Brian A. Rutherford

Genre Analysis of Corporate Annual Report Narratives A Corpus Linguistics–Based Approach

The study reported on in this article analyzes the U.K. Operating and Financial Review(OFR) as a genre of accounting narrative, employing word frequencies to identify genre rules. Evidence is found of rhetorical ploys within the genre and of differences in word frequencies, suggesting the existence of subgenres, related to the exigencies of the rhetorical situation. The genre employs language biased toward the positive (the “Pollyanna effect”), despite authoritative guidance that the OFR should be expressed in neutral terms. Evidence of subgenres includes differential propensity to employ positive language and differences in the rhetorical ploys adopted in connection with marketing strategy, corporate recovery, selfreference, comparative analysis, and gearing (leverage). The study also demonstrates the value of a corpus linguistics approach in analyzing accounting narratives.

Obfuscation, Textual Complexity and the Role of Regulated Narrative Accounting Disclosure in Corporate Governance

This paper examines whether poorly performingcompanies use textual complexity to obfuscatein the Operating and Financial Review (OFR) andthus undermine effective communication and goodgovernance. Prior research on the ‘obfuscationhypothesis’ has reached confused andcontradictory conclusions. The OFR is a usefulobject for testing the hypothesis because itssemi-regulated status provides a measure ofcommonality of content while leaving scope forvariability in textual complexity. This studyexamines whole texts, employs a larger numberof variables and proxy measures than previousstudies, and uses regression analysis, toovercome some of the possible causes ofinconsistency in previous results. It concludesthat poorly performing companies do notobfuscate by the use of textual complexity.OFRs are nonetheless textually complex and byno means all this complexity can be attributedto the complexity of the underlying activitiesto be described. The consequences of thisfinding for regulators and researchers arebriefly examined. The weakness of the evidencefor the hypothesised obfuscation by textualcomplexity shifts attention to other forms ofobfuscation and some suggestions for futureresearch are made.

The social construction of financial statement elements under Private Finance Initiative schemes

An episode in the development of accounting for Private Finance Initiative (PFI) scheme transactions is explored from a social constructionist perspective. The “carrying” of meanings between sub‐worlds of the financial accounting world through social processes, principally by means of the standard‐setting body’s conceptual framework, is shown to be implicated in the social construction, maintenance and modification of accounting meanings. The social constructionist model is developed in several ways, some of which respond to particular characteristics of the financial accounting world.

The Construction and Presentation of Performance Indicators in Executive Agency External Reports

For a variety of reasons, factors affecting the understandability and comparability of performance indicators, and perceptions of their status, may differ from those applying in the case of profit-seeking sector financial statements. This study examines the construction and presentation of performance indicators from the perspective of understandability, comparability and perceived importance. It identifies a number of aspects of reporting practice which may undermine these qualities.

Accounting Research and Accounting Policy: What Kind of Gap?

This paper is a response to Singleton-Greens examination of the relationship between scholarly financial accounting research and financial accounting policymaking and, in particular, the failure of policymakers to make much use of contemporary research (Accounting in Europe, 7(2), pp. 129–145, 2010). He argues that a major cause of this failure is a communication gap between academics and policymakers but this paper suggests that there is a major gulf between the interests and approaches of the academic and policymaking communities that will not be overcome by improving communication. Thus, his conclusion is too optimistic and may lead policymakers to expect much more from engagement with academic research than they are likely to obtain and academics employing contemporary research paradigms to believe that their work will be received by policymakers with more enthusiasm than is likely to be the case.

Making indicators perform

Getting to grips with the technical difficulties of performance measurement should not blind us to the fact that political factors can be as important as technical ones in the management of organisations, particularly in the public sector. Government Departments carry out different tasks and work within different traditions. The combination of political and contingent factors should lead us to expect that performance measurement in government will be diverse in its operation.

The social scientific turn in UK financial accounting research: A philosophical and sociological analysis

Abstract The demise of the classical programme of financial accounting research is generally represented as a progressive development. This paper argues that the academys abandonment of classical methods was justified neither by the fruitfulness of post‐classical programmes nor by their incontestable epistemological superiority. Rather, what occurred was a turn to mainstream social science, reflecting sociological characteristics of the UK financial accounting research community. The paper concludes with a call for a revival of the classical programme.

The production of narrative accounting statements: An exploratory study of the operating and financial review

This paper reports the results of an interview programme designed to investigate the processes involved in the production of narrative accounting statements, and specifically the Operating and Financial Review, with a view to identifying the effect such processes might have on the content and character of such statements. A range of features of the production process is identified with the potential to affect the content and character of statements, and thus to influence the relationship between the content and character of statements and the characteristics of the companies producing them, such as size, performance, risk and sector. The pattern of potential impacts is likely to be a complex one. It is suggested that preparers face a range of choices in the preparation of narrative financial statements that may be wider than some realise.

A Possibilitarian History of Price Change Accounting in the UK: 1971-1985

Abstract This paper offers a ‘possibilitarian’ analysis of the history of price change accounting in the UK, exploring how events might have turned out differently at a number of key nodal points. It argues that a stable current cost accounting regime could have been established significantly before SSAP16 was in fact adopted or, alternately, that the retreat from SSAP16 could have been managed in a way that would have maintained compliance with current cost accounting. Had a substantial period of widespread compliance within a stable regime eventuated, a quite different dynamic might have emerged, including significant user pressure to maintain current cost accounting, thereby underpinning the regime and leading to its long-term survival.

Towards a conceptual framework for public sector financial reporting

What are the purposes served by financial reporting? In the profit‐seeking sector the answer to that question is straightforward — to meet the needs of potential investors. There is no equivalent response in the case of the public sector and, therefore, much confusion about what financial reporting is meant to achieve.