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Accounting is the language of business, increasingly standardized across the world through global banks and corporations: a technical tool used to reach the correct, unquestionable answer. Nonetheless, as recent corporate scandals have shown, a whole range of financial professionals (accountants, auditors, bankers, finance directors) can collectively fail to question dubious actions. How is this possible? To understand such failures, this book explores how accountants construct the technical knowledge they deem relevant to decision-making. In doing so, it not only offers a new way to understand deviance and scandals, but also suggests a reappraisal of accounting knowledge which has important implications for everyday commercial life. The book's findings are based on interviews with chartered accountants working in the largest accountancy practices in London. The interviews reveal that although accounting decisions seem clear after they have been made, the process of making them is contested and opaque. Yet accountants nonetheless tend to describe their work as if it were straightforward and technical. This book delves beneath the surface to explore how accountants actually construct knowledge, and draws out the implications of that process with respect to issues such as professionalism, performance, transparency, and ethics. This thought-provoking book concludes that accountants' technical discourse undermines their ethical reasoning by obscuring the ways in which accounting decisions must be thought through in practice. Accountants with particular ethical perspectives more readily understand and construct particular types of knowledge, so the two issues of knowledge and of ethics are inseparable. Increasingly technical accounting rules can therefore be counterproductive. Instead, this book shows how reinvigorating the ethical discourse within the financial world could be a more effective means of averting future scandals.

Accounting has an ever-increasing significance in contemporary society. Indeed, some argue that its practices are fundamental to the development and functioning of modern capitalist societies. We can see accounting everywhere: in organizations where budgeting, investing, costing, and performance appraisal rely on accounting practices; in financial and other audits; in corporate scandals and financial reporting and regulation; in corporate governance, risk management, and accountability, and in the corresponding growth and influence of the accounting profession. Accounting, too, is an important part of the curriculum and research of business and management schools, the fastest growing sector in higher education. This growth is largely a phenomenon of the last fifty years or so. Prior to that, accounting was seen mainly as a mundane, technical, bookkeeping exercise (and some still share that naive view). The growth in accounting has demanded a corresponding engagement by scholars to examine and highlight the important behavioural, organizational, institutional, and social dimensions of accounting. Pioneering work by accounting researchers and social scientists more generally has persuasively demonstrated to a wider social science, professional, management, and policy audience how many aspects of life are indeed constituted, to an important extent, through the calculative practices of accounting. Anthony Hopwood, to whom this books is dedicated, has been a leading figure in this endeavour, which has effectively defined accounting as a distinctive field of research in the social sciences. The book brings together the work of leading international accounting academics and social scientists, and demonstrates the scope, vitality, and insights of contemporary scholarship in and on accounting and auditing.

This book addresses two important questions: first, why did financial innovation lead to the crisis in the banking sector that developed in 2007–8; and, second, why the political reform of finance has apparently proved so difficult across a variety of political jurisdictions? This ambitious book draws on a team of researchers from different disciplines to develop an innovation and distinctive argument in response to these two critical issues. In the first half of this book our question is about how crisis was generated. Chapters 2, 3, and 4 develop our answer, which is that innovation in and around the financial markets took the form of bricolage which did not consider the risks, uncertainty, and unintended consequences of volume-based business models and complex circuits. The direct implication is that finance needs to be simplified, rather than regulation made more sophisticated. In the second half of the book, our question is about why democratic political control both before and after the crisis has proved so difficult? Chapters 5, 6, and 7 develop our answer, which is that self-serving financial elites are not easily controlled by technocratic elites who are themselves recovering from knowledge failure, or by the rest of the governing classes concerned with political positioning for electoral advantage on issues which are technical, opaque, and illegible to the electorate at large. In Chapter 8, we discuss some of the implications of this analysis for how reform of both banking regulation and democracy is required.

This book provides a historical study of the International Accounting Standards Board (IASB) from 2001 to 2011. During this period, the IASB and its International Financial Reporting Standards (IFRSs) acquired a central position in the practice and regulation of financial reporting around the world. As a unique instance of a private-sector body setting standards with legal force in many jurisdictions, the IASB’s rise to prominence has been accompanied by vivid political debates about its governance and accountability. Similarly, the IASB’s often innovative attempts to change the face of financial reporting have made it the centre of numerous controversies. The book traces the history of the IASB from its foundation as successor to the International Accounting Standards Committee (IASC), and discusses its operation, changing membership and leadership, the development of its standards, and their reception in jurisdictions around the world. The book gives particular attention to the IASB’s relationships with the European Union, the United States, and Japan, as well as to the impact of the financial crisis on the IASB’s work.

Why are there so many crises in the world? Is it true that the global system is today riskier and more dangerous than in past decades? Do we have any tools at our disposal to bring these problems under control, to reduce the global system’s proneness to instability? These are the tantalizing questions addressed in this book. Using a variety of demographic, economic, financial, social, and political indicators, the book demonstrates that the global system has indeed become an “architecture of collapse” subject to a variety of shocks. An analysis of the global financial crisis of 2008, the bilateral relationship between the U.S. and China, and the European sovereign debt crisis illustrates how the complexity and tight coupling of system components creates a situation of precarious stability and periodic disruption. This state of affairs can only be improved by enhancing the shock-absorbing components of the system, especially the capacity of states and governments to act, and by containing the shock-diffusing mechanisms, especially those related to phenomena such as trade imbalances, portfolio investment, cross-border banking, population ageing, and income and wealth inequality.

From illegal drugs, stolen artwork, and forged trademarks, to fraud on financial markets—the phenomenon of illegality in market exchanges is pervasive. Illegal markets have great economic significance, have relevant social and political consequences, and shape economic and political structures. Despite the importance of illegality in the economy, the field of economic sociology unquestioningly accepts the premise that the institutional structures and exchanges taking place in markets are law-abiding in nature. This volume seeks to challenge this. Questions that stand at the center of the chapters are: What are the interfaces between legal and illegal markets? How do demand and supply in illegal markets interact? What role do criminal organizations play in illegal markets? What is the relationship between illegality and governments? Is illegality a phenomenon central to capitalism? Anchored in economic sociology, this book contributes to the analysis and understanding of market exchanges in conditions of illegality from a perspective that focuses on the social organization of markets. Offering both theoretical reflections and case studies, the chapters assembled in the volume address the consequences of the illegal production, distribution, and consumption of products for the architecture of markets. It also focuses on the underlying causes and the political and social concerns stemming from the infringement of the law. This book provides insights into the trades in diamonds and counterfeit clothing, rhino horn and human organs, alcohol and doping products, marihuana and smuggled goods, stolen antiquities and personal information, and illegal practices in finance and price setting.

Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value for money audits, environmental audits, quality audits, teaching audits, and many others. Why has this happened? What does it mean when a society invests so heavily in an industry of checking and when more and more individuals find themselves subject to formal scrutiny? This book argues that the rise of auditing has its roots in political demands for accountability and control. At the heart of a new administrative style, internal control systems have begun to play an important public role and individual and organizational performance has been increasingly formalized and made auditable. The author argues that the new demands and expectations of audits live uneasily with their operational capabilities. Not only is the manner in which they produce assurance and accountability open to question but also, by imposing their own values, audits often have unintended and dysfunctional consequences for the audited organization.

The financial crisis that began in 2007 in the United States swept the world, producing substantial bank failures and forcing unprecedented state aid for the crippled global financial system. Providing an international perspective, this book draws critical lessons from the causes of the crisis and proposes important regulatory reforms, including sound guidelines for the ways in which distressed banks might be dealt with in the future. While some recent policy moves go in the right direction, others, the book argues, are not sufficient to prevent another crisis. The book shows the necessity of an adaptive prudential regulatory system that can better address financial innovation. Stressing the numerous and complex challenges faced by politicians, finance professionals, and regulators, and calling for reinforced international coordination (for example, in the treatment of distressed banks), the book puts forth a number of principles to deal with issues regarding the economic incentives of financial institutions, the impact of economic shocks, and the role of political constraints.

Politics matter for financial markets and financial markets matter for politics, and nowhere is this relationship more apparent than in emerging markets. This book investigates the links between politics and finance in countries that have recently experienced both economic and democratic transitions. It focuses on elections, investigating whether there is a “democratic premium”—whether financial markets and investors tend to react positively to elections in emerging markets. Special attention is devoted to Latin America, where over the last three decades many countries became democracies, with regular elections, just as they also became open economies dependent on foreign capital and dominated bond markets. The analysis draws on a unique set of primary databases covering an entire decade: more than 5,000 bank and fund manager portfolio recommendations on emerging markets. The book examines the trajectory of Brazil, for example, through its presidential elections of 2002, 2006, and 2010 and finds a decoupling of financial and political cycles that occurred also in many other emerging economies. It charts this evolution through the behavior of brokers, analysts, fund managers, and bankers. Ironically, while some emerging markets have decoupled politics and finance, in the wake of the 2008–2012 financial crisis many developed economies (Europe and the United States) have experienced a recoupling between finance and politics.

In the 1970s global financial markets were controlled by governments, compartmentalized along national boundaries and segregated according to the particular activities they engaged in. All that disintegrated in the decades that followed under the pressure of market forces, global integration, and a revolution in the technology of trading. However, none of the outcomes were inevitable despite the forces at work. Instead, they were the product of decisions taken at the time for a variety of reasons. Banks, exchanges, and regulators were faced with unprecedented challenges and opportunities, as a revolution swept away traditional ways of conducting banking, the methods used to trade in financial markets, and the rules and regulations employed to enforce discipline. One outcome of the scale and pace of the changes that took place was the Global Financial Crisis of 2008, which exposed the fragility of the new structures created. Since then new structures have been put in place and they were put to the test by the consequences of the coronavirus epidemic of 2020. Global financial markets are never at rest and this book captures that world through the perspective of banks, exchanges, and regulators. Nothing like it has been attempted before.

This is the first study of the entire British banking system from its origins in the late seventeenth century until the present. It analyses what made the British banking system the most resilient and trusted in the world and how it was able to maintain that for so long. It describes a process of continuous adaptation and innovation as the system responded to the challenges and opportunities that arose over three centuries, provides an explanation for the calamity that overtook the British banking system in 2007/8, and the insight required to restore it to the position it once occupied. To achieve that insight requires an understanding of the entire banking system, not a subset of banks. Banks are key components of a complex financial system continually interacting with each other, and constantly changing over time. This makes the conventional distinctions drawn between different types of banks inappropriate for any long-term analysis. These distinctions were neither absolute nor permanent but relative and temporary. Banks were also central to both the payments system and the money market without which no modern economy could function. Only with such an understanding is it possible to appreciate what the British banking system achieved and then maintained from the middle of the nineteenth century onwards, why it was lost in such a short space of time, and what needs to be done to return it to the position it once occupied. Without such an understanding the mistakes of the recent past are destined to be repeated.

A new era of global banking and insurance is emerging, with leading banks eager to serve international markets. This book explores the issues that arise for banks in their strategic choices as they move into these new international markets. This book challenges conventional assumptions from the international management literature on topics such as the limits of globalization, the importance of cultural and institutional distance, the nature of economies of scale and scope, the existence of first mover advantages, the logic behind the global value chain configuration, the speed and timing of market entry, as well as organizational architecture. It focuses on fundamental strategic decisions such as when, where, and how to enter foreign markets and how to design the organizational architecture of the multinational financial services firm. Using simple theoretical frameworks illustrated by case examples, this book provides a guide to the challenges of the international market for financial services firms.

Cash and Dash looks at the origins and development of the automated teller machine (ATM) as means to provide the unifying thread to explain changes in retail banking brought about by and around the introduction of computer technology. Main themes include an explanation of why technological change is slow in retail financial markets, and how different groups of people and organizations interact to shape a particular technology. Documentary evidence helps to clarify the myth of the single inventor and details the monumental task to deliver digital banking for retail consumers. Of particular importance for banks around the world throughout this task, was the need to balance new and unintended uses of a device by consumers as opposed to solving impending technical issues and gaining consumers’ trust, acceptance, and high usage. Research illuminates the progress of an industry-specific innovation becoming a novelty and how new payment devices embed in everyday life. The story in Cash and Dash also illustrates that serious ethical and political issues can emerge while adopting, making operational, and maintaining a particular technology within and around retail financial institutions. This approach contrasts with others that perceive technological change as external, neutral, and devoid of context and social setting. The book aims to keep the focus of the narrative off obsolescence and on maintenance and reinvention, while also allowing space to provide conceptual underpinnings and celebrating industry milestones. In short, Cash and Dash recounts a story of decisions about capital investments, business strategies, and technological evolution, and how these were followed by decisions dealing with legacy systems, personnel, standards, locations, and whether machines could become a source of competitive advantage in retail banking.

Investment is no longer a matter of individual savers directly choosing which shares or bonds to buy. Rather, most of their money flows through a ‘chain’: an often extended sequence of intermediaries. What goes on in that chain is of huge importance: the world’s investment managers, who are now almost as well paid as top bankers, control assets equivalent in value to around a year of total global economic output. In Chains of Finance, five social scientists (four of whom have worked in investment management) discuss the ways in which the intermediaries in the chain influence each other, channel the flows of savers’ money, enhance investment decisions, and form audiences for each other’s performances of financially competent selves. The central argument of the book is that investment management is fashioned profoundly by the opportunities and constraints this chain creates. Whether chains constrain or enable, however, they always entangle, tying intermediaries to each other—silently and profoundly shaping the investment management industry. Chains of Finance is a novel analysis that will make students, social scientists, financial professionals and regulators look at the workings of financial markets in a new light. A must-read for anyone looking for insights into the decision-making processes of investment managers and those influenced by and working for them.

Can entrepreneurs develop a nation, serve the poor, and pursue creative freedom, all while generating economic value? This book shows the contradictions that arise as designers, engineers, and businesspeople frame development and governance as opportunities to innovate. The book documents the rise of “entrepreneurial citizenship” in India over the past seventy years, demonstrating how a global ethos of development through design has come to shape state policy, economic investment, and the middle class in one of the world's fastest-growing nations. The book chronicles the practices and mindsets that hold up professional design as the answer to the challenges of a country of more than one billion people, most of whom are poor. While discussions of entrepreneurial citizenship promise that Indian children can grow up to lead a nation aspiring to uplift the poor, in reality, social, economic, and political structures constrain whose enterprise, which hopes, and which needs can be seen as worthy of investment. In the process, the book warns, powerful investors, philanthropies, and companies exploit citizens' social relations, empathy, and political hope in the quest to generate economic value. The book argues that the move to recast social change as innovation, with innovators as heroes, frames others—craftspeople, workers, and activists—as of lower value, or even dangers to entrepreneurial forms of development. The book lays bare how long-standing power hierarchies such as class, caste, language, and colonialism continue to shape opportunity in a world where good ideas supposedly rule all.

Does too much competition in the banking sector hurt society? What policies can best protect and stabilize banking without stifling it? Institutional responses to such questions have evolved over time, from interventionist regulatory control after the Great Depression to the liberalization policies that started in the United States in the 1970s. The 2007–2009 crisis, which originated from an oversupply of credit, once again raised questions about excessive banking competition and what should be done about it. This book addresses the critical relationships between competition, regulation, and stability, and the implications of coordinating banking regulations with competition policies. The book argues that while competition is not responsible for fragility in banking, there are trade-offs between competition and stability. Well-designed regulations would alleviate these trade-offs but not eliminate them, and the specificity of competition in banking should be accounted for. It also asserts that regulation and competition policy should be coordinated, with tighter prudential requirements in more competitive situations, but it also shows that supervisory and competition authorities should stand separate from each other, each pursuing its own objective. The book reviews the theory and empirics of banking competition, drawing on up-to-date analysis that incorporates the characteristics of modern market-based banking, and he looks at regulation, competition policies, and crisis interventions in Europe and the United States, as well as in emerging and developing economies. Focusing on why banking competition policies are necessary, the book examines regulation's impact on the industry's efficiency and effectiveness.

This book integrates both the changing structure of the commercial banking industry in Europe and the strategic implications of these changes. It begins by concentrating on the economics of banking, presenting an analysis of the principal environment forces affecting the financial sector: deregulation, internationalization, economic instability, technical change, and financial innovation. The second part offers valuable information on current trends in the five main EC countries. The analysis of each country includes a study of the recent evolution of its financial sector, in turn; each sector's inherent economic outlook in terms of profitability, costs, productivity, and competition; as well as the changes in the regulatory environment. The third part of the book is dedicated to an analysis of some of the strategic choices of European banks, such as scale, diversification, and internationalization. Finally, the pace of change within the European banking industry is evaluated, as well as how some of the banks are adapting to the new environment.

This book addresses major modern controversies in corporate governance, clarifying the issues at stake and assessing the arguments for corporate reform. The main focus is on governance of the large organizations that employ the majority of workforces in developed economies and which account for most of the finance and refinance of the private sector. Shareholder value and shareholder primacy are now under increasing scrutiny having previously been positioned as natural precepts of governance. The book joins that debate with a critique and also with suggestions for company reform that allow for plurality within jurisdictions: the trust firm, industrial foundations, social enterprises, the ‘benefit corporation’, restricted voting rights, employee representation etc. The book addresses several sets of controversies in corporate governance. Part 1 places the corporate form within the context of legal constitution and governmental regulation. The second set of chapters considers corporate governance systems and their role in innovation and adaptation. The chapters in part 3 discuss labour relations and worker involvement in the governance of companies. Part 4 widens the focus to consider effects external to the firm—on consumer interests and the environment. What these issues point to is that the modern corporation is not only an economic institution but also a cultural and political one, reflecting the firm’s role in civil society The overall theme is that the corporate governance agenda has been on the wrong track and needs to be fundamentally reset.

As the world's political and economic leaders struggle with the aftermath of the Financial Debacle of 2008, this book asks the question: have financial crises presented opportunities to rebuild the financial system? Examining eight global financial crises since the late 19th century, this historical study offers insights into how the financial landscape — banks, governance, regulation, international cooperation, and balance of power — has been (or failed to be) reshaped after a systemic shock. It includes careful consideration of the Great Depression of the 1930s, the only experience of comparable moment to the recession of the early 21st century, yet also marked in its differences. Taking into account not only the economic and business aspects of financial crises, but also their political and socio-cultural dimensions, the book highlights both their idiosyncrasies and common features, and assesses their impact in the broader context of long-term historical development.