is clear and succinct (weighing in at a mere 173 pages, inclusive of a methodological appendix and endnotes). Despite Gill’s clarity of argument and language, I suspect that most social scientists will find the book dense and difficult; dense, because of Gill’s economy with sentences and difficult, because few of us are as comfortable as Gill with sociological theory, accounting theory and diverse humanistic excursions into the nature of acting, truth and ethics ‐ Aaron Pitluck, in Work, Employment and Society

These comments above provide the reader with a general taste of the book. Many of the reviewers are more sociologists than accountants, and thus the statement by Joanne Jones that Gill's book “represents one of the few accounting studies that provides an inside and in‐depth view of the practice of accounting” could be challenged, considering the wealth of diverse qualitative research in the areas of “the professions”, the Big 4, and ethical issues for many past years.

It is a good read: well written, and yet challenges the reader to consider how knowledge and expertise are constructed in practicing accountants. Gill's book arises from PhD research, and he tackles some key issues in the arena of professional practice firms. Talking to 20 mid‐level accountants in a Big 4 firm, he reviews their responses to ethical scenarios within what has now developed into a complex and sophisticated ethical landscape.

The underlying premise of the book is the problem of trust, trust in standardized forms of financial knowledge. Trust that users of financial information have to place in qualified accountants, but a hope he declares to be misplaced. The cohort of accountants in this study could be seen to be vulnerable to unethical persuasion in the grey areas of ethical decision making, and tried simply to think as their colleagues did. However, they also wish to uphold a concept of truthfulness over and above obedience to accounting rules, and develop a personal standard of professionalism, although this might not always be articulated.

The book starts with an introduction to the social world of accountants; performance and role play, honest and transparency are thoroughly explored. Chapter 3 then focuses on the interviewee's responses to an ethical scenario in evolving the establishment of an industrial‐scale roasting oven, with teething problems leading to £400,000 worth of burnt cooked chickens. As established costs can rightly be part of getting the asset in question into the location and condition necessary for its use, can these burnt chickens be capitalised as part of the cost of the asset? There is a well‐presented case study with financial data which well illustrates the issues in this scenario to non‐accountants.

The interviewees in question are 20 male accountants all in the Big‐4 offices in London. Most are a few years into their training, and nearly all ICAEW‐qualified, but the group is mostly self‐selected. Six substantive chapters follow in which their views arising from consideration of this scenario and other matters are fully documented; including a theoretical reflection on performance and truthfulness, an empirical analysis of reactions to the scenario, chapters addressing technocratism, pragmatism, professionalism, and ethics.

In the end, we are left with the proposition by Gill that the drive toward principles‐based accounting standards may be a step in the right direction, but it is a shift that will only be successful if accountants move away from a rules‐bound mentality. Certainly, it is clear from this book that accountants need to do more talking about the ethical and political aspects of accounting. If young entrants into the profession read this book, it will certainly ensure that they appreciate much better the values and norms which are most likely to be embedded in their “indoctrination” into the firm and lead them to reflect more on what could be done better in ethical values and training, as they progress in their own careers.

The clear illustrations of ethical immaturity are of concern to anyone involved in accounting education, and as one who has been involved in the professional training of new entrants to the profession, this book raises a very interesting issue. We need more critical thinking skill development, and less time studying so‐called “model solutions” to teaching scenarios which are constructed with the grey areas of ethical analysis in mind. One particular aspect which was of deep concern to me was the extent to which these entrants into the profession more or less skipped over the part of their training regarding ethical training (as outlined on page 119). “Alistair” describes how his colleagues tended not to bother with the training (an electronic training package he was to complete on the prevention of money laundering), skipped to the multiple choice questions at the end, and then guessed the answers.

The second concern is with the sample as noted by a number of reviewers: male, mostly middle class, very much like Matthew Gill himself. There are some possible justifications for this deep bias in the sample, but the one provided on page 172: that 80 per cent of the members of the ICAEW are male, is not persuasive. As noted by Gill, further research might be necessary to determine the salience of gender, but his all‐male group of interviewees may be a fatal flaw in this book, one which will challenge those assessing its contribution in the long run. When similar studies of other age groups, gender, and those in ”other‐sized” firms are also available in the public domain, then this book will be valuable not only for comparative purposes, but as a yardstick for thorough and perceptive analysis. This book is a welcome addition to the corpus of literature in this area; and hopefully one which, as well as stimulating other studies, will also promote discussion about how ethical training is undertaken, and the nature of the control held within accounting firms that prefers client interests over objectivity and “truth” in accounting.