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The disciplinary power of accounting-based regulation: the case of building societies, circa 1960

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  • Batiz-Lazo, Bernardo
  • Noguchi, Masayoshi

Abstract

This paper examines how accounting–based regulation was introduced through the House Purchase and Housing Act, 1959 (HPHA59) and Building Societies Act, 1960 (BSA60). It also tells how it was put into practice by the Registrar of Friendly Societies (RFS). The discussion is framed by the so called ‘disciplinary perspective’ of accounting as represented by Hoskin and Macve (1986; 1988; 1994a; 1994b; 1996; 2000). Fieldwork documents cases of intervention by the RFS under new powers granted by BSA60. These new powers were used to discipline targeted societies or those revealing inadequate use of their funds and thus, observed important deviations from specified accounting-based criteria which was generally recognized as financially sound within the industry. As a result we provide evidence of how accounting-based regulation affected the operation of the societies. This evidence amends other studies claiming that managers of British financial intermediaries disregarded accounting information in their operation and strategic plans (or that they incorporated such criteria until the 1990s).

Suggested Citation

  • Batiz-Lazo, Bernardo & Noguchi, Masayoshi, 2011. "The disciplinary power of accounting-based regulation: the case of building societies, circa 1960," MPRA Paper 28374, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28374
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    File URL: https://mpra.ub.uni-muenchen.de/28374/1/MPRA_paper_28374.pdf
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    References listed on IDEAS

    as
    1. Hoskin, Keith W. & Macve, Richard H., 1986. "Accounting and the examination: A genealogy of disciplinary power," Accounting, Organizations and Society, Elsevier, vol. 11(2), pages 105-136, March.
    2. Leigh Drake, 1989. "The Building Society Industry in Transition," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-09680-0.
    3. Colin Drury, 1998. "Management Accounting Information Systems in UK Building Societies," The Service Industries Journal, Taylor & Francis Journals, vol. 18(2), pages 125-143, April.
    4. Miller, Peter & O'Leary, Ted, 1987. "Accounting and the construction of the governable person," Accounting, Organizations and Society, Elsevier, vol. 12(3), pages 235-265, April.
    5. Innes John & Mitchell Falconer, 1997. "The Application of Activity-based Costing in the United Kingdom's Largest Financial Institutions," The Service Industries Journal, Taylor & Francis Journals, vol. 17(1), pages 190-203, January.
    6. Nightingale, Paul & Poll, Robert, 2000. "Innovation in Investment Banking: The Dynamics of Control Systems within the Chandlerian Firm," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 9(1), pages 113-141, March.
    7. Chen, Kevin C.W. & Wang, Jiwei, 2007. "Accounting-based regulation in emerging markets: The case of China's seasoned-equity offerings," The International Journal of Accounting, Elsevier, vol. 42(3), pages 221-236.
    8. Hoskin, Keith W. & Macve, Richard H., 1988. "The genesis of accountability: The west point connections," Accounting, Organizations and Society, Elsevier, vol. 13(1), pages 37-73, January.
    9. N/A, 1996. "Note:," Foreign Trade Review, , vol. 31(1-2), pages 1-1, January.
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    Cited by:

    1. Batiz-Lazo, Bernardo & Noguchi, Masayoshi, 2011. "Auditors and the supervision of retail finance: evidence from two small-sized building societies, 1976-1978," MPRA Paper 32193, University Library of Munich, Germany.

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    More about this item

    Keywords

    accounting-based regulation; House Purchase and Housing Act; 1959 (HPHA59); Building Societies Act; 1960 (BSA60); Chief Registrar of Friendly Societies (CRFS); the Building Societies Association (Association); disciplinary power; reserve ratio;
    All these keywords.

    JEL classification:

    • N8 - Economic History - - Micro-Business History
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • N2 - Economic History - - Financial Markets and Institutions

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