Positive Accounting: Problems and Solutions

201 Pages·1984·19.104 MB·English

by  Trevor Gambling (auth.)

POSITIVE ACCOUNTING
PROBLEMS AND SOLUTIONS
By the same author
MODERN ACCOUNTING
SOCIETAL ACCOUNTING
A ONE-YEAR ACCOUNTING COURSE, PARTS I AND II
BEYOND THE CONVENTIONS OF ACCOUNTING
POSITIVE
ACCOUNTING·
PROBLEMS AND
SOLUTIONS
Trevor Gambling
M
MACMILLAN
© Trevor Gambling 1984
Softcover reprint of the hardcover 1st edition 1984
All rights reserved. No part of this publication may be
reproduced or transmitted, in any form or by any means,
without permission.
First published 1984 by
THE MACMILLAN PRESS LTD
London and Basingstoke
Companies and representatives
throughout the world
ISBN 978-1-349-04599-0 ISBN 978-1-349-04597-6 (eBook)
DOI 10.1007/978-1-349-04597-6
The author and publishers wish to thank Sir Kenneth Bond for
permission to reproduce his letter to the Financial Times, and the Radio
Times for extracts from the issue dated 27 November-S December 1982.
Contents
List of Figures viii
List of Tables ix
Introduction X
PART I SOME PROBLEMS
1 The Nature of the Accounting Function 3
1.1 How financial decisions are really made 3
1.2 A lesson in conversational arithmetic 8
1.3 Problems in measuring non-existent variables 12
1.4 Normative and observable functions of accounting 15
1.5 Accounting as a residual profession 18
1.6 Professional practice in the residual gap 20
I. 7 Industrial practice in the residual gap 22
1.8 The accountant and personality 23
1.9 The methodology of residual explanation 25
2 Realism and Illusion in Accounting 28
2.1 The reality of the unknowable? 28
2.2 A 'systems' view of the world 31
2.3 Towards a post-Newtonian accounting 34
2.4 The political content of accounting 40
2.5 Ambiguity-avoidance and conflict-avoidance 42
2.6 Bunkum rules, OK? 43
Appendix: Official ideals and social reality in socialist
societies 46
3 Aggregation and Disaggregation in Accounting 47
3.1 The accounting continuum 47
3.2 The elementary particles of accounting 52
3.3 Toward a physics of society 56
3.4 The mechanics of anti-science 63
3.5 Accounting and general field theory 65
3.6 The representation of multivariate aggregates 69
vi Contents
4 Law and Art and the Accountant 71
4.1 The art of the indescribable 71
4.2 The law of disorder 74
4.3 Jurisprudence and organisations 77
4.4 Accounting standards: fine art or coarse law? 80
4.5 The setting of accounting standards 83
4.6 A hopeful sort of despair 84
PART II SOME SOLUTIONS
5 Post-Newtonian Accounting Techniques 91
5.1 Information systems and the world view 91
5.2 Accounting as a language 94
5.3 Alternative media for accounting 97
5.4 The audio-visual presentation of financial information 100
5.5 Problems of balance in audio-visual presentations 102
5.6 The fundamental principles of multi-media presen-
~tioo 1M
5.7 The audit of multi-media presentations 109
6 Warming up the World's Coldest Profession 112
6.1 The inadequacy of total communication 112
6.2 Towards a video accounting medium 115
6.3 The harp that nobody wants to play 120
6.4 Systematising expert consensus 123
7 The Professional Care of Ignorance 128
7.1 A residual profession in a post-Newtonian world 128
7.2 A science of accounting behaviour 130
7.3 A clinical approach to accounting practice 134
7.4 Problems of observation in accounting 136
7.5 The importance of professionalism in research 140
Appendix: Some medical analogies 143
8 Education for a Residual Profession 146
8.1 Training 'men for all seasons' 146
8.2 A taxonomy of educational objectives 147
8.3 Educating the 'low-culture' Uncles 154
8.4 Educating the 'high-culture' Uncles 159
Contents vii
8.5 An analysis of some current accounting programmes 161
8.6 Accounting programmes for the future 164
Appendix: Analysis of some more accounting pro-
grammes 169
Epilogue: I'll drown my book ... 171
Bibliography 175
Index 180
List of Figures
1.1 Jung-MitrofT schema of personality types 23
3.1 A numerical trip-let -or trip-fig 60
3.2 A non-representational trip-let 62
6.1 Holding company and subsidiary company balance sheets
in graphic form 116
6.2 Consolidated balance sheets in graphic form 117
6.3 A tentative presentation of a graphic balance sheet 117
6.4 Ratio analysis with graphics 118
6.5 Graphic form of current cost balance sheet 119
6.6 Animation of graphic form of current cost balance sheet 120
6.7 Schematic representation of traditional final accounts 121
8.1 Teaching methods and subject matter 153
8.2 Educational profiles of our 'Uncles' 156
8.3 Uncle Moses 158
8.4 Uncle Pablo 160
8.5 Uncle Luke 161
8.6 Needs for relevant cognitive education of accounting
'Uncles' 167
viii
List of Tables
1.1 Culture, science and the professions 17
2.1 An epistemological hierarchy 29
8.1 Instructional methods, associated learning theories 152
8.2 Comparative programmes for undergraduate studies in
accounting 162
8.3 Comparative programmes for postgraduate studies in
accounting 163
8.4 Comparative programmes for all study 164
ix