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What are recommended accounting textbooksteaching students about corporate stakeholders?

John Ferguson*, David Collison, David Power, Lorna Stevenson

Department of Accountancy and Business Finance, University of Dundee, Dundee DD1 4HN, UK

Received 6 June 2003; revised 24 March 2004; accepted 9 August 2004

Abstract

This paper reports the results of a content analysis of the preface and preliminary chapters of 21

introductory accounting textbooks as recommended by 12 accounting degree-awarding institutions

in Scotland. The investigation builds on previous research which suggests that accounting education

is heavily influenced by neo-classical economic theory and, as a consequence, inculcates students

with the notion that primacy should be given to shareholders above all other stakeholder groups.

Accounting education may be deficient by neglecting other theoretical perspectives and margin-

alising the interests of other stakeholder groups; arguably this may inhibit the ethical development

and critical awareness of accounting students. This research investigates the extent to which

recommended accounting textbooks explicitly consider different stakeholders. Findings from the

study indicate that the interests of shareholders are predominant within financial accounting and

financial management textbooks, while management accounting texts have a more pronounced

managerial orientation.

q 2004 Elsevier Ltd. All rights reserved.

Keywords: Textbooks; Stakeholders; Shareholder wealth; Content analysis

1. Introduction

There is a growing body of literature which expresses concern over the purpose and

content of tertiary accounting courses. In particular, critics have questioned the role

of accounting education in maintaining the status-quo (Chua, 1986; Collison, 2003;

0890-8389/$ - see front matter q 2004 Elsevier Ltd. All rights reserved.

doi:10.1016/j.bar.2004.08.002

The British Accounting Review 37 (2005) 23–46www.elsevier.com/locate/bar

* Corresponding author. Tel.:C44 1382 344707.

E-mail address: [email protected] (J. Ferguson).

http://www.elsevier.com/locate/bar

http://www.elsevier.com/locate/bar



Kelly and Pratt, 1994; McPhail and Gray, 1996), the priority it ascribes to shareholders

(Collison and Frankfurter, 2000; Gray et al., 1994; Puxty et al., 1994) and its failure to

develop ethical and moral maturity amongst students (Gray et al., 1994, 1996b; McPhail,1996, 2001; McPhail and Gray, 1996; Seenan, 1995). Whilst these criticisms are aimed at

accounting education in general, they are rarely extended to include the textbooks that are

recommended on accounting courses.

However, despite the crucial role the textbook plays in the pedagogic process (Brown

and Guilding, 1993), no sizeable body of literature exists on the development and usage

of textbooks in the accounting and finance area. Indeed, this aspect of education theory

seems relatively undeveloped. A literature search has elicited only a handful of studies

that explicitly consider what values are implicit in accounting and finance texts, or try to

link the texts’ theoretical grounding to a.prevailing hegemony in the area (see Puxty

et al., 1994). In fact, the literature that does exist in this area tends to be limited to one

discipline (see Kelly and Pratt, 1994 or Scapens et al., 1984 for a discussion of

management accounting textbooks), or is discussed as only a small part of a wider study

(Zeff, 1988). Section 2 discusses the relevant literature in more detail. In particular, this

section attempts to link the concepts of ideology and hegemony to recent criticisms of

accounting education. This section concludes with a discussion of the literature that

addresses accounting textbooks specifically. This is followed by a delineation of the

method employed in the study and a discussion of the findings. The final section

concludes.

2. Literature review

There have been concerns raised within the accounting education literature regardingthe ethical and moral development of accounting students; in particular, that the

theoretical underpinnings of the subject are restricted to only one ‘subset’ of ethical

reasoning: financial utilitarianism1 (Gray et al., 1994, 1996b; McPhail, 1996; McPhail and

Gray, 1996). According to Gray et al. (1994, p. 62) restricting learning in this way, without

offering an alternative perspective from which students can exercise their own reasoning

ability is, in a sense, ‘indoctrination’ (see also Loeb, 1991; Van Dijk, 1998). Therefore, by

not encountering any other ethical perspectives, accounting students learn to accept that an

action is judged to be desirable if it generates the maximum economic rewards.

Interestingly, McPhail (1996) and McPhail and Gray (1996) suggest that this financial

utilitarian behaviour is restricted to the domain of accounting and that ‘accounting and

finance students are able to offer evidence of more developed ethical maturity in non-accounting areas of their lives’ (McPhail and Gray, 1996, p. 2). Therefore, students seem

to construct accounting and business activity as a separate category of experience

(McPhail, 1996, 1999; McPhail and Gray, 1996).

1 Gray et al. (1994) assess three modes of ethical reasoning; consequentialism (of which financial utilitarianism

is a subset), motivism and deontology. They argue that no particular mode is inherently superior to any other, and

that it is quite often the case that individuals could apply all three. However, by emphasising one particular mode,

accounting education may restrict the development of ethical reasoning.

J. Ferguson et al. / The British Accounting Review 37 (2005) 23–46 24



As a result of such a constrained ethical perspective, recent studies within the

accounting education literature have claimed that: (i) accounting students are failing to

develop ‘deep’ approaches to learning2

and, (ii) in this light, accounting education can beviewed as a means of reproducing and sustaining the ‘ideological status quo’3 (Chua,

1986; Collison, 2003; Cooper and Sherer, 1984; Gray et al., 1994; Hines, 1988; Kelly and

Pratt, 1992, 1994; McPhail, 1999; McPhail and Gray, 1996; Tinker et al., 1982). In

particular, it is claimed that accounting education contributes to the creation of a society in

which the identity and existence of those holding power is often obscured (see McPhail,

1999, 2001). Whilst student approaches to learning are implicitly considered throughout

the present study, it is the ‘ideological’ role of accounting education which is directly

explored. Section 2.1 addresses the concept of ideology and describes Gramsci’s notion of

Hegemony; this perspective provides a basis by which to explain how more subtle forms of

power might operate within accounting education (and in particular, accounting

textbooks).

2.1. Ideology and hegemony

The term ideology is one of the most contested notions in sociology (Abercrombie

et al., 2000; Eagleton, 1991).4 However, perhaps the most widely accepted definition is the

role of ideology in ‘legitimating the power of a dominant social group or class’ (Eagleton,

1991, p. 5; see also Thompson, 1990). In this case ideology can be conceived of as a

critical concept or ‘critical tool’, whereby the ‘phenomena characterised as ideology are

misleading, illusory or one sided’ (Thompson, 1990, p. 54). Drawing on this conception,

Giddens (1993, p. 722) describes ideology as a system of ‘values and beliefs which help

secure the position of more powerful groups at the expense of less powerful ones’.

2 Gray et al. (1994, p. 57) state that “the development of ethical reasoning requires deeper and developmental

learning patterns”. ‘Deep’ learning is deemed to be consistent with the purpose of higher education ( Duff et al.,

2003; Gray et al., 1994) as well as the avowed aims of the accounting profession (AAA, 1986; AECC, 1990a,b;

Albrecht and Sack, 2000; Gray et al., 2001; Mathews, 1994a). The underlying concepts regarding ‘student

approaches to learning’ can be traced back to the ‘phenomenographic’ studies carried out by Marton and Saljo

(1976), who identified two levels of processing when learning: deep and surface. A deep approach entails looking

for meaning in the matter being studied and relating it to other experiences and ideas with a critical approach. A

surface approach can be thought of as a reliance on rote-learning and memorisation in isolation from other ideas.

Researchers in a multiplicity of different fields have developed Marton and Saljo’s work to create ‘self-reporting’

inventories aimed at assessing students’ approaches to learning. Although differences exist within this research, 3

‘fundamental’ approaches to learning can be identified: deep, surface and strategic (see Duff et al., 2003).3 The ideological status quo is considered to be representative of current social and political arrangements.4 Thompson (1990, p. 2) argues that, in the two centuries since its conception, the notion of ideology has been

‘twisted, reformulated and recast’. Equally, Eagleton (1991, p. 1) states that ideology “has a world of useful

meanings, not all of which are compatible to each other”. Some definitions include; specific kinds of beliefs, such

as fascism, communism or nationalism (Abercrombie et al., 2000; Eagleton, 1991); beliefs which are in some way

false or which legitimate (political) power (Eagleton, 1991); ideology constitutes any set of beliefs (a conception

which draws from ‘sociology of knowledge’ in which all knowledge is deemed to be socially determined) (see

Abercrombie et al., 2000; Thompson, 1990); ideology is manifest in discourse which constrains what is said or

thought (Abercrombie et al., 2000; Bourdieu, 1991; Eagleton, 1991; Fairclough, 2003; Foucault, 1991;

Thompson, 1990; Wodak and Meyer, 2001).




The Italian Marxist, Antonio Gramsci, contended that traditional Marxist theories of

power were ‘one sided in the exclusive attention’ they ascribed to the role of force and

coercion in establishing and maintaining a dominant ruling class (Boggs, 1976, p. 38). ForGramsci, these theories of power overlooked the ‘more subtle but pervasive forms of

ideological control’ that served to maintain repressive structures (Boggs, 1976, p. 38).

Gramsci (1971) proposed a refinement to such theories by distinguishing between two

forms of political control: domination, which referred to direct physical coercion (for

example, by the police or armed forces) (Boggs, 1976) and hegemony which explained

how a ‘governing power wins consent to its rule from those it subjugates’ (Eagleton, 1991,

p. 112 emphasis added ).5 Therefore, hegemony described social scenarios, whereby the

powerful do not have to impose power on subordinate groups because less powerful

groups accept prevailing conditions and constraints as natural or as common sense (see

Boggs, 1976; Eagleton, 1991). Danaher et al. (2000) cite Margaret Thatcher’s re-election

in the 1980s as an example of hegemony, whereby the working class maintained the statusquo (their relative disadvantage) by voting Conservative. In this sense, hegemony may be

viewed as a form of ‘false consciousness’ or a ‘mistaken view of the world’ (Danaher

et al., 2000, p. 48).6

The concept of hegemony proposed by Gramci assumes that popular support and

legitimacy are required to maintain stability in the long term (Boggs, 1976; see also

Strinati, 1995). The role of civil society (or non-coercive institutions), in particular,

schools, universities, families, churches and the media, are viewed as integral mechanisms

in sustaining such support (Eagleton, 1991; Strinati, 1995; Mayo, 1991). Gramsci,

maintained that these structures reflect an entire system of values; those of the ‘established

order’ (Boggs, p. 39).7 For Althuser (1971), education more than any other institutional

influence, inculcated individuals with values that support the continued hegemony of the

ruling class (see also McPhail, 1999, 2001).8

2.2. Accounting education, ideology and hegemony

McPhail (1996) maintains that both accounting and accounting education may be

considered a form of hegemony because accounting is constructed as an ‘innocuous

5 Although in many cases hegemony is often used synonymously with ideology, there are distinctions between

the two terms; in particular, whilst ideologies may be forcibly imposed, hegemony generally relates to consensus.

In addition, Eagleton (1991, p. 112) states that hegemony is a ‘wider term’ and includes ideology ‘but is not

reducible to it’ (see also Abercrombie et al., 2000; Thompson, 1990).6 The heuristic and contentious nature of such expressions which carry an implication of ‘true consciousness’ is

acknowledged. See Roslender (1992) for a succinct discussion of the development of thinking on this topic with

particular reference to Marx.7 For Gramsci the conception of hegemony could also be empowering or emancipatory, in that ruling class

ideology could be overthrown by a ‘counter hegemony’. Gramsci viewed the creation of working class

intellectuals or ‘organic intellectuals’ as an intrinsic part of establishing such a counter hegemony (Boggs, 1976).8 In a similar way to Gramsci, Althuser (1971) distinguishes between repressive ‘state apparatuses’

(government, army, police) and ‘ideological state apparatuses’ (ISAs) (schools, religion, media, etc.). Althuser

(1971) maintains that ISAs are the most important mechanisms for social reproduction in industrial societies

(McPhail, 2001).




technical process’, particularly within accounting education, even though it actually

imbues students ‘with values and processes required for them to fulfil a crucial function

within a capitalist system’ (McPhail, 1996, p. 287; see also Gray et al., 1994; Humphreyet al., 1996) The pervasiveness of such unchallenged assumptions and perspectives

prevent the questioning of how social reality both arises and is maintained (Chua, 1986a,

1996; Cooper, 1980; Hines, 1988; Kelly et al., 1999). Moreover, it has been suggested that

hegemony is enacted within accounting education through the linguistic forms by which

knowledge is communicated to students (McPhail, 2001). 9

In identifying both direct and indirect10 forms of propaganda, Collison (2003)

acknowledges that ‘unwitting’ agents may be persuaded to sustain the cause of a ‘master

voice’. Whilst Collison (2003) is concerned with issues of propaganda (in particular the

role of corporate propaganda in developing different forms of capitalism) his discussion

addresses the role that accounting education plays in developing values in students which

serve corporate interests and which emphasise that the interests of ‘only one group of stakeholders should be maximised’. In this sense, accounting and finance education and

practice, may be viewed as an indirect form of corporate propaganda, through the

promoting of ‘taken for granted’ values and assumptions (Collison, 2003). This view is

shared by McPhail (1996), who states that ‘accounting departments appear to function

as ministries of propaganda, subliminally instructing students in the rudiments of

neo-classical market economics,’ (McPhail, 1996, p. 278; see also Gray et al., 1994).

The assumptions which accounting education (whether intentionally or not)

uncritically propagates are apparent in the priority it gives to the interests of shareholders

(Collison, 2003; Collison and Frankfurter, 2000; Gray et al., 1994; Puxty et al., 1994).

Doyle (1994) notes the overwhelming deference to providers of capital and the emphasis

on short-term profitability goals among the companies of Western developed countries (in

particular, the UK and US). In contrast, the objective of the firm for most Japanesecompanies is generally to increase the long-term goal of market share, which helps

maintain lifetime employment for its employees (Doyle, 1994).11 Hutton (1996, p. 269)

argues that ‘Japanese capitalist structures emphasise trust, continuity, reputation and co-

operation’ and bring these ideals into all economic relationships. According to Doyle

(1994) the most common business objective and measure of performance for Western

companies is profitability, either expressed as a ratio such as earnings per share or as a

percentage such as return on investment. He argues that almost all journals and business

magazines use profitability to construct league tables of performance. For these reasons,

Doyle (1994) believes profitability to be ubiquitous in organisations as a measure of

9 The relationship between language and power is a growing issue in the social sciences. Pierre Bourdieu’s

(1991) Language and Symbolic Power provides an extremely insightful account of the role of language in

maintaining power relations. In addition, an emerging discipline within the social sciences, Critical Discourse

Analysis, examines this relationship as the core of its analysis (see Fairclough, 1989, 1995, 2003; Wodak and

Meyer, 2001).10 The term indirect propaganda is used to describe a situation, whereby the promotion of certain interests is

carried out unknowingly. In this sense, indirect propaganda could be considered ‘hegemonic’.11 Doyle (1994) outlines a number of possible business objectives, including, profitability, market share,

shareholder value and acquisitive growth, all of which, Doyle claims, focus on the perspective of different

stakeholder groups.




divisional and business unit performance. He states that it is primarily used by Western

companies as a means of protecting the interests of their shareholders (Doyle, 1994).12

In more recent studies, Collison (2003) and Collison and Frankfurter (2000) extendDoyle’s analysis. They contend that in modern business practice, maximising shareholder

wealth/value is the ultimate business objective and has replaced the ‘old-fashioned’

profitability goal for many western companies. In addition to highlighting the technical

issues involved, Collison (2003) and Collison and Frankfurter (2000) acknowledge, more

importantly, that although the technique has changed, the interests to be served are still the

same (i.e. the shareholder’s). The shareholder wealth objective, with arguable circularity,

is considered to be the most intellectually respected by many theorists and practitioners

due to the ‘considerable legal and conceptual merit’ attached (Doyle, 1994, p. 5),13 despite

the fact that the user needs of other stakeholders are neglected.14

2.3. Accounting textbooks

The important role of textbooks in accounting degree courses is emphasised by Brown

and Guilding (1993); these academics surveyed English University Business Schools in

order to assess the importance ascribed to different modes of instruction. The study

compared accounting and non-accounting faculties and ranked their teaching practices

according to the ten most ‘widely applied’ methods. Their findings indicate that for both

accounting and non-accounting schools, the top three teaching methods employed were

lectures, seminars/tutorials and prescribed textbooks. However, accounting departments

placed considerably more emphasis on both lectures and prescribed textbooks than their

non-accounting contemporaries. Brown and Guilding (1993) claim that because

‘accounting focuses on widely accepted practices, then much of the teaching can beachieved through textbooks and prescriptive lectures’, adding ‘If, however, attempts are

made.to develop analytical and professional judgement skills.then different teaching

methods are needed’ (Brown and Guilding, 1993, p. 211). They suggest that the lesser

emphasis placed on tutorials in accounting departments might be suggestive of a less

discursive approach to teaching. The greater employment of prescribed textbooks by

accounting faculties may have educational consequences such as less critical analysis of

widely accepted theory and the ‘homogenisation’ of accounting degree programmes

(Brown and Guilding, 1993).

Scapens et al. (1984) undertook an analysis of 24 management accounting textbooks.

Their study suggested that the core material of management accounting textbooks had not

substantially changed in the twenty-year period covered by the study. The influence of a

neo-classical economic framework was noted in providing decision-making models.

12 Profitability or earnings, as a business objective, is subject to ‘practical, methodological and conceptual

criticisms’ (Doyle, 1994, p. 3) as profits can be easily manipulated by using different accounting methods (for

example, depreciation, accounting for stock).13 Doyle (1994) claims that this is the case because the legal owners are the shareholders and the task of

management is to maximise the value they receive.14 Despite the ascension of stakeholder theory over recent years, it arguably still remains a marginal part of most

degree courses.




The assumptions related to these models imply ‘that the decision maker is either the owner

or shares the owner’s goals’ and is a profit maximiser (Scapens et al., 1984, p. 34).

In replicating the above study, Kelly and Pratt (1988) surveyed ‘conventional wisdomas presented to students of business through current textbooks’ to identify ‘areas, where

the wisdom is now suspect and potentially damaging’ (Kelly and Pratt, 1988, p. 2). They

selected a sample of textbooks by asking eleven publishers for their leading texts. This

research concluded that over-simplified and incomplete perceptions of management

accounting were presented in popular management accounting texts and that the content

did not equip graduates to overcome management accounting problems in a practical

setting. The authors claimed that most of the textbooks analysed for the study relied

heavily on the format and content of previous textbooks which resulted in ‘monotonous

homogeneity’. One reason cited for such ‘stagnation’ in management accounting

textbooks was that academics did not question ‘conventional wisdom which they,

actively or passively, [helped] to sperpetuate to undergraduates’ through the use of the

textbooks they prescribed (Kelly and Pratt, 1988, p. 20).

Kelly and Pratt (1994) also examined the content of 13 introductory management

accounting textbooks which were recommended by degree-awarding institutions in New

Zealand. They raised concerns over the dominance of neo-classical economics and

scientific management in management accounting textbooks. They claimed that ‘nearly

all’ management accounting textbooks assume that the purpose of management

accounting is to ‘assist management to increase profitabilities’ (Kelly and Pratt, 1994,

p. 316). By performing a comparative analysis between popular texts, Kelly and Pratt

(1994) showed that management accounting texts seemingly adhere to the same general

format. Similarities between Horngren and Drury for example are described as

‘remarkable’ (Kelly and Pratt, 1994).

Drawing on the work of Lee (1989), Hopwood (1988) and Kelly and Pratt (1994)suggested that the influence of the accountancy profession has had a negative effect on

students’ intellectual development (see also Humphrey et al., 1996; Gray et al., 1994). The

paper highlighted the lack of innovation and development in the form and content of

management accounting texts used for educational purposes and points to a general

absence within management accounting textbooks of explicit discussion of the traditional

framework or paradigm that informs the text. However, in their concluding remarks Kelly

and Pratt (1994) acknowledged an exception to this general statement. By trying to

introduce theory into a management accounting text, they contended that The Social and

Organisational Context of Management Accounting (Puxty, 1993) achieves ‘an holistic

appreciation of the business world’ adding ‘we feel that all serious students of

management should be exposed to the philosophical and sociological perspectives’(Kelly and Pratt, 1994, p. 325). The Puxty (1993) text, to which they refer, would arguably

be considered by most academic staff to be novel or at least idiosyncratic.

Zeff’s (1988) exposure of the lack of regard afforded to the historical and social

developments of accounting standards within accounting textbooks, indicates at least one

way in which students may be prevented from ‘acquiring a full appreciation of how change

occurs in their field’ (Zeff, 1988, p. 434; see also Zeff, 1989). Manninen (1997) points out

that all texts are written with some purpose in mind and are therefore representative of

some vision of the world. The importance for students to engage in the critical reading of




texts is apparent when one considers the suggestion that textbooks contain ‘certain

silenced assumptions’ and are ‘built on many choices and concealments’ which were

evident in Zeff’s (1988) study (Manninen, 1997, p. 287).Despite the relatively few studies involving the content or use of accounting textbooks,

it seems apparent from the review of the literature outlined above that they have the

potential (whether intentionally or not) to maintain predominant ideological perspectives.

By presenting the rudiments of accounting in an uncritical manner without addressing the

implicit values and assumptions they expound or the processes of which they are a result,

accounting textbooks could be subjected to the same criticism that has been directed

towards accounting education in general. The purpose of this study is to examine the

content of the preface and introductory chapters of accounting textbooks as recommended

by accounting degree awarding institutions in Scotland.15 By undertaking a content

analysis of the texts, the study aims to determine whether textbooks contain implicit

‘value’ assumptions, in particular whether they emphasise the user needs of particularstakeholder groups.

3. Research method

The relevance of applying content analysis to the current investigation is apparent in

light of Krippendorf (1980, p. 18) observation that ‘educational material [has been]

recognised as a rich source of data’ to facilitate the understanding of ‘larger political,

attitudinal and value trends to be found in its textbooks’. Smith and Taffler (2000, p. 627)

note that two generic approaches to content analysis are typically taken: the ‘form

orientated’ approach (based on counting of words) and the ‘meaning orientated approach’

(based on counting of underlying themes). Krippendorf (1980) suggests the latter approach

is preferable but difficult in practice, whereas Smith and Taffler (2000) suggest that the

word approach is more reliable. The approach applied to the current investigation reflects

the ‘form orientated’ approach and is consistent with an early form of content analysis

identified by Krippendorf (1980) as ‘quantitative newspaper analysis’. This approach

reflects the notion that the more frequently a word or phrase is used, the greater is its

importance to the area under investigation (Day, 1986; Fowler, 1991; Fowler et al., 1979).

As with all research methods, content analysis is subject to a number of limitations.

Milne and Adler (1999) and Unerman (2000) contend that content analysis studies

performed on corporate social reporting activity demonstrate a lack of rigorous reliability.

Of course, this depends partly on whether or not the analysis is performed as a word countor as an identification of themes (Smith and Taffler, 2000). The accuracy of the analysis

can be improved by rigorous pre-testing (Krippendorf, 1980; Milne and Adler, 1999;

15 A perusal of course structures for participating departments would indicate that the first two years of most

accounting degree programs are more technically focused, whilst the final two years introduce ‘broader’ themes

(for example, social and environmental accounting or accounting history). However, this focus on ‘techniques’

during the first two years may result in them becoming deeply embedded and difficult to challenge in the latter

part of the degree (Humphrey et al., 1996).




Unerman, 2000). However, an unavoidable element of subjectivity in content analysis will

still remain.

The names and authors of the introductory accounting textbooks used on degreeprogrammes were obtained through a postal questionnaire. Replies to the questionnaires

were received between January and February 2001. Reminders were issued to non-

respondents in February 2001. As the replies to the questionnaires were returned, initial

attempts at performing content analysis on selected recommended textbooks were made

by the researchers. The analysis was performed on 21 introductory conventional

accounting textbooks which were recommended by Scottish university accounting

departments for the academic year 2000/2001 (see Table 1). The analysis concerned the

content of the preface and the introductory chapter only. This limitation was applied

because, firstly, time considerations prevented a full analysis of the whole text.

Table 1Recommended textbooks

Financial accounting Management accounting Financial management

Atrill and McLaney (1999),

Accounting: An Introduction

Artrill and McLaney (1997),

Accounting and Finance for

Non-Specialists

Arnold (1998), Corporate

Financial Management (3)



Non-Specialists


Management Accounting for

Non-Specialists



Non-Specialists

Berry (1999), Financial

Accounting: An Introduction

Drury (1998), Costing:

An Introduction

Brealy and Myers (1996),

Principles of Corporate Finance

(2)

Dodge (1997), Foundations of

Business Accounting

Drury (1996), Management and

Cost Accounting (6)

McLaney (1994), Business

Finance for Decision Makers

Gillespie et al. (1997), Principles

of Financial Accounting

Horngren et al. (2000), Cost

Accounting: A Managerial

Emphasis

Pike and Neale (1999), Corporate

Finance and Investment

Gray et al. (1996a,b), Financial

Accounting: Method and

Meaning (2)

Mackey and Thomas (2000),

Management Accounting: A Road

to Discovery

Ross et al. (1996), Corporate

Finance (3)

Melville (1999), Financial

Accounting

Thomas (2002), Introduction to

Financial Accounting

Watts (1996), Accounting in the

Business Environment

Weetman (1996), Financial and Management Accounting

Wood and Sangster (1999),

Business Accounting 1

This table summarises the textbooks recommended in session 2000–2001 on introductory accounting course in

Scottish University accounting departments. Two Institutions used Financial Accounting: Method and Meaning

by Gray et al. (1996a,b). Six Institutions used Management and Cost Accounting by Drury (1996). Three

Institutions used Corporate Financial Management by Arnold (1998), three Institutions used Corporate Finance

by Ross et al. (1996) and two Institutions used Principles of Corporate Finance by Brealy and Myers (1996).

There was one non-respondent for both management accounting textbooks and financial management textbooks.




Secondly, it was felt that, typically, a general discussion about stakeholder groups would

be located at the start of each text while technical material would fill later chapters.16

Analysis was performed manually at first, counting the number of times eachstakeholder group appeared in the introductory chapter and preface and totalling the

number of words in each. Three researchers initially undertook text counts and compared

their results. These proved to be inconsistent at first until a substantive list of synonyms

was developed and agreed upon (see Appendix). The results yielded thereafter were

generally consistent among all the researchers involved.17

After the preliminary stages of analysis were complete, the researchers felt that the

process could be made more reliable if the manual element was reduced. It was decided

that scanning the introductory chapter and preface on to computer would yield reliable

word count results.18 Once the scanning process was completed, the researcher proceeded

to search for the specific synonyms using the ‘find’ function in Microsoft Word .19 The

frequency of use of each synonym was recorded and then tabulated in a Microsoft Excelspreadsheet.

4. Results

The results of the analysis are discussed under the following four headings: financial

accounting textbooks; management accounting textbooks; financial management text-

books and observations. Other ways of presenting the results could have been used but it

was felt that this approach facilitated a comparison with what little literature exists in the

area and helped to structure the conclusions reached in a coherent manner.

16 A follow up to the initial questionnaire suggests that, in most cases, students are instructed to read the

introductory chapter as part of the course outline (53% of the initial respondents were contacted, all of whom

stated that they recommend students read the introductory chapter). However, the authors also accept the

possibility that even though certain chapters may be recommended as part of a course, students (for whatever

reasons) may not actually read them.17 An initial list of the search criteria and associated synonyms (to be identified within the context of the content

analysis) were agreed upon by all of the researchers. Before any formal analysis of text took place, a random

sample from the list of recommended textbooks were read (introductory chapters only) in order to identify any

further synonyms which may have been overlooked in drawing up the initial list. Formal analysis commenced

once a satisfactory list was agreed upon.18 When scanning the relevant textbook chapters, all the scanned text was converted to Microsoft Word files. In

some cases, not all of the scanned text (typically tables or figures) was readable in this format. When this

occurred, the non-scanned text was manually typed and added to the scanned text. Therefore, the content analysis

of the texts included all figures, tables and footnotes.19 Initial inconsistencies were noticed but soon rectified. For example, if one were to probe for the word

shareholders, only the word shareholders is generated, but if one were to search for the word shareholder, both the

words shareholder and shareholders are generated. It, therefore, became apparent that to account for all the

occurrences of a word in a text it was required to search for it in its singular form. The results of this search were

confirmed using another software package (NUD.IST) which has the capacity to generate word frequencies from

large text files. The results from each were compatible.




4.1. Financial accounting textbooks

Eleven different introductory financial accounting textbooks were prescribed by theacademic staff responsible for textbook selection in the 12 institutions which award

accounting degrees in Scotland. There was therefore a wide variety in the financial

accounting textbooks used. In fact, the only financial accounting textbook that was

prescribed by more than one institution was Gray et al. (1996a) (see Table 1). This finding

suggests that there is a great deal of choice among the financial accounting texts and the

course lecturers at the institutions examined were making use of this large number of

alternatives.20

For the content analysis, Table 2 shows the frequency with which various stakeholder

groups are mentioned in the preface and the introductory chapters of the financial

accounting texts studied. A number of points emerge from a visual inspection of the table.

The number of occurrences of the word ‘shareholder’ is far greater than any other andtherefore the inference is that the shareholders’ perspective is promoted more.21 This was

the case for all but four of the recommended financial accounting textbooks (see Table 2).

Artrill and McLaney (1997) and Wood and Sangster (1999) had higher word counts for

managers and creditors/suppliers, respectively, but even here the shareholder group was

second in each book in terms of the number of mentions given. For example, although

Wood and Sangster (1999) have 24 references to creditors/suppliers, they have 20

mentions of the word shareholder. For all the other texts, the term shareholder was the

most frequently used. It is worth pointing out that Wood and Sangster (1999) is unique

amongst all the recommended textbooks analysed due to the apparent emphasis on debtors

and creditors. However the reason for this is primarily the result of a number of

illustrations of double entry book-keeping and not of any explicit discussion of their user

needs. The term ‘shareholder’ was actually used relatively little in the financial accountingtextbooks and the phrase ‘owner’ was more frequently applied. Overall, managers are the

second most frequently cited user group in the sample of recommended financial

accounting textbooks.

At the other end of the spectrum debtors were not mentioned at all in six of the 10 books

studied, while trade creditors were not mentioned in four of the texts analysed. Gray et al.

(1996a) had no mention of customer/consumers, while Wood and Sangster (1999) did not

refer to the government or employees in their preface and introductory chapter.

One possible reason for such a high number of references to managers in the financial

accounting textbooks could be the fact that many of the textbooks spend some of the

introduction explaining the difference between external and internal users of accounting

information. By identifying managers as internal users of accounting information, the textstypically describe the type and form, which such information would take. In doing so, the

texts tended to make reference to managers in a number of ways; for example, they argue

that such information would help managers make decisions or assist them in target setting.

20 A greater level of homogeneity among the other areas was apparent, with six different textbooks being

prescribed for each of management accounting and financial management (see Table 1).21 A number of synonyms were used for each stakeholder group when analysing the textbooks. A discussion of

the synonyms used and their application can be viewed in Appendix.




Table 2

Number of appearances of words or synonyms in recommended financial accounting textbooks

Text A B C D E F G H I J K

Total nos of words 8693 6282 12,552 13,969 7195 9746 4125 9080 12,290 11,687 2

Description

Shareholder 33 8 44 46 33 9 20 34 49 59 2

Manager 32 33 18 33 9 5 15 16 6 43 0

Lender 6 2 7 6 9 3 9 8 0 16 4

Institutional investor 0 0 4 0 0 0 0 0 2 3 0

Employee 5 5 15 10 3 2 5 18 6 15 0

Government 4 4 7 7 3 2 3 13 5 6 0

Creditor/supplier 4 3 4 16 6 3 7 17 4 16 2

Debtor 0 0 0 5 0 0 0 3 1 2

Customer/consumer 6 7 5 5 1 0 5 11 4 10

Analyst/advisor 2 2 3 1 3 0 0 4 0 0 0

Wider issues 6 7 37 14 3 51 4 45 9 17

Total nos. of refs 98 71 144 143 70 75 68 169 86 187 6

Total refs as % of

total words

1.13% 1.13% 1.15% 1.02% 0.97% 0.77% 1.65% 1.86% 0.70% 1.60% 2

A, Atrill and McLaney (1999), Accounting: An Introduction; B, Atrill and McLaney (1997), Accounting and Finance for Non-Specialis

Accounting: An Introduction; D, Dodge (1997), Foundations of Business Accounting; E, Gillespie et al. (1997), Principles of Financ

(1996a), Financial Accounting: Methods and Meaning; G, Melville (1999), Financial Accounting; H, Thomas (2002), Introduction to F

(1996), Accounting in the Business Environment ; J, Weetman (1996), Financial and Management Accounting; ,K, Wood and Sangste

synonyms used to analyse the textbooks according to the above categories can be viewed in the Appendix along with an explanation of

analysis.



Similarly, many of the textbooks made a number of references to shareholders or owners

in the context of explaining the stewardship function of accounting.

Of the 11 textbooks analysed, only three addressed ‘wider issues’ to any noticeabledegree: texts C (Berry, 1999), F (Gray et al., 1996a) and H (Thomas, 2002). For Berry

(1999), most of the ‘wider issue’ references pertained to the natural environment. A

significant reason for this finding is that Berry (1999) uses a case study which provides

extracts from the annual report of RJB Mining plc 1996. This extract is used to illustrate

how employment and environmental issues can be addressed in a company report. In

addition, Berry (1999) provides an extract from British Airways plc Annual Report 1996–

1997, which contains performance measures other than financial data, such as number of

passengers carried, to illustrate the importance of non-financial information. However,

apart from a critique of the conceptual framework, Berry (1999) is very similar in many

respects to most of the other recommended financial accounting textbooks, especially with

regard to its discussion of different user groups. This is the case because Berry (1999), likemany of the other authors, refers to the Corporate Report (ASSC, 1975) to identify

different user groups. One paragraph is then used to explain what information each user

group might require, except shareholders whose user needs take up a page of explanation.

Most of the references to wider issues in the introductory chapter of Berry (1999) were

contained in the case studies.

Thomas (2002) is the most recent book included in the sample and this might explain

the relatively large number of references to wider issues. The majority of the references to

different stakeholder groups emerges, but is yet again taken from a discussion of the

Corporate Report (ASSC, 1975). The difference between Thomas (2002) and the other

recommended textbooks examined is that this discussion also draws comparisons between

the Corporate Report (ASSC, 1975) and the Statement of Principles of Financial

Reporting (ASB, 1999), a comparison which could not have been made in many of the

other financial accounting textbooks. The majority of the references to wider issues in

Thomas (2002) pertain to ‘public accountability’ or the ‘public’ role that accountancy

plays.

Gray et al. (1996a) were unique in the overall approach that was adopted by their text.

For example, they had the highest number of references to ‘wider issues’ and relatively

few references to either shareholders or managers. In fact, 51 out of 75 (68%) references to

different user groups relate to a discussion of wider issues. Gray et al. (1996a) formed part

of a series of introductory accounting textbooks entitled ‘Method and Meaning’. The

intention of the series is described in the series editor’s preface (Wilson and Chua, 1993)

as adopting an approach that encourages both techniques acquisition and analytical

thought. This approach encourages students to consider the views of individuals andsociety and not to accept current practice as being the most appropriate.22

22 The series included the titles Managerial Accounting: Method and Meaning ( Wilson and Chua, 1993) and

Financial Management: Method and Meaning (Puxty and Dodds, 1991). It is worth noting that the series has been

discontinued. The only surviving text from the series is Gray et al. (1996a) (now Bebbington et al. (2001)

‘Financial Accounting: Practice and Principles’. If it were assumed that the discontinuation of the series was due

to lack of demand, then perhaps it could also be assumed that accounting educators do not want to prescribe

textbooks which deal with wider societal issues.




Gray et al. (1996a) emphasise the, arguably, frightening tendency for accounting

students to concentrate on the acquisition of techniques and to resist asking deeper

questions such as why are the techniques important? Accordingly, this text claims toconcentrate on developing students’ critical awareness of issues and encourages ‘deep-

learning’ approaches to the subject. As one might expect from such an approach to

learning, Gray et al. (1996a) locate accounting within an historical context and explore the

significance of events such as the Industrial Revolution and the implications of

accounting’s status as a profession. The majority of references to wider issues comes

not from a summary of the Corporate Report (1975) like many of the other textbooks, but

from considerations of how large organisations can affect the natural environment and

society and the role which accountants play in this process.

4.2. Management accounting textbooks

There was much less diversity among the recommended management accounting

textbooks. The most popular book among management accounting lecturers was Drury’s

(1996) Management and Cost Accounting (see Table 1) which was used in six out of the 12

institutions in Scotland that award accounting degrees. One of the other textbooks

recommended for management accounting, Artrill and McLaney (1997), was

recommended for both financial and management accounting at one institution, as part

of a general introduction to accounting. For the purposes of this study the text was

included in both the financial accounting and management accounting analyses.

Unlike the financial accounting textbooks, but very much as expected, the

recommended management accounting texts emphasised the user needs of management

considerably more than those of other stakeholders (see Table 3). When ‘glancing’ overTable 3 one cannot help but think that Horngren’s Cost Accounting: A Managerial

Emphasis is aptly named, with nearly 180 references to managers/management.

Interestingly, even though Horngren et al. (2000) has 177 references to managers

compared to Drury (1998) who has 83, both equally emphasise the needs of this group in

relation to their total references to each stakeholder group (63%).

The only management accounting textbook which does not give priority to

managers/management is Mackey and Thomas (2000). In this text, the interests of the

customer are emphasised slightly more than those of management, with 50 references to

customer/consumer and 48 to manager (see Table 3).23 However, two of the other

management accounting texts, (Drury, 1998; Horngren et al., 2000) also reference

customers a considerable number of times; 50 and 61 times, respectively.

Drury (1998) and Horngren et al. (2000) appear similar in a number of importantrespects. This is especially true for the apparent concern about the customer.

23 Mackey and Thomas (2000) are unique among the management accounting textbooks not only because

managers are not the most mentioned stakeholder group but also because of the approach adopted in the textbook.

The book is written as a conversation between the members of a family who have just inherited the family

business and who each perform different roles within the business, such as finance director or management

accountant. It is through the conversation that the reader learns the nature of each role and the associated

techniques.




Table 3 shows that both these texts, and Mackey and Thomas (2000) had at least five timesmore references to customers than any of the other texts analysed. However, it seems that

this emphasis may not be the result of the authors stressing any moral obligation that

businesses might have to their customers, but rather an illustration of how management

strategies can be implemented in order to maintain customer satisfaction and thus yield

better profits. An extract from Horngren et al. (2000, p. 8) may help illustrate this point:

“The challenge facing managers is to continue investing sufficient (but not

excessive) resources in customer satisfaction—such that profitable customers are

attracted and retained”.

Similarly, the needs of employees are frequently emphasised in many of the

management accounting texts. Again, this emphasis is not based on any respect for thelivelihood of the employees, but rather on explaining why managers need to motivate staff

to attain organisational goals. For example, by introducing bonus schemes based on

performance targets or budgets, the texts argue that employees may work towards the

goals of the organisation or management. All of the recommended management

accounting texts assume this profit maximising behaviour to be almost self-explanatory

and no attempt is made to explain the values implicit in such performance/bonus schemes

(see Miller and O’Leary, 1987 for a discussion of how the emergence of standard costing

made possible the governing of individuals within the firm).

Table 3

Number of appearances of words or synonyms in recommended management accounting textbooks

Text A B C D E F Mean Std Dev

Total nos of

words

6282 6809 9547 13,165 16,131 17,868 11,634 4852.01

Description

Shareholder 8 6 13 14 11 24 13 6.31

Manager 33 55 84 83 177 48 80 51.56

Lender 2 2 1 1 0 0 1 0.89

Inst investor 0 0 0 0 0 0 0 0.00

Employee 5 5 16 9 15 9 10 4.75

Government 4 4 6 5 5 13 6 3.43

Creditor/supplier 3 3 7 3 10 7 6 2.95

Debtor 0 0 0 0 0 0 0 0.00

Customer 7 9 50 6 61 50 31 25.71

Analyst/advisor 2 2 0 0 0 0 1 1.03Wider issues 7 7 5 11 2 5 6 2.99

Total nos. of refs 71 93 182 132 281 156 153 74.83

Total refs as % of

total words

1.13% 1.37% 1.91% 1.00% 1.74% 0.87% 1.34% 0.004

A, Artrill and McLaney (1997), Accounting and Finance for Non-Specialists; B, Artrill and McLaney (1995),

Management Accounting for Non-Specialists; C, Drury (1998), Costing: An Introduction; D, Drury (1996),

Management and Cost Accounting; E, Horngren et al. (2000), Cost Accounting: A Managerial Emphasis;

F, Mackey and Thomas (2000), Management Accounting: A Road to Discovery. The synonyms used to analyse

the textbooks according to the above categories can be viewed in the Appendix along with an explanation of how

they were applied in the analysis.




The least referenced stakeholder groups were institutional investors and debtors which

had no references in any of the six recommended management accounting textbooks.

Similarly, the analyst/advisor group was barely recognised, with texts C (Drury, 1998), D(Drury, 1996) , E (Horngren et al., 2000) a n d F (Mackey and Thomas, 2000) not

mentioning the group at all in their preface or introductory chapter. A possible reason for

the lack of attention to these specific groups is the fact that management accounting is

regarded as an internal function to serve the information needs of management. All the

management accounting texts analysed seemed very keen from the outset to make this

distinction clear. Therefore, the external activity of institutional investors and analysts/

advisors do not feature much in the recommended management accounting texts.

4.3. Financial management textbooks

An examination of Table 4 clearly identifies shareholders as the predominant usergroup within the sample of recommended financial management textbooks. The second

most frequently referenced user group was managers/management. A combination of the

averages among the financial management texts for these two groups accounts for 75% of

the total references to user groups within the prefaces and introductory chapters. The

average number of references to shareholders in the financial management textbooks was

96 as compared to 32 for the financial accounting texts and 13 for the management

accounting texts. This emphasis is apparent in Arnold (1998), where 206 references were

Table 4

Number of appearances of words or synonyms in recommended financial management textbooks

Text A B C D E F Mean Std devi-ation

Total nos of words 22,502 6282 7405 5492 13,167 10,980 10,971 6364.10

Description

Shareholder 206 8 61 70 138 93 96 68.58

Manager 163 33 52 25 123 68 77 54.51

Lender 16 2 33 9 11 4 13 11.22

Inst investor 46 0 17 5 1 2 12 17.86

Employee 26 5 3 1 11 1 8 9.64

Government 17 4 2 0 0 8 5 6.52

Creditor/supplier 12 3 1 15 3 3 6 5.81

Debtor 2 0 0 0 1 0 1 0.84

Customer 11 7 0 0 1 1 3 4.59

Analyst/advisor 6 2 0 1 1 0 2 2.25Wider issues 22 7 0 0 8 0 6 8.59

Total nos. of refs 527 71 169 126 298 180 229 164.40

Total refs as % of total

words

2.34% 1.13% 2.28% 2.29% 2.26% 1.64% 1.99% 0.005

A, Arnold (1998), Corporate Financial Management ; B, Artrill and McLaney (1997), Accounting and Finance

for Non-Specialists; C, Brealy and Myers (1996), Principles of Corporate Finance; D, Ross et al. (1996),

Corporate Finance; E, McLaney (1994), Business Finance for Decision Makers; F, Pike and Neale (1999),

Corporate Finance and Investment . The synonyms used to analyse the textbooks according to the above

categories can be viewed in Appendix along with an explanation of how they were applied in the analysis.




made to shareholders. However, despite the fact that Arnold (1998) has more references to

shareholders than any other text, McLaney (1994) and Pike and Neale (1999) have a

higher percentage of references to shareholders.The emphasis on shareholders was particularly apparent within the sample of financial

management textbooks, except text B (Artrill and McLaney, 1997) which strictly speaking

is not a conventional financial management text; although the textbook covers financial

management material, it serves as a general introduction to all three conventional

accounting disciplines (financial accounting, management accounting and financial

management) and therefore all of these areas are covered in the introductory chapter.

Thus, the text does not talk exclusively about financial management, which may explain

why it is relatively unusual among the sample.

A number of user groups were not identified at all by some of the textbooks; noticeably

debtors, which were not mentioned in four of the financial management textbooks (texts B,

Artrill and McLaney, 1997; C, Brealy and Myers, 1996; D, Ross et al., 1996 and F, Pike

and Neale, 1999), see Table 4). Customers were scarcely referred to, and in fact were not

mentioned at all in texts C (Brealy and Myers, 1996) and D (Ross et al., 1996). The lack of

discussion of wider issues in the sample of recommended financial management textbooks

was particularly significant. Texts C (Brealy and Myers, 1996), D (Ross et al., 1996) and F

(Pike and Neale, 1999) made no mention at all of wider discussions, such as society or the

environment. The average reference to wider issues was six times in the financial

management textbooks, which was the same as the management accounting textbooks but

significantly less than the financial accounting textbooks, which on an average, referred to

wider issues 18 times in their prefaces and introductory chapters.24

4.4. Observations

For financial accounting textbooks at least, texts seem to have moved away from being

a technical Bible for the ‘average student’.25 The increased awareness and references to

‘other stakeholders’ in financial accounting textbooks may suggest a move to incorporate

24 In addition to the analysis outlined above, the study also contained a ‘longitudinal’ element, in that previous

editions of several of the recommended textbooks (Wood, 1979, 1993, Business Accounting, Drury, 1992,

Management and Cost Accounting, Drury, 1994, Costing: An Introduction and Brealy and Myers, 1991,

Principles of Corporate Finance) were examined for changes in their content throughout different editions.

Although the analysis was not as systematic as that applied for the content analysis, a number of points emerged.

Any changes that occurred between editions were essentially ‘cosmetic’ or at most a revision of a particular

technique. For example, the companion web-site, power-point presentations or overhead projector slides were not

available with the third or sixth editions of Frank Wood but were present in the eighth edition. Drury (1998) was

the only text that made an attempt at integrating ‘wider’ issues into its content. A new chapter in the fourth edition

entitled Organisational and Social Aspects of Management Accounting (chapter 22) addressed issues such as,

how management accounting can be used to maintain the subordination of labour to the needs of capital and how

management accounting can be used to legitimise decision making. However, this discussion was contained in the

latter part of chapter 22 and covered only four pages out of the 928 pages in the whole text.25 Or the ‘student of average ability’ (Castle and Owen, 1991, p. xii). This description of the authors intended

audience was apparent in a perusal of a number of accounting textbooks published 20–30 years ago. It was also

made explicit that the purpose of these textbooks was to assist students who were sitting their professional

accounting examinations.




wider issues and perspectives. However, there are a number of reasons why this change

might not be significant.

Firstly, an informal perusal of subsequent chapters shows an emphasis on double entrybookkeeping and an absence of any detailed discussion about the needs of wider

stakeholder groups. A description of the different possible users of accounting

information, and of their needs, is generally contained within the first chapter of financial

accounting textbooks. It seems that their needs are only briefly acknowledged and then

ignored for the remainder of the book. It is acknowledged that a limitation of the current

paper is that only the introductory chapters were examined and a detailed analysis of

subsequent chapters is left for further study.

For many of the financial accounting textbooks, one could be forgiven for thinking that

all the introductory chapters had been penned by the same author,26 such was their

similarity; Gray et al. (1996a) was the one noticeable exception to this generalisation. The

format of the newer, seemingly more ‘enlightened’, introductory chapters can besummarised as follows: (i) definition of what accounting is, usually using AAA or AICPA

explanations; (ii) explanation that accounting information can be used either externally or

internally; (iii) explanation that financial accounting is external and management

accounting is internal; (iv) discussion of external users with reference to those groups

identified in the Corporate Report (ASSC, 1975); and (v) limitations of accounting

information (usually its reliance on money measurement and its focus on historic

information).

The discussion about different users tends to be quite brief, with about 5–10 lines

devoted to each user, including how they could benefit from information contained in the

company report. If a section in a recommended text is devoted to explaining the needs of

different users, there tends to be an emphasis placed on shareholders. This is not simply in

terms of the number of references made, but also in terms of the space devoted toexplaining user needs and in particular the goal of the organisation.

The tone of many of the larger recommended financial management textbooks

suggested a strong shareholder emphasis. This was particularly evident from the

introduction of Brealy and Myers (1996, p. 3), where it is argued ‘the secret of success in

financial management is to increase value’ and that shareholders are made better off by an

increase in value. Apart from a noticeable shareholder emphasis in both the language and

analysis of the financial management textbooks, a footnote that appeared in the first

chapter of Brealy and Myers (1996) may help to illustrate the unquestioned, but highly

contestable ethical perspective projected by some of the financial management textbooks.

26 Findings from an exploratory study into the production and use of accounting textbooks ( Ferguson et al.,

2004) shed some light into why accounting textbooks are so ‘homogenous’. In addition to conducting interviews

with lecturers responsible for the selection of accounting textbooks, Ferguson et al. (2004) spoke with two

publishers regarding the production process of these texts. Both interviewees indicated that accounting education

was a ‘dual’ market, encompassing both academic and professional aspects. This ‘killing two birds with one

stone’ approach may suggest why so many recommended textbooks still have a strong technical emphasis, and

cover similar material. In addition, both publishers noted that, since the introduction of the Research Assessment

Exercise (RAE), authors were increasingly being recruited from Ireland and continental Europe. They noted that

many universities in the UK ‘frowned’ upon their staff spending time on work that will not directly benefit their

departments’ RAE position.




The footnote related to an explanation of corporation law and pointed out that if a

company were to incorporate in the US, then it would be subject to the laws of the state in

which it was incorporated. Brealy and Myers (1996, p. 6) explained “Delaware has a welldeveloped and supportive system of corporate law” adding “even though they may do little

business in that state, a high proportion of US corporations are incorporated in Delaware”.

This statement is generally held to mean that Delaware’s corporate law system is

supportive of companies and their perspectives in disputes with other parties.27 Although a

seemingly innocuous statement, it may send the message to students that it is appropriate

conduct for a financial manager to take advantage of (arguably, inadequate) laws that

prioritise shareholders interests’ over those of other stakeholders.

The use of imagery was also more apparent in the financial management textbooks,

particularly when depicting the qualities or attributes of a financial manager. The image of

the financial manager was generally described as having to be a ruthless competitor in an

unforgiving business world. However, Brealy and Myers (1996, p. vii) stated that even“down to earth, red blooded managers” (emphasis added) sometimes have to bother with

theory.

5. Conclusions

The results of this study offer an insight into some findings from previous research,

which suggest that accounting students are inculcated with particular values that have

implications for their ethical and moral development. By identifying a pronounced

shareholder and managerial emphasis within a sample of recommended conventionalaccounting textbooks, this study provides further support to the claim that the primary

ethical perspective conveyed to accounting students is that of financial utilitarianism

(Gray et al., 1994). It would therefore appear that, in most cases, what students learn

from the recommended accounting textbooks analysed, is that an accounting decision or

action is only appropriate if it maximises shareholder wealth (or in the case of

management accounting texts, that it meets with managers and owners objectives) (Gray

et al., 1994; McPhail, 1996, 1999; McPhail and Gray, 1996; Seenan, 1995 ). This would

suggest that students are being deprived of a broader insight into the study of accounting

that could be provided through a consideration of other ethical perspectives. In addition,

such an emphasis, together with a lack of critical discussion, helps to reinforce an

uncritical approach to learning, with the possible implication that accounting graduateswho enter practice may be unaware of the ethical, economic and political assumptions

underpinning their work (McPhail, 1999). In this sense accounting education can be

viewed as means of maintaining the ideological status-quo through the unquestioned

reproduction of contestable values and beliefs (Collison, 2003; Gray et al., 1994;

27 Delaware’s non-jury Court of Chancery uses judges to resolve corporate disputes. The damages awarded by

juries in corporate disputes are often held to be ‘punitive’ and therefore damaging to corporations (Ecologist,

2004).




Humphrey et al., 1996; Kelly and Pratt, 1992, 1994; Lewis et al., 1992; McPhail, 1996,

1999; McPhail and Gray, 1996; Puxty et al., 1994).

The content analysis would suggest that the ideology expounded in the recommendedtextbooks is subtly concealed, and for the majority of the textbooks, is more apparent in

how the discourse is limited (what is left unsaid) as opposed to any explicit discussion

within the text (Hines, 1988). In this sense, the discourse of the majority of the

introductory accounting textbooks analysed can be viewed as maintaining ‘a particular

system of thought’ by effectively silencing other constituencies’ claims regarding their

rights to accounting information (McPhail, 1999, p. 844). It is imperative that accounting

educators are aware of the ideological function textbooks can perform; furthermore, if the

calls for ‘critical thinkers’ and ‘active, independent learners’ by the professional

accounting bodies are to be taken seriously, then accounting academics must resist the

single perspective presented in most textbooks, help students to recognise the singularity

of views offered and provide alternative perspectives from which students can exercise

their own reasoning (McPhail, 2001). Further research may consider the extent to which

accounting educators do offer such alternative perspectives.

The content analysis of the recommended texts in this study represents a small step to

understanding the values (or implicit theoretical assumptions) in accounting textbooks.

Further analysis is required in order to illuminate the factors, which prescribe or influence

the content of textbooks, including the role of the profession and professional accreditation

requirements. A deeper, more detailed analysis of texts might be employed, drawing on

studies in applied linguistics (see Sydserff and Weetman, 2002) or critical discourse

analysis (see Galhoffer et al., 2001) to provide a better understanding of the use of

language or the relationship between language, ideology and power. In addition, further

research may consider an analysis of the complete content of textbooks (as opposed to the

preface and introductory chapter), as well as an analysis of the supplementary material,which supports these recommended texts.

Acknowledgements

The authors are grateful for the helpful and insightful comments from Ken McPhail and

Barbara Flood and for the constructive criticisms of two anonymous reviewers.

Appendix. Synonyms and decision rules for stakeholder categories

Shareholder(s): shareholder, stockholder, investor, and owner(s). The term investor

was not applied if the discussion was in relation to institutional investors. If it was not

possible to establish the context in which the term investor was used, it was assumed that

individual investors were being referred to and was therefore classified with

shareholder(s).

Manager/management : manager(s), management(s), board of director, director(s),

chairman or chief executive officer. The term management was not counted if it was used




to explain a subject or technique, such as ‘just in time management’. The term was only

applied if referred to an individual or individuals.

Lender(s): lender(s), bank, bondholder(s), building society, loan creditor/provider of loan capital, savings and loan company. The term creditor was assumed to refer to trade

creditors unless the text was explicit in distinguishing between the two. The term bank was

not counted if it was in reference to a service, such as ‘telephone banking’ or ‘internet

banking’. The term ‘bank’ was only counted if it was in the context of explaining the role

banks can play in financing an organisations activity by means of a loan.

Institutional investors: backer, pension fund, insurance company, financial inter-

mediary, mutual funds, unit trust/trust fund.

Employee: employee, workforce, staff, human resources. The term human resources

was not counted if it was in reference to a ‘human resource manager’ or ‘human resource

management’.

Government : for the purpose of this study no other synonym was applied.

Trade creditor : the term creditor was assumed to refer to ‘trade creditors’ unless

otherwise stated. For the purpose of this study the term ‘supplier’ was counted

synonymously.

Debtor : for the purpose of this study no other synonym was applied.

Customer : customer and consumer were deemed to be equivalent terms for the purpose

of this study.

Investment analyst/advisor : no alternative terms were applied

Wider issues: natural environment, general public, public, community, society, social.

The term environment was counted only if within the context of the natural environment,

therefore, terms such as ‘business environment’ were not counted. The term society was

counted if within the context of explaining the impacts or affects business and accounting

can have on society/community/public. The term social was counted if an attempt wasmade to explain the function of business or accounting within a social context, such as the

‘social role of accounting’ or ‘the social need for accounting information’

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