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The role of accounting in corporate governance in a developing country: institutional political economy perspective

The role of accounting in corporate governance in a developing country: institutional political... Conceptualisation of corporate governance in mainstream accounting research seems to be based on the assumption of pure economic type governance which is characterised by control systems and political neutrality. This study examines institutional and socio-political dynamics of the role of accounting in corporate governance in a government-owned commercial bank in a developing country. Using data from semi-structured interviews and document analysis, the study draws on the theory of institutional political economy to examine the socio-political and institutional complexities associated with using accounting as a mechanism of governance. Findings reveal that although the bank meticulously complied with various professional and regulatory requirements in internal and external reporting in response to normative, coercive and mimetic pressures, such compliance was mainly to gain legitimacy, appearance and society’s support, rather than to enhance good governance. Further, the paper clearly demonstrates the political complexity of corporate governance in developing countries and how accounting becomes less effective within such political complexities. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Accounting, Auditing and Performance Evaluation Inderscience Publishers

The role of accounting in corporate governance in a developing country: institutional political economy perspective

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References (67)

Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1740-8008
eISSN
1740-8016
DOI
10.1504/IJAAPE.2014.060207
Publisher site
See Article on Publisher Site

Abstract

Conceptualisation of corporate governance in mainstream accounting research seems to be based on the assumption of pure economic type governance which is characterised by control systems and political neutrality. This study examines institutional and socio-political dynamics of the role of accounting in corporate governance in a government-owned commercial bank in a developing country. Using data from semi-structured interviews and document analysis, the study draws on the theory of institutional political economy to examine the socio-political and institutional complexities associated with using accounting as a mechanism of governance. Findings reveal that although the bank meticulously complied with various professional and regulatory requirements in internal and external reporting in response to normative, coercive and mimetic pressures, such compliance was mainly to gain legitimacy, appearance and society’s support, rather than to enhance good governance. Further, the paper clearly demonstrates the political complexity of corporate governance in developing countries and how accounting becomes less effective within such political complexities.

Journal

International Journal of Accounting, Auditing and Performance EvaluationInderscience Publishers

Published: Jan 1, 2014

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