IDEAS home Printed from https://ideas.repec.org/a/eee/crpeac/v88y2022ics1045235421000411.html
   My bibliography  Save this article

Financialisation and the Conceptual Framework: An update

Author

Listed:
  • Zhang, Ying
  • Andrew, Jane

Abstract

As an extension of our prior work (Zhang & Andrew, 2014), this paper offers a critical theoretical reading of the most recent Conceptual Framework for Financial Reporting 2018 (hereafter called Framework 2018). We focus on key changes to the framework, analysing how they reinforce the financialisation of economies. Specifically, we discuss both the inclusion of stewardship as part of the purpose of financial reporting, and the new definition and recognition criteria for assets and liabilities. In these updates, Framework 2018 signals the International Accounting Standards Board’s (IASB) deepening commitment to the needs of a very narrow set of market actors despite its public interest charter. Our paper is an effort to interrogate some of these changes to the global regulatory architecture surrounding financial markets as it is progressively reconceptualised. We argue that recent updates in Framework 2018 are likely to support the production of a particular form of wealth that provides extraordinary benefits to a very small minority of people. To make this point, we contrast the IASB’s charter to act in the public interest with the most recent reports on global economic inequality (World Inequality Report, 2018). In doing so, we show that the connection between the conceptual framing of accounting, and the material experiences of people living in globalised, deregulated, liberalised, and financialised market economies requires much greater attention from both regulators and researchers. Doing so may allow us to explore the role accounting regulations play in the production of “regimes of inequality” (Piketty, 2020, p. 6).

Suggested Citation

  • Zhang, Ying & Andrew, Jane, 2022. "Financialisation and the Conceptual Framework: An update," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:crpeac:v:88:y:2022:i:c:s1045235421000411
    DOI: 10.1016/j.cpa.2021.102322
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1045235421000411
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.cpa.2021.102322?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alistair M. Brown, 2006. "The Financial Milieu of the IASB and AASB," Australian Accounting Review, CPA Australia, vol. 16(38), pages 85-95, March.
    2. Klein, Mathias & Winkler, Roland, 2019. "Austerity, inequality, and private debt overhang," European Journal of Political Economy, Elsevier, vol. 57(C), pages 89-106.
    3. Müller, Julian, 2014. "An accounting revolution? The financialisation of standard setting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(7), pages 539-557.
    4. Bryer, R. A., 2000. "The history of accounting and the transition to capitalism in England. Part one: theory," Accounting, Organizations and Society, Elsevier, vol. 25(2), pages 131-162, February.
    5. Jonathan T. Vu & Benjamin K. Kaplan & Shomesh Chaudhuri & Monique K. Mansoura & Andrew W. Lo, 2020. "Financing Vaccines for Global Health Security," NBER Working Papers 27212, National Bureau of Economic Research, Inc.
    6. Newberry, Susan & Robb, Alan, 2008. "Financialisation: Constructing shareholder value … for some," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 19(5), pages 741-763.
    7. Baud, Céline & Chiapello, Eve, 2017. "Understanding the disciplinary aspects of neoliberal regulations: The case of credit-risk regulation under the Basel Accords," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 46(C), pages 3-23.
    8. Wally Smieliauskas & Kathryn Bewley & Ulfert Gronewold & Ulrich Menzefricke, 2018. "Misleading Forecasts in Accounting Estimates: A Form of Ethical Blindness in Accounting Standards?," Journal of Business Ethics, Springer, vol. 152(2), pages 437-457, October.
    9. Jane Andrew & Corinne Cortese, 2011. "Accounting for climate change and the self-regulation of carbon disclosures," Accounting Forum, Taylor & Francis Journals, vol. 35(3), pages 130-138, September.
    10. Dariusz Wójcik & Stefanos Ioannou, 2020. "COVID‐19 and Finance: Market Developments So Far and Potential Impacts on the Financial Sector and Centres," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(3), pages 387-400, July.
    11. Murphy, Tim & O’Connell, Vincent & Ó hÓgartaigh, Ciarán, 2013. "Discourses surrounding the evolution of the IASB/FASB Conceptual Framework: What they reveal about the “living law” of accounting," Accounting, Organizations and Society, Elsevier, vol. 38(1), pages 72-91.
    12. Gjesdal, F, 1981. "Accounting For Stewardship," Journal of Accounting Research, Wiley Blackwell, vol. 19(1), pages 208-231.
    13. Arnold, Patricia J., 2009. "Global financial crisis: The challenge to accounting research," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 803-809, August.
    14. Roger Lee & Gordon L. Clark & Jane Pollard & Andrew Leyshon, 2009. "The remit of financial geography--before and after the crisis -super-1," Journal of Economic Geography, Oxford University Press, vol. 9(5), pages 723-747, September.
    15. David Harvey, 2007. "Neoliberalism as Creative Destruction," The ANNALS of the American Academy of Political and Social Science, , vol. 610(1), pages 21-44, March.
    16. Mark Westcott & John Murray, 2017. "Financialisation and inequality in Australia," The Economic and Labour Relations Review, , vol. 28(4), pages 519-537, December.
    17. Clarke, Thomas & Jarvis, Walter & Gholamshahi, Soheyla, 2019. "The impact of corporate governance on compounding inequality: Maximising shareholder value and inflating executive pay," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 63(C).
    18. Bryer, R. A., 1993. "The late nineteenth-century revolution in financial reporting: Accounting for the rise of investor or managerial capitalism?," Accounting, Organizations and Society, Elsevier, vol. 18(7-8), pages 649-690.
    19. Andrew, Jane & Cortese, Corinne, 2011. "Accounting for climate change and the self-regulation of carbon disclosures," Accounting forum, Elsevier, vol. 35(3), pages 130-138.
    20. Young, Joni J., 2006. "Making up users," Accounting, Organizations and Society, Elsevier, vol. 31(6), pages 579-600, August.
    21. Barthold, Charles & Dunne, Stephen & Harvie, David, 2018. "Resisting financialisation with Deleuze and Guattari: The case of Occupy Wall Street," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 52(C), pages 4-16.
    22. Sikka, Prem, 2015. "The hand of accounting and accountancy firms in deepening income and wealth inequalities and the economic crisis: Some evidence," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 30(C), pages 46-62.
    23. Cooper, Christine, 2015. "Accounting for the fictitious: A Marxist contribution to understanding accounting's roles in the financial crisis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 30(C), pages 63-82.
    24. Zhang, Ying & Andrew, Jane, 2014. "Financialisation and the Conceptual Framework," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 17-26.
    25. Young, Joni J., 2003. "Constructing, persuading and silencing: the rhetoric of accounting standards," Accounting, Organizations and Society, Elsevier, vol. 28(6), pages 621-638, August.
    26. Geoffrey Whittington, 2008. "Fair Value and the IASB/FASB Conceptual Framework Project: An Alternative View," Abacus, Accounting Foundation, University of Sydney, vol. 44(2), pages 139-168, June.
    27. Riccardo Pariboni & Walter Paternesi Meloni & Pasquale Tridico, 2020. "When Melius Abundare Is No Longer True: Excessive Financialization and Inequality as Drivers of Stagnation," Review of Political Economy, Taylor & Francis Journals, vol. 32(2), pages 216-242, April.
    28. Roberts, John & Wang, Timothy, 2019. "Faithful representation as an ‘objective mirage’: A Saussurean analysis of accounting and its participation in the financial crisis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 65(C).
    29. Bryer, R. A., 2000. "The history of accounting and the transition to capitalism in England. Part two: evidence," Accounting, Organizations and Society, Elsevier, vol. 25(4-5), pages 327-381, May.
    30. Erb, Carsten & Pelger, Christoph, 2015. "“Twisting words”? A study of the construction and reconstruction of reliability in financial reporting standard-setting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 13-40.
    31. Richard Barker & Stephen Penman & Thomas J. Linsmeier & Stephen Cooper, 2020. "Moving the Conceptual Framework Forward: Accounting for Uncertainty," Contemporary Accounting Research, John Wiley & Sons, vol. 37(1), pages 322-357, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Musa Ghazwani & Mark Whittington & Akrum Helfaya, 2023. "Assessing the Anti-Corruption Disclosure Practices in the UK FTSE 100 Extractive Firms," Sustainability, MDPI, vol. 15(6), pages 1-33, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Ying & Andrew, Jane, 2014. "Financialisation and the Conceptual Framework," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 17-26.
    2. Stenka, Renata & Jaworska, Sylvia, 2019. "The use of made-up users," Accounting, Organizations and Society, Elsevier, vol. 78(C).
    3. Palea, Vera & Biancone, Paolo Pietro, 2017. "Which Accounting Rules for Economic and Social Sustainable Development? Engaging Critically with IFRS Adoption in the EU," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201733, University of Turin.
    4. Erb, Carsten & Pelger, Christoph, 2015. "“Twisting words”? A study of the construction and reconstruction of reliability in financial reporting standard-setting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 13-40.
    5. Yasmine Chahed, 2021. "Words and Numbers: Financialization and Accounting Standard‐Setting in the United Kingdom," Contemporary Accounting Research, John Wiley & Sons, vol. 38(1), pages 302-337, March.
    6. Aust, Viktoria & Pelger, Christoph & Drefahl, Christian, 2021. "Exploring the relationship between valuation and stewardship uses of accounting information: Empirical evidence from German listed firms," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 42(C).
    7. Murphy, Tim & O’Connell, Vincent, 2017. "Challenging the dominance of formalism in accounting education: An analysis of the potential of stewardship in light of the evolution of legal education," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 44(C), pages 1-29.
    8. Himick, Darlene & Brivot, Marion, 2018. "Carriers of ideas in accounting standard-setting and financialization: The role of epistemic communities," Accounting, Organizations and Society, Elsevier, vol. 66(C), pages 29-44.
    9. Pucci, Richard & Skærbæk, Peter, 2020. "The co-performation of financial economics in accounting standard-setting: A study of the translation of the expected credit loss model in IFRS 9," Accounting, Organizations and Society, Elsevier, vol. 81(C).
    10. Palea, Vera, 2018. "Financial reporting for sustainable development: Critical insights into IFRS implementation in the European Union," Accounting forum, Elsevier, vol. 42(3), pages 248-260.
    11. Palea, Vera, 2017. "Whither accounting research? A European view," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 42(C), pages 59-73.
    12. Cooper, Christine, 2015. "Accounting for the fictitious: A Marxist contribution to understanding accounting's roles in the financial crisis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 30(C), pages 63-82.
    13. Hayoun, Shaul, 2019. "How fair value is both market-based and entity-specific: The irreducibility of value constellations to market prices," Accounting, Organizations and Society, Elsevier, vol. 73(C), pages 68-82.
    14. Bryer, R. A., 2005. "A Marxist accounting history of the British industrial revolution: a review of evidence and suggestions for research," Accounting, Organizations and Society, Elsevier, vol. 30(1), pages 25-65, January.
    15. Toms, J. S., 2002. "The rise of modern accounting and the fall of the public company: the Lancashire cotton mills 1870-1914," Accounting, Organizations and Society, Elsevier, vol. 27(1-2), pages 61-84.
    16. Argilés-Bosch, Josep Mª & Ravenda, Diego & Garcia-Blandón, Josep, 2021. "E-commerce and labour tax avoidance," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 81(C).
    17. A.J. Arnold & S. McCartney, 2008. "The transition to financial capitalism and its implications for financial reporting," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(8), pages 1185-1209, October.
    18. Miley, Frances & Read, Andrew, 2021. "Soldiers don't go mad: Shell shock and accounting intransigence in the British Army 1914-18," The British Accounting Review, Elsevier, vol. 53(2).
    19. Cascino, Stefano & Clatworthy, Mark A. & Osma, Beatriz Garcia & Gassen, Joachim & Imam, Shahed, 2021. "The usefulness of financial accounting information: evidence from the field," LSE Research Online Documents on Economics 107569, London School of Economics and Political Science, LSE Library.
    20. Suzuki, Tomo, 2007. "Accountics: Impacts of internationally standardized accounting on the Japanese socio-economy," Accounting, Organizations and Society, Elsevier, vol. 32(3), pages 263-301, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:crpeac:v:88:y:2022:i:c:s1045235421000411. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/critical-perspectives-on-accounting/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.