Accounting research and trust: a literature review

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  • Accounting research and trust:a literature review

    Gudrun BaldvinsdottirTrondheim Business School, Trondheim, Norway, and

    Andreas Hagberg, Inga-Lill Johansson,Kristina Jonall and Jan Marton

    School of Business, Economics and Law,University of Gothenburg, Gothenburg, Sweden

    Abstract

    Purpose The purpose of this paper is to provide a structured overview of literature in the nexus oftrust and accounting. This can serve as a basis for future research, and thus provide a framework forasking more precise and focused research questions.

    Design/methodology/approach All papers published in prominent accounting journals during a15-year period were examined. Papers pertaining to the field of trust and accounting were categorizedand analyzed in more detail, and qualitatively classified in accordance with selected dimensions. Thereview focused on papers explicitly exploring the link between accounting and trust.

    Findings A large proportion of the papers is in the field of management accounting (MAN). Themajority of published papers in the field are based on sociological theory, but there are someeconomics-based papers. Sociologically based analysis seems to provide more structure, but is alsoless paradigmatic in nature than economic theory. Only a small number of papers have an explicitdefinition of the concept of trust. The authors conclusion is that the state of research has beendeveloping to become more paradigmatic in recent years.

    Originality/value This is the only literature review that provides a comprehensive overview ofresearch on trust and accounting. Thus, it is an aid to future research in the area.

    Keywords Trust, Accounting, Research work, Serials, Paradigmatic research, Trust definition

    Paper type Literature review

    1. IntroductionThe concept of trust has received interest in research in a variety of fields. In the area ofeconomics, North (1990) claims that trust in institutions, for example in proprietorshipand the judicial system, is crucial for achieving economic growth. The importance oftrust for the functioning of societies is also pointed out by Putnam (1993, 2002). He refersto social capital, a concept closely related to trust, as important for the functioning of ademocratic society. Both North and Putnam discuss trust on an overall societal level.In the organizational literature, the role of trust as a facilitator of effective organizationalrelations has been widely discussed, and considerable interest has been directed towards

    The current issue and full text archive of this journal is available at

    www.emeraldinsight.com/1176-6093.htm

    The authors gratefully acknowledge financial support from the Jan Wallanders and Tom HedeliusFoundation, the Swedish Research Council, and from the Torsten and Ragnar SoderbergsFoundation. The authors also thank the Editor, Deryl Northcott, and two anonymous reviewersfor their encouragement and suggested improvements. Finally, thanks are also due to workshopparticipants at the AAA Annual Meeting in New York 2009 and at the EAA Annual Congress inTampere, 2009.

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    Qualitative Research in Accounting& ManagementVol. 8 No. 4, 2011pp. 382-424q Emerald Group Publishing Limited1176-6093DOI 10.1108/11766091111189891

  • the issue of how trust can be both created and maintained (Mayer et al., 1995; Nooteboom,1996). This research indicates the importance of the concept of trust in humaninteraction, and its applicability to various social fields.

    Recent developments in practice reinforce the importance of understanding trust.The significance of trust becomes especially obvious when there is a strong decline intrust. The credit crisis of 2007-2009 was to a large extent a crisis of confidence and trust,evidenced by a flight from risk. In the autumn of 2008, interbank credit markets onlyfunctioned when guaranteed by governments, a clear indication of lack of trust inprivate financial organizations. Loss of trust in emerging markets has occurred severaltimes in the last few decades, for example in Southeastern Asia (1997), Russia (1998), andLatin America (Mexico and Argentina, 1995). According to Krugman (2009), the problemin those crises was in some cases not fundamental economics, but rather loss ofconfidence or trust from international investors. Accordingly, the response to crises bygovernments and international organizations such as the International MonetaryFund was not based on the theoretically correct economic remedies, but rather onrestoring trust in those emerging markets (Akerlof, 1970).

    A feature that became apparent in the credit crisis of 2007-2009 is the role ofaccounting, and its relation to trust in markets. An aspect of the crisis is the perceivedlack of information about credit exposure in financial institutions. This exacerbated theloss of trust and created calls for new regulation of accounting for financial instruments,both from regulators directly involved, and from politicians. The Financial AccountingStandards Board (FASBs), International Accounting Standards Board (IASBs) andFinancial Crisis Advisory Group (FCAG) have acknowledged that weakness in theapplication of accounting rules and standards has reduced credibility in financialreporting (FCAG, 2009). A few years earlier, the Enron bankruptcy of 2001 led to thethreat of loss of trust in the accounting system (Rockness and Rockness, 2005). Theimportance of restoring trust in financial reporting is indicated by the strong response ofgovernments, especially in the USA with the enactment of the Sarbanes-Oxley Act in2002, but also in the European Union with the update of the eighth Directive in 2005.

    Consequently, the interaction of trust and accounting may be of particularimportance. Accounting as codified and/or institutionalized practice can increase trust,both in systems and in organizations (Van der Meer-kooistra and Vosselman, 2000).In addition, trust in accounting is arguably necessary for an accounting system tofunction properly ( Jones and Dugdale, 2001). Thus, the very nature of accounting, and itsrole in economic and social interaction, point to the importance of understanding trust insuch a setting.

    There is a need for further research on trust and accounting, as organizations,regulators and governments would benefit from a better understanding of whichaccounting choices and disclosures help increase trust, and which ones may destroytrust. Thus, research on trust and accounting helps us understand not only the role oftrust in accounting processes, but also how trust can come about by means of accounting.

    As early as 1972, Hopwood pointed out that accounting can be studied as an aspect ofsocial interaction and analyzed at the organizational level. This was developed as earlywork in the field of trust and accounting by Neu (1991a, b, c), who concluded that there is aneed for additional research. Following Neu, there has been an increase in research in thefield, although calls for additional research continue to appear in the literature. These callsare both general, and more specifically focused on particular issues. OConnor (1995),

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  • for example, suggests longitudinal case studies to enhance the understanding oftheoretical relationships. With a similar intention, Jonsson and Macintosh (1997) arguefor more ethnographic studies in the field. Tomkins (2001) points to further research in anumber of directions, however stressing the need for developing explicit theories of howtrust needs to be taken into account in all the different dimensions of accounting (p. 185).Arguably, the study of trust in relation to accounting is of interest, as researcherscontinue to call for additional research. Judging from the references, there are especiallycalls for qualitative research in the field. The review reported in this paper also indicatesthat the majority of research done to date is qualitative in nature.

    Before making another call for further research, however, it is relevant to makea systematic analysis of what has been done so far. In this paper, we report the results ofa literature review in which we summarize and structure trust-related papers publishedwithin the accounting field. The purpose of the study is to assist researchers in the areaof trust and accounting, and thus to provide a framework for asking more precise andfocused research questions. This is done by providing a structured overview of what hasbeen done to date. It shows in which areas substantial prior research exists, and alsowhere relevant issues for future research have been identified. In addition, we attempt topoint out the dimensions along which the concept of trust has been categorized inresearch. Finally, we study the extent to which paradigms have emerged within the fieldof trust and accounting research. The emergence of paradigms indicates areas whereresearchers have focused particular attention. In paradigmatic research, it may also bepossible to develop more complex theories.

    The focus in the paper is on the nexus between trust and accounting. We do not,however, aim at providing a definition of trust, nor do we suggest a theory most suitablefor this type of research. Instead, the definitions used in the reviewed papers arepresented together with the theoretical bases used. As noted previously, we expect trustto be an important concept in relation to accounting. Given the ongoing debate in societyabout the importance of trust, we assume that the topic of accounting and trust willgather further interest in the accounting research community. The literature studyprovided here could thus serve as a useful starting point for researchers interested indeveloping this important field. (The Appendix includes studies that were canvassed toprovide a basis for the overview of the research field, that is, Primary 1 papers.)

    The remainder of the paper is structured in four sections. We start in Section 2 bypresenting the method used for the identification and analysis of papers included in theliterature review. Section 3 presents our empirical data, that is, the findings of the reviewincluding descriptive data, and results of the categorization and classification of papers,and this is statistically tested in Section 4. Section 5 includes a discussion and analysis ofthe results, including some suggestions for future research. The paper ends with a briefsummary of results in Section 6.

    2. MethodIn this section, we present the method used in the literature review. The review can bedivided into several steps. Only papers published in scientific journals are included inthe study. First, we delimited the search for papers both in terms of journals included,and in terms of time period covered. Second, we applied criteria for which papers toinclude in the review, and third, once a number of relevant papers had been identified weused a structured method for analyzing them.

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  • 2.1 Journals included and time period coveredOur field of interest is the interaction between trust and accounting. In order to findpapers in this field, we could either look for papers in the trust literature, or in theaccounting literature. Given that only a small minority of trust papers is related toaccounting, and that such papers are dispersed in a large number of journals, it would bedifficult to search potential journals. The trust literature does not appear in a fewselected journals. Instead, we chose to focus on the accounting literature. In doing so,we believe we have identified the overwhelming majority of papers on trust andaccounting, although it is possible that we may have missed some papers.

    The next issue was to decide what accounting journals to include, given the largenumber of potential journals available. We chose to base our selection on two publishedrankings of the most influential journals in the field of accounting, one by Ballas andTheoharakis (2003), and the other by Zeff (1996). We selected the top ranked journalsfrom the two studies (the journals selected are shown in Table I). Our selection includes20 out of the top 25 journals ranked by Ballas and Theoharakis, and 13 out of the 15 topjournals suggested by Zeff (1996, p. 164)[1]. These 13 were all among the top 25 journalsranked by Ballas and Theoharakis (2003).

    Three top ranked journals were excluded. The first is Issues in Accounting Educationtop ranked in both studies. We also excludedAuditing: A Journal of Practice andTheory,and Journal of American Taxation Association top ranked by Ballas and Theoharakis(2003). A search of these three journals showed that no papers were relevant to our study.This is not surprising, since the journals have a focus that differs from our primaryinterest as we study trust in relation to accounting practice. We focus neither oneducation, nor auditing or taxation issues.

    After having identified the most influential journals in the field of accounting,we needed to delimit the time period of review. In Section 1 above, we refer to a fewimportant papers, such as Neu (1991a, b, c), OConnor (1995), Jonsson and Macintosh(1997), and Tomkins (2001). We chose a time-period that would include publishedresponses to these six papers. Given the inherent time lag in the publication of papers, wedecided to review papers in the years 1995 through 2009 inclusive. The total number ofpapers in the journals selected, stratified by year of publication, are shown in Table I.

    2.2 Selection of papersAfter having identified more than 9,000 potential papers in 20 journals, the next step wasto search for papers that specifically relate to trust and accounting. We did this byelectronically searching the full text of all papers for the word trust[2]. We excludedpapers where trust was only used in the meaning of trust fund, hospital trust, etc. We alsoexcluded papers where the word trust appeared only in the reference list, footnotes,etc. This search resulted in the identification of the 793 papers included in the review.

    2.3 Categorization of papersAll of the identified papers do not have the same relevance to our research issues,however. An initial review of the papers indicated one dimension for classification inthat they were qualitatively different in terms of their treatment of the relation betweentrust and accounting. Within this dimension, we identified three categories. First, therewere papers that contribute to the knowledge of the relation between trust andaccounting, either empirically and/or theoretically. These papers, we categorized

    Accountingresearch

    and trust

    385

  • Jou

    rnal

    1995

    1996

    1997

    1998

    1999

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    Tot

    al

    ABACUS

    1313

    1116

    1820

    2223

    2623

    2128

    3128

    2832

    1Accounting,

    Auditing&

    AccountabilityJournal

    (AAAJ)

    2030

    2824

    3328

    2426

    3227

    5240

    3654

    5951

    3Accounting&

    BusinessResearch

    (ABR

    )41

    4639

    3033

    2624

    2325

    3322

    4035

    3626

    479

    AccountingHorizons

    (AH

    )48

    5346

    3628

    2729

    2737

    2118

    2327

    3223

    475

    Accounting,

    OrganizationsandSociety

    (AOS

    )33

    3740

    4034

    3732

    3246

    4338

    3335

    4858

    586

    BehavioralResearchin

    Accounting

    (BREA

    )7

    1212

    87

    1112

    116

    911

    1313

    1411

    157

    British

    AccountingReview

    (BAR

    )15

    1822

    1923

    2326

    2325

    4035

    3529

    3119

    383

    Contemporary

    AccountingResearch

    (CAR

    )29

    2630

    2332

    2828

    2628

    3642

    4251

    4744

    512

    CriticalPerspectiveson

    Accounting

    (CPA

    )54

    8196

    102

    6464

    5866

    7110

    059

    8168

    7552

    1,09

    1EuropeanAccountingReview

    (EAR

    )55

    4355

    4348

    4440

    4945

    4145

    4946

    4046

    689

    Journalof

    Accounting,

    Auditing&

    Finance

    (JAAF

    )39

    3118

    2524

    2521

    1631

    2622

    1729

    2524

    373

    Journalof

    AccountingandEconom

    ics

    (JAE

    )27

    3036

    1847

    4024

    2244

    3926

    3534

    4329

    494

    Journalof

    AccountingLiterature

    (JAL

    )5

    44

    64

    83

    44

    44

    44

    34

    65Journalof

    AccountingandPublicPolicy

    (JAPP

    )10

    1415

    1819

    1918

    1023

    3922

    3126

    3032

    326

    Journalof

    AccountingResearch

    (JAR

    )20

    2830

    3035

    2535

    4534

    3328

    3537

    4442

    501

    Journalof

    BusinessFinance

    &Accounting

    (JBFA

    )72

    8780

    6855

    5858

    5656

    4470

    7773

    5355

    962

    Journalof

    ManagementAccountingResearch

    (JMAR

    )7

    99

    135

    56

    1012

    1110

    88

    2015

    148

    ManagementAccountingResearch

    (MAR

    )22

    2023

    2219

    2421

    2220

    3120

    2018

    2122

    325

    Reviewof

    AccountingStudies

    (RAS

    )0

    187

    2716

    1723

    2526

    2422

    2526

    2525

    306

    TheAccountingReview

    (AR

    )29

    2827

    2422

    1929

    4045

    4738

    4549

    9487

    623

    Tot

    al54

    662

    862

    859

    256

    654

    853

    355

    663

    667

    160

    568

    167

    576

    369

    79,

    325

    Table I.Number of papers in eachof journals selected,stratified by year(1995-2009)

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  • as Primary 1 (P1) papers. Second, there were papers that refer to, and use, existingknowledge about trust and accounting[3], but that do not add to this knowledge. Thesepapers we categorized as Primary 2 (P2) papers. Third, we identified papers that are inthe accounting literature, and refer to trust, but where the relation between trust andaccounting is neither developed nor mentioned. Rather, in these papers, trust is used inan incidental, and often everyday manner, such as trust in financial markets with nofurther analysis. These papers, we classified as Secondary (S) papers. This category alsoincluded papers that focus on or mention trust in the accounting researcher, rather thanin accounting per se[4].

    Another dimension used for classification of papers was the topic covered. Somepapers focus on the relation between trust and auditing, trust and accounting regulation,or trust and accounting education. These papers add to our understanding of the relationbetween trust and accounting in a broader sense, but are not specifically related to ourmain topic of interest, that is, trust and accounting practice. Thus, these papers wereclassified into their own category, which we call Primary 3 (P3)[5].

    2.4 Dimensions used in the paper reviewOnce papers were identified and categorized, we started the actual analysis of thepapers. In order to structure the review, different dimensions were selected for analyzingthe papers. All 793 papers included in the study were reviewed, although the P1 papers,the most relevant to our research topic, were subject to a more in-depth analysis. Thedimensions presented below were only applied to the P1 papers[6]. For the other papers,we provide descriptive statistics in Section 3.

    The selection of dimensions for analysis was based on the research issues presentedin Section 1, that is, to provide an overview of what has been published in the area oftrust and accounting, to identify dimensions along which the concept of trust can becategorized, and to study the paradigmatic nature of the research field. The chosendimensions are summarized below. Once dimensions had been selected, we developedcategories for classification within each dimension. This was largely done in an iterativeprocess, inspired by a grounded theory approach. Thus, initial reviews of the paperswere used to develop categories. Then, a more in-depth analysis was conducted,applying the categories already developed.

    Trust inwhom. The categories in this dimension were developed from the material, thatis, no predefined categories were used. The identified categories were of different kinds.First, there was trust in a specific type of actor, such as partners, peers, managers/superiors(by employees/subordinates), employees/subordinates (by managers/superiors), or clients(by auditors). Second, there was trust in institutions or systems.

    Direction of relation between trust and accounting. This dimension was directlyapplicable to the study, since we were specifically interested in the relation betweentrust and accounting. Logically, the direction could fall into one of three categories:

    (1) trust affecting accounting practice;

    (2) accounting practice affecting trust; and

    (3) a relationship working in both directions between accounting and trust.

    The role of trust in accounting practice. During the review it became apparent that paperscould be classified into a few distinct qualitative categories as regards the view taken onthe role of trust in relation to accounting practice. This dimension is somewhat similar

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  • to the previous dimension, but we posit that this new dimension provides additionalunique information for our study. The categories identified were: trust as an intangibleasset, trust as a facilitator of business activity on an individual or organizational level, andtrust as important for the functioning of regulation or on a societal level. A separatecategory was where trust is being influenced by accounting practice. In this last categorytrust does not have a role per se, but is rather the outcome of an accounting activity.

    Research approach. We classified papers by the overall research approach taken.Three main categories were used: empirical, experimental, and theoretical. Theempirical papers were then further subdivided into categories such as archival, casestudies, document studies, interviews, observation, and questionnaires. This dimensionwas included in the review in order to supply an overview of how research in the field isconducted. Indirectly, to the extent that there was agreement in research approachesbetween papers, it gave indications of the extent to which paradigmatic research exists.

    Theoretical basis. In the literature there are observations that accounting researchtends to be based on two main theoretical bases; economic and sociological (Tomkins,2001; Searcy and Mentzer, 2003). An initial review of the P1 papers clearly showed thatthis was also the case for research in the area of trust and accounting, that is, the papersreviewed could largely be classified into these two categories. In addition, some papersexhibited a theoretical movement, that is, they moved between the categories. Weidentified the following four categories:

    (1) Economic theory rejected. Papers starting out from economic theory,but criticizing and rejecting it.

    (2) Economic theory applied. Papers that are based on economic theory and thatapply it either for an empirical study or for theoretical development[7].

    (3) Sociological theory applied. Papers that apply one theoretical basis (like theprevious category) but that are based on sociological theory and apply it eitherfor an empirical study or for theoretical discussion. There are also papers in thiscategory combining a theoretical discussion with an empirical study.

    (4) From economic theory to sociological theory. Papers starting out from economictheory, criticizing and rejecting it, only to make way for sociological theory.

    Papers in the first and last categories are similar, in that they both reject economic theory.However, while the papers in the last category argue for a specific alternative, those in thefirst category argue in more general terms that some alternative theoretical basis is needed.

    After having classified the papers into the four categories listed above, we noted amore detailed structure in the theoretical basis of the papers. The economics-basedpapers fell into the following three discernible subcategories:

    (1) Papers reflecting general economic thinking although not explicitly linked toany specific economic theory or literature reference.

    (2) Papers identifying specific references in economic theory and applying these toan empirical study.

    (3) Analytical papers that contribute to theory development.

    The sociology-based papers fell into four discernible subcategories:

    (1) Papers contributing to a field-specific theory through an empirical study.

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  • (2) Papers involving an empirical study without explicitly relating to theory.

    (3) Papers relating to a field-specific theory without applying it to an empirical study.

    (4) Papers neither relating to field-specific theory nor carrying out an empirical study.

    The dimension of theoretical basis of papers was used to analyze the state of research ontrust and accounting. It helped to us evaluate the paradigmatic nature of research in thefield. It was also useful in identifying issues for future research, as such issues tend to bedependent on the theoretical base adopted.

    Central trust reference. This dimension related to the primary reference(s) used indeveloping and structuring the concept of trust in each of the papers. Not all papers havea central trust reference, however. These references can be both from inside and outsidethe field of accounting. The dimension indicated to what extent there is a common basisfor the discussion of trust in the field.

    Definition of trust. Some papers provide a definition of trust. The definition can bebased either on a reference (cf. the previous dimension), or developed in the specificpaper. A paper was classified as having an explicit definition of trust in either of thefollowing three situations:

    (1) in the paper there is an explicit statement that a definition is provided;

    (2) a definition is provided through modeling; or

    (3) trust is explicitly operationalized as a variable.

    This dimension indicated to what extent papers in the research field are based on acommon understanding of trust. In that sense, both this and some of the previousdimensions provided insight into the paradigmatic nature of research.

    3. Presentation of descriptive data and resultsThe presentation of data starts with descriptive statistics of the papers included in thestudy. As mentioned previously, all included papers containing the word trust wereclassified as either Primary 1-3 (P1-P3), or Secondary (S) papers. The categorization ofthe 793 papers included in the study (Table I) shows that in the period from 1995 to 2009there were 196 papers that made a contribution to our knowledge of trust in relation toaccounting practice (P1 papers). Almost as many, or 158 papers, made use of existingknowledge of trust related to accounting practice, however, without making a newcontribution to the area (P2). One hundred and nine papers cover issues related to the roleof trust in relation to auditing, accounting regulation, and accounting education (P3).The remaining 330 papers use trust as an everyday concept (S).

    In order to acquire an overview of published research, Table II, Panel A presentsstatistics regarding in what journals the included papers have been published organizedby classification P1-P3 and S. This table provides us with a rough idea as regards thedirection of the research since the different journals tend to specialize in specific types oftopics, research methods and theoretical approaches. Four journals dominate:Accounting Auditing & Accountability Journal (AAAJ), Accounting, Organizations& Society (AOS), Critical Perspectives on Accounting (CPA), and ManagementAccounting Research (MAR). All four journals can be said to largely publish papersconcerned with accounting in a social context. For the most part, the research in thesejournals is carried out using some form of case study and predominantly the papers

    Accountingresearch

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    389

  • Primary1

    Primary2

    Primary3 Secondary S

    Panel A: number of papers by journal, grouped by classificationAAAJ 23 33 20 70 146Abacus 3 6 2 12 23ABR 9 5 3 12 29AH 3 5 9 25 42AOS 42 40 26 61 169AR 11 2 3 10 26BAR 10 1 1 6 18BREA 2 9 9 8 28CAR 8 5 3 3 19CPA 24 12 15 58 109EAR 10 6 8 11 35JAAF 3 2 2 5 12JAE 7 1 2 8 18JAL 3 1 0 4 8JAPP 7 5 4 7 23JAR 3 4 0 2 9JBFA 0 1 1 5 7JMAR 7 1 0 5 13MAR 20 19 1 15 55RAS 1 0 0 3 4Total 196 158 109 330 793Panel B: number of papers by topic area, grouped by classificationAccounting education (AED) 0 2 2 9 13Accounting history (AHI) 4 8 6 34 52Accounting and information systems (AIS) 2 2 0 2 6Accounting theory (ATH) 2 6 0 6 14Auditing (AUD) 3 7 57 32 99Critical perspectives (CPP) 27 11 15 36 89Economic and analytical modelling (EAA) 8 3 0 5 16Financial accounting (FAN) 14 8 0 30 52Financial reporting (FRG) 20 7 5 36 68Accounting and governance (GOV) 6 5 3 9 23International accounting (INA) 0 0 1 10 11Management accounting (MAN) 82 47 0 35 164Organizational and behavioral accounting(OBA) 4 16 6 9 35Public sector accounting (PSA) 11 17 7 23 58Social and environmental accounting (SEA) 0 9 3 18 30Taxation (TAX) 1 0 0 1 2Several 6 8 2 6 22Unclear 6 2 2 29 39Total 196 158 109 330 793Panel C: Number of papers by year of publication, grouped by classification1995 8 6 4 8 261996 9 4 11 12 361997 9 6 8 10 331998 5 11 6 13 351999 5 5 5 14 28

    (continued )

    Table II.Papers by journal,topic area, and yearof publication, groupedby classification

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  • are informed by sociology. Their dominance is especially strong for P1 and P2 papers,that is, those papers that either contribute new knowledge about trust or those that useexisting knowledge about trust in relation to accounting practice. For P3 and S papers,that is, papers about trust in relation to auditing, regulation, and education and papersusing the word trust as an every-day concept, there is more variation in terms of journals.

    In order to generate an overview of what type of topics have generated interestamongst researchers, the papers have been classified by topic area in Table II, Panel B[8].The table shows that management accounting (MAN) is clearly the most prevalentresearch topic amongst P1 papers and P2 papers. Four additional topics have createdrelatively large interest, that is, public sector accounting (PSA), financial accounting(FAN), financial reporting (FRG) and critical perspectives (CPP). Organizational andbehavioral accounting (OBA) is substantial among P2 papers. All other topic areas aresmall or non-existent within the P1 and P2 categories. In the P3 category, naturally, theauditing (AUD) topic is the one that dominates, since this category consists of papersrelated to auditing and its regulation. Regarding the S category, we see a more dispersedpattern, with the AUD topic again being important, as well as the accounting history(AHI), CPP, FAN, FRG and MAN topics. Overall, this indicates that there are sometopics, such as MAN, CPP and AUD, that more frequently than others relate toaccounting and trust issues, although there are also many trust papers in other topics[9].

    In order to obtain an indirect indication of knowledge accumulation, the papers havebeen classified based on their publication year in Table II, Panel C. As shown in the table,the number of published papers in all four categories has increased in the last fewyears of the sample. This increase in the number of published papers could be seen asindicative of increased interest in trust-related research and accounting over time.As seen in Section 4 of this paper, the increase over time is statistically significant[10].

    In Table II, the data has been divided into the categories P1-P3 and S in order to createan overview of research where the concept of trust is used in different ways and settings.The primary concern of this paper, however, is to gain insights into the accumulation ofknowledge about trust in relation to accounting practice, that is, there is a focus on theP1 papers. The remainder of this section will thus be dedicated to the 196 paperscategorized as P1. In Table III, the papers have been organized by journal and year to seeif the interest in trust research in relation to accounting practice has remained stable over

    Primary1

    Primary2

    Primary3 Secondary S

    2000 5 9 1 9 242001 8 6 4 14 322002 8 6 6 10 302003 11 13 6 21 512004 16 15 5 22 582005 23 10 12 39 842006 21 15 8 28 722007 20 10 11 33 742008 23 17 10 50 1002009 25 25 12 47 109Total 196 158 109 330 793 Table II.

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  • Jou

    rnal

    1995

    1996

    1997

    1998

    1999

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    S

    AAAJ

    01

    21

    22

    32

    33

    01

    00

    323

    Abacus

    00

    00

    00

    10

    00

    00

    02

    03

    ABR

    10

    10

    00

    00

    10

    10

    11

    39

    AH

    00

    00

    00

    00

    00

    01

    10

    13

    AOS

    65

    14

    13

    22

    15

    11

    35

    242

    AR

    00

    00

    00

    01

    03

    21

    02

    211

    BAR

    00

    00

    00

    00

    01

    41

    00

    410

    BREA

    00

    10

    00

    00

    00

    00

    10

    02

    CAR

    00

    00

    00

    01

    00

    11

    32

    08

    CPA

    01

    00

    00

    10

    03

    13

    53

    724

    EAR

    00

    10

    00

    00

    00

    51

    21

    010

    JAAF

    00

    00

    00

    01

    00

    11

    00

    03

    JAE

    10

    00

    00

    11

    00

    30

    01

    07

    JAL

    00

    00

    10

    00

    00

    01

    01

    03

    JAPP

    00

    10

    00

    00

    00

    14

    10

    07

    JAR

    00

    00

    00

    00

    00

    20

    00

    13

    JBFA

    00

    00

    00

    00

    00

    00

    00

    00

    JMAR

    02

    20

    00

    00

    10

    01

    00

    17

    MAR

    00

    00

    10

    00

    51

    14

    25

    120

    RAS

    00

    00

    00

    00

    00

    00

    10

    01

    Tot

    al8

    99

    55

    58

    811

    1623

    2120

    2325

    196

    Table III.Papers by journaland year (P1 only)

    QRAM8,4

    392

  • the period of this study or if we can identify any changes. As partly shown in Table II, thefour journals AAAJ, AOS, CPA and MAR dominate within the P1 category.Interestingly, however, in Table III, it can be seen that the publication frequency variesover time in different journals. In AAAJ there is a decreasing tendency over time, whileAOS has been relatively stable over the 15-year period. From the table, we can see thatinterest in trust related to accounting practice increases over time, and is relatively highthroughout the period of 2005-2009. The increase in the last five years is due to trustpapers being published in journals that have not previously published such papers.These include, for example, MAR, CPA, Contemporary Accounting Research (CAR),Accounting Review (AR), British Accounting Review (BAR), and European AccountingReview (EAR). The first two mentioned journals, that is, MAR and CPA, generallypublish research that shows some similarity with AAAJ and AOS regarding researchtopics, methodological approach and the use of sociological theory. CAR andAR, however, typically publish research of a more quantitative nature with a clearinfluence of economic theory, while BAR and EAR are more mixed. This indicates thatthe interest in trust issues related to accounting practice has not only increased but alsothat the interest has broadened across publication outlets as the number of journalsfrequently publishing papers in the field has increased[11].

    Table IV presents what is known empirically about the relation between trust andaccounting. In Table IV, Panel A the data has been divided into groups based on whois the trusted party. Six groups were identified. The largest group is trust ininstitutions/systems where topics such as the implementation of new publicmanagement systems are discussed (Hood, 1995). This group has also received moreinterest in the last few years, with the increase in research on FAN and reporting.Another large group is trust in partners, for example trust in a setting of inter-firmrelations. Van der Meer-kooistra and Vosselman (2000) discuss how a number of factors,such as organizational culture, explain why a company opts for a bureaucracy or atrust-based control pattern in its relations with other companies. The third largest groupis trust in management/superiors. Sholihin and Pike (2009), included in this group,conclude that when performance evaluations are perceived as fair, trust in managersincreases. An effect of this is that job satisfaction also increases.

    In Table IV, Panel B, the papers have been categorized based on the direction of therelationship between accounting and trust, that is, what is seen as having an impact onwhat. As an example of how trust has an impact on accounting practice, Broadbent et al.(1996) show how high trust relations imply less need for accounting controls within theUK public sector. In relation to the impact of accounting practice on trust, Llewellyn(1998) discusses how the caring sector can be constrained by costing and argues thataccounting systems can destroy trust in professionals. Langfield-Smith (2008) discusseshow managers effectively can use the control package , i.e. governance structure,behavior controls, output controls, social controls and internal processes to developtrust in alliances and in partners, and how the need for detailed accounting informationdecreases with interaction between the parties. The P1 papers are largely dividedbetween those studying the impact of trust on accounting or vice versa, with the latterpredominating. As seen in Table IV, the majority of the papers, or 80.1 percent, examinea one-sided relation between trust and accounting or accounting and trust, with only8.2 percent of the papers looking at the relationship in both directions.

    Accountingresearch

    and trust

    393

  • To better understand the impact of trust in relation to accounting practice, the papershave been grouped by the role that has been ascribed to trust in Table IV, Panel C. Twocategories predominate. One of the categories is when trust is seen to be a facilitator ofthe functioning of companies (Subramaniam and Mia, 2003), to smooth the auditingprocess and establish the areas where auditing is needed (Power, 1996), and how it canassist cooperation in arms-length relations (Seal et al., 2004). The other category iswhen accounting is seen to influence trust, either positively for example by creatingethical awareness (McPhail, 2009) or negatively such as when accounting informationcontributes to the creation of budgetary slack (Lau and Eggleton, 2003).

    The remaining tables relate to the state of research in the field of trust and accounting.First, we categorize the papers by the research approach adopted. Three categories wereidentified: empirical, experimental, and theoretical (Table V, Panel A). The majority ofpapers, or 59.7 percent, are of an empirical nature, where the researcher has directlystudied an empirical setting, for example how the introduction of new accountingtechniques may affect the image of the accountant (Friedman and Lyne, 1997). Only7.7 percent of the papers are experimental studies, which can be said to share somesimilarities to empirical studies although, instead of studying practitioners,experimental settings are created by the researcher, usually by exposing students tohypothetical situations. This was done by, for example, Fan and Wong (2002)

    Number %

    Panel A: papers categorized by trust in whom/whatPartnersa 55 28.1Peers 18 9.2Management/superiors 28 14.3Employees/subordinates 12 6.1Clients, by auditors 2 1.0Institutions/systems 75 38.3Unclear 6 3.1Total 196 100Panel B: papers categorized by direction of accounting/trust relationTrust! Accounting 63 32.1Accounting! Trust 94 48.0Both directions 16 8.2Unclear 23 11.7Total 196 100Panel C: Papers categorized by role of trustTrust is an intangible asset that has value 4 2.0Facilitates functioning of companies, audits,cooperation between companies, etc. 92 46.9Important on a regulatory and societal level 31 15.8Accounting affects trust, positively or negatively 51 26.0Other or unclearb 18 9.2Total 196 100

    Notes: aPartners represent companies having business transactions with each other; trust in thosecases may refer either to trust in the organizations, or in specific individuals within thoseorganizations; bpapers can be classified as unclear because they have a more theoretical discussion,i.e. they are not about the role of trust in practice

    Table IV.Papers categorized bytrust dimensions

    QRAM8,4

    394

  • in examining the effects of verification of managers private information on efficiency.The other main category, papers of a more theoretical nature, contain analyses based onprior research, or have a more theoretical focus in their research orientation. Twoexamples of this type of research are Lau and Tan (2006), who develop a model on thelinks between budgetary tension, procedural fairness, job-related tension andinterpersonal trust, and Jones and Dugdale (2001) who carry out a theoretical analysisbased on Giddens (1990) while looking at the concept of accounting regime.

    Empirical studies can be done using a variety of data-collection methods and datasources. A classification of the 117 empirical papers into six categories of researchmethods resulted in the distribution shown in Table V, Panel B. The methods include:archival data from databases such as Barros Kimbro (2002), who look at the correlationbetween trust, accounting information and corruption; interviews as when Goddard(2004) examines how accountability is perceived in budgeting processes within thepublic sector; observations as done by Peters (2001) when looking at changes in theadministrative practice of budgeting; experiments when looking at how informationsystems may affect honesty (Hannan et al., 2006); and questionnaires, for example asdone by Magner et al. (1995) when examining the relation between trust and employeebudget participation.

    The remainder of the analysis focuses on the theoretical basis of the papers. As seenin Table VI, Panel A, sociological research is a more common theoretical basis forpapers than economic theory. The research inspired by sociological theory is muchmore varied, making it difficult to talk about a common paradigm. Some of thesociological papers discuss and criticize economic theory, but none of theeconomics-based papers argue against sociological research. This can be interpretedas economics-based literature being the mainstream in overall research. Thirteenpapers start out from economic theory but then reject the theory. An example of thistype is the paper by Pentland and Carlile (1996) where economic theory is rejectedbased on the complexity of real-world situations, making it difficult to capture insimple models.

    A further subdivision of the theoretical basis of the papers is possible. The 69 papersclassified as Economic theory applied, are further divided into three subcategories:

    Number %

    Panel A: papers by research approachEmpirical 117 59.7Experimental 15 7.7Theoretical 64 32.7Total 196 100Panel B: empirical papers by research methodArchival 16 13.7Case studies, mixed methods 8 6.8Document 15 12.8Interview 46 39.3Observation 9 7.7Questionnaire/survey 23 19.7Total 117 100

    Table V.Papers categorized

    by research approachand method

    Accountingresearch

    and trust

    395

  • (1) papers that reflect economic thinking but without an explicit link to it;

    (2) papers that have an explicit reference to economic theory; or

    (3) analytical research papers with development of economic theory (Table VI,Panel B).

    Some 30 percent of the papers are based on economic thinking, without explicit links toany specific theory. Otley and Pierces (1995) paper on leadership and auditing is as anexample of this type of paper. It examines the relationship between the design ofcontrol-systems and dysfunctional behavior in budgeting processes, and concludes thatsubordinates who trust their superiors will result in a better handling of budgetprocesses. However, most economic theory papers have explicit references to theeconomics literature, such as Mitchell et al. (1995), which is based on a principal-agentframework and empirically investigates the accounting requirements that venturecapitalists have on companies and shows how trust in investees mitigates the issue ofinformation asymmetry. Among those few papers that develop economic theory, thepaper by Luft (1997) includes theoretical modeling, and concludes that factors such asfairness and ethics should be included in transaction cost models. The main argument isthat trust is a factor that improves the predictive ability of transaction cost models inresearch (assuming that there is a link between honesty and trust). Also, Coletti et al.(2005) attempt to develop economic thinking by involving social dilemmas and by linkingtheir theoretical framework to more sociologically inspired research on trust. Their study,

    Theoretical basis Number % Number %

    Panel A: papers by theoretical basisEconomic theory rejected 5 2.6Economic theory applied 69 35.2Sociological theory applied 89 45.4Economic theory! Sociological theory 13 6.6Unclear, review paper 20 10.2Total 196 100Panel B: papers by theoretical subcategory (economic theory applied only)Reflect economic thinking, but no explicit link 20 30.0Explicit reference to economic theory 37 53.6Analytical research, development of economic theory 10 14.5Unclear 2 2.9Total 69 100Panel C: Papers by theoretical subcategory (sociological theory only)

    Soc. Applied Econ.! Soc.Contribute to field-specific theory by empirical study 49 55.1 8 61.5Involve empirical study without explicitly relating totheory 11 12.4 0 0Relate to field-specific theory, without empiricalstudy 18 20.2 5 38.5Neither relate to field-specific theory, nor involveempirical study 9 10.1 0 0Unclear 2 2.2 0 0Total 89 100 13 100

    Table VI.Papers categorized bytheoretical basis

    QRAM8,4

    396

  • carried out as an experiment, shows that strong control systems can increase trustbetween colleagues and thus reduces incentives for opportunistic behavior.

    The 102 papers with a theoretical basis in sociology, classified as Sociological theoryapplied or Economic theory ( Sociological theory, make up more than half of theP1 papers. These have been classified into four subcategories:

    (1) papers that contribute to field-specific theory by empirical studies;

    (2) papers that involve empirical studies without explicitly relating to theory;

    (3) papers that relate to a field-specific theory, without empirical studies; or

    (4) papers that neither relate to field-specific theory, nor involve empirical studies.

    As seen in Table VI, Panel C, most of these papers contribute or relate to theory.Compared to papers based on economic theory, however, these papers applyfield-specific, rather than general, theory. Also, worth noting in Table VI is that somepapers neither relate to theory, nor involve an empirical study (10.1 percent).

    Chua (1995) serves as an illustration of the type of papers belonging to the firstsub-category, that is, papers that contribute to field-specific theory by empirical studies.This paper is based on case studies of three hospitals. Drawing on actor-network theory,change in accounting models is explained by faith, experts, rhetoric and by efforts oftying together different interests. Trust is found to be a necessary precondition forallowing a function to perform certain tasks, such as accounting tasks. An example ofthe type of papers in the second category, that is, papers that involve empirical studieswithout explicitly relating to theory, is the paper by ODwyer et al. (2005) where theauthors report on the role that sustainability reports play in holding non-governmentalorganizations accountable to stakeholders. They conclude that sustainability reportspractice is viewed negatively and adds neither credibility nor trust to financialinformation. The third subcategory, papers that relate to a field-specific theory withoutempirical studies, can be illustrated by the paper of Covaleski et al. (1996). In this paper,alternative approaches to mainstream MAR are put forward as being useful. Theauthors point to requirements for obtaining validity in alternative research, and to thephenomenon of trust affecting employees action, thus negating intended effects ofmanagement accounting systems. The fourth subcategory, papers that neither relate tofield-specific theory nor involve empirical studies, is illustrated by Gibson (2000). Thispaper is based on the analysis of prior literature and discusses how accounting languageand terminology fails to include and account for social values central to the beliefsystems of Aboriginal society.

    Our data indicates that the main body of research on trust in relation to accountingpractice is based on sociological theory as the theoretical departure and framework.Papers based on economic theory represent a minority, with 35.2 percent (Table VI,Panel A) of the papers demonstrating attempts to relate the concept of trust to economictheory. To the extent that these two theoretical bases represent paradigms, one mayexpect that some central references are more frequently drawn on than others byresearchers working within the respective paradigms. This expectation is howevercontradicted in Table VII, which shows the wide variety of central trust references usedin the 196 P1 papers analyzed in this paper. In the table, the central trust referencesreferred to in at least two papers are listed. Tomkins paper from 2001 is the mostfrequently used accounting reference. Since its publication, this paper has had an impact

    Accountingresearch

    and trust

    397

  • on the literature. Giddens (sociological theory) and Sakos (economic theory)are two authors whose writings from the early 1990s are heavily referredto. Some other accounting researchers, apart from Tomkins (2001), have been referredto more than once. An interesting observation is that there is an increase in references toaccounting papers in the last five years of our study. The accounting papers that arereferred to most (Dekker, 2004; Langfield-Smith and Smith, 2003; Neu, 1991a, b, c; Sealand Vincent-Jones, 1997; Tomkins, 2001; Van der Meer Kooistra and Vosselman, 2000,2006) are cited mainly in papers published in the 2005-2009 period. Thus, it seems as ifthe level of cross-referencing in the field of trust and accounting is increasing over time.This indicates that there is an increase in the paradigmatic nature of research in the field.

    An area where it is still difficult to see signs of a paradigm even an emerging one in trust research in accounting concerns the definition of trust. Table VIII shows that only36 papers (18.4 percent of the P1 papers) have an explicit definition of trust, based on

    References Field of research Times usedOf which2005-2009

    Giddens (1984, 1990, 1991a, b) Non-accounting 18 7Tomkins (2001) Accounting 18 14Sako (1992) Non-accounting 12 7Neu (1991a, b, c) Accounting 6 4Dekker (2004) Accounting 5 5Das and Teng (1998, 2001) Non-accounting 5 5Granovetter (1985) Non-accounting 5 5Luhmann (1979, 1984, 1988) Non-accounting 5 3Van der Meer Kooistra and Vosselman (2000, 2006) Accounting 5 4Berg et al. (1995) Accounting 4 2Gambetta (1988) Non-accounting 4 2Langfield-Smith and Smith (2003) Accounting 4 4Seal and Vincent-Jones (1997) Accounting 4 3Bachmann (2001) Non-accounting 3 3Garfinkel (1963, 1967) Non-accounting 3 0Rousseau et al. (1998) Non-accounting 3 3Williamson (1975, 1993) Non-accounting 3 1Zand (1972, 1997) Non-accounting 3 1Zucker (1986) Non-accounting 3 1Bolton (1991, 1997) Non-accounting 2 0Busco et al. (2006) Accounting 2 2Coletti et al. (2005) Accounting 2 2Cook (2001) Non-accounting 2 2Evans et al. (2001) Accounting 2 2Gulati (1995) Non-accounting 2 1Johansson and Baldvinsdottir (2003) Accounting 2 2Mayer et al. (1995) Non-accounting 2 1Putnam (1993) Non-accounting 2 2Read (1962) Non-accounting 2 1Ring and Van de Ven (1992) Accounting 2 1Seal et al. (1999) Accounting 2 1Seal et al. (2004) Accounting 2 2Unerman and ODwyer (2004) Accounting 2 1

    Table VII.Number of papers usingeach reference as acentral trust-relatedreference

    QRAM8,4

    398

  • a reference. About 14 additional papers provide a structure to the concept of trust. Theremaining 146 papers have no explicit definition or structure related to the concept.

    Table IX presents the explicit trust definitions used in the papers. Most papers witha definition refer to sociological research such as Zand (1972), Giddens (1990), andRousseau et al. (1998). A few definitions are based on economic theory. Economicmodeling is a basis for definitions by Gietzmann (1996) and Luft (1997). A moreempirically operationalized definition is provided in Abernethy et al. (2004).

    Tomkins (2001) develops his own definition. In the accounting literature, his paper isunique in that his definition is used by four other researchers in the field (Coad and Cullen,2006; Dekker, 2004; Johansson and Baldvinsdottir, 2003; Kajuter and Kulmala, 2005).Most definitions used are developed outside the field of accounting. The definition byHopwood (1972) is from the accounting literature, but it is only used once in our sample.

    4. Statistical analysisAfter having reviewed the papers in our study, and classified them by the dimensionsselected, we did statistical testing on the papers. The results of these tests are summarizedin this section. We conducted three types of tests. First, there are tests of significant trendsover time, that is to what extent there is a development over time in the trust literature.Second, tests are made of significant differences in papers from various journals. Third,tests of differences in papers in various topic areas are performed. The last two types oftests provide an overview of the research that has been done to date. All three tests giveinsight into the paradigmatic nature of research in the field of trust and accounting.

    Tests of changes over time are both quantitative and qualitative. Quantitativedevelopment is tested on the data in Table II, Panel C. Our tests (Spearman rankcorrelation) showed that there is a significant increase in the number of trust papers overtime. For the P1, P2 and S categories, the significance level is at the 1 percent level, whileit is at the 10 percent level for the P3 papers.

    Qualitative development is tested by seeing to what extent there is a significantchange over time in variables such as, topic areas, methods used, and theoretical bases ofpapers. This test was only done for P1 papers and the test used was x 2. Results showthat there are significant changes over time in terms of topic areas. The proportion ofpapers in the fields of FAN and reporting (FIN and FRG) has increased over time. None ofthe other variables changed significantly over time.

    We tested P1 papers for differences between journals, in order to see to what extentthe debate and development of trust is mostly centered in certain journals. Ax 2-test wasperformed, where we looked for differences in terms of variables such as year, topic,research approach, and theoretical basis. All variables showed significant variation atthe 1 percent level, except definition of trust that was significant at the 5 percent level.There is a marked development over time in different journals (Table III). Trust research

    Definition Number %

    Explicit definition provided 33 16.8Structure provided to the concept of trust, but no explicit definition 15 7.7No definition provided 148 75.5Total 196 100

    Table VIII.Papers categorized by

    the existence oftrust definition

    Accountingresearch

    and trust

    399

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    (continued

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    Table IX.Explicit definitionsof trust

    QRAM8,4

    400

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    led

    info

    rmat

    ion

    abou

    tth

    eac

    tion

    sof

    that

    oth

    erp

    arty

    Tom

    kin

    s(2

    001)

    Ab

    ern

    eth

    yetal.

    (200

    4)T

    rust

    asle

    vel

    ofex

    per

    ien

    ce,

    oper

    atio

    nal

    ized

    asn

    um

    ber

    ofy

    ears

    oncu

    rren

    tjo

    b

    Dek

    ker

    (200

    4)A

    dop

    tion

    ofa

    bel

    ief

    by

    one

    par

    tyin

    are

    lati

    onsh

    ipth

    atth

    eot

    her

    par

    tyw

    ill

    not

    act

    agai

    nst

    his

    orh

    erin

    tere

    sts,

    wh

    ere

    this

    bel

    ief

    ish

    eld

    wit

    hou

    tu

    nd

    ue

    dou

    bt

    orsu

    spic

    ion

    and

    inth

    eab

    sen

    ceof

    det

    aile

    din

    form

    atio

    nab

    out

    the

    acti

    ons

    ofth

    atot

    her

    par

    ty

    Tom

    kin

    s(2

    001)

    Gib

    bsetal.

    (200

    4)T

    rust

    aste

    nu

    reon

    the

    job

    R

    owe

    (200

    4)T

    rust

    asth

    ew

    illi

    ng

    nes

    sto

    incr

    ease

    one

    sv

    uln

    erab

    ilit

    yto

    oth

    ers

    inth

    eab

    sen

    ceof

    adeq

    uat

    esa

    feg

    uar

    ds

    Kra

    mer

    (199

    9),

    Zan

    d(1

    997)

    ,an

    dM

    eyer

    sonetal.

    (199

    5)

    Col

    ettietal.

    (200

    5)P

    erce

    ived

    lik

    elih

    ood

    that

    anot

    her

    per

    son

    wil

    lco

    oper

    ate,

    abse

    nt

    any

    ince

    nti

    ves

    tod

    oso

    Lau

    and

    Sh

    olih

    in(2

    005)

    Con

    fid

    ence

    inth

    esu

    per

    ior

    sm

    otiv

    esan

    din

    ten

    tion

    sw

    ith

    resp

    ect

    tom

    atte

    rsre

    lev

    ant

    toth

    esu

    bor

    din

    ate

    sca

    reer

    and

    stat

    us

    inth

    eor

    gan

    izat

    ion

    Rea

    d(1

    962)

    Bu

    scoetal.

    (200

    6)T

    rust

    asa

    mec

    han

    ism

    that

    can

    red

    uce

    un

    cert

    ain

    tyin

    con

    tex

    tsof

    inte

    ract

    ion

    and

    faci

    lita

    teth

    efu

    nct

    ion

    ing

    ofor

    gan

    izat

    ion

    alsy

    stem

    sth

    rou

    gh

    the

    beh

    avio

    rof

    soci

    alac

    tors

    Gid

    den

    s(1

    990,

    1984

    )

    (continued

    )

    Table IX.

    Accountingresearch

    and trust

    401

  • Pap

    erD

    efin

    itio

    nof

    tru

    stM

    ain

    refe

    ren

    ce(s

    )

    Coa

    dan

    dC

    ull

    en(2

    006)

    Th

    ead

    opti

    onof

    ab

    elie

    fb

    yon

    ep

    arty

    ina

    rela

    tion

    ship

    that

    the

    oth

    erp

    arty

    wil

    ln

    otac

    tag

    ain

    sth

    isor

    her

    inte

    rest

    s,w

    her

    eth

    isb

    elie

    fis

    hel

    dw

    ith

    out

    un

    du

    ed

    oub

    tor

    susp

    icio

    nan

    din

    the

    abse

    nce

    ofd

    etai

    led

    info

    rmat

    ion

    abou

    tth

    eac

    tion

    sof

    the

    oth

    erp

    arty

    Tom

    kin

    s(2

    001)

    Cu

    gan

    esan

    (200

    6)T

    rust

    asan

    un

    cert

    ain

    tyre

    du

    ctio

    nm

    ech

    anis

    mT

    omk

    ins

    (200

    1),

    Sak

    o(1

    992)

    ,an

    dG

    amb

    etta

    (198

    8)D

    onad

    aan

    dN

    ogat

    chew

    sky

    (200

    6)T

    rust

    incl

    ud

    esa

    set

    ofex

    pec

    tati

    ons

    abou

    tth

    eli

    kel

    ihoo

    dof

    hav

    ing

    ad

    esir

    able

    acti

    onp

    erfo

    rmed

    by

    the

    tru

    sted

    par

    tner

    McA

    llis

    ter

    (199

    5),

    Wil

    liam

    son

    (199

    3),

    and

    Sak

    o(1

    992)

    Han

    nan

    etal.

    (200

    6)T

    rust

    asso

    cial

    app

    rov

    alE

    van

    setal.

    (200

    1)L

    auan

    dT

    an(2

    006)

    Tru

    stas

    ap

    sych

    olog

    ical

    stat

    eco

    mp

    risi

    ng

    the

    inte

    nti

    onto

    acce

    pt

    vu

    lner

    abil

    ity

    bas

    edu

    pon

    pos

    itiv

    eex

    pec

    tati

    ons

    ofth

    ein

    ten

    tion

    sor

    beh

    avio

    rof

    anot

    her

    Don

    eyetal.

    (199

    8),

    Ela

    ng

    ovan

    and

    Sh

    apir

    o(1

    998)

    ,R

    ouss

    eauetal.

    (199

    8),

    and

    Wh

    iten

    eretal.

    (199

    8)

    Em

    sley

    and

    Kid

    on(2

    007)

    Tru

    stas

    ap

    sych

    olog

    ical

    stat

    eof

    acce

    pti

    ng

    vu

    lner

    abil

    ity

    bas

    edon

    pos

    itiv

    eex

    pec

    tati

    ons

    Tom

    kin

    s(2

    001)

    ,R

    ouss

    eauetal.

    (199

    8),

    and

    Sak

    o(1

    992)

    McG

    ounetal.

    (200

    7)T

    rust

    isth

    eas

    sure

    dre

    lian

    ceon

    the

    tru

    thof

    som

    eon

    eor

    som

    eth

    ing

    ,wh

    erea

    str

    uth

    isa

    gen

    eral

    agre

    emen

    tof

    asi

    gn

    wit

    hit

    sob

    ject

    Pei

    rce

    (199

    1)

    Cak

    er(2

    008)

    Tru

    stw

    ork

    son

    the

    bas

    isof

    pos

    itiv

    eas

    sum

    pti

    ons

    abou

    tal

    ter

    ego

    sw

    illi

    ng

    nes

    san

    dab

    ilit

    yto

    co-

    oper

    ate,

    wh

    ile

    pow

    eris

    con

    stit

    uti

    vel

    yb

    ased

    onth

    ese

    lect

    ion

    ofa

    neg

    ativ

    eh

    yp

    oth

    etic

    alp

    ossi

    bil

    ity

    reg

    ard

    ing

    alte

    reg

    os

    (re)

    acti

    ons

    Bac

    hm

    ann

    (200

    1)

    Fre

    e(2

    008)

    Tru

    stre

    fers

    toth

    ew

    illi

    ng

    nes

    sof

    ap

    arty

    tob

    ev

    uln

    erab

    leto

    the

    acti

    ons

    ofan

    oth

    erp

    arty

    bas

    edon

    the

    exp

    ecta

    tion

    that

    the

    oth

    erw

    ill

    per

    form

    ap

    arti

    cula

    rac

    tion

    imp

    orta

    nt

    toth

    etr

    ust

    or,

    irre

    spec

    tiv

    eof

    the

    abil

    ity

    tom

    onit

    oror

    con

    trol

    that

    oth

    erp

    arty

    Tom

    kin

    s(2

    001)

    ,May

    eretal.

    (199

    5),S

    ako

    (199

    2),a

    nd

    Neu

    (199

    1a)

    (continued

    )

    Table IX.

    QRAM8,4

    402

  • Pap

    erD

    efin

    itio

    nof

    tru

    stM

    ain

    refe

    ren

    ce(s

    )

    Lan

    gfi

    eld

    -Sm

    ith

    (200

    8)C

    omp

    eten

    cetr

    ust

    ,w

    hic

    hre

    late

    sto

    ap

    artn

    ers

    abil

    ity

    top

    erfo

    rmac

    cord

    ing

    toth

    esp

    ecifi

    edag

    reem

    ent

    orco

    ntr

    act

    Noo

    teb

    oom

    (199

    6)an

    dR

    ing

    and

    van

    de

    Ven

    (199

    2)

    Goo

    dw

    ill

    tru

    std

    efin

    edas

    per

    cep

    tion

    sof

    ap

    artn

    ers

    inte

    nti

    onto

    per

    form

    inac

    cord

    ance

    wit

    hth

    ose

    agre

    emen

    tsL

    auetal.

    (200

    8)T

    rust

    asa

    psy

    chol

    ogic

    alst

    ate

    com

    pri

    sin

    gth

    ein

    ten

    tion

    toac

    cep

    tv

    uln

    erab

    ilit

    yb

    ased

    up

    onp

    osit

    ive

    exp

    ecta

    tion

    sof

    the

    inte

    nti

    ons

    orb

    ehav

    ior

    ofan

    oth

    er

    Rou

    ssea

    uetal.

    (199

    8)

    Vel

    ezetal.

    (200

    8)T

    rust

    asth

    ew

    illi

    ng

    nes

    sof

    ap

    arty

    tob

    ev

    uln

    erab

    leto

    the

    acti

    ons

    ofan

    oth

    erp

    arty

    onth

    eex

    pec

    tati

    onth

    atth

    eot

    her

    par

    tyw

    ill

    per

    form

    ap

    arti

    cula

    rac

    tion

    wh

    ich

    isim

    por

    tan

    tto

    the

    tru

    stor

    Tom

    kin

    s(2

    001)

    ,D

    asan

    dT

    eng

    (199

    8),

    and

    Sak

    o(1

    992)

    Wil

    liam

    son

    (200

    8)T

    rust

    asg

    ame,

    mea

    nin

    gw

    illi

    ng

    nes

    sto

    giv

    eu

    pm

    oney

    for

    pot

    enti

    aljo

    int

    retu

    rns

    un

    der

    un

    cert

    ain

    tyB

    ergetal.

    (199

    5)an

    dM

    ille

    r(2

    003)

    Har

    tman

    nan

    dS

    lap

    nic

    ar(2

    009)

    Ap

    erso

    ns

    tru

    stw

    orth

    ines

    sas

    that

    per

    son

    sp

    refe

    ren

    cefo

    ru

    ph

    old

    ing

    soci

    alan

    db

    ehav

    iora

    ln

    orm

    s,su

    chas

    hon

    esty

    and

    fair

    nes

    s,in

    situ

    atio

    ns

    inw

    hic

    hth

    etr

    ust

    ing

    par

    tyw

    ill

    ben

    efit

    from

    the

    adh

    eren

    ceto

    thos

    en

    orm

    s

    Gam

    bet

    ta(1

    988)

    Jay

    asin

    gh

    ean

    dT

    hom

    as(2

    009)

    Tru

    stin

    vol

    ves

    ale

    apof

    fait

    hb

    eyon

    dth

    eco

    gn

    itiv

    ele

    vel

    ofex

    per

    ien

    cean

    dac

    tion

    Lew

    isan

    dW

    eig

    ert

    (198

    5)

    Vos

    selm

    anan

    dv

    and

    erM

    eer-

    Koo

    istr

    a(2

    009)

    Tru

    stim

    pli

    esth

    ata

    par

    tyis

    wil

    lin

    gto

    acce

    pt

    vu

    lner

    abil

    ity

    ,al

    thou

    gh

    this

    par

    tyis

    not

    com

    ple

    tely

    sure

    that

    the

    oth

    erp

    arty

    wil

    ln

    otb

    ehav

    eop

    por

    tun

    isti

    call

    y

    Tom

    kin

    s(2

    001)

    Table IX.

    Accountingresearch

    and trust

    403

  • is decreasing over time in AAAJ, while there is an increase in trust papers in later yearsin AR, BAR, CAR, CPA, EAR, JAR and MAR. Of special interest may be the fact thatquantitatively oriented journals such as AR, CAR and JAR started publishing trustpapers in the later years of the surveyed period. In the early years, two journals (AAAJand AOS) dominate trust research. Over time, trust research is more evenly distributedamong journals. The difference in topics, research approach and theoretical basis isexpected, since journals tend to specialize.

    The third test involved comparing papers from different topics. A x 2-test on theP1 papers was performed, testing for significant differences in terms of variables such asresearch approach and method, theoretical basis, and use of trust definition. There aresignificant differences at the 0.1 percent level for all these variables, except researchmethod (significant at the 5 percent level). Most experimental studies are found in MAN,while CPP has a high proportion of theoretical papers. Archival studies are especiallyprevalent in FRG, while MAN has most of the interview studies (Table V). Economic theorydominates among analytical modeling (EAA) and FRG papers. Sociology dominatesamong CPP papers, while MAN papers are evenly spread among economics and sociologyas a theoretical basis (Table VI). Finally, having an explicit definition of trust is morecommon among MAN papers than in other topic areas (Table VIII). In FIN and FRG, on theother hand, explicit definitions of trust are very unusual (only 1 out of 34 papers has it).

    5. DiscussionIn this section, we analyze and discuss the findings of the review as well as suggestsome possible directions for future research.

    5.1 Aspects of the trust-accounting relationshipA clear finding from the literature review is that when research is done on trust andaccounting, the definition and operationalization of trust will vary by certain aspects.There is, for example, some variation in the definition of trust, as shown in Table IX,although the variation is not as large as it might appear at first sight. Arguably, theconcept of trust is context-dependent and different aspects of trust are relevant to focuson in different contexts. If this is the case, it is helpful for researchers to know accordingto which contextual aspects trust tends to vary in research. Below we attempt to identifysuch aspects and provide a framework for asking more precise and focused researchquestions. The aspects discussed below offer help in the identification of what can affectdifferent empirical manifestations of trust. In addition, they provide a basis foranalyzing how trust manifests itself in different situations (Free, 2008).

    First, we have some aspects that are related to the empirical setting studied:. The type of accounting studied, for example MAN and FAN. This aspect is based

    on the findings presented in Table II, Panel B.. The actor being focused on. Actors could be, for example, management,

    accountants, auditors, and regulators. This is based on the actors noted in Table IV,Panel A.

    Other aspects are related to the specific situation is being studied, for example:. Trust in a pre- versus a post-contract situation could vary. This is related to

    Tomkins (2001) distinction between different stages of a trust-building process.

    QRAM8,4

    404

  • . Type of information studied, also based on Tomkins (2001) who distinguishesbetween accounting information used to build trust, and information used formastery of events (p. 171), which is a more functional usage.

    . The role of trust. This aspect is based on the findings presented in Table IV, Panel C.

    There are also aspects related to trust per se, and to the relationship between trust andaccounting that is studied. These include:

    . Personal trust versus system trust. This aspect is related to the analysis shownin Table IV, Panel A, on who/what is the object of trust.

    . The direction of the relationship between trust and accounting, based on thedistinctions made in Table IV, Panel B.

    5.2 Research issues identifiedLeaving the empirical context of trust and accounting, we now focus on differenttheoretical bases of research. As shown in Table VI, Panel A, research can be classifiedas based on economics or sociology. Below we point out some research issues thatemanate from the papers studied in the two theoretical areas. We begin witheconomics-based papers.

    In economic models, human activities are often assumed to be costly and to requireconsumption of scarce resources. For instance, business relations require costlycontracting. Both an accounting system (including auditing and regulatory oversight)and the building of personal trust are assumed to be costly activities. The notion of trustand accounting as substitutes gives rise to the issue whether there is an optimal level oftrust (Tomkins, 2001). One possible future research path could be to find the optimallevel of trust in different situations. Many existing studies implicitly assume that moretrust is better than less trust (Free, 2008)[12]. An optimal level of trust would presumablybe a level that would optimize total economic output. Having said this, it needs to bepointed out that this does not necessarily mean it would be optimal for each individualactor. Therefore, another issue for future research could be to study the implications onwealth for different parties for different levels of trust and accounting. Of course, once anoptimal level of trust (for the economy or for the individual actor) is determined, the nextchallenge would be how to achieve this level. To generate a specified level of trust is not atrivial exercise and more knowledge is needed in order to find out how this can beachieved. Gietzmann (1996) and Luft (1997) suggest ways to analytically model this inresearch. A number of studies focus on this issue and identify factors and circumstancesthat help enhance or destroy trust (Seal and Vincent-Jones, 1997).

    Another issue related to the definition of trust is how to measure trust. In order for anoptimal level of trust in a specified setting to be meaningful, there must be a definition oftrust so that we can attain a measure of the level of trust. Moreover, for the purposes ofresearch we must also be able to operationalize this measure. An issue for research iswhat the validity of instruments for measuring trust is. A number of instruments tomeasure trust have been used (for an overview of intra-organizational trust measures,see for example Dietz and Den Hartog, 2006), although no comparison and evaluation oftheir usefulness in different research settings has been carried out.

    This leads into another avenue for future research, namely the value of trust. If weassume that it is costly to achieve trust, it should also be possible to attach value to it.And in that case, what is the value of trust, and is it possible to improve the precision

    Accountingresearch

    and trust

    405

  • of measuring it? The issue of intangible assets and intellectual capital may serve asan example (Guthrie, 2001). Some of the papers included in our review treat trust as anintangible asset, for example Van der Meer-Kooistra and Zijlstra (2001) and Roslenderand Fincham (2004). The difficulty of measuring the value of intangible assets isdiscussed from a theoretical perspective by Lev and Daum (2004), and was madeempirically evident by the issuance of Statements of Financial Accounting Standards(SFAS) 141 and 142 (2002) and International Financial Reporting Standard 3 (2004).Much of what is paid for in a business combination is the value of ongoing relationships,where trust has had time to develop. For example, brand names can be analyzed in termsof trust as they relate to trust in the product or organization carrying the name (Ford et al.,1998; Holland, 2001). Customers expect a positive outcome from buying the product orinteracting with the organization and are therefore willing to accept vulnerability, wherenormal quality controls are disregarded. A similar reasoning applies to customerrelations as intangible assets. The role of trust in value creation, materialized asintangible assets, would also be a fruitful area for future research.

    As shown in Table VI, sociological research dominates in the field of trust andaccounting even though the interest within the field of economics has increased over time.The former may be an indication that sociology offers a stronger potential for theorydevelopment than economics. We now continue with pointing out research issues that arebased on sociological research. All of the sociological analysis within the accounting fieldis ultimately about accountings role in the establishment and preservation of socialorder. Specific attention is paid to how accounting regulates human relations and aspectsof this role are in need of further research. Sociology has contributed foremost by addingaspects important for understanding the dynamic nature of the relationship betweentrust and accounting. The role of commitment is one of these aspects. Commitment isevident through the fulfillment of expectations, and trust is associated with positiveexpectations in individuals or systems (Giddens, 1990, 1991a, b). In an accountingcontext, the commitments may become visible through peoples habits and throughorganizations accounting routines ( Johansson and Baldvinsdottir, 2003). The researchdone to date shows that accounting may affect peoples expectations; however, we do notknow how. An important area of interest is thus linked to expectations with respect toperformance and the role of accounting in creating those expectations.

    Based on research with a sociological foundation, we can draw the conclusion that thereare reasons to treat the relation between trust and accounting seriously and look furtherinto how accounting systems and accounting information affect trust-relations. Thefindings here are somewhat contradictory and it seems to be the control environment thatdecides whether the effect will be positive or negative. On one hand, we see how the merepresence of accounting systems in organizations can be connected to a stringent controlenvironment that affects trust-relations negatively (Jacobs and Kemp, 2002). On the otherhand, reduced reliance on accounting as a basis for performance evaluation may actuallyreduce trust and increase job-related tension since accounting information often serves asa common reference for the evaluation of individuals performance, which in turn affectsthe experience of the fairness in the evaluation (Lau and Buckland, 2001). More knowledgeis thus needed to find out what kinds of control environments promote or destroy trust.In regard to trust affecting accounting, even less is known and more research is neededabout the circumstances where trust-relations will affect the use of accounting.

    QRAM8,4

    406

  • The world has become more complicated and trust in systems has replaced trustbetween people in many situations (Porter, 1995). Moreover, trust in systems, such asaccounting systems, is often taken for granted. We could argue that accounting systemsdiffer from other systems because of their unique possibility of reflexivity. This isbecause accounting information conveys messages, for example about competence,responsibility and trustworthiness of both the accountant and the object beingportrayed by the accounting numbers. Another area to look into is thus to investigatehow personal trust affects system trust. This is an unexplored field, at least empirically.We still do not know how personal and system trust interact and affect each other.In order to truly understand what makes people trust accounting information, furtherempirical research needs to be done.

    5.3 An emerging paradigm?Paradigmatic research involves research that relates closely to what has previously beendone. Hereby, it is possible to develop more complex theory and to achieve a highercertainty in findings. However, paradigmatic research comes at a cost. As mentionedpreviously, it may be relevant to see the concept of trust as context-dependent and, if so,paradigms based on shared or standardized definitions can conceal variation andcomplexity of the concept. But, whether paradigms are good or bad for research, we stillconsider it relevant for future researchers on trust and accounting to know to whatextent paradigms do exist.

    To evaluate to what extent paradigms exist, it is necessary to operationalize thisconcept. Paradigms can be defined in different ways, as discussed by Searcy andMentzer (2003). They define paradigms in accounting research in terms of high levelontological and epistemological starting points, as well as types of research issues mostfrequently focused on. We provide this type of data for the papers reviewed, and classifythem into such categories (Table VI). Here, however, we will apply the concept ofparadigm in a slightly different manner and focus on the extent to which research papersappear to be building on each others results (Kuhn, 1962). In order to examine to theextent to which a paradigm has emerged in the field of trust research in accounting,we first focus on the extent to which different researchers refer to each other. Second,we look at the definitions of trust in the papers reviewed, including to what extentdefinitions come from other accounting papers. In addition, we study whetherresearchers tend to increasingly agree on definitions over time. This gives an indicationof the extent to which a paradigm emerges in the field of trust research in accounting.

    Starting with cross-referencing, it is evident from Table VII that few papers useanother accounting paper as a central trust reference. Instead, the typical centraltrust reference is from outside the field of accounting, often from sociological ororganizational theory. There is, however, one exception, Tomkins (2001), who suggests astructure for the study of the interaction between trust and accounting. His work hasbeen referenced in 18 of the papers included in this study and Tomkins may thusconstitute the start of research with a paradigmatic nature. Seven of the papers that referto Tomkins were found in one journal, MAR. Although there is a variety in researchissues in the papers, it is possible to discern signs of a common debate. First, the findingsof all papers are possible to relate to how accounting processes (changes) affect behaviorand other organizational processes (changes) and vice versa. Second, a number of papersdiscuss the role of trust in the specific context of MAN and organizational change.

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  • Third, a number of papers touch upon the relationship between trust and control. Toconclude, paradigmatic research can be said to exist within a sub-topic.

    In general, MAN dominates among trust papers, both intra- and inter-organizationalMAN. This is not surprising, given that MAN is more often related to long-term, andpersonal, relationships, when compared to FAN. Thus, it may render a more appropriatesetting for the study of the relation between trust and accounting. Statistical testingfurther shows that a definition of trust is significantly more common in MAN papersthan in other fields. In fact, some recent papers that contribute to the theoreticaldevelopment of the relationship between trust and accounting are all in a setting of MANin inter-firm relations (Free, 2008; Tomkins, 2001; Vosselman and van derMeer-Kooistra, 2008)[13]. The long-term nature, as well as the high level of interactionbetween transacting parties, makes this setting suitable for theoretical development oftrust. This indicates that the relation between trust and accounting is easier to modelinternally in organizations, than for topics such as FRG and FAN.

    The relevance for future research is that it may be easier to conduct research in the areaof MAN, both because of the nature of the context studied, but also because there is moreresearch to relate to. On the other hand, this opens an opportunity for research on FRG andtrust, as this field is underrepresented. In addition, the relevance for FRG practice inrelation to accounting scandals and the financial crisis is strong, as discussed in Section 1.

    A broadening of research is already evident in the last few years of our literaturereview. There is a higher proportion of papers in FAN and reporting than before, thereare more papers based on economic theory, and there is wider variety in terms of journalswhere trust papers are published. A possible reason for this development could be thatthere is more interest in trust following accounting scandals and financial crises.To conclude, paradigmatic research exists within a sub-topic.

    Another indication of paradigmatic research would be if there was a common definitionof trust, especially if the use of this definition is increasing over time. As shown inTable VIII, the overwhelming majority of papers do not have any explicit definition oftrust. This lack of definitions also indicates non-paradigmatic research. On the other hand,those few that have a definition (Table IX) share some common themes. These are:

    . Willingness to accept vulnerability/risk. Relying on trust means acting onincomplete information. In that sense, trust can be seen as a form of uncertaintyreduction.

    . Expectations of certain behavior, usually based on past events. In economicmodeling, it could be based on known self-interest of the trusted party.

    . Trust is important in situations of dependence and cooperation.

    Having concluded that the paradigmatic research is non-comprehensive in the field oftrust and accounting, we can ask ourselves whether this is a problem, and what theimplications for research are. Searcy and Mentzer (2003) show that the broader field ofaccounting research in general is characterized by paradigmatic diversity. Llewellyn(2003) claims that there may be rational reasons for this diversity, such as specific casesbeing more important than patterns or regularities and that the context of accountingphenomena is important for understanding them. However, if trust and accountingconstitute a unique economic and empirical setting, a paradigm specific for this fieldmay be desirable since this research field is potentially different both from research ontrust in other empirical areas, and from non-trust-related accounting research.

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  • 6. SummaryAfter having searched more than 9,000 published research papers, we can conclude thatthere is some research done on trust in the accounting field (Free, 2008), and that it isincreasing over time. Approximately 800 out of the 9,000 papers mention trust, either asa primary or a secondary concept. Further, almost 200 papers make a substantivecontribution to the field.

    Although a number of papers on trust and accounting have been published since1995, the review indicates that questions and issues remain unresolved. Research ontrust and accounting is largely non-paradigmatic. There may, however, be signs of anemerging paradigm in that Tomkins (2001) is increasingly referred to, and based on therecent research debate in the journal MAR.

    One interesting observation is that several of the papers that have contributed to atheoretical development of trust and accounting in the last decade are in the field ofinter-firm relations (Free, 2008; Tomkins, 2001; Vosselman and van der Meer-Kooistra,2009). This field may be particularly appropriate for the study of trust and accounting,although we believe important contributions can also be made in other areas ofaccounting research. Our analysis indicates, however, that to date, no overall paradigmin research on trust and accounting has developed, even though cross-referencing in thefield has increased in the last five years. If this development continues, it may well bethat a paradigm on a more general level will develop.

    We also note a broadening of trust research in accounting in the last few years, forexample in terms of topics covered (more papers in FAN and reporting), theoreticalbasis (more papers based on economic theory), and journals where papers arepublished. This could be interpreted as the field of trust and accounting becomingmore mature and mainstream.

    A remaining issue is that there does not seem to be agreement regarding thedefinition of trust. Where definitions are found, there is variation albeit with somecommon themes. We believe that, for the field to develop, it is necessary to have morerigorous and common definitions of trust.

    A different type of issue is to what extent the development of such a research strandwould contribute back to accounting research and trust research in general. Theanalysis strongly suggests that trust research would be useful for accounting research ingeneral. This is because, arguably, trust is an essential feature of accounting practice. Toconclude that there would be a contribution to trust research in general from this newresearch strand is less self-evident. We do, however, believe that an importantcontribution can be made, in that the role of information and communication in buildingand destroying trust can be structured and analyzed in accounting research.

    Both economic and sociological theories could be useful in modeling the relationshipbetween trust and accounting. Researchers have a choice. Economic theory, withstringent assumptions, appears to be more easily used to develop a research paradigm,although not much has been done to date relating to trust. Sociology, on the other hand,allows a richer analysis with additional aspects, at the cost of making it more difficult todevelop paradigmatic research. Economic and sociological theory may be possibleto combine in some way. However, the development of a rigorous theory or modelfor the field is beyond the scope of this paper. One contribution made in the paper is thatwe identify aspects along which trust and accounting can demonstrate variation.We also point out research issues that emanate from the existing literature.

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  • Although this literature review cannot provide a rigorous theory for accounting andtrust, we hope this review is helpful in identifying the islands of current research in anocean of emerging theory.

    Notes

    1. Zeffs ranking is based on number of library subscriptions, i.e. top ranked journals are thosethat are most likely to be subscribed to by academic libraries. He notes, however, that these15 journals also tend to rank highest in perception and citation studies.

    2. It has been acknowledged that other key-words belonging to the semantic field of trust couldhave been used (e.g. confidence and faith). In the first search, for 1995, these words wereincluded. This resulted in a high number of hits. This, together with the observation thatmany authors used the words to define concepts other than trust, made us decide to use theword trust as the only key-word.

    3. For example, by making references to other papers.

    4. The classification was carried out by two researchers, in an iterative process. A number ofpapers were selected for calibration between the researchers, until the correlation was foundto be high and the categories were found to be qualitatively distinct.

    5. The papers categorized as P3 were included in our literature review since, for example,auditing is a field close to accounting. More knowledge about auditing practice is thus likelyto add to the knowledge of accounting practice. However, these papers were not included inthe P1 category as they do not directly relate to accounting.

    6. The analysis of the P1 papers was coordinated and discussed among several researchers.

    7. Among papers classified as economic theory applied, some researchers argue for aninter-paradigmatic development in research and thus do not reject sociological research.

    8. The classification follows the topic areas used by the European Accounting Association inits classification of papers presented at the 2007 annual congress.

    9. A x 2-test (further discussed in the following section) was performed to see whether there aresignificant differences between papers in different topics. There are differences in terms ofresearch approach and the theoretical basis of a paper. This is not surprising, since journals tendto specialize in such respects. A more interesting finding is that papers inmanagement accounting are more likely to have a definition of trust than papers in otherareas. This could be an indication of stronger theory development of trust in managementaccounting than elsewhere.

    10. Statistical tests were applied to see whether there was a significant increase of trust papersover time. The Spearman rank correlation was performed for P1, P2, P3, S, and all papers,separately. For all categories there is a significant increase in number of papers over time,although the significance level is weak for P3 papers (10 percent).

    11. A statistical analysis was performed to test whether there is a significant difference betweenpapers in different journals (further discussed in the following section).

    12. An optimal level of trust assumes that trust can vary along a (continuous) scale. There couldbe situations where trust is more correctly modeled as binary, i.e. that trust either exists ordoes not exist. If so, the research issue becomes whether it is optimal in a certain situation totrust, or not to trust.

    13. Tomkins, for example, uses a setting of long-term alliances between companies to develop amodel for trust and accounting. The long-term nature of the relationships enables thedevelopment of a step-wise model, mapping out the dynamic nature of the interaction of trustand accounting, through the use of a temporal model. Free uses long-term relations between

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  • suppliers and customers to develop a more empirically based model for trust and accounting.Vosselman and van der Meer-Kooistra discuss the relation between accounting and control ina setting of inter-firm relationships.

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    Corresponding authorGudrun Baldvinsdottir can be contacted at: gudrun.baldvinsdottir@hist.no

    To purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints

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