Sean McCartney

Competence is not enough: meta-competence and accounting education

The UK Management Charter Intiative (MCI) movement towards competence-based education is an indication of the growing attention being paid to the notion of the competent professional. There are already developments by the UK accounting bodies to develop detailed programmes to introduce competence-based education to accounting students. Competences have been defined in various ways - a behavioural description of workplace performance; doing rather than knowing; a focus on output (what a person can do) rather than input (what he or she has been taught). The underlying notion is to provide specific skills that are relevant to professional practice. The paper suggests that competences are not enough, and that what is required - meta-competence - can be learned but cannot be taught. Meta-competence is the overarching ability under which competence shelters. It embraces the higher order abilities which have to do with being able to learn, adapt, anticipate and create. Meta-competences are a prerequisite for the...

Audit automation as control within audit firms

This paper explores the nature of audit automation as control within audit firms. The themes of the paper are control over the work process and audit staff, deskilling and resistance, and competition, which are analysed using the theoretical framework provided by Coombs et al., who applied Giddens’ structuration theory to research the impact of information technology in organizations. Building on a previous survey study we interviewed audit staff at all levels in two Big 5 audit firms. The results show that audit automation cannot be viewed simply as a technology for improving the quality and/or productivity of the audit process. It also has value as a symbol of the firm’s market competitiveness and hence helps to promote the firm both to clients and internally. In addition, the research shows that audit automation offers considerable opportunities for greater managerial surveillance and control, but at the same time it facilitates a less hierarchical and more informal organisational structure.

The Link Between Research And Teaching: Its Purpose And Implications

The assumption that the good researcher is a good teacher is causing a great deal of stress and distress in the colleges of higher education still seeking university status, and in the new universities, and has resulted in an increase in the number of publications during the 1990s on the topic of the link between research and teaching. This paper explores this supposition, following the debate about the link through its various convolutions in the literature, discussing the story so far. Then it draws attention to the contribution made by the concept of a deep approach to learning as a bridge between research and teaching, and the final section discusses the implications of the discussion for the education and training of academics.

Audit Automation in the UK and the US: A Comparative Study

The purpose of this paper is to investigate the nature and extent of the use of audit automation by audit firms in the UK and the US. In particular, the paper seeks to identify the significant differences between practices in the two countries. The authors argue in the paper that there are two main forces that might account for these differences. On the one hand, globalization tends to promote similar audit automation practices in the two countries. On the other hand, cultural factors mitigate homogeneity in audit automation practices. The research consisted of a survey of current audit automation practice in large and medium sized audit firms in the UK and the US. The principal conclusions from the research are: (1) that there are differences in the practice of audit automation in the UK and the US; (2) that these differences persist even amongst Big 6 firms. These two conclusions would suggest that cultural differences are not dominated by the forces of globalization. The authors also conclude that (3) the most important benefit of audit automation in both countries is perceived to be improvements in audit quality; and (4) the most important costs across all types of audit firm are training and staff learning time.

The development of capability: the content of potential and the potential of content

All too often discussion of Capability proceeds as if it is clear what ‘Capability’ is: and that all that is required is the ascertaining of means for developing it. This paper seeks to explore the meanings of Capability. It provides two broad meanings, and discusses the paradoxes inherent in the application of these to the real world of management and business. On the one hand, Capability is defined as Potential, what the individual could achieve. Potential is an endowment, which is realised by the acquisition of skills and knowledge, i.e. the acquisition of Content. On the other hand, Capability is defined as Content: what the individual can (or has learned to) do. This Content has been acquired by, or input into, the individual, who then has the Potential to develop further. So there are different routes to Capability, depending on the definition of Capability one chooses. All of this impinges on the development of Capability. This leads us on to a consideration of whether the ‘Development of Capability’ is a meaningful concept.

The railway mania of 1845‐1847: Market irrationality or collusive swindle based on accounting distortions?

The wild boom and slump of 1845‐1847 was the most important of the nineteenth century railway manias, in terms both of its scale and effects on the economy as a whole. It has almost invariably been seen as a market irrationality, a view fundamentally challenged by Bryer’s theorisation of it as a deliberate and collusive device of the “London wealthy”, aided by central government, to swindle provincial middle class investors. This analysis also greatly extended previous perspectives on the role of accounting by asserting that accounting practices were crucial to the success of the process and were thus “deeply implicated” in a great, class‐based swindle. The acceptance of such a perspective would have important implications for the way we understand the functioning of accounting and capitalism in the mid‐nineteenth century, but this paper instead argues that such notions are misconceived, looking to both the evidence that was available when Bryer’s paper was written and to recently collected data on the depreciation accounting practices of the time.

Financial reporting in the context of crisis: reconsidering the impact of the 'mania' on early railway accounting

The patterns of change in the financial reporting practices of the early railway companies, and their causes, are important aspects of the evolution of accounting practice more generally. They have accordingly been widely discussed in the literature, although the views expressed have rarely been supported by reference to any very substantial or systematically derived bodies of empirical evidence. One of the most interesting and important suggestions in this literature is the claim that the early UK railway companies voluntarily made both quantitative and qualitative changes to their published accounting statements, in response to a crisis in shareholder confidence in the second half of the 1840s, consequent upon the collapse of the railway mania of 1845–47. The quantitative response involved the disclosure of far more information and the qualitative led to changes in the conceptual basis of reporting, from a cash to an accruals basis, changes that met with the satisfaction of the shareholders concerned and were important parts of the gradual evolution of financial reporting. The paper undertakes a systematic analysis of the financial accounting practices of the major early railway companies from 1840 until 1855. The mapping of the variety of such practices, and their changes over time, enable a re-examination of these important claims concerning the nature of the financial reporting response to one of its earliest crises.

George Hudson's financial reporting practices: putting the Eastern Counties Railway in context

George Hudson was the most important railway promoter of his time. He had a particular aptitude for visualizing and arranging spectacular company and line amalgamations and his activities helped to bring about the beginnings of a more modern railway network. In 1849 he exercised effective control over nearly 30 per cent of the rail track then operating in the UK, most of it owned by four railway groups, the Eastern Counties Railway, the Midland, the York, Newcastle and Berwick, and the York and North Midland, before a series of scandalous revelations forced him out of office. The economic, railway and accounting literatures have treated George Hudson as an important figure in railway history, although concentrating largely on the financial reporting malpractices of the Eastern Counties Railway, while Hudson was its chairman, which were incorporated into the influential Monteagle Committee Report of 1849. Relatively little attention has been paid, however, to events at Hudsons other major companies. This paper analyzes the available evidence, particularly that produced by the Committees of Investigation established at all four railway groups, in order to provide a more balanced assessment of George Hudsons approach to financial reporting and thereby place events at the Eastern Counties Railway in a broader context.

Rates of Return, Concentration Levels and Strategic Change in the British Railway Industry, 1830-1912

This article presents new data on rates of return for different sectors of the railway industry and on levels of industrial concentration across the period from 1830 until shortly before the start of the First World War and considers their implications for existing views on strategic change in the industry. The authors first identify the main characteristics of the pre-First World War railway industry in Britain and then examine governmental regulation and competition policies, as they affected that industry. The following two sections examine the issue of industrial concentration and its linkages with profitability; new findings are presented on changes in levels of industrial concentration and rates of return for different sectors of the industry. These focus on the period from 1830, when scheduled passenger services began on the Liverpool & Manchester Line, until shortly before the First World War. The authors conclude that the period of 1870 to 1912 was one of structural stasis in which the legitimate interests of those who had funded the railways were progressively abandoned in favor of the interests of their trader/customers and society at large.

The beginnings of accounting for capital consumption: disclosure practices in the British railway industry, 1830–55

Abstract Accounting for capital consumption has been one of the most vexed issues in the history of financial reporting. The early railway companies, whose ability to exploit the commercial opportunities available to them required unprecedented levels of capital expenditure, provided the first real arena for the development of possible solutions to the problem. Although accounting practices in the industry were subject to little regulation, some writers have asserted the existence of regularities in depreciation and replacement accounting practices (possibly driven by economic self-interest), although the evidential basis for these assertions has been slight. This paper provides the first assessment of the capital consumption accounting practices of companies in the railway industry, and of their regularities and patterns of change during the period 1830–55. to be derived from a substantial empirical base.