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A theoretical framework of external accounting communication

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  • Doris M. Merkl-Davies
  • Niamh M. Brennan

Abstract

Purpose - The purpose of this paper is to provide a theoretical framework of external accounting communication in the form of a typology based on perspectives, traditions, and theories from the discipline of communication studies. The focus is accounting communication with external audiences via public written documents outside the audited financial statements, i.e., annual reports, press releases, CSR reports, websites, conference calls, etc. Design/methodology/approach - The theoretical framework is based on two broad research perspectives on accounting communication: (A) a functionalist-behavioural transmission perspective and (B) a symbolic-interpretive narrative perspective. Eight traditions of communication research are introduced which provide alternative ways of conceptualising accounting communication, namely (1) mathematical tradition, (2) socio-psychological tradition, (3) cybernetic/systems-oriented tradition, (4) semiotic tradition, (5) rhetorical tradition, (6) phenomenological tradition, (7) socio-cultural tradition, and (8) critical tradition. Exemplars of each tradition from prior accounting research, to the extent they have been adopted, are discussed. Finally, a typology is developed, which serves as a heuristic device for viewing similarities and differences between research traditions. Findings - Prior accounting studies predominantly focus on the role of discretionary disclosures in accounting communication in the functioning of the relationship between organisations and their audiences. Research is predominantly located in the mathematical, the socio-psychological, and the cybernetic/systems-oriented tradition. Accounting communication is primarily viewed as the transmission of messages about financial, environmental, and social information to external audiences. Prior research is mainly concerned with the communicator (e.g. CEO personality) and the message (e.g. intentions and effects of accounting communication). Research from alternative traditions is encouraged, which explores how organisations and their audiences engage in a dialogue and interactively create, sustain, and manage meaning concerning accounting and accountability issues. Originality/value - The paper identifies, organises, and synthesises research perspectives, traditions, and associated theories from the communication studies literature in the form of a typology. The paper concludes with an extensive agenda for future research on accounting communication.

Suggested Citation

  • Doris M. Merkl-Davies & Niamh M. Brennan, 2017. "A theoretical framework of external accounting communication," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 30(2), pages 433-469, February.
    • Handle: RePEc:eme:aaajpp:aaaj-04-2015-2039
    DOI: 10.1108/AAAJ-04-2015-2039
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    Citations

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    Cited by:

    1. She, Chaoyuan & Michelon, Giovanna, 2019. "Managing stakeholder perceptions: Organized hypocrisy in CSR disclosures on Facebook," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 61(C), pages 54-76.
    2. Mohammed Hossain & Md. Tarikul Islam & Mahmood Ahmed Momin & Shamsun Nahar & Md. Samsul Alam, 2019. "Understanding Communication of Sustainability Reporting: Application of Symbolic Convergence Theory (SCT)," Journal of Business Ethics, Springer, vol. 160(2), pages 563-586, December.
    3. Ying Sophie Huang & Moeki Nemoto, 2022. "Communication tool in management accounting: adapting Jakobson’s (1960) communication model," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-9, December.
    4. Ciaran Heavey & Zeki Simsek & Christina Kyprianou & Marten Risius, 2020. "How do strategic leaders engage with social media? A theoretical framework for research and practice," Strategic Management Journal, Wiley Blackwell, vol. 41(8), pages 1490-1527, August.
    5. Valentinetti, Diego & Flores Muñoz, Francisco, 2021. "Internet of things: Emerging impacts on digital reporting," Journal of Business Research, Elsevier, vol. 131(C), pages 549-562.
    6. Kara Nel & Nadia Mans-Kemp & Pierre D. Erasmus, 2023. "Sustainable Thematic Investing: Identifying Opportunities Based on an Analysis of Stewardship Reports," Sustainability, MDPI, vol. 15(10), pages 1-20, May.
    7. Brennan, Niamh M. & Edgar, Victoria C. & Power, Sean Bradley, 2022. "COVID-19 profit warnings: Delivering bad news in a time of crisis," The British Accounting Review, Elsevier, vol. 54(2).
    8. Maryam Safari & Jacqueline Birt & Yi Xiang, 2022. "The sociology of compensation inequality in upper‐echelon positions: evidence from Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2615-2649, June.
    9. Corinne Bessieux-Ollier & Grégoire Davrinche & Guillaume Dumas, 2022. "L'adaptation de la communication financière face à la crise COVID : le cas des résultats non-GAAP," Post-Print hal-03948560, HAL.
    10. Thomas Hermann, 2018. "A rhetorical situation triggers accounting communication. The case of the conflict between the Bank of German States and the Government in 1955/56," CONTABILIT? E CULTURA AZIENDALE, FrancoAngeli Editore, vol. 2018(1), pages 73-118.
    11. Corinne Bessieux-Ollier & Grégoire Davrinche & Guillaume Dumas, 2022. "L'adaptation de la communication financière face à la crise COVID : le cas des résultats non-GAAP," Post-Print hal-03948567, HAL.
    12. Shrives, Philip J. & Brennan, Niamh M., 2017. "Explanations for corporate governance non-compliance: A rhetorical analysis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 49(C), pages 31-56.
    13. Power, Sean Bradley & Brennan, Niamh M., 2022. "Accounting as a dehumanizing force in colonial rhetoric: Quantifying native peoples in annual reports," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 87(C).
    14. Nicolas Garcia‐Torea & Belen Fernandez‐Feijoo & Marta De La Cuesta, 2020. "CSR reporting communication: Defective reporting models or misapplication?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 952-968, March.
    15. Valerio Antonelli & Nieves Carrera & Christopher Napier, 2018. "Banks and financial institutions in historical perspective," CONTABILIT? E CULTURA AZIENDALE, FrancoAngeli Editore, vol. 2018(1), pages 9-12.
    16. Camelia-Daniela Hategan & Ruxandra-Ioana Curea-Pitorac & Vasile-Petru Hategan, 2020. "Responsible Communication of Romanian Companies for Ensuring Public Health in a COVID-19 Pandemic Context," IJERPH, MDPI, vol. 17(22), pages 1-16, November.
    17. Yuli Marcela Suárez-Rico & Mauricio Gómez-Villegas & María Antonia García-Benau, 2018. "Exploring Twitter for CSR Disclosure: Influence of CEO and Firm Characteristics in Latin American Companies," Sustainability, MDPI, vol. 10(8), pages 1-19, July.
    18. Qin Xiong & Yichun Xu & Tongying Yang & Meixin Zhuang & Yunnan Peng & Pingrong Zhou & Liuxian Wu & Sitong Chen & Yuqing Fan, 2022. "Pathos in ECCs during COVID-19: Discourse Analysis Based on Sino-A Companies," Studies in Media and Communication, Redfame publishing, vol. 10(1), pages 135-149, June.
    19. Tobias Gerwing & Peter Kajüter & Maximilian Wirth, 2022. "The role of sustainable corporate governance in mandatory sustainability reporting quality," Journal of Business Economics, Springer, vol. 92(3), pages 517-555, April.
    20. Michele Gendelsky de Oliveira & Graça Azevedo & Jonas Oliveira, 2021. "The Relationship between the Company’s Value and the Tone of the Risk-Related Narratives: The Case of Portugal," Economies, MDPI, vol. 9(2), pages 1-28, May.
    21. Sri Pujiningsih, 2021. "Exploration of University Sustainability Report Indicators: Evidence from Indonesia," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 46-54, December.
    22. Silvia Ruiz & Silvia Romero & Belen Fernandez‐Feijoo, 2021. "Stakeholder engagement is evolving: Do investors play a main role?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1105-1120, February.
    23. Nicola Dalla Via & Paolo Perego, 2018. "Determinants of Conflict Minerals Disclosure Under the Dodd–Frank Act," Business Strategy and the Environment, Wiley Blackwell, vol. 27(6), pages 773-788, September.

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