Assembling international development: Accountability and the disarticulation of a social movement


Accounting Organizations and Society

février 2017, vol. 63, pp.6-20

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Accountability, Social movements, International development, Non-governmental organizations (NGOs), Governmentality, Assemblages

This paper examines how international development funding and accountability requirements are implicated in the so-called disarticulation of a social movement. Based on field studies in Guatemala and El Salvador, we show and explain the way accountability requirements, which encompass management and accounting, legal, and financial technologies, constitute the field of international development through the regulation of heterogeneous social movement organizations. We highlight how accountability enables a form of governance that makes possible the emergence of entities (with specific attributes), while restricting others. Our analysis has implications for governmentality studies that have examined the interrelation of assemblages by analyzing how these interrelations are operationalized at the field level through the Deleuze-and-Guattari-inspired processes of territorialization, coding, and overcoding

Blockholder Exit Threats in the Presence of Private Benefits of Control

Ole-Kristian HOPE, H. WU, Wuyang ZHAO

Review of Accounting Studies

juin 2017, vol. 22, n°2, pp.873-902

Départements : Comptabilité et Contrôle de Gestion

Mots clés : Exit-Threat Theory, Private Benefits of Control, Liquidity, China, Split-Share Structure Reform, Operating Performance, Quasi-Experiment

Exit theory predicts a governance role of outside blockholders’ exit threats; but this role could be ineffective if managers’ potential private benefits exceed their loss in stock-price declines caused by outside blockholders’ exit. We test this prediction using the Split-Share Structure Reform (SSSR) in China, which provided a large, exogenous, and permanent shock to the cost for outside blockholders to exit. Using a difference-in-differences design combined with propensity-score matching, we find that firms whose outside blockholders experience an increase in exit threats have a greater improvement in performance than those whose outside blockholders experience no increase. Moreover, the governance effect of exit threats is ineffective in the group of firms with the highest concern for private benefits of control. Finally, a battery of theory-motivated tests show that the documented effects are unlikely explained by outside blockholder intervention or some well-known intended effects of SSSR

Consequences of the Abandonment of Mandatory Joint Audit: An Empirical Study of Audit Costs and Audit Quality Effects


European Accounting Review

2017, vol. 26, n°2, pp.311-339

Départements : Comptabilité et Contrôle de Gestion

Mots clés : Joint audit, Audit cost, Audit quality, Audit market, Denmark

This paper focuses on the unique Danish setting in examining the consequences of abandoning a mandatory joint audit regime. We study the effects on audit costs (measured by audit fees) and audit quality (measured by abnormal accruals) of the abandonment of the mandatory joint audit in Denmark in 2005. We perform our analysis on non-financial listed Danish companies for the 2002–2010 period. Our results show that a joint audit is associated with higher fees, but that the association between joint audit and abnormal accruals is insignificant. This suggests that the higher audit fees cannot be explained by higher audit quality. Our results are robust to alternative measurements of fees and audit quality. Additional analyses show that the fee premium related to a joint audit decreases over time and that the Big 4 concentration in our sample has increased since the switch from mandatory to voluntary joint audit. Our results are consistent with the motivations driving the regulatory change in Denmark and are of interest to regulators and actors in the audit market

Constructing, Contesting, and Overloading: A Study of Risk Management Framing


European Accounting Review

2017, vol. 26, n°4, pp.703-728

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

In this study, we examine the ways in which actuarial consultants attempt to motivate their clients to see pension-related accounting regulations and market volatility as ‘risks’ that need to be managed through particular risk-mitigating technologies. This study is predicated on 23 interviews conducted with actuarial consultants and their clients and consulting agencies’ publically available documents. Taking framing theory and the sociological literature on risk as conceptual starting points, we find that consultants engage in specific framing strategies to persuade clients by rhetorically weaving a series of financial risk objects, financial de-risking strategies, and calls for action. We also find that current and prospective clients sometimes contest consultants’ prescriptions, despite the pervasiveness of risk management as the ultima ratio of organizational governance. This contestation occurs, ironically, because adopting de-risking solutions in one area is perceived by some clients as triggering new risks in areas unforeseen by consultants. This research increases our knowledge of how new risk objects and de-risking solutions come into existence and why some risk management practices fail to be diffused within organizations despite the staggering success of the risk management rationality. We explain the latter through the concepts of frame diffraction and overload

Evaluative Infrastructures: Accounting for distributed network production


Accounting Organizations and Society

juillet 2017, vol. 60, n°7, pp.79-95

Départements : Comptabilité et Contrôle de Gestion

Mots clés : AccountingHierarchical consciousnessEvaluationInfrastructurePlatform organization!

Platform organizations such as Uber, eBay and Airbnb represent a growing disruptive phenomenon in contemporary capitalism, transforming economic organization, the nature of work, and the distribution of wealth. This paper investigates the accounting practices that underpin this new form of organizing, and in doing so confronts a significant challenge within the accounting literature: the need to escape what Hopwood (1996) describes as its “hierarchical consciousness”. In order to do so, this paper develops the concept of evaluative infrastructure which describes accounting practices that enable platform based organization. They are evaluative because they deploy a plethora of interacting devices, including rankings, ratings, reviews, and audits to establish orders of worth. They are infrastructures because they provide the invisible yet essential mechanisms for the flow of economic activity and exchange on platforms. Illustrating the concept of evaluative infrastructure with the example of eBay, the paper's contribution is to (1) provide an analytical vocabulary to capture the accounting practices underpinning platforms as new organizational forms, and in so doing (2) extend accounting scholars' analytical focus from hierarchical settings towards heterarchies. Conceptually, this shift from management accounting to evaluative infrastructures entails a focus on relationality (evaluative infrastructures do not represent or reference but relate things, people and ideas with each other); generativity (evaluative infrastructures do not territorialize objects but disclose new worlds); and new forms of control (evaluative infrastructures are not centres of calculation; rather, control is radically distributed, whilst power remains centralized).

Letter from the Editor: Why Are Papers Desk Rejected at European Accounting Review? (note)


European Accounting Review

juillet 2017, vol. 26, n°3, pp.411-418

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

The aim of this note is to present desk rejections made by EAR in 2016 and also to provide some suggestions to authors in order to avoid these desk rejections.(Partial reproduction of the Letter published in the EAA Newsletter No. 57, March 2017)Desk rejection is often feared by authors and generates a lot of disappointment. As explained by Craig (2010 Craig, J. B. (2010). Desk rejection: How to avoid being hit by a returning boomerang. Family Business Review, 23, 306–309. doi: 10.1177/0894486510386024[Crossref], [Web of Science ®], [Google Scholar], p. 306), ‘the stories of woe are commonplace in conference hotel bars, campus coffee shops, and faculty photocopy room conversations, and reactions are shared in colorful language in various post rejection emails and phone calls among disenchanted authors’.In a previous newsletter,11 all notes Salvador Carmona, Past Editor of EAR, had written a text on ‘Avoiding desk rejections’. In the present text, I would like to extend my predecessor’s view by adding some new insights, based on statistics drawn from my first year of editorship at EAR. These statistics will also highlight the unfortunate development of ethical issues.The aim of the present letter is not only to provide some suggestions to authors in order to avoid these desk rejections but also to explain the functioning of our journal in full transparency

Media bias and the persistence of the expectation gap: An analysis of press articles on corporate fraud


Journal of Business Ethics

septembre 2017, vol. 144, n°3, pp.637-659

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Expectation gap, Media bias, Corporate fraud, Management behavior, Press, Fraud-related professional standards

Prior research has documented the continued existence of an expectation gap, defined as the divergence between the public’s and the profession’s conceptions of auditor’s duties, despite the auditing profession’s attempt to adopt standards and practices to close this gap. In this paper, we consider one potential explanation for the persistence of the expectation gap: the role of media bias in shaping public opinion and views. We analyze press articles covering 40 U.S. corporate fraud cases discovered between 1992 and 2011. We compare the auditor’s duties, described by the auditing standards, with the description of the fraud cases as found in the press articles. We draw upon prior research to identify three sources of the expectation gap: deficient performance, deficient standards, and unreasonable expectations. The results of our analysis provide evidence that (1) the performance gap can be reduced by strengthening auditor’s willingness and ability to apply existing auditing standards concerning fraud detection; (2) the standards gap can be narrowed by improving existing auditing standards; and (3) unreasonable expectations, however, involve elements beyond the profession’s sphere of control. As a result, the expectation gap is unlikely to disappear given the media’s tendency to bias, with an overemphasis of unreasonable expectations in their coverage of frauds and press articles tending to reinforce the view that the auditor should take more responsibility for detecting fraud, irrespective of whether this is feasible at a reasonable cost. In addition to the primary role of the press in perpetuating the expectation gap, a second reason for continuation of the expectation gap is that the rational auditor will have difficulty in assessing subjective components of fraudulent behavior.

The Effect of Business and Financial Market Cycles on Credit Ratings: Evidence from the Last Two Decades



mars 2017, vol. 53, n°1, pp.59-93

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Business cycles; Credit rating agencies; Financial marketcycles; Investor reaction

We analyze the effect of business and financial market cycles on creditratings using a sample of firms from the Russell 3000 index that are ratedby Standard and Poor’s over the period 1986–2012. We also examine inves-tor reaction to credit rating actions in different stages of business andfinancial market cycles. We document that credit rating agencies areinfluenced by business and financial market cycles; they assign lower creditratings during downturns of business and financial market cycles andhigher ratings during upturns. Our study is the first to find strong evidenceof pro-cyclicality in credit ratings using a long window. We also documentstronger investor reaction to negative credit rating actions during down-turns. Our results confirm theoretical predictions and inform regulators

The Effect of Joint Auditor Pair Composition on Audit Quality: Evidence from Impairment Tests


Contemporary Accounting Research

Spring 2017, vol. 34, n°1, pp.118-153

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Joint Audits, Audit Quality, Auditor Independence, Impairment Testing, Conservatism

The Relationship between Lack of Controllability and Proactive Work Behaviour: An Empirical Analysis of Competing Theoretical Explanations


Accounting and Business Research

2017, vol. 47, n°2, pp.144-171

Départements : Comptabilité et Contrôle de Gestion

Mots clés : controllability principle, management control systems, role theory, role conflict, flexible role orientation, proactive work behaviour

The controllability principle suggests evaluating managers solely based on performance measures they can control. In practice, however, companies often disregard this principle. Therefore, our study addresses organisational benefits linked to the lack of controllability in measures used for managers’ performance evaluations. We draw on important case-based findings to establish a positive ‘base relationship’ between lack of controllability and proactive work behaviour. We test this base relationship with a large-scale sample and find that companies encourage higher levels of proactive work behaviour when they rely on less controllable performance measures. Drawing on recent developments in role theory, we advance previous research and extend the base model by including the theoretical construct of flexible role orientation. We examine different mechanisms through which flexible role orientation potentially impacts the base model. Using survey responses from 432 managers, we find evidence for a mediation model as opposed to an interaction model. Specifically, we find that lack of controllability enhances role conflict, which in turn induces more flexible role orientations ultimately resulting in higher levels of proactive work behaviour