TY - GEN

T1 - Accounting Communication

AU - Brennan, Niamh

AU - Hemmings, Danial

AU - Merkl-Davies, Doris

PY - 2023/5/26

Y1 - 2023/5/26

N2 - Non-accounting (and some accounting) scholars tend to view accounting narrowly as a technical practice focusing on recording economic transactions via financial statements for financial decision-making. By contrast, Garry Carnegie, Lee Parker, and Eva Tsahuridu view accounting as “a technical, social and moral practice concerned with the sustainable utilisation of resources and proper accountability to stakeholders to enable the flourishing of organisations, people and nature” (“It’s 2020: What Is Accounting Today?,” Australian Accounting Review 31.1 [2021]: 69). Accounting involves measurement, processing, and communication of financial and nonfinancial information. “Accounting communication” refers to the communication of quantitative and qualitative information in a variety of formats (i.e., financial statements, corporate reports, corporate press releases, etc.) and media (i.e., corporate websites, social media, etc.) by organizations to external audiences (i.e., shareholders, stakeholders, financial analysts, the media, etc.) to either comply with legal or stock exchange requirements or on a voluntary basis. Accounting research uses the term “reporting” (i.e., annual reporting, corporate reporting, corporate social responsibility [CSR] reporting) to refer to organizational communication on financial, social, and environmental performance to external audiences outside the financial statements and includes mandatory and voluntary aspects. Research refers to the reports and documents outside financial statements as “accounting narratives” or “disclosures.” They include documents focusing on communicating social and environmental practices, policies, and performance, such as CSR reports. However, we only tangentially refer to CSR reporting, as it is a distinct stream of research in the accounting literature (see Muzammal Khan, Abeer Hassan, Christian Harrison, and Heather Tarbert, “CSR Reporting: A Review of Research and Agenda for Future Research,” Management Research Review 43.11 [2020]: 1395–1419, for a literature review). The more recent theoretical literature adopts the term “accounting communication” to highlight the dynamic and reciprocal aspects (i.e., two-way dynamic interactive communication between organizations and their audiences), oral forms (e.g., conference calls, CEO speeches, and media interviews), and nontraditional forms of communication (e.g., social media). Accounting communication is a multifaceted and complex phenomenon. It is inherently problematic due to the important role large organizations, particularly listed companies, play in society as employers, providers of goods and services, and investment vehicles. This multifaceted nature gives rise to a diverse set of audiences with often competing interests and diverse views on the purpose of accounting communication. Accounting communication ultimately provides the basis for the debate on how to distribute the wealth generated by firms among managers, shareholders, stakeholders, and society. Therefore, it is not surprising that evidence suggests that accounting communication is often strategic, with companies trying to balance disclosure and transparency with concealment and obfuscation.

AB - Non-accounting (and some accounting) scholars tend to view accounting narrowly as a technical practice focusing on recording economic transactions via financial statements for financial decision-making. By contrast, Garry Carnegie, Lee Parker, and Eva Tsahuridu view accounting as “a technical, social and moral practice concerned with the sustainable utilisation of resources and proper accountability to stakeholders to enable the flourishing of organisations, people and nature” (“It’s 2020: What Is Accounting Today?,” Australian Accounting Review 31.1 [2021]: 69). Accounting involves measurement, processing, and communication of financial and nonfinancial information. “Accounting communication” refers to the communication of quantitative and qualitative information in a variety of formats (i.e., financial statements, corporate reports, corporate press releases, etc.) and media (i.e., corporate websites, social media, etc.) by organizations to external audiences (i.e., shareholders, stakeholders, financial analysts, the media, etc.) to either comply with legal or stock exchange requirements or on a voluntary basis. Accounting research uses the term “reporting” (i.e., annual reporting, corporate reporting, corporate social responsibility [CSR] reporting) to refer to organizational communication on financial, social, and environmental performance to external audiences outside the financial statements and includes mandatory and voluntary aspects. Research refers to the reports and documents outside financial statements as “accounting narratives” or “disclosures.” They include documents focusing on communicating social and environmental practices, policies, and performance, such as CSR reports. However, we only tangentially refer to CSR reporting, as it is a distinct stream of research in the accounting literature (see Muzammal Khan, Abeer Hassan, Christian Harrison, and Heather Tarbert, “CSR Reporting: A Review of Research and Agenda for Future Research,” Management Research Review 43.11 [2020]: 1395–1419, for a literature review). The more recent theoretical literature adopts the term “accounting communication” to highlight the dynamic and reciprocal aspects (i.e., two-way dynamic interactive communication between organizations and their audiences), oral forms (e.g., conference calls, CEO speeches, and media interviews), and nontraditional forms of communication (e.g., social media). Accounting communication is a multifaceted and complex phenomenon. It is inherently problematic due to the important role large organizations, particularly listed companies, play in society as employers, providers of goods and services, and investment vehicles. This multifaceted nature gives rise to a diverse set of audiences with often competing interests and diverse views on the purpose of accounting communication. Accounting communication ultimately provides the basis for the debate on how to distribute the wealth generated by firms among managers, shareholders, stakeholders, and society. Therefore, it is not surprising that evidence suggests that accounting communication is often strategic, with companies trying to balance disclosure and transparency with concealment and obfuscation.

U2 - 10.1093/OBO/9780199756841-0289

DO - 10.1093/OBO/9780199756841-0289

M3 - Article

JO - Oxford Bibliographies

JF - Oxford Bibliographies

ER -