ISSN 0951-3574

Volume 20 Number 6 2007

Celebrating 20 years 1987-2007

Accounting, Auditing & Accountability Journal

Accounting as codified discourse
Guest Editors: Sue Llewellyn and Markus J. Milne

www.emeraldinsight.com

Accounting, Auditing & Accountability Journal

Accounting as codified discourse
Guest Editors Sue Llewellyn and Markus J. Milne

ISSN 0951-3574 Volume 20 Number 6 2007

Access this journal online _______________________________ 803 Editorial advisory board _________________________________ 804 INTRODUCTION Accounting as codified discourse
Sue Llewellyn and Markus J. Milne _________________________________

CONTENTS

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Discourse and audit change: transformations in methodology in the professional audit field
Rihab Khalifa, Nina Sharma, Christopher Humphrey and Keith Robson ___

825

Social and environmental reporting and hegemonic discourse

Crawford Spence________________________________________________

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Enrolling discourse consumers to affect material intellectual capital practice

Suresh Cuganesan, Christina Boedker and James Guthrie _______________

883

Analysing accounting discourse: avoiding the fallacy of internalism

John Ferguson__________________________________________________

912

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CONTENTS
continued

Reply to: Analysing accounting discourse: avoiding the fallacy of internalism

Sonja Gallhofer, Jim Haslam and Juliet Roper ________________________

935

Calls for papers ___________________________________________ 941

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AAAJ 20,6

EMERITUS BOARD MEMBERS

Professor Allan Barton The Australian National University, Australia Professor Trevor Hopper University of Manchester, UK Professor Tom Lee Edinburgh, UK Professor Reg Mathews Charles Sturt University, Australia Professor David Owen Nottingham University Business School, UK

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EDITORIAL ADVISORY BOARD

Professor Carol Adams LaTrobe University, Australia Professor Richard Baker Adelphi University, USA Professor Jan Bebbington St Andrews University, UK Professor Niamh Brennan University College Dublin, Ireland Professor Jane Broadbent Roehampton University, UK Professor Garry Carnegie University of Ballarat, Australia Dr Chung Lai Hong Nanyang Technological University, Singapore Professor Christine Cooper University of Strathclyde, UK Professor David Cooper University of Alberta, Canada Professor Craig Deegan RMIT University, Australia Professor Mahmoud Ezzamel Cardiff University, UK Professor Richard Fleischman John Carroll University, USA Professor Tim Fogarty Case Western Reserve University, USA Professor Warwick Funnell The University of Canterbury, UK Professor Sonja Gallhofer Dundee University, UK Professor Andrew Goddard University of Southampton, UK Professor Robert Gray St Andrews University, UK Associate Professor Theresa Hammond Boston College, USA Professor Jim Haslam Dundee University, UK Professor Christopher Humphrey University of Manchester, UK

Professor Kerry Jacobs Australian National University, Australia Professor Mike Jones Cardiff University, UK Ms Linda Kirkham Robert Gordon University, UK Professor Katsuhiko Kokubu Kobe University, Japan Professor Kim Langfield-Smith Monash University, Australia Professor Irvine Lapsley University of Edinburgh, UK Professor Stewart Lawrence University of Waikato, New Zealand Professor Cheryl Lehman Hofstra University, USA Professor Sue Llewellyn University of Manchester, UK Professor Ken McPhail University of Glasgow, UK Professor Kenneth Merchant University of Southern California, USA Professor Markus Milne University of Canterbury, New Zealand Professor Jan Mouritsen Copenhagen Business School, Denmark Professor Christopher Napier Royal Holloway, University of London, UK Professor Dean Neu University of Calgary, Canada Professor Brendan ODwyer Amsterdam Graduate Business School, The Netherlands Professor David Otley University of Lancaster, UK Associate Professor Chris Poullaos University of Sydney, Australia Associate Professor Vaughan Radcliffe University of Western Ontario, Canada Professor Bob Scapens University of Manchester, UK Professor Prem Sikka University of Essex, UK Professor Tony Tinker City University of New York, USA Professor Stuart Turley University of Manchester, UK Professor Jeffrey Unerman Royal Holloway, University of London, UK Professor Stephen Walker Cardiff University, UK Professor Paul Williams North Carolina State University, USA Professor Joni Young University of New Mexico, USA

Accounting, Auditing & Accountability Journal Vol. 20 No. 6, 2007 p. 804 # Emerald Group Publishing Limited 0951-3574

The current issue and full text archive of this journal is available at www.emeraldinsight.com/0951-3574.htm

INTRODUCTION

Introduction

Accounting as codied discourse

Sue Llewellyn
Manchester Business School, The University of Manchester, Manchester, UK, and

805
Received July 2007 Revised August 2007 Accepted August 2007

Markus J. Milne
College of Business and Economics, University of Canterbury, Christchurch, New Zealand
Abstract
Purpose This paper aims to introduce the AAAJ special issue on Accounting as codied discourse, explicate the idea of codication and locate the notion of a codied discourse within the broader tradition of discourse studies in management. Design/methodology/approach The approach is conceptual and discursive, and provides a theoretical framework for understanding codication and a discursive context for the accepted papers in this special issue. Findings Theoretically, consideration of the more determinate relationship between codied discourse and practice can add to the general understanding of the discourse/practice dynamic in organisation studies. Several issues are identied that call for further empirical investigation. First, some of the broad-spectrum accounting codes (e.g. historic cost) are currently under review in the expectation that change will enable constructive accounting innovation. Second, the impact of more codied accounting on management practice in organisations requires evaluation. Third, how far intangibles and externalities can be codied is a pertinent current agenda. Fourth, work is needed on whether and to what extent professional power is curtailed when politicians and policy makers introduce more codied discourses. Research limitations/implications Currently codication is not well understood in the literature. This AAAJ special issue opens up the debate but there remains considerable scope for future work to take this agenda forward to enable more detailed understanding of accounting as codied discourse. Originality/value Although discourse studies and discourse analysis are now rmly embedded in the organisational/management literature, codied discourses have not featured in the debate. This is a signicant omission as codication is a key feature of many discourses especially in professional elds like accounting, law, and medicine. Moreover, codied discourses are becoming more widespread. The value of this paper lies in its exposition of accounting as codication in relation to discourse. Keywords Accounting, Accounting policy, Language Paper type General review

The authors are grateful to James Guthrie and Lee Parker for their guidance and support in the editing of this special issue. They would also like to thank them for arranging the refereeing of this paper, and the referees for helpful remarks. Finally, they would also like to extend thanks to all the people who supported this AAAJ special issue by submitting papers or acting as reviewers for these papers.

Accounting, Auditing & Accountability Journal Vol. 20 No. 6, 2007 pp. 805-824 q Emerald Group Publishing Limited 0951-3574 DOI 10.1108/09513570710830254

AAAJ 20,6

Introduction In this AAAJ special issue the distinctive character of accounting as a discourse is explored[1]. The starting point is Faircloughs (2005) understanding that:
A discourse is a particular way of representing the (physical, social, psychological) world . . .[2].

806

Accounting represents the nancial world. This world is differentiated; it consists of different realities (Llewellyn, 2007a), having some physical, or perhaps better described as material, aspects (tangible assets like buildings, equipment and cash) but, predominately, consisting of socially embedded elements (intangible assets such as intellectual capital, concepts like value and activities such as exchange). With regard to the material aspects of the nancial world, these are relatively easily cast into numbers; the socially embedded side presents more difculties. Accounting as the language of business is a specialised form of discourse, in part, because it relies, primarily, on numerical representations but also, and relatedly, because it is codied. By codied[3] we mean that accounting is cast into systematic forms that prescribe codes for practices. Like a recipe, rule, guideline, template, protocol or law, accounting tells people how to do things. For example, discounted cash ow tells managers how to make investment decisions through a particular way of valuing their likely returns. So accounting prescribes practice in the nancial world, but accounting itself is also the result of prescriptions. For example, a balance sheet is the outcome of a particular way of accountants following codes to represent assets and liabilities. Codication xes nancial realities. Once particular codied rules are adopted the history of the underlying economic realities becomes . . . legally and socially irreversible . . . (Suzuki, 2003) as the ability is un-pick the codes, to recover what was represented, is lost. Accounting is professionalised, its instruction codes are professionally constituted and regulated. Only the professional elite[4] can encode, in the sense of setting or amending the codes. Any decoding (e.g. deciphering the meaning of a balance sheet) takes place within the ambit of professional accounting practice. In the domain of nancial accounting, specic normative codes are adopted; these are interpreted but they cannot be discarded. Historic cost, for example, is a broad-spectrum code that is highly constraining vis-a-vis potential accounting innovations. Coding rules apply to the various accounting categories. For example, detailed codes dictate what can count as an asset. Asset codes reect aspects of tangibility, property rights, future benets and service potential (for a review, see Williams, 2003).Within a nation state all companies follow the same set of codes. Periodically, the aggregate results of any company converge in the nodal accounting text the nancial accounts. The representations in this central text must conform to the correct codes; moreover, these codes must be seen to be interpreted and applied in the manner prescribed. This codication, albeit to an attenuated form, also spills over into the narrative text of annual reports, enabling and constraining what can written about and how it can be represented. Auditing is a codied procedure that checks the correct application of codes in accounting texts. This monologic approach to the codes that dictate nancial reporting is not without its critics. Macintosh and Baker (2002), for example, argue for a more open method; they suggest heteroglossic accounting reports[5]. Such accounting texts would speak with multiple voices thus revealing various possible ways to code nancial realities to the accounts[6]. In management accounting there have always been multiple voices; as this information

is for internal company use, there is more exibility and less prescription. For example, company managers do not have to employ discounted cash ow, they can use payback. But whatever technique they mobilise, managers represent their nancial decisions through accounting codes. This AAAJ special issue is concerned to understand accounting as a written, instructional, codied text but, dependent on the research agenda, we also wish to explore how people mobilise accounting in organisational dialogue. So our understanding of discourse encompasses both talk and text. Moreover, because discourse analysis will often focus on how accounting is elaborated in organisational and social interaction, . . . discourse studies are about talk and text in context (van Dijk, 1997, p. 3, emphasis in the original). It seems to us that accounting discourse centres around three main agendas. First, there are professionalised instructional discourses practice codes for accountants; for example, the rules that underlie the construction of a prot and loss account or the codied procedures that underpin an audit. Second, there are the codied accounting texts that result from these instructional codes; for example, a balance sheet or a nancial audit. Third, there are the professional, organisational or societal discourses that elaborate, make claims for or seek to change these practice codes and/or accounting texts; for example, the accruals, standard setting, and creative accounting discourses. So we are positing a threefold schema for the analysis of accounting discourse: practice code-codied text-codied discourse. Clearly, in addition, accounting often features in non-codied discourse, as a means of arguing for a specic organisational strategy, for example. But, as the papers in this AAAJ special issue reveal, this multi-level denition of accounting discourse does raise some issues for research, as analytic textual methodologies are not always integrated easily with what are, generally, ethnographic approaches to empirical work in organisations. Nor, for reasons we discuss later, would the results of textual analyses necessarily be supported by the ethnographic ndings of how these texts were received and mobilised in specic organisational settings. As Iedema (2007, p. 932) remarks:
[. . .] tensions remain between discourse research dened as the application of a conceptual-analytical procedure to a text, and discourse research dened as a way of engaging with a workplace, its politics and its (dis)organization.

Introduction

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Moreover, accounting discourse is not restricted to the organisational arena, as accounting has a broad social function in protecting the public interest, so ethnographic research in accounting can extend beyond organisational boundaries. We now turn to consider the individual contributions of the papers in this AAAJ Special Edition in some depth; these are examined along the practice code-codied text-codied discourse categorisation. As we discuss the papers, we reect upon how this schema plays out in actual organisational and societal context- thus raising the tensions that Iedema points out on the uncertain relationship between analysing a text and researching the politics of discourse in organisations. Key issues in the papers The rst paper is this issue by Rihab Khalifa, Nina Sharma, Chris Humphrey and Keith Robson focuses on the professionalised instructional discourse of auditing over the

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past decade. By drawing on a wide range of interviews with auditors and close discursive readings of two audit manuals from KPMG, Khalifa et al. (2007) illustrate the discursive shifts in big rm audit methodology from 1997 through to 2005. They show that back in the late 1990s the practice codes for audit were being changed. The talk and texts of audit methodologies emphasised a broad-based focus on business risk, strategic analysis, benchmarking, and other value adding activities that permitted audit rms to offer clients additional services in audit/consulting hybrids. Such business risk auditing (BRA) practices were considered the justiable response to market and competitive pressures on audit fees. Moreover, and based on interview evidence, BRA practices were judged by audit partners as methodologies that would prove exciting to graduate recruits, and provide the means to recover lost revenues and lost esteem in comparison to other business advisory and service lines offered by the audit rms. To deliver on BRA, Khalifa et al. (2007) note, for example, that KMPG required hew forms of auditor expertise, which itself led to new training and methodology texts and professional body initiatives all reecting the new vocabulary of business risk and valued added. In contrast to the BRA discourse of the late 1990s, Khalifa et al. (2007) show professional auditing has now entered a new phase and new audit discourse of making auditing auditable. Largely out is the discourse of business risk and value adding and in is a discourse of audit quality and enabling audit practices themselves to become auditable. Through a series of interview extracts from auditors, and references to agencies such as the UKs Audit Inspection Unit, and the USs Public Oversight Board, Khalifa et al. (2007) evidence the growing attention to improving the monitoring of audit quality through adequate documentation. Such changes in the discourse of auditing are traced back to the Enron collapse, other associated events, and the auditing regulators response. The interview ndings are supplemented with evidence from the two audit methodology texts and these show the relative frequency of terms like risk, quality, value, evidence, business and client, for example, vary dramatically across the two texts. Overall, one is left in no doubt that talk of auditing practice has changed signicantly over the decade examined. Interestingly, however, and of relevance to our discussion of discourse and practice below, quotes from some audit practitioners suggest a belief that the practice of audit has not changed, well in so far as the conducting of quality audits what has changed they claim is the documentation required to demonstrate one has conducted a quality audit. Of course, as Khalifa et al. (2007) themselves note, evidence of changed discourse is not necessarily evidence of changed practice. Likewise, however, audit partners may be unwilling to admit that the quality of audit practices has now changed (improved) at the same time implying previously they were inferior in a highly competitive market. As we discuss below, changed talk and changed practice may or may not be co-emergent. The second paper by Crawford Spence explores the role of social and environmental reporting (SER) within the wider context of organisational and societal discourses concerning organisation-socio-environmental interactions. Drawing on the political philosophy and discourse theory of Laclau and Mouffe, Spence (2007) analyses the emerging and increasingly codied practice of social and environmental reporting within the constraints of a business case discourse for sustainable development and corporate social responsibility. As Spence (2007) shows, the recent emergence of SER practice since

the 1990s is in part due to a capacity on the part of business to discursively align extra-business interests with its conventional interests, namely prot, returns and growth. By articulating a business case discourse within the broader business, social and political community and articulating a more specic, and increasingly codied, discourse for SER practice, through such guidelines as the GRI (2000, 2002) business has been able to render its own version of SER. Spences concern is that current business-based SER discourse and practice is antithetical to the original intent of earlier proposals for reform, to a democratic and fair society, and to any requirements for humanity to adapt to a pressing ecological crisis. By specically analyzing a series of interview extracts from corporate executives, Spence illustrates the hegemonic potential of this new SER discourse as projected through corporate reporting practice. While much SER practice remains non-codied, or perhaps pre-codied in our sense of the terms, rules and protocols, or standards for the conduct of SER practice are beginning to emerge (see, for example, GRI, 2000, 2002; Milne and Gray, 2007; UNEP/SustainAbility, 2000, 2002, 2004). Similarly, codied texts (i.e. SERs) do not yet exist in the fashion described for the central texts of nancial accounting. Instead, general agreement on these and the practice codes for their production remain to be worked out in the broader context (and contest) of professional, organisational and societal discourses. Nonetheless, foreshadowing the increasing likelihood and sedimentation of a fully codied form of SER practice in the future, for Spence (2007), and others with like concerns over the business-case discourse, this likelihood suggests a need to challenge and resist such forms of codication. Indeed, a key point to emerge from Spences analysis is how much of current SER practice is backed by and projects a business-case discourse that constrains corporate accountability, shapes the thinking of organisational actors, and potentially imprisons them within an ideological hegemony (see also Livesey, 2002; Milne et al., 2006; Tregidga and Milne, 2006). Moreover, by appearing to provide discursive closure under the illusion of transparency, objectiveness and completeness, Spence (2007) claims the business-case SER discourse functions as myth. Historically the SER discourse as propounded by academics had remained oppositional to, and largely outside of the conventional discourse of business. Its calls for business to discharge duties under a social contract, full accountability obligations, and internalise externalities posed a counterpoint to conventional modes of economic organisation and accounting. The SER discourse of the 1970s and 1980s presented obvious threats and challenges, both in terms of vested interests in material relations, and in terms of tting it within the existing codied discourse of conventional accounting. The result was that few organisations attempted to undertake such reporting, and professional initiatives like the AAA committees on social costs (e.g., AAA, 1971, 1972, 1973, 1974, 1975, 1976) and the Corporate Report (ASSC, 1975) were abandoned on such grounds that social and environmental impacts could not be measured and quantied nancially, or such procedures were difcult or impossible to audit. In effect, they could not be tted into the existing codied discourse of accounting. Spences concern is that the modern SER discourse as propounded by business itself obscures fundamental conicts between business, society and the environment. Consequently, further codication of SER practice based on the business case SER discourse may prove a signicant hindrance and contrary to the emanicipatory aims of social accountants.

Introduction

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Like Spence, Suresh Cuganesan, Christina Boedker and James Guthrie (Cuganesan et al., 2007) concern themselves with an emerging and pre-codied discourse: intellectual capital accounting. Based on an ethnographic case study of an Australian public agency, Cuganesan et al. (2007) provide an empirical account of how a largely new and vaguely understood discourse takes hold in organisational dialogue. Moreover, they argue and illustrate that the pre-codied discourse of intellectual capital accounting, because it remains vague and ambiguous, has helped members of the agency discourse consumers connect an otherwise alien discourse to their interests and concerns and thus shape material practice. By proving sufciently exible and pliable, the intellectual capital discourse introduced into the public lands agency has enabled a series of changed subject positions in relation to its interpretation and adaptation without apparent contradiction on the part of organisational agents. While the adaptability of the management and the exibility of the discourse have been important, Cuganesan et al. (2007) also illustrate the importance of other factors in the emergence of changed talk and practice. Of signicance appears to be a climate primed for changed talk and practice, and in this case study the need to cope with an ageing workforce and secure continuing funding for long-term organisational survival appears to have been particularly critical. Also important, and particularly as an initiator, was the principal internal champion for changed talk, the agencys CEO. Nonetheless, while these factors were important in getting the discourse launched, it is clear that managers were initially reticent and perhaps even hostile to the notion of intellectual capital accounting. What is of most interest in the case study, however, is how managers subsequently changed their minds and practices, and through the exible discourse of 1C sought to reconnect solutions with the pre-existing management problems of an aging workforce and funding needs. A further point to emerge from Cuganesan et al.s (2007) paper is the tension between codication and ambiguity in discourse, and particularly how this may aid or inhibit changed practice. A point they note in their study is that the lack of codication in the IC discourse ultimately contributed to its wider take up as potential discourse consumers were able to nd ways to (re)connect it with their interests and concerns. While codied discourses reduce the need for sense making and make clear the changed practices required - that is they prescribe what is to be done - they may also alienate those agents from whom change is sought by narrowly or over prescribing what is to be done. The nal two papers in this special issue by John Ferguson (Ferguson, 2007) and Sonja Gallhofer, Jim Haslam and Juliet Roper (Gallhofer et al., 2007) relate to concerns of how researchers should go about analysing accounting discourse. Based on a critical review of an earlier paper by Gallhofer et al. (2001), and more general observations of accounting research examining accounting texts, Ferguson (2007) is keen to ensure discourse researchers avoid the fallacy of internalism a concern based on Thompson (1990) that suggests researchers often overemphasise the internal characteristics of texts and neglect their context, while at the same time drawing inferences about or speculating on such contexts. As we have noted in this introduction, our focus is on accounting as a codied discourse; that is, a focus on talk and text in context as it relates to the practice codes for accountants and accounting, the codied accounting texts that result, and the contextual discourses within which

these occur. Fergusons (2007) concerns, then, while directed more towards broader contextual discourses than ours, potentially have important lessons for researchers interested in accounting as codied discourse. And we now touch on several of these drawing on both his critique of Gallhofer et al. (2001), and their reply (Gallhofer et al., 2007). Following Thompson (1990), a key point Ferguson (2007) makes is that texts should not be treated in isolation, but that researchers also need to consider the social-historical contexts of their production, transmission and reception. Quoting Thompson, and drawing on a series of critiques of Faircloughs critical discourse analysis the approach adopted in Gallhofer et al. (2001) Ferguson (2007) emphasises a traditional concern of hermeneutics to study interpretive processes directly, and to recognise that texts are produced, transmitted and received within a series of existing power relations. Similarly, and echoing Barthes (1999), uncovering authorial intent is also deeply problematic, but a point Ferguson (2007) makes is that in much (critical) discourse analysis, including Gallhofer et al. (2001), producers and consumers of texts are never consulted [and] no attempt is ever made to establish empirically what writers might have intended by their texts (Widdowson, 1998, p. 143 quoted in Ferguson, 2007). By equating accounting discourse and more particularly accounting texts with mass communication, a further point Ferguson (2007) takes from Thompson is a need to consider the structured break between message producer and recipient, and the consequent institutional mechanisms of message production and diffusion. In short, then, Ferguson (2007) is keen to ensure discourse researchers treat context seriously, and his suggested solution is to advise the would-be researcher to follow Thompsons (1990) tripartite approach. Such advice results in calls for researchers to (rst) consider the opinions, beliefs, and understandings held and shared by the individuals who produce the symbolic forms (practice codes, codied texts, and codied discourse) of interest. By ethnographic means (interviews, participant observation, etc.) we may come to elucidate the understandings of those who produce and transmit messages. Such means also permit us to (second) treat audiences seriously to consider how message recipients receive and appropriate such messages. And (third and) nally, in turning to the symbolic forms themselves the texts emphasis is given to a variety of linguistic methods such as semiotic analysis, conversation analysis, syntactic analysis, narrative analysis and rhetorical analysis. In replying to Ferguson (2007), Gallhofer et al. (2007) ask whether it is reasonable or practical to attend to all parts of Thompsons tripartite approach in one study or one paper. They also ask whether Thompsons framework, which was developed in the context of mass communication, is universally applicable to accounting texts and context. And nally, they are moved to carefully draw a distinction between the political and linguistic motives of researchers using critical discourse analysis[7]. As Gallhofer et al. (2007) point out, both Fairclough and Thompson do not seek to prescribe or proscribe particular methods of research but outline broad methodological frameworks. In part, then, while Fergusons (2007) advice might be seen as comprehensive, or perhaps idealistic, it should not be taken as implying (partial) studies are necessarily decient. Indeed, both Spence (2007) and Cuganesan et al. (2007) in this issue illustrate the insights that can be obtained by partial analyses of discourse producers and consumers. Cuganesan et al.s (2007) paper also illustrates the

Introduction

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complexities involved with concepts like the production and consumption of texts. They note that much discourse literature seems to privilege analysis of discourse producers and texts, and like Ferguson (2007) they suggest a focus on discourse consumers. Cuganesan et al. (2007) however, illustrate that discourse consumers are contextually relative. Ordinarily, we might conceive of managers involved in the production of intellectual capital statements as discourse producers, but clearly they are also consumers of the talk and texts that precede such reports, and most likely of the reports they themselves produce. The strength of Fergusons (2007) work lies with those instances where accounting is used rhetorically. Where there is evidence that accounting is being used to persuade the public to see a company in a favourable light, then a mass communication context is appropriate. For example, glossy annual reports that present favourable comment on the social and environmental impact of companies activities can be considered as part of the media industry. However, most instances of accounting discourse are produced and understood in a specialised context. Any implementation of Thompsons tripartite approach as Ferguson (2007) urges, then, requires careful consideration in the light of the research focus taken and questions asked[8]. Locating codied and non-codied discourses What can an exposition of accounting as a discourse add to the work that has already been undertaken in management/organisation studies? The papers in this AAAJ special edition illustrate concerns with the impact of discourse on practice and the power of codied texts. In the sections below we discuss the potential further contribution of studying accounting as a codied discourse. We structure the discussion into three sections discourse and practice; reading codied texts and participating in codied discourse; and the spread of codied discourses. Discourse and practice One key aspect in discourse debate is the relationship between discourse and practice. Texts do not just sit on shelves or lie in wait for the computer to be switched on. The practices of talking and writing use (and produce) texts, so, in one sense, discourse is a practice. As Fairclough (1995, p. 7) puts it:
My view is that discourse is use of language seen as a form of social practice, and discourse analysis is analysis of how texts work within sociocultural practice.

But clearly practice is more than discourse; just as people may talk without acting, they may also explore or intervene in the world without discourse. Moreover, discourse and practice may not be aligned. Various positions have been taken on the impact of discourse on practice. First, Iedema (2007), for example, asserts that discourse and practice are usually co-emergent so new ways of talking (or writing) tend to accompany new ways of acting. As Khalifa et al. (2007) narrate, while business risk audit was being written up by KPMG, audit practitioners were paying more attention to the key business risks of the companies whose books they audited. Hatherly (1998) argues that auditors were beginning to see risk less as a prime auditing concept and more through the eyes of management. Audit practice was changing as audit discourse took a new turn-they were co-emergent.

However, new discourses and any associated new practices do not emerge into a vacuum. Discourses represent the world and, hence, they tell us what the world means. Meaningfulness is embedded in human practice, so discourse and practice are normally aligned or reciprocally conrming (Williams, 1962, cited in Sayer, 2000, p. 44). A new way of talking (or arguing) is usually expounded primarily in relation to a project[9], so as Hardy et al. (2000, p. 1232) remark:
[. . .] people engage in discursive activity to pursue their plans . . . [and] with particular intentions in mind . . . but they do so against a backdrop of multiple discourses that have complex, far reaching effects that are beyond the control of single individuals.

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This makes it clear why new discourses may struggle to prevail and often fail, not least because the current discourse/practice may serve powerful interests (Grant and Hardy, 2003). An emergent discourse may be valuable and convincing but if it challenges hegemonic discourse/practice, it may, ultimately, have no impact. This implies that a new way of talking precedes a new way of acting and that a change in practice is by no means guaranteed consequent on a change in talk. So the second position on the relationship between discourse and practice is that, rather than being co-emergent, changes in discourse precede any changes in practice. The third position is that changes in practice precede discursive change. This is most likely when the agents of practice transformation are powerful enough to change how things are done without open talk about what their change strategies mean. It is often easier, quicker and, strategically, more effective to act rst and let those affected work out later what the new agenda implies when it is often too late for effective counterattack. The executive branch of government, through dictatorial powers or a strong mandate, is sometimes able to act without discursive debate. Or it can even be the case, as Brunsson (2002, p. xiii) points out, that discourse and practice point in different directions, . . . organizations may talk in one way, decide in another and act in a third. This situation may, as Brunsson (2002) argues, reect a hypocrisy that arises because of the complexity of the demands placed on an organisation (along with the difculty in satisfying all involved) or it may signal a deliberate manoeuvre practiced to pre-empt any opposition. In sum, discourse and practice are usually reciprocally conrming but, during social and organisational change, they may co-emerge, one may precede the other or they may even be mis-aligned, for reasons of exigency or duplicity. Codication makes this complex relationship between discourse and practice more determinate; indeed this is one, if not the main, purpose of codication. Clearly it would not be in the public interest if company management could talk about shareholder value or portray their protability in whatever way they chose. Practice codes dictate how accounting is carried out in organisations and accounting texts embed these practice codes. Moreover, as discussed earlier, only the professional accounting elite can change the instructional practice codes and their prescriptions are mandatory. This implies that changes in practice cannot occur without discursive change because practice is in accordance with explicit codes. So where there is codication, new practices cannot precede discourse. Accounting discourse (as other codied discourses) should have a stringent hold over practice; when new codes are introduced practice should change more or less immediately. Unlike the case of non-codied discourses, whose protagonists may struggle to be heard, the privileged proponents of codied

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discourses should expect a guaranteed response in terms of practice change. Where there is codication, one would anticipate the strongest evidence of the reciprocally conrming nature of discourse and practice. In particular, accounting codication should prevent management talking, deciding and acting in inconsistent and arbitrary ways vis-a-vis the nancial status of their companies. However, codication turns out to be a less than perfect solution. Indeed, currently, companies can stray across the boundary between legal and illegal practice without their excursions being readily apparent in the accounts, as scandals of the likes of Enron, Worldcom and Parmalat demonstrate. Because accounting is codied, the lay public are apt to imagine that accounting texts represent nancial realities through a single, non-negotiable, one to one mapping but, as Khalifa et al. (2007) make clear, this is not the case. Accounting can be manipulated, in large part this is due to the complexity of practice codes; the realisation that accounting can be creative has engendered public dismay and fuelled the so-called expectations gap over the legitimacy of accounting and audit. One function of audit is to leverage transparency and strengthen one-to-one mapping. Despite code complexity being at the root of the creative accounting problem, more transparency is frequently equated with yet more codication. With respect to companies, there are demands for a more prescriptive audit (see Khalifa et al., 2007) with many stakeholders arguing that a more codied audit will close the expectations gap. Reading codied texts and participating in codied discourses The complexity of the codes embedded in accounting prescriptions renders them opaque to the uninitiated. Not all readings of accounting texts are equal. Indeed, an uninformed reading would be simply wrong. The production and reception of codied accounting texts takes place within the professional accounting jurisdiction. But, sometimes, dependent on the basis of the codication, accounting jurisdictions become contested. For example, the project to codify (and then audit) environmental reports has led to a contest between scientists, engineers and accountants over whose expertise should prevail (Power, 1997). Unequal discursive rights is also a feature of non-codied discourses, as Hardy et al. (2000, p. 1236) comment, . . . the subject position of the enunciator [of a discourse] must warrant voice, otherwise other individuals will simply ignore his or her statements . . . ; this warranted voice is a particularly strong feature of discursive positioning with respect to codied discourses. The technical nature of codied discourses is such that most non-professional voices are simply ruled out- as they lack the expertise to speak. There are arguments that codication can diminish professional power; being committed any kind of codied text reduces the judgemental elements of practitioners decision making as practice becomes more standardised (Edwards et al., 1999; Doolin, 2002; Llewellyn and Northcott, 2005). Wherever a codied discourse dictates practice, practice will become more uniform. Codication (like classication[10]) reduces judgement and exibility whilst increasing standardisation and transparency; so it can be a driver in reducing professional discretion and, hence, professional power. But, as argued above, because only professionals can encode and decode, their power is not necessarily diminished with the advent of codication. What may occur is that the power of the professional elite is advanced whilst professional power on the ground is more circumscribed.

This raises a more general issue: that of active/passive discursive positioning. On the one hand as Doolin (2002, p. 375) points out: Discourses...provide ways in which individuals come to know themselves as subjects. On the other hand, Hardy et al. (2000) portray discourse as a strategic resource that people mobilise to achieve their preferred outcomes. In the case of codied discourses, only those who possess requisite and recognised expertise are able to elaborate the discourse in pursuit of their aims. In contrast, those who lack expertise will frequently nd themselves positioned as subjects bamboozled by technical jargon. This remains likely even when the discourse in question is actually in pursuit of a general organisational aim, a specic strategy, for example. The spread of codied discourses Despite the frequent failures of codied discourses to deliver their practice recommendations, in business, and in organisations more generally, the popularity of codied forms is increasing. In consequence, they are spreading. There is pressure on companies to produce accounts that codify areas of their activities that if they were represented at all were discussed in a non-codied way. For example, the social and environmental movement have called for the triple bottom line report; this will give codied information on the impact of companies in areas which used to be considered as external to their prot-making agenda. As a result of this activity, there is now a growing set of companies that produce a stand-alone report on their social and environmental impact. As discussed in the Spence (2007) paper, there is also pressure for an audit of such environmental reports, with developments on guidelines for best practice reporting and auditing. Another example of codication spread is the plea for intangible assets, such as intellectual capital, to be coded for inclusion in the accounts (see Cuganesan et al., 2007). The agendas around both environmental accounting and intellectual capital demonstrate that thought is required on how far externalities and intangibles have the materiality that allows instructional codication, numerical representation and veriability. Indeed, there is now quite a debate over whether broad-spectrum codes (such as historic cost) should change to allow more accounting innovation. Amongst US academics, Ross Watts argues that accounting should remain as traditionally and conservatively conceived (based on historic cost and transactions oriented) while the FASB and others propose fair value and mark-to-market accounting in the belief that modern accounts should incorporate value-based estimates (see, for example, Barth et al., 2001; FASB, 2005a, b, 2006; Holthausen and Watts, 2001; Schipper, 2005; Watts, 2003a, b, 2005). Meanwhile proposals to codify new areas without fundamental changes to the basic coding formulae are resulting in equivocal results. Parker (2005) reports that traditional accounting and accountants were . . . barely engaged . . . with social and environmental accountability. Chiang (2007) found that although auditors were ostensibly following a new practice code for environmental matters, this code had not had a discernable impact on their audits; the key consideration for auditors was whether the environmental matter had a nancial effect that they could quantify. This quantication proviso clearly limits the scope of any environmental audit. Currently, Ball et al. (2000) described the verication reports on environmental accounting as of very little value.

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Nevertheless, outside of business, and again in the hope that they will constrain practice, codied discourses are also gaining ground. Politicians have decreed that simple forms of cash accounting give too much margin to public sector providers; the more rule-bound accruals concept has been enforced (see, for example, HM Treasury, 2005). In this respect, the advent of accruals accounting converges with the introduction of protocols and guidelines for clinical practice in the health care domain, for example. As in the private sector, this is intended to simultaneously reduce the exibility and increase the transparency (as compliance with codes can be checked) of those with the power to access and commit organisational resources. The events portrayed in Cuganesan et al. (2007) can be seen as a reaction to such government strategies. The introduction of accruals accounting was the background to managers at LandsNSW taking forward a project to codify intellectual capital for inclusion in the accounts- as such an accounting would result in a better representation of their nancial position. Although codied discourses, through the analogy with recipes and rules, seem to imply straightforward procedures that can promptly be translated into practice, in complex professionalised domains characterised by specialised expertise, the production of simple codes is unlikely. For example, the accruals discourse is more complicated and more abstruse than the cash accounting it replaced. Ezzamel et al. (2005) report that, although politicians pressed for accruals accounting in the public sector, most of them cannot understand it! However, this does not prevent politicians making discursive claims about how accruals accounting can enhance the performance of public sector bodies by providing more codied information on such aspects as efciency (Guthrie, 1998). In sum, issues associated with the increasing prevalence of codied discourses foster a rich research agenda. Theoretically, consideration of the more determinate relationship between codied discourse and practice can add to the general understanding of the discourse/practice dynamic. Charting the spread of codication and investigating its success in circumscribing practice is an agenda that requires ethnographic research. Some examples of such work are: the impact of more codied accounting on management practice in companies; how far intangibles and externalities can be codied; and whether and to what extent professional power is curtailed when politicians and policy-makers introduce more codied discourses. Finally, textual analyses are called for that show how accounting represents the nancial world through codied forms. Concluding issues on researching codied discourse Although we are convinced of the value of work on accounting as a codied discourse, at this point we return to some of the issues raised by research on discourse. As we discussed in the introduction, Iedema (2007) speaks of the tensions between textual analyses and ethnographic research on discourse in organisations. Here we expand on what we believe are some of those tensions. Ferguson (2007), using Thompsons work on mass communication, argues that any accounting research that does not cover the entirety of the discourse process (i.e. both the production and reception of the text, along with the text itself) is essentially limited, and may even be misleading. As discussed above, we believe that the strength of his case lies where accounting is being used rhetorically, for example, in research that

studies how companies use social and environmental reporting to create a halo effect around their activities and whether such propaganda efforts are successful. In other areas it is not so clear that such an encompassing approach, even if feasible, is necessarily productive. Bhasker (1975) argues that research in social science grapples with three dimensions: the real, the actual and the empirical. In the study of discourse, as any other area of research, these three dimensions do not necessarily accord. One can be a realist in the sense of believing that there are real causal powers embedded in a situation but these powers may not be activated and, hence, not actualised. As Archer (2003, p. 2) argues, causal powers are mediated through social agency, so whether causal powers are activated and the extent to which they are actualised depends on agents reproducing these powers. Agents generally do reproduce social powers, whether through constraint, habit, tradition, proclivity or desire. But they do not always, and the extent to which they do is variable. For example, accounting has real causal powers; accountants cannot prepare (and auditors cannot audit) nancial statements in whatever way they choose. But auditors can sometimes turn a blind eye and, hence, powers are not activated in a particular instance or they may begin to see situations through the eyes of management and, so, the powers of audit are partially thwarted. As Khalifa et al. (2007) make clear, the power of both the business risk and audit quality discourse were diffused on the ground with variable take-up amongst different auditors. So agents have real powers too. At the extreme of some postmodern thought, agency is dismissed for discourse, as Archer (2000, p. 2) remarks: . . . strident voices would dissolve the human being into discursive structures and humankind into disembodied textualism. Although we are promoting the study of accounting as a discourse, this is not our position. Agents do not just mitigate the effects of discursive structures they also instigate projects. An agent, by denition, has the capacity to carry out a project (Llewellyn, 2007b). As the Cuganesan et al. (2007) paper shows managers started to push for intellectual capital to be included in the accounts. In instigating this move they were actively seeking to counteract some of the effects of accruals discourse/practice in other words, there were agents with projects at LandsNSW. So another reason that the real structural powers embedded in any situation may not be actualised, is that agents may be pursuing projects that challenge those powers. Or the unintended consequences of agents actions may attenuate or magnify real powers. Hence, the real is not coterminous with the actual or, in other words, what actually happens is not entirely predictable through knowledge of the real powers embedded in the situation because what agents will do is not entirely knowable. The empirical (or what we discern as researchers in any situation) is not necessarily congruent with either the real or the actual. Our respondents may not know of the real powers embedded in the situation being researched. Moreover, they may not correctly identify what is actually going on. Some respondents are more knowledgeable and/or more perceptive than others or they may be in more ` privileged positions vis-a-vis the issues being researched (Llewellyn and Northcott, in press). Similarly, if we are conducting observational research, our perceptions as researchers, are fallible regarding the real and the actual.

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Hence any research that attempts to integrate ethnographic research on discursive production and reception with textual analyses may come up with equivocal results. For example, the real powers embedded in an accruals text will have a variable impact on the practice of managers dependent upon whether they accept, attempt to evade or work to challenge the accruals discourse. This actual response does not deny the real power of accruals as disclosed by a textual analysis. Similarly, the real powers of a text are not negated by the failure of some to comprehend it. Ethnographic work may reveal that many managers do not grasp the import of accruals but again this empirical nding does not demonstrate that an accruals discourse has no power. Moreover, if a discourse becomes naturalised/institutionalised within an empirical setting respondents may not discern its impact. Once again this does not deny discursive power rather it can point to the magnitude of its effects. In a similar manner, production can be disengaged from both the text and its impact; the producers of the accruals code are unlikely to have been intending, for example, to reduce professional power. Producers intentions, the powers embedded in texts and the effects of a discourse may be aligned or at variance with one another. We are advocating a variety of research approaches but because of real-actual-empirical distinctions we do not expect that the ndings of ethnographic work will necessarily be in accordance with textual analyses on the power of a discourse. Both are valuable but their ndings will not always add up or triangulate. Research questions can be limited to textual analyses or matters concerning the production and/or impact of texts without fear that such work is somehow incomplete. So although we are arguing that codied discourses have a more determinate effect on practice than do non-codied ones, this does not imply that their impact is determined[11]. As we argued earlier, accounting tells people how to do things and makes them act in particular ways but it cannot completely encode their actions. Overall, we posit that the signicance of codied discourse is increasing and further work is called for to investigate its multifarious dimensions. Accounting is an important example of a codied discourse as it has a profound impact on both organisational and social practice. As discussed above, there is much current debate aimed at re-casting the broad spectrum codes applied in accounting; now is a thought-provoking time to pursue research on accounting as a codied discourse.
Notes 1. There has already been work on the discursive aspects of accounting and corporate reports in the general tradition of the ideological power of language (see, for example, Hines, 1988; Arrington and Francis, 1989; Burchall et al., 1980, 1985; Cooper and Shearer, 1984; Tinker and Neimark, 1987; Collison, 2003). There is also work on accounting representations or (mis)-representations (see, for example Baker and Hayes (2004); Ezzamel et al. (2004); Lilley et al. (2004); Porter (1995); Robson (1992); and Sikka (2001)). We do not demur from either of these bodies of work but we are aiming to do something rather different- to identify the general characteristics of accounting as a discourse (i.e. the type of representational discourse accounting is). 2. Interest in discourse analysis has mushroomed consequent upon our contemporary reliance on representational texts (the internet, television, news media) to understand the world. We now know the world less and less through our immediate encounters and more and more through representations (see, for, example Wittgenstein, 1953; Austin, 1962; van Dijk, 1977;

3.

4.

5.

6.

7.

8. 9.

10. 11.

Foucault, 1972, 1980; Bakhtin, 1986). Societal reliance on representation emphasises the increasing contemporary signicance of signs and symbols (see, for example, Burke, 1966; Baudrillard, 1981; Lyotard, 1984). Codied has also been used in a weaker sense to indicate explicit (as opposed to tacit) knowledge mat can be managed and transferred (see, for example, Hall, 2006; Mathiassen and Pourkomeylian, 2003). Clearly, our sense of codied encompasses this understanding (albeit that knowledge is only an aspect of discourse) but also extends it- as we focus on links between codication and practice. By professional elite we refer to entities such as the Financial Reporting Council (UK), the Accounting Standards Board (UK), the Auditing Practices Board (UK), the Financial Accounting Standards Board (US), the Accounting Standards Review Board (NZ), and the International Accounting Standards Board see www.irc.org.uk, www.fasb.org, www.asrb. co.nz or www.iasb.org for more details (accessed 15 July 2007). Macintosh and Baker (2002) illustrate their argument with reference to the oil and gas industry where they argue that four different methods of accounting have been used: immediate write off of all costs; full cost; successful efforts; and reserve recognition, Each of these ways of coding the nancial reality of the oil and gas industry has advantages and disadvantages. Macintosh and Baker (2002) suggest that the publics understanding of accounting would be enhanced, if they were allowed to see how multiple ways of accounting result in varied representations of the success of any oil and gas company. An example where multiple approaches were permitted, albeit briey, was over how to cope with ination where SSAP 16 allowed supplementary ination accounts alongside historic cost. A particular interpretation that might be taken here is that Thompsons (1990) tripartite approach may be insufciently critical and overly linguistically oriented to provide researchers sufcient space to provide politically motivated discourse critiques. Thompsons (1984) earlier work on theories of ideology, discourse analysis, and his depth-hermeneutics, however, suggest a broad-based framework much in common with that of Fairclough. See Barry et al. (2006) for further discussion on the tensions between discourse analysts capacities to research text and/or context using singular, multiple or combined methods. Exceptions are some academic/intellectual discourses that aim only to shift how people think (and argue) rather than also change what they do. For example, the debate as to whether structure and agency are only analytically distinct or whether they actually reect separate ontological slrata does not appear to have implications for practice. See, Bowker and Star (1999), for similar arguments as applied to classication. As was implicit in our earlier discussion on the relationship between discourse and practice, we reject strong versions of social constructivism that conate discourse and its material effects (for examples of such strong constructivism see Gergen, 1985; Edwards et al., 1995; Potter, 1996, 1998). Such positions imply that discourse determines practice. Some writers in the management area appear to have been inuenced by such views. Hardy (2001, p. 26, emphasis added) speaks of . . . practices of talking and writing, which bring objects into being through the production, dissemination and consumption of texts. This statement portrays discourse as straightforwardly performing material effects, i.e. producing objects. Indeed, as Sayer (2000, p. 45) points out, Conating discourses with their effects [assumes] that performativity involves producing not only effects but the exact effects intended or stated . . . . Clearly, although we are arguing that codied discourses are produced with the intention of having effects of practice, such intentions are not always realised and are certainly not simply produced.

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Llewellyn, S. and Northcott, D. (in press), The singular view in management case studies, Qualitative Research in Organizations and Management: An International Journal. Lyotard, J.F. (1984), The Postmodern Condition: A Report on Knowledge, University of Minnesota Press, Minneapolis, MN (trans. by Bennington, G. and Massumi, B.). Macintosh, N.B. and Baker, C.R. (2002), A literary theory perspective on accounting: towards heteroglossic accounting reports, Accounting, Auditing & Accountability Journal, Vol. 15 No. 2, pp. 184-222. Mathiassen, L. and Pourkomeylian, P. (2003), Managing knowledge in a software organization, Journal of Management Knowledge, Vol. 7 No. 2, pp. 63-80. Milne, M.J. and Gray, R.H. (2007), The future of sustainability reporting, in Unerman, J., ODwyer, B. and Bebbington, J. (Eds), Sustainability Accounting and Accountability, Routledge, London. Milne, M.J., Kearins, K.N. and Walton, S. (2006), Creating adventures in wonderland: the journey metaphor and environmental sustainability, Organization, Vol. 13 No. 6, pp. 801-39. Parker, L. (2005), Social and environmental accountability research: a view from the commentary box, Accounting, Auditing & Accountability Journal, Vol. 18 No. 6, pp. 842-60. Porter, T. (1995), Trust in Numbers: The Pursuit of Objectivity in Science and Public Life, Princeton University Press, Princeton, NJ. Potter, J. (1996), Representing Reality: Discourse, Rhetoric, and Social Construction, Sage, London. Potter, J. (1998), Fragments in the realization of relativism, in Parker, I. (Ed.), Social Constructionism, Discourse and Realism, Sage, London, pp. 27-45. Power, M. (1997), Expertise and the construction of relevance: accountants and environmental audit, Accounting, Organizations and Society, Vol. 22 No. 2, pp. 123-46. Robson, K. (1992), Accounting numbers as inscription: action at a distance and the development of accounting, Accounting, Organizations and Society, Vol. 19, pp. 45-82. Sayer, A. (2000), Realism and Social Science, Sage, London. Schipper, K. (2005), Fair values in nancial reporting, paper presented at the American Accounting Association Annual Convention, San Francisco, CA. Sikka, P. (2001), Regulation of accountancy and the power of capital: some observations, Critical Perspectives on Accounting, Vol. 12 No. 2, pp. 199-211. Spence, C. (2007), Social and environmental reporting and hegemonic discourse, Accounting, Auditing & Accountability Journal, Vol. 20 No. 6, pp. 855-82. Suzuki, T. (2003), The accounting guration of business statistics as a foundation for the spread of economic ideas, Accounting, Organizations and Society, Vol. 28 No. 1, pp. 65-95. Thompson, J.B. (1984), Studies in the Theory of Ideology, Polity Press, Cambridge. Thompson, J.B. (1990), Ideology and Modern Culture: Critical Social Theory in the Era of Mass Communication, Polity Press, Cambridge. Tinker, T. and Neimark, M. (1987), The role of annual reports in gender and class contradictions at General Motors: 1917-1976, Accounting, Organizations and Society, Vol. 12 No. 1, pp. 71-88. Tregidga, H. and Milne, M.J. (2006), From sustainable management to sustainable development: a longitudinal analysis of a leading New Zealand environmental reporter, Business Strategy and the Environment, Vol. 15 No. 4, pp. 219-41. UNEP/SustainAbility (2000), The Global Reporters: The 2000 Benchmark Survey, UNEP/SustainAbility, London.

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UNEP/SustainAbility (2002), Trust Us: The Global Reporters 2002 Survey of Corporate Sustainability, UNEP/SustainAbility, London. UNEP/SustainAbility (2004), Risk and Opportunity: Best Practice in Non-nancial Reporting, UNEP/SustainAbility, London. van Dijk, T.A. (1977), Text and Context: Explorations in the Semantics and Pragmatics of Discourse, Longman, London and New York, NY. van Dijk, T.A. (1997), The study of discourse, in van Dijk, T.A. (Ed.), Discourse as Structure and Process,Vol. 1, Sage, London, pp. 1-34. Watts, R. (2003a), Conservatism in accounting part I: explanations and implications, Accounting Horizons, Vol. 17, September, pp. 207-21. Watts, R. (2003b), Conservatism in accounting part II: evidence and research opportunities, Accounting Horizons, Vol. 17, December, pp. 287-301. Watts, R. (2005), What has the invisible hand achieved?, paper presented at the Institute of Chartered Accountants in England and Wales Information for Better Capital Markets Conference, London, 20 December. Widdowson, H.G. (1998), The theory and practice of critical discourse analysis, Applied Linguistics, Vol. 19 No. 1, pp. 136-51. Williams, R. (1962), Communications, Penguin, Harmondsworth. Williams, S.J. (2003), Assets in accounting: reality lost, Accounting Historians Journal, Vol. 30 No. 2, pp. 133-74. Wittgenstein, L. (1953), Philosophical Investigations, Basil Blackwell, Oxford (trans. by Anscombe, G.E.M.). Further reading Power, M. (1991), Auditing and environmental expertise: between protest and professionalisation, Accounting, Auditing & Accountability Journal, Vol. 4 No. 3, pp. 30-42. Corresponding author Sue Llewellyn can be contacted at: sue.llewellyn@mbs.ac.uk

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The current issue and full text archive of this journal is available at www.emeraldinsight.com/0951-3574.htm

Discourse and audit change

Transformations in methodology in the professional audit eld
Rihab Khalifa
Warwick Business School, Warwick University, Coventry, UK

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Received December 2005 Revised November 2006, July 2007 Accepted July 2007

Nina Sharma
Cardiff Business School, University of Cardiff, Cardiff, UK

Christopher Humphrey
Manchester Business School, University of Manchester, Manchester, UK, and

Keith Robson
Cardiff Business School, University of Cardiff, Cardiff, UK
Abstract
Purpose This paper aims to develop understanding of how the pursuit of practice change in auditing, especially in relation to audit methodologies, is conveyed, presented, reected in and enabled (or hindered) through discursive, textual constructions by audit rms. Design/methodology/approach The paper uses an extensive series of interviews with audit practitioners, educators and regulators and a textual study of the content, concordances and narratives contained in two key audit methodological texts published by KPMG, one of the Big Four accounting rms. Findings Major discursive shifts in audit methodologies are identied over the last decade, with the dominant audit discourse switching from one of business value to one of audit quality. Such shifts are analysed in terms of developments in the wider, organisational eld and discursive (re)constructions of audit at the level of the audit rm. Originality/value The identied shifts in auditing discourse are important in a number of respects. They demonstrate the signicance of discursive elements of audit practice, contradicting inuential prior claims that methodological discussions and developments in audit over the last decade had focused consistently on notions of audit quality. Methodologically, they demonstrate the importance and opportunities for knowledge development available by combining institutional, eld-wide analysis with a detailed discursive study of individual interviews and texts. Keywords Auditing, Quality, Risk management, Organizations Paper type Research paper

The authors would like to give many thanks to Thomas Ahrens, David Cooper, Mark Dirsmith, Brendan ODwyer and Mike Power for their constructive comments on this paper. Earlier versions of this paper were presented at the EARNet Workshop, Amsterdam, October 2005, EAA Dublin, March 2006, EIASM Workshop on Audit Quality, Milan, November 2006 and Amsterdam Business School Staff Seminar Series, January 2007. They would also like to thank discussants and other participants at these events and the AAAJ reviewers and Editors of the special issue for their helpful suggestions. The research on which this paper is based was supported by an ESRC grant (Risk audit methodologies, knowledge practices and organisational legitimation: RES-00-23-0977) and an initial grant from the former Manchester Federal School of Business and Management. Both are gratefully acknowledged.

Accounting, Auditing & Accountability Journal Vol. 20 No. 6, 2007 pp. 825-854 q Emerald Group Publishing Limited 0951-3574 DOI 10.1108/09513570710830263

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As the 20th century draws to a close, an unprecedented array of technological, political, and economic events has changed the nature of business and the risks organizations face . . . Some auditors now believe, however, that the audit methodology that was appropriate for the industrial age may not be sufciently broad for the information age, when assets are intangible, commerce is electronic, markets are global, and the pace of change is ever-accelerating. Aware of how these factors pose new risks for organizations, and how they have the potential to signicantly affect nancial reporting, some auditors are expanding their approaches to the nancial statement audit (Elliott et al., 1999, pp. 4-5). [D]espite the apparent rapidity of changes in and around nancial auditing, it is always dangerous to equate talk of change with change at the level of practice itself. We are still at a very early level of practice development (Power, 2000, p. 4).

There have been relatively few studies of audit methodologies or other auditing practices to match the level of interest in studying, for example, management accounting in its organisational and social context (for reviews, see Humphrey, 2001; Power, 2003). This neglect extends even to the role of audit in major corporate scandals. While there have been a number of commentaries on, and analyses of, Arthur Andersens approach on the Enron audit (e.g. Gwilliam, 2003; Morrison, 2004; OConnell, 2004) and a number of texts documenting the lives of key individuals inside Arthur Andersen before the fall (e.g., see Squires et al., 2003; Tofer and Reingold, 2003; Cruver, 2003; Eichenwald, 2005), the impact of Enron and other such scandals on the work of corporate external auditors and associated discourses of audit has not attracted great research attention. No doubt part of the neglect of studying audit practice could be attributed to the problematic nature of access and co-operation from the large audit rms, including apparent concerns over the condentiality of audit practice. Studying audit, however, is not simply a process restricted to observing the everyday work of auditors in checking internal controls, verifying the existence of assets and documenting audit ndings. A signicant part of the conditions of possibility for audit are the discursive practices and processes through which auditors promote, justify and account for their work. Through the terms or vocabulary embedded within their work they connect with, and facilitate responses to, shifting discourses within the broader, organisational eld of audit. In this way, audit can be viewed not simply as a technology, but a hybrid of shifting discursive (and non-discursive) practices, shaped by and shaping a network of key relations between auditors, audit rms, audit clients and key (regulatory) agencies. Accordingly, in this paper we adopt a discursive analysis of audit and seek to demonstrate its value as an important supplement to existing modes of audit research. Robson et al.(2007) argued that changes in auditing technologies are linked to transformations within the organisational eld of audit. Their study of the rise of business-risk auditing approaches in the 1990s as expounded above in bold terms by authors such as Elliott et al. (1999) showed how organisational tensions within auditing rms and the relative status and prestige of audit as compared to other business lines, notably management consultancy, played signicant roles in structuring the development of new audit technologies within the Big Five (as was). Other studies have spoken of the growing fragmentation of the audit process and the creation of competitive sub-elds, such as risk management, and predicted professional turf battles (both inter and intra) within the larger rms as they create

internal structures to differentiate overlapping product lines (Covaleski et al., 2003; Power, 2000, 2003; Khalifa, 2004). Robson et al. (2007, p. 431) suggested that the eld of audit would recongure post-Enron and, in this paper, we seek to study the signicant shifts in the discourses relating to audit methodologies that have taken place as the business-risk focus has been supplanted by a methodological emphasis on audit quality. We provide an analysis of discursive shifts in the organisational eld of audit through two principal mechanisms a series of interviews with auditors, audit educators and regulators discussing audit methodological developments and the study of two important audit texts published by one of the multinational audit rms between 1997 and 2005. Instead of being seen simply, or even primarily, as a technical phenomenon, audit emerges from our study as a highly discursive practice, enabling and reecting institutional (regulatory, cultural and normative) and competitive (audit markets) changes in the audit eld, and shifting prevailing conceptualisations of the role of audit. In studying the extent to which recent methodological developments in audit have relied upon, and been supported by, a careful use of appropriate discourse, we suggest that textual content analysis of keywords and concordances offers a particularly powerful method for analysing the shifting practice of audit. Indeed, in documenting a clear shift from a discourse of (business) value to one of (audit) quality, the paper serves to challenge recent assertions that methodological developments in audit during the last decade have all been about audit quality (see Peecher et al., 2007). The paper is organised around four sections. The next section provides a brief overview of relevant literature that has sought to understand and explain contemporary audit practices, emphasising the importance of examining the discursive textual practices that constitute audit. Section two then presents discourse analysis as a mode for exploring methodological changes in the audit eld, and outlines our specic research methods. Section three draws on ndings from analyses of eld-based interviews and other textual material, such as web sites, and audit rm publications, to identify a clear shift in the methodological discourse of audit from the mid-1990s to the mid-2000s. Such a shift is connected to changes in the wider organisational eld of audit. The paper closes by considering the signicance of such a relationship and its implications for the future study of auditing. 1. Discursive shifts in audit During the last decade researchers have begun to access rms in ways that have enabled examinations of the audit process itself (McNair, 1991; Pentland, 1993; Power, 2000; Barrett et al., 2005). Of these, some have addressed changes to audit methods and methodologies, and processes through which audit methods change (Carpenter and Dirsmith, 1993; Humphrey and Moizer, 1990; Power, 1992). Commentators have noted the movement from discourses of professional judgement in auditing towards those that advocate a greater reliance on highly structured auditing techniques. This gradual shifting from apparent individual expertise towards, for example, scientic sampling, has been, as Francis (1990, 1994) suggests, indicative of an order of scientism in audit practice and a development that has occluded the importance of tacit knowledge and practical consciousness in the enactment of audit.

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While beliefs in the science of audit and the possibility of optimal audit techniques have motivated movements towards new audit technologies and perpetual reform of audit procedures, there are many other contextual issues that connect to this shift from apparent judgement to technique. Humphrey and Moizer (1990), in a study of audit planning processes, claimed that new audit processes have to demonstrate the potential to enhance audit protability (or perceptions of the value of the audit) in the face of client pressures to keep audit fees low and intensied commercial motivations to expand the range of non-audit services to clients (also see Anderson-Gough et al., 1998; Carpenter and Dirsmith, 1993; Kosmala MacLullich, 2003). The increasing formalisation of audit can, as Fogarty (1996) has argued, be connected directly to the perceived need among audit rms to seek more technological and scientic discourses within which to justify audit practices to clients and/or the courts, as well as issues of controlling work of audit employees (Pentland, 1993; Fischer, 1996; Power, 2003). As audit has become more formalised and codifed and so, as Fogarty (1996) suggests, it has become more mobile and transferable to organisations and institutions previously uncolonised by audit practices and auditing rms. Seen in these terms, the rise of new audit technologies involves more than a simplistic shift from practices of decision by judgement to decision by technique. The works of Pentland (Pentland, 1993, 2000; Pentland and Carlile, 1996) and Harper (1988, 1989) suggest a process in which becoming comfortable with (accounting) numbers involves a complex interplay between formal regulations and informal methods through which auditors exercise their tacit knowledge, and draw on previous audit experiences and relationships, perhaps with the same client, to gain condence of, and from, the client, their peers and important agencies, such as regulators, in the audit eld. Barrett et al. (2005) explore the intra-organisational interplay between audit ofces in different jurisdictions that produce an audit opinion. Audit technologies represent a kind of negotiated settlement with the key agents (clients, regulators, professional administrators) in their eld in which matters of legitimacy and market relationships structure audit processes. Moreover, as studies of professional socialisation have shown, audit is a performative practice in which audit professionals engage in symbolic displays to their client, their seniors and other important agents through impression management, appropriate use of organisational discourse, legitimate forms of socialising and temporal commitment (Anderson-Gough et al., 1998, 2000, 2001). Fischer (1996) demonstrates that the implementation of new audit methodologies is problematical as audit staff struggle to learn and follow procedures of which they feel unsure and for which the justication is often obscure. In this context, the new technologies fail to become embedded within old or previous audit practices such that auditors follow rules ritualistically, without much understanding of supporting principles, and in ways which merge comfortably with prior beliefs and judgements about the client. Fischers work is valuable in pinpointing the problem of internal validity amongst audit staff themselves, without which new technologies of audit will fail to become embedded in audit routines and, most signicantly for our study, it raises the issue of external legitimation of new audit technologies in their audit environment. In such a scenario, audit practice continues to follow previous methods and models, while new audit technologies take on an enabling and symbolic role

redolent of the loose coupling relationships between administrative reform and operative routines suggested by neo-institutional theorising (Meyer and Rowan, 1977). This paper addresses this latter feature of Fischers work, namely the relationship of an audit technology to its environment and the importance of discourse to audit practice and transformations in audit methodologies. It is through discourse that the large public audit rms re-present and legitimate their audit practices to clients and signicant others. Audit practice is in part afrmed and sanctioned by reference to appropriate forms of discourse. In this paper, we explore the discursive shifts associated with changes to auditing methodologies over the last decade, drawing particularly on the substantial, publicly available texts that one of the Big Four accounting rms, KPMG, has used to promote and explain such developments (see Bell et al., 1997, 2002, 2005; Elliott et al., 1999). To date, there has been relatively little study of audit discourses and, in particular, the texts that surround and support the methodologies that audit rms produce both to guide and to legitimate their work. Yet during the 1990s it was widely noted that a number of the Big Five (as was) had introduced (and heralded changes, as the opening quotation to this paper indicates) in their audit methodologies (Lemon et al., 2000; Knechel, 2007; Elliott et al., 1999; Power, 2000; Robson et al., 2007). By the late 1990s a new normative consensus had emerged around business risk based-audit methods. KPMG, PwC, Ernst & Young and Arthur Andersen each produced varieties on an audit methodology focusing on client business risk as the key element of a new audit approach (Eilifsen et al., 2001; Lemon et al., 2000; Knechel, 2007; Perrin, 1998; Winograd et al., 2000). KPMG allowed academics to follow trials of their audit method and assess their ability to provide knowledge spillovers to the client (Eilifsen et al., 2001). Arthur Andersen attempted to promote its Business Audit across North America and Europe, though with varying degrees of success (Tofer and Reingold, 2003). In 1997, to herald their new audit approach, KPMG published Auditing through a Strategic Systems Lens which outlined the approachs underlying theories and methodologies. According to one of the authors, over 200,000 copies were printed and distributed in the US to clients, academics and other interested parties. KPMG also provided substantial research funding to examine KPMGs methodology and to assist in the development of their business measurement process (the KPMG methodology for assessing business risk see Bell et al., 2002). By 2001 academics, regulators and professional bodies were considering the implications of the business risk methodology for research, practice and modes of audit regulation. The language of business and associated understandings were evidently inuencing discourses of audit change and penetrating regulatory processes in the audit eld (Lemon et al., 2000; Gwilliam, 2003; Bagshaw, 1999; Curtis and Turley, 2007; Knechel, 2007). However, it is evident today that the conceptualisation of audit has changed once more in response to new events and relationships in the organisational eld which, in turn, have spawned new legitimating discourses for quality audit methodologies. It is this shift upon which our discursive analysis will focus, drawing on recent advances in the study of discourse and institutional change (Franzosi and Mohr, 1997; Ventresca and Mohr, 2002; Philips et al., 2004). Accordingly, our focus on discourse is concerned with the level of cultural and institutional, rather than individual, meanings. In the next section we outline our approaches to discourse analysis across two key time periods: the mid- to late-1990s, which was essentially an

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era of business risk; and the post-Enron era, which has been increasingly dominated by a new movement promoting audit quality and the need for audit to be made auditable. 2. Audit discourse, structure and practice 2.1. Audit technologies, discourse and legitimacy Audit practitioners draw on discourse both to construct the sense of their world and to intervene within it, and it this co-construction of discourse and the eld of audit activities that sets the boundaries of our analysis (Robson et al., 2007). In general terms, practice understands activities in terms of how they transform the world within which they occur. The distinction that we play upon in this paper is that between discursive and non-discursive practices, even though every discursive act necessarily has a non-discursive aspect to it (Foucault, 1972; Prior, 2003, p. 126). This focus upon discursive practice is grounded in four insights concerning discourse (Sarangi and Coulthard, 2002). One is the afrmation that social realities are in part linguistically/discursively constructed. The second is the appreciation of the context-bound nature of discourse: hence, following a neo-institutional frame (Scott, 2001), the importance of an organisational eld-level approach. The third is the idea of discourse as practice and social action that intervenes on and constructs a eld of activities (Foucault, 1972; Coupland et al., 2001; Sarangi, 2001; Prior, 2003; Robson et al., 2007). The fourth is the understanding that meaning is established in interaction, rather than being present once and for all in single, abstracted, context-less utterances (Drew and Heritage, 1992). While previous studies have explored practitioners sense making and their interaction with the surrounding structures and its discourse (Kosmala, 2005; p. 31), in our study we seek to show how audit discourses construct audit methodologies in terms appropriate to their audit eld. Neo-institutionalists have demonstrated the role and importance of symbols and cultural processes in the theory of organisations and their environments (Meyer and Rowan, 1977; DiMaggio and Powell, 1983; Scott and Meyer, 1994; Scott, 2001). By linking the work of symbolic interactionism and ethnomethodology of the 1960s to questions of social structure, numerous theoretical approaches within the social sciences have begun to emphasise the duality of relations between structures and cultural meanings (Mohr, 1998; Bourdieu, 1977; Cicourel, 1982; Giddens, 1984; Swidler, 1986; Sewell, 1992). In embracing a form of phenomenological structuralism, neo-institutional theory has considered how the production of meanings through discourse is linked to the eld of organisational relations within which they are articulated. Discourse, in this context, is carried through speech and writing, both formal and informal (Potter and Wetherell, 1987). At the same time discourse helps dene acceptable ways of talking or writing about a particular topic (Fairclough, 1989, 1992). Spoken and written texts constitute a framework, emphasising the prevalence of certain criteria, terms, concepts and vocabularies over others at particular points in time (Foucault, 1972; Prior, 2003, p. 25). As such, and in line with the hermeneutics tradition, our paper is concerned with interpreting and understanding processes of objectication of audit rms actions, especially in relation to new methodologies, and in this instance from different sources of text (Llewellyn, 1993). While Berger and Luckmann (1966) addressed the discursive processes by which institutions are

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constructed, there have been few studies examining the discursive processes of institutional transformation (Philips et al., 2004). This neglect underplays the role of discourse (as texts) in carrying, enabling and communicating such transformations:
It is primarily through texts that information about actions is widely distributed and comes to inuence the actions of others (Philips et al., 2004, p. 635).

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By highlighting the role of texts in sense making and the cultural production of meaning, Philips et al. (2004, p. 635; see Berger and Luckmann, 1966) suggested that they form a crucial part of the establishment of institutional structures:
[. . .] actors interact and come to accept shared denitions of reality, and it is through linguistic processes that denitions of reality are constituted.

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Innovators or institutional entrepreneurs (Suddaby and Greenwood, 2006) trying to establish new practices reafrm their message through discursive acts; those seeking to gain or repair legitimacy produce and distribute texts that establish or verify changes to meanings and actions (Philips et al., 2004). By drawing on discourses from other elds, organisational actors can extend institutional boundaries. Texts and strategic deployment of language can be used to convey and reect values and social interests at particular points in time, and, in so doing, initiate change (Suddaby and Greenwood, 2005). By examining discursive changes within auditing we can begin to understand how discourse helps audit rms to maintain, or indeed reconstruct, relationships between the rm, its audit work and the audit eld. Barry et al. (2006) refer to this as a combined exo/endotextual approach, working both within a text and outward from a text to its eld. In effect we are trying to locate eld-level institutions in the local textual practices the structuration of the audit eld: New discourses emerge from reworking existing discourse and as a result of structural or strategic organisational changes, which in turn means that the new discourses contribute to changes within and between organisations (Fairclough, 2005). Through institutionalisation processes, discourses of change are embedded and inuence meanings and understandings within the organisational setting. Our intent is to explore the discursive changes associated with recent audit methodological developments and to relate them to changes and patterns in the organisational eld of audit. In so doing, it is hoped that the paper will serve to indicate the importance of discourse analysis, and textual practices in particular, in terms of understanding processes of audit change. In the next section we outline the methods we have deployed to conduct discursive analysis. 2.2. Conducting discourse analysis: methodology and method Our chosen methodological approach comprises two dimensions. The rst draws on ndings from seventy interviews with auditors, audit educators and regulators, seeking to gain an understanding of the prevailing vocabulary of auditing practice, the way in which audit methodologies and associated discourses are changing, and the regulatory, normative, cultural and competitive inuences on such changes[1]. The majority of these interviews have been in London, Manchester, Birmingham and Cardiff, with audit practitioners (in different rm sizes and at varying stages in their careers, encompassing newly qualied audit seniors, audit managers, senior audit

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managers and audit partners. The interviews were semi-structured and usually lasted between one to one and a half hours. Most were digitally recorded and subsequently transcribed. Interview transcripts were analysed both manually and using qualitative data analysis software, Nvivo version 7 and Nud *Ist. In summary terms, the interviews have sought information and viewpoints on interviewees backgrounds and training, their understanding of changes in the audit regulatory environment and experiences of shifts in the nature of audit practice and methodological changes preand post-Enron. Through such narratives, auditors and auditing regulators construct versions of past events and project their interpretations in describing shifts in the audit eld. These oral accounts helped us to identify the principal dimensions of the discourses prevailing within the audit eld at different points in time. The second major dimension of our research approach involves the analysis of key written texts, particularly those that outline methodological approaches in audit. In this paper, we focus on two important audit texts by KPMG, the Big Four audit rm that has most visibly promoted its audit methodology, whether through monographs, sponsored research and/or publicity material. The KPMG audit methodology texts (see Bell et al., 1997, 2005) are examined through two main strategies. First, we subjected them to keyword analyses using text analysis software[2], TextStat[3] and Nud *Ist,. The objective of this analysis was to provide content analysis comparisons across the two texts. In general terms, content analysis provides basic statistical semantics describing the contents of any form of communication (Prior, 2003; Krippendorf, 2004). To this end computer-assisted content analysis has advantages of speed and reliability in the performance of a textual content analysis (Krippendorf, 2004. pp. 257-62). Our content analysis was partly latent in that initially we aggregated uses of words in the two KPMG texts, rather than using coding to t texts into a set of predened categories set up by ourselves as researchers (Berg, 2004; Franzosi, 2004, p. 60). Other keywords were selected intentionally on the basis of their presence in the audit eld: in discussions of audit regulation, education, the market for audit, and included, amongst others, terms such as audit, business, risk, value and quality. In that sense some of our content analysis was partly manifest (Berg, 2004, pp. 269-70). Once the keyword list was constructed, we used the textual analysis software to retrieve all instances in which these keywords occurred in the two audit methodology texts. Our second analytical strategy with respect to the KPMG texts was to examine the usages of these keywords in context. Here our purpose was to try to focus on the narrative grammar of the texts not simply how often words are used (relative to each text) but also to understand something of the active or passive structural relationships between key terms, and to examine the co-occurrence of terms associated with the key words. This we largely accomplished by picking up the keywords and then exploring their concordances within the texts. Concordances are simply descriptors for the immediate textual context of a key word or term, and can be examined readily through appropriate textual analysis software. The purpose is to understand usages of terms and the structures of meaning in which particular key words are embedded[4]. Examples of this kind of keyword analysis have become more common within social science and organisational analysis as a means of trying to interrogate changing institutions and cultural meanings (Franzosi and Mohr, 1997; Ventresca and Mohr, 2002). For example, Guillen (2001) and Drori (2006) both used keywords to explore the emergence and growth of terms such as globalisation and governance in popular

media, NGOs and governmental organisations. By focusing upon growth of, and changes in, the usage of words, we become aware of the discursive processes through which certain practices are realised and problematised. In our study the words that surround terms like audit and risk serve to signal (and perform) changing priorities in the audit eld, and shifting usages in the discursive practice of audit within rms. The combination of interviewee accounts and the analysis of written texts is particularly useful in this respect in that it not only serves to highlight the pervasiveness of particular audit vocabularies, but also helps to frame and contextualise our analysis of the main discursive shifts occurring in the audit eld over the last decade. 3. Audit discourses and transformations in the audit eld 3.1 Value-added audit: the rise of business risk methodologies When four of the Big Five audit rms started to pursue a new methodology of audit in the early to mid-1990s, it was clear that audit fee pressure was beginning to compromise audits protability within audit rms (Suddaby et al., 2007). This is not to say that the Big Five rms were struggling: non audit services in particular management consulting services had increased signicantly as a proportion of rms total revenue (Zeff, 2003a, b). Yet, audit had begun to suffer from a competitive market in which clients were keen to shop around for audit services and auditors were increasingly competing on fee levels (see Humphrey et al., 2002):
There was a lot of pressure on fees and we, I know at the time, we did a lot of work taking time out of audits. . . And we really started to look at that and that then really came in the concept of materiality to a big, big way and thats stayed with us ever since now and perhaps even more aggressively from the point of view of if something is considered low risk and its not material, just dont look at it, you know, document your reasons but just move on (AP1: 3[5]).

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833

The new varieties of audit offered a hybridised version of audit by incorporating an auditors assessment of the client companys business risks as a central component of the audit process. Analyzing business risk implied that the auditor would assess the clients strategy and strategic risks, its core business processes and offer benchmark comparisons with similar companies in the clients industrial sector. This preliminary analysis of business risk formed the basis for identifying potential key audit risks. Business risk assessment, in short, became the basis for the audit planning processes being promoted by Ernst & Young, PricewaterhouseCoopers, KPMG and Arthur Andersen (Lemon et al., 2000; Curtis and Turley, 2007; Knechel, 2007). Audits founded on the analysis of business risk would, it was suggested, help to streamline audit and reduce audit fee pressure. A better planned and more focused audit, based upon an initial assessment of business risk, could cut audit costs, and also help afrm a new identity for audit that promised more interest for prospective audit staff recruits. Part of this new construction of audit was dependent upon the incorporation of business knowledge, such as benchmarking, business process re-engineering and strategic analysis (Jeppesen, 1998; Bell et al., 1997). As Eilifsen et al. (2001) noted in their eld work study of KPMGs audit methodology in the late 1990s, business risk type audit had the potential to offer a better service to clients by feeding back to them the auditors insights into a clients possible business risks. Though this new audit was not consulting, and not labelled as such, the business risk audit could

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add value to the audit. Hence, the new audit could be conceived as an audit/consulting hybrid (Jeppesen, 1998), with the focus on business risks potentially offering opportunities for audit rms to provide additional services to help the client manage their business. The introduction of the new business risk methodologies in auditing, as with other auditing developments, has tended to be accompanied by a central, seemingly trouble-free ofcial narrative, such as that offered by Elliott et al. (1999)[6]. Economic or cost-based rationales gured highly as they did in our interviews with Big Firm audit partners, who saw business risk auditing (henceforth, BRA) as a justiable response to market or competitive pressures on audit fees:
A lot of it [BRA] in all honesty had to be a cost issue, where the competition was, everyone was looking at taking time out, making it more efcient . . . So you know, I think it was largely a commercial pressure that forced us to look at how we did our work, how we could be more efcient and how we could keep or win more big orders (AP1: 3).

The economic benets of BRA to the audit itself were seen to reside in a greater reliance on understanding business risk exposures, assessing the strength of internal control systems and generating consequent reductions in levels of substantive testing:
Theres no doubt in my mind, that in theory if you are absolutely condent from a range of controls, that you understand everything about the business, the business is low-risk, the nancial processes covering that business are entirely robust, and those nancial processes lead inescapably to the production of nancial statements, which are thoroughly competent, then you can get to cutting down your work very substantially (AP2: 5).

Many audit partners that we interviewed emphasised the importance of the auditing being able to compete with the protability of other functional disciplines. Large rms appeared no longer content to view themselves as auditors but as professional service rms competing in a range of business service and advisory markets (Jeppesen, 1998; Robson et al., 2007). After experiencing decreases in income derived from audits, interviewees spoke of the adoption of BRA as helpful to audit partners in recovering some of their lost prestige within their rms:
[. . .] the audit partners realised that if they were to justify their existence in their own rm and also, to be honest, they had if they were to attract people, they had to change audit from being reactive, to actually being what you know, the solutions provider, you know, value added all those sort of trendy management consultant type words, basically they had to come up with bright ideas, and I think that encouraged them to be quite aggressive in terms of the ideas and the way they would treat things (FormerAP: 1[7]).

BRA, accordingly, was supported as it offered enhanced opportunities to audit divisions to provide other, added-value services to their audit clients placing the division in a better fee-earning position in relation to other service lines. Our interviewees also spoke of the potential human resource benets of BRA. It enabled the auditing activity to be marketed in more positive terms to current and prospective audit staff. According to interviewees, if BRA methodologies were able to make the audit process more relevant and creative, their rm had a much greater chance of attracting and retaining top-rate graduates:
I mean the business adviser stuff is partly to make it a bit more sort of sexy and you know, to other graduates joining, you know, youre going to be talking to managing directors about

their issues ok, you might be, but you probably need ten years experience before youre going to have a sensible conversation [. . .] coming back to the business advisory, I think its partly youre selling it to recruits, you know, youre not just going to be, you know, doing boring things like ticking tick-boxes (AP2: 5).

Discourse and audit change

Gaining such experience was also considered to have positive spillover effects for clients in that they would be gaining, and demanding access, to quality business advisers:
[. . .] its partly selling it to clients, where you say, you know, the people you get will be business advisers, theyve got loads of experience, but thats very much a sort of you know, an add-on, and it comes from experience, I mean you know, the number of businesses that John will have seen, Johns analytical skills honed during audit work are quite valuable to a client, so he will ask John I have this particular problem, should I make this investment, how do I set up in America, hes a natural person to ask (AP2: 5).

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As Jeppesen (1998) notes, KPMGs approach to BRA (as detailed in Bell et al., 1997) presented an eclectic mix of strategic analysis, business process re-engineering and benchmarking. Such forms of knowledge do not reside conventionally within the normal education of auditors both professional and in-house and thus the education and training of auditors required a re-orientation towards new forms of auditor expertise. In the UK KPMGs business risk audit was subsumed within a new audit methodology known as Audit 2000, which required both new training and Information Technologies (such as information databases measuring key performance indicators across rms and sectors). Educational initiatives within professional bodies such as the ICAEW during the late 1990s also began to reect this vocabulary of business risk and value added. In 1997 the ICAEW issued a document on education reform of professional examinations entitled Added Value Professionals (ICAEW, 1996). Specialist routes in professional education and training were proposed. Another ICAEW working party, headed by Robert Hodgkinson of Arthur Andersen, suggested that companies could produce a Statement of Business Risk for shareholders that auditors could then audit (see ICAEW, 1997, 1999, 2002a). Figure 1 provides a representation of the business risk, added value discourse and the key supporting dimensions within the audit eld that constituted the discourse of value added audit. This discourse had ve main components: a problematisation of the market for audit services and the protability of audit; an associated problematisation of the status of audit within self-styled professional service rms (PSFs); the incorporation of business knowledge into the audit function itself; the further integration of audit into cross-selling opportunities; and the re-education of audit and auditors seen to be required by the new business risk audit philosophy. Market conditions in audit and the evolving structure of audit rms to PSFs were all of a piece with the new methodology of business risk that drew upon business knowledge, such as benchmarking and strategic analysis, (see Jeppesen, 1998; Bell et al., 1997), in an attempt to add value to audit. Supported by changes in education and proposed regulations, business risk also tied in entrepreneurial opportunities for other added value services that audit rms could provide, including internal control. In short, the isomorphism present in the development of new audit methodologies across the Big audit rms (Deloitte excepted) was also reected in the rationales in play in the professional institutions operating within the organisational eld of auditing.

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Figure 1. Business risk audit and the audit eld

3.2. Making audit auditable the rise of audit quality

Well, I think the mantra has become quality. I think people would say that has been the top priority . . . If you think also back in the 1990s in part, yes, the profession was talking about value added, but in part it was because society and the business community no longer valued audit. It was a pretty natural reaction I think to the fact that audit had become commodied. If you sat in at the meeting with an audit committee their primary objective how am I going to get as little fee for the audit? . . . So I think it was a pretty normal reaction for the rms to think, well how do we create value back into the service? . . . And theres little doubt that the impetus behind the business risk idea was more to understand the issues that the senior people in an entity were battling with. What were the things that kept management awake at night, those sorts of catchphrases were being banded around, and if you knew what kept managers awake at night it might give you a clue about what to worry about in the accounts . . .Now, of course, all thats largely gone (AP2: 1).

As the above interviewee notes, auditing regulators, Enron and associated events in 2001 have set in train a different set of discourses and ideals around audit that now occlude reference to business risk. The most visible response to Enron, the passing of

the Sarbanes Oxley Act in the US, introduced restrictions on the provision of non-audit services by audit rms in order to enhance independence and required that auditors give greater attention to clients internal control systems. Arguably some of the agenda fullled by the Sarbanes-Oxley Act pre-existed Enron, with the Panel on Audit Effectiveness of the Public Oversight Board, for example, in the US having already raised concern at the commercialisation of audit and the tone at the top set by the partners of the Big Firms:
The Panel calls on audit rms to reafrm, within their organizations and to the outside world, the importance of their audit practices and to stimulate their auditors to proudly hold high the banner of objectivity, independence, professional scepticism and accountability to the public by performing quality audit work . . . The Panel recommends that audit rms ensure that the performance of high-quality audits is recognized as the highest priority in their professional development activities, performance evaluations and promotion, retention and compensation decisions (POB, 2000, p. xi, emphasis added).

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The global signicance of Enron and other such scandals (WorldCom, Global Crossing, Parmalat and Ahold) arising in the immediate aftermath, coupled with the additional stimulus provided to regulatory regimes outside of the USA by the extraterritorial reach embodied in the provisions of the Sarbanes-Oxley Act, gave weight and momentum to a new regulatory emphasis on notions (and the language) of audit quality:
Recent corporate failures have. . .also led to questions as to the effectiveness of audits and the integrity of the audit process and emphasized the key role of high quality auditing standards (IAASB, 2003a, p. 3, emphasis added).

The introduction of inspections of audit work initiated by the PCAOB in the US and various agencies in the UK such as the Audit Inspection Unit (AIU) of the Professional Oversight Board (POB)[8] have reected concerns with the effectiveness of self-regulatory, professional peer review systems and a desire to validate the process of providing an audit opinion (see PCAOB, 2004, 2006; AIU, 2005, 2006). Accordingly, while the primary regulatory focus has become audit quality, this has been coupled with a process intended to enable audit practices to become more auditable (see FRC, 2006a, b; POB, 2006a, b, 2007). This focus is particularly evident in the formal remit of the regulatory inspections. For example, the AIU in the UK states that:
The overall purpose of our work is to monitor and promote improvements in audit quality, thereby enhancing investor condence in the audit process and nancial reporting. Our responsibility extends beyond compliance with specic requirements of the regulatory framework and includes an assessment of the key audit judgments made (AIU, 2005, para. 4.1, emphasis added).

The emphasis on monitoring and micro-control is reected in regulatory requirements for audit rms to set out in writing how their audit methodology meets the requirements of UK Auditing Standards. Audit rms must show they have in place an annual compliance review process which covers a sample of completed audits (referred to by the UKs AIU as the Audit Quality Review (AQR) process). A constant theme running throughout the AIUs 2004/5 audit inspection report is the identied failings or limitations in standards of documentation:

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We identied a need to improve the quality of audit documentation across all rms, in respect of many of the audit engagements we reviewed . . . In many cases we found that audit work undertaken could not be fully understood without obtaining oral explanations from the audit team and that the rationale for key audit judgments was not adequately recorded on the audit les . . . Senior management within the audit rms must emphasise that poor audit documentation is unacceptable. This message needs to be reinforced by the importance that those responsible within rms for reviewing audit working papers attach to proper documentation of audit work undertaken and audit judgments exercised (AIU, 2005, para 5.3.6, emphases added).

The AIU has emphasised the value of documentation in terms of the maintenance and, signicantly, the monitoring of audit quality:
Insufcient documentation of audit work undertaken and the basis on which audit judgments have been made poses risks to quality for the rms. It not only renders internal quality control reviews less effective but also affects the ability of the rm, if challenged subsequently, to justify the conclusions reached. Inadequacies in audit documentation have also rendered our own reviews more difcult, especially as regards the consideration of audit judgments (AIU, 2005, para 5.3.6, emphases added).

This discourse of audit quality and (lack of) auditability has been reinforced in the AIUs annual inspection reports. While concluding that the reviewed audits had generally been conducted to a high or acceptable standard, it has noted a lack of emphasis on high quality audits in the strategies of some of the rms reviewed:
We identied a strong emphasis on the importance of audit quality in communications from the leadership of all the rms, including a clear message that the recurring deciencies identied during our initial inspections needed to be addressed. . . . In particular there is insufcient visibility of quality indicators in the documented goals and objectives set for partners and senior staff and the basis on which their performance is assessed. The documentation we examined indicated that commercial considerations and measures continued to be a driver of performance assessment (AIU, 2006, para. 4.2.1, emphases added

The AIU has also stressed the need for continuing development in the documentation of audit processes and associated auditor judgements, nding no overall improvement in the standard of documentation explaining the rationale behind such judgements. It concluded that a cultural change was necessary to secure this on the part of certain audit partners and rms (para. 4.4.2), noting a number of areas where the monitoring of audit quality could be improved[9]. In the USA, the Sarbanes-Oxley Act required the PCAOB to undertake a continuing programme of inspections to assess the degree of compliance (in terms of audit performance) of each registered public accounting rm and associated persons of that rm. Such inspections are required to include reviews of selected audit engagements and an overall evaluation of the sufciency of the quality control system of the rm, and the manner of the documentation and communication of that system by the rm. The PCAOB undertook limited inspections of the Big Four rms in 2003 (see PCAOB, 2004), followed by the rst full series of inspections of all the registered public accounting rms in 2004. In accordance with Section 104(g)(2) of the Sarbanes-Oxley Act of 2002, the PCAOB does not make public any portions of those reports that dealt with criticisms of any of the rms quality control systems, but would do so if any of

the rms failed satisfactorily to address such criticisms within 12 months (an approach also adopted by POBA in the UK). In March 2006, the PCAOB issued a public statement declaring that the Big Four rms had satisfactorily addressed the criticisms made during the 2003 limited inspections crafting steps that fully implemented would, in the views of the PCAOB, have benecial effects on audit quality and the monitoring of audit quality (PCAOB, 2006, pp. 3-7). Revised, reinforced international auditing standards (ISAs) have adopted a form of wording that accommodates more traditional, audit-risk methodologies and places considerable emphasis on the rigour and visibility of risk-assessment at all levels of audit enquiry, including the demonstration of a clear linkage between risk assessments and audit procedures (see IAASB, 2003a, b, c, d, e; Robson et al., 2007; Curtis and Turley, 2007). A similar emphasis on clarity and rigour was evident in the PCAOBs (2005) report on Sarbanes-Oxley required audit reports on internal controls relating to nancial reporting the report criticising auditors for taking too uniform an approach to internal control testing and for not adopting a more thoughtful, risk-based approach, a view also supported by the SEC (2005). Other illustrations of the increasing quality emphasis in audit standard setting and regulation include a revised SAS 240, in the UK, on Quality Control for Audit Work (issued in September 2001)[10], an international quality control standard (ISQC 1) and revised international standards for Audit documentation (ISA 230) and Quality control for audits of historical nancial information (ISA 220)[11]. Post-Enron, regulatory agencies have articulated an emergent discourse on the signicance of audit quality, bringing with it the emphasis on the documentation of audit processes and procedures:
(W)hats changed is the regulators, I suppose it started in the US and has ended up in the UK; the Audit Inspection Unit and everybody else around you . . . .Unfortunately a lot of the focus is not in terms of, have you signed the right audit opinion, the focus is actually have you got all the schedules on the le you should have . . . I dont think quality has changed, I think the quality was already in there, was built in there. What people are looking for is evidence that the quality is there (AP1: 1). Audit hasnt changed fundamentally but its much more prescriptive about what you should be doing to be able to say, yes weve done an audit (AD2: 1[12]).

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The Audit and Assurance Faculty of the ICAEW published a detailed report on the subject of audit quality in November 2002. Building in part on a series of earlier publications entitled Towards Better Auditing (see ICAEW, 2001), the foreword to the report stated that the emphasis of the report was on how audit quality is achieved in practice with illustrations of good practice being given throughout the text. It also intended to help inform wider stakeholders about the remit, purpose and limitations of an audit and to give reassurance on the audit professions commitment to audit quality in the UK (ICAEW, 2002a, p. 2). The report reviews a number of dimensions of audit quality and issues that rms could consider in seeking to improve their audit work and associated processes of practice management. Over time, inspections have increasingly focused on assessing whether procedures and controls were being operated properly and/or tailored appropriately to deal with non-standard situations (see ICAEW, 2002b, p. 63).

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Continuing indications of the growing regulatory discourse centred on the promotion and monitoring of audit quality can be found in the establishment in the UK in 2005 of the Audit Quality Forum (AQF). The AQF is convened by the ICAEW but comprises leading representatives from the accounting profession, investor groups, banks, regulators and government. Its initial focus addressed topics such as competition and choice in the audit market (a topic subsequently taken up by the Department of Trade and Industry (DTI) and the Financial Reporting Council (FRC) see below), the transparency and quality of auditing procedures, including the right for shareholders to question the auditor, enhanced disclosures regarding the contractual terms of the audit, the name of the partner responsible for the audit and the content of auditor resignation letters, and the relationship between audit quality and auditor liability. It has subsequently published papers on the purpose of the audit, principles-based auditing standards, making global standards local and auditor reporting (for more details on the AQF work programme and associated publications, see www.icaew.com/index.cfm?route 125705)[13]. The FRC has also recently clearly emphasised its own interest and commitment to overall standards of audit quality, issuing a discussion paper on the subject of promoting audit quality, seeking views as to whether it was felt that all was being done to maintain and enhance the quality of audits (see FRC, 2006b). The DTI/FRC commissioned Oxera (2006) report on the level of competition within the UK auditing services market and the resulting responses both from regulators and institutional investors reiterated the signicance of the importance of market choice to audit quality and the continuing desires for enhanced levels of visibility/transparency of audit quality to enhance client choice. Linking audit quality to market choice, the Oxera report identied signicant barriers to entry in the audit market associated with large companies, with the Big Four audit rms being responsible for the audits of 97 per cent of the FTSE 250 and any signicant entry into this market by non-Big four audit rms likely to be uneconomic unless market conditions and perceptions change:
The loss of another Big Four rm (four-to-three) would exacerbate problems around auditor choice, requiring regulators to make exceptions to auditor independence rules. A lack of audited accounts in the event of a Big Four rm exit would be a signicant concern for investors, who also worry about the consequences for audit quality of a further increase in audit market concentration (DTI/Oxera, 2006, p. i).

In issuing a consultation paper on the ndings and implications of the Oxera study, the UKs Professional Oversight Board (POB, 2006a, b) emphasised that a restricted degree of market choice may well represent a risk to audit quality and competitively priced auditing. Given audits stated centrality to a well functioning capital market, the POB paper sought to stimulate public debate on the nature of risks to the effectiveness of the audit market and possible ways of mitigating these risks. Responses to the paper from institutional investors have also have echoed issues regarding audit quality, particularly its visibility. Hermes, one of the largest pension fund managers in the City of London, exemplied such views in arguing that a lack of visibility on audit quality sties innovation, commodies audit and drives competition down to issues of price, which in turn generates barriers to entry. Overall, the written responses to Oxera reinforced the contemporary importance of quality and visibility of auditing practice, not just from the perspective of audit regulators or audit rms but also from a market based perspective, incorporating the views of a range of key stakeholder groups[14].

Internationally, the pursuit of audit quality has gured centrally in the formal policy remit of the International Forum of Independent Audit Regulators (IFIAR), formed in September 2006 and now having a membership of independent audit regulatory bodies from 22 countries. At its rst meeting (Tokyo, March, 2007), IFIARs agenda was dominated by the issue of audit quality, including discussion of the drivers of audit quality, the availability and sustainability of quality audits (given existing market conditions), audit inspection and the global promotion of audit quality[15]. In summary terms, this dominant discourse of audit quality can be seen to have ve key dimensions: regulatory concerns with the independence of audit, post-Enron, which found expression in new legislative or supervisory provisions governing the structure of audit regulatory regimes; new audit practice standards; a greater emphasis on the role of inspection in delivering enhanced transparency and visibility of audit practices; a renewed commitment to providing a competitive and sustainable market for audit services; and the advocacy of new audit methodologies in which calls for evidence and documentation of audit quality have deposed prior concerns with business risk and adding value services. Figure 2 diagrammatically illustrates the main elements of this discourse of audit quality.

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Figure 2. Audit quality and the audit eld

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In the next section we take our analysis of the eld of audit and associated audit discourse to a textual examination of the technical audit methodologies focusing, specically, on the audit methodologies of KPMG as articulated in texts published in 1997 and 2005. 3.3. A case study of textual practice: KPMGs audit methodology 1997 and 2005 Our concern in this section is to explore the extent to which the above noted transformations in the audit eld are evident in formal audit texts outlining the techniques and methodologies of audit. The publication in 2005 by KPMG of a revised perspective on audit methodology, The 21 st Century Public Company Audit (see Bell et al. (2005) henceforth KPMG2005) allows for a consideration of the impact that regulatory shifts in the audit eld have had on methodological discourse as reected previously in KPMGs 1997 statement on Auditing through a Strategic Systems Lens (Bell et al., 1997 henceforth KPMG1997)[16]. As outlined in the previous section, the narrative of audit methodologies in the late 1990s clustered around the concept of business risks and analysis of strategy as modes of audit planning. Our rst focus was thus to examine whether this vocabulary was still central to KPMGs new methodology. As the keyword count in Table I indicates, in the 2005 (KPMG2) monograph much less textual emphasis is given to terms such as strategy and related words (strategy, strategies, strategically, strategic) in explaining KPMGs audit methodology. The term risk (risks, risk-assessment) continues to play a signicant role in the articulation of the methodology in KPMG2005 but it is rarely qualied with the adjective business unlike in KPMG1997 where terms such as strategic risk and business risk serve central explanatory roles. The radical innovation claimed for KPMGs new methodology in 1997 is indicated by the prevalence of terms like traditional in KPMG1997 distinguishing the strategic-systems audit from old style compliance audit. Terms such as new, in relation to descriptions of the methodology, are also more prevalent in KPMG1997 (Table II).
KPMG1997 KPMG2005 3 43 45 353 104

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Table I. Keyword differences in two KPMG audit methodology monographs: strategy and risk

Tradition, traditional New Strateg * (strategy, strategic, etc.) Risk * Business

23 82 264 287 496

Table II. Keyword differences in two KPMG audit methodology monographs: risk and business concordances

KPMG1997 Business process, -es Business strategy Business risk Audit risk 63 19 81 17

KPMG2005 13 0 10 27

Looking at the concordances for risk, although the term still occupies a central place in the discussion of the 2005 methodology, its usage is clustered around terms such as internal, fraud and in particular assessment, signalling the role of the word risk in contexts that refer to conventional audit notions of audit risks (inherent, control, detection) rather than business or strategic risks. In KPMG2005, the word business is used mainly to qualify nouns such as managers, management, representations, environment, organisations or just stands as a noun. However, the word-couple of business risk or business risks occurs just 10 times in total in KPMG2005. In KPMG1997, the word business is not only much more prevalent but also normally acts as the qualier to terms like risk (81 instances), process, strategy, model and measurement. The term business risk is clearly a much more signicant methodological element in KPMG1997 than it is in KPMG2005. Less obvious, however, is the relative scarcity of the term client in KPMG2005. As Anderson-Gough et al. (1998) argued, client is one of the more ambiguous terms in everyday auditor discourse. Although legally the term client refers to the owners for whom the auditors are appointed to conduct an audit, normally the client is used as a more general term, incorporating not just shareholders but also the management on whose nancial reports the auditors are commenting. Indeed, in everyday audit language, auditors frequently deploy the terms client to refer to the management and staff of the organisation being audited (see Humphrey and Moizer, 1990). In KPMG1997, the word client is ubiquitous and generally encompasses both management and shareholders suggesting a harmony of interest. KPMG2005, however, deploys this word much less frequently, with the main category-grouping of actors in the monograph (apart from auditor) being manager, management. Although the usage of the term manager is roughly equal across the two texts (KPMG1997, p. 183; KPMG2005, p. 163), the term client almost disappears from KPMG2005. In contrast, as Table III indicates, KPMG1997 has over 200 usages of either client or clients. The word value is not as abundantly dispersed in KPMG1997 as might have been expected, particularly in comparison to related KPMG promotional material (such as Elliott et al., 1999). Nevertheless, it is notable that the term value is only used in KPMG2005 to refer to the value of audit or nancial statements more generally, whereas in KPMG1997 it is linked to value creating as in value creating strategies and other contexts in which business value creation is seen as central to the business risk assessment process. Terms such as market and customer are similarly more prevalent in KPMG1997. In KPMG2005, a much greater importance is attached to issues surrounding the accumulation of audit evidence to support audit opinions and assessments of audit risk. As Table I shows, the word evidence occurs to a negligible degree in KPMG1997,
KPMG1997 Client Manage * Manager, -s Market(s) Choice Customer 208 179 14 51 6 53 KPMG2005 13 163 12 12 2 16

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Table III. Keyword differences in two KPMG audit methodology monographs: manager and client

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whilst in KPMG2005 it is referred to nearly 400 times. That is not to say that KPMG1997 has no concern with evidence in audit but that it asserts the need to have evidence, rather than outlining the approaches and methods through which evidence is to be generated and validated. In contrast, in KPMG2005 concordances for the word evidence show that it is often clustered with terms such as triangulation, sources, direct, indirect, acquire (and acquiring) that indicate a more focused concern with due audit process than KPMG1997. Whilst a similar focus with risk remains from KPMG1997, in KPMG2005 the use of audit risk assessments in setting up audits, testing controls and undertaking substantive tests is much more central with particular reference to the validity and robustness of types of information and sources. Words associated with the term test occur in KPMG2005 almost four times more frequently than in KPMG1997 (96 and 26). Other terms such as documentation and standards (standardisation) also occur more frequently in KPMG2005 than in KPMG1997, exemplifying the new centrality of the concern with audit process and compliance. Regulation (regulatory) words do occur marginally more frequently in KPMG1997, but they appear mainly in the context of discussions of clients strategic business environments. In KPMG2005, regulation words refer more often to audit and accounting regulators. Fraud is discussed frequently in KPMG2005, but is hardly mentioned in KPMG1997. However, the impact of internal control discourses ` post-Enron is evident in the KPMG2005 monograph vis-a-vis KPMG1997. The term control is much more strongly associated with management control in the value-added audit discourse than that of audit quality (Table IV). Given this greater focus on the collection of audit evidence, it is highly symbolic that the term audit or auditor appears nearly twice as much in KPMG2005 than it does in KPMG1997 (874 to 478). KPMG2005 is much more concerned with the auditors engagement in the practice of audit testing rather than in terms of advising businesses. It is also more concerned with notions of audit quality, compliance and levels of testing. The term quality appears almost twice as frequently in KPMG2005 than KPMG1997. Most signicantly, the term quality in KPMG2005 signals audit quality (the majority of instances of the word quality refer to audit) whilst in KPMG1997 quality refers exclusively to client issues such as product quality, earnings quality, TQM, strategies, management. In KPMG1997, quality is never used in the context of audit quality (Tables V and VI).
KPMG1997 Evidence Test Triangulat * Control Document * Standard * Information Management control Internal control Fraud 26 26 0 116 7 13 87 7 3 6 KPMG2005 384 96 67 189 30 38 60 1 36 85

Table IV. Keyword differences in two KPMG audit methodology monographs: audit evidence words

In summary, the above keyword counts conrm a discursive shift in the terms and categories that dominate the discussion of KPMGs technical audit methodology. KPMG1997 highlights a methodology that was centrally concerned with making audit valuable as a business tool creating and adding further value to traditional audit. KPMG2005 demonstrates the (current) focus on audit procedures, evidence, triangulation, assessment and auditor-management relationships the central discursive construction of which is the creation and validation not of value in an economic sense, but of quality in a verication sense. Quality in KPMG2005 resides in an audit that is well documented, considers multiple sources of evidence and the parties that generate different kinds of evidence, and attempts to triangulate audit evidence through risk assessments, controls testing and substantive tests of transactions and balances. The shifts in textual emphasis from discussing audit as a new and non-traditional value creating practice for clients towards a more evidence-based practice in the name of audit quality, is consistent with the changes noted in the organisational eld of audit. KPMG1997 demonstrates the linkages between audit texts and normative sources of authority in the audit eld: business and management knowledge emphasising the role of adding value to the business and the importance of strategic analysis to management control. KPMG1997 both reects and enables these practices by rationalising and legitimising a view of audit as a value creating productive practice. KPMGs audit methodology in 2005 reects a different and, in some sense, more traditional conception of the audit practice ideal. By focusing upon audit procedures, testing and the triangulation of evidence, KPMGs new audit methodology matches a new regulatory environment in which state agencies, professional bodies and supra-national regulatory agencies increasingly seek more transparent indications of audit quality in the market for audits. Business risk is downplayed while audit quality is examined, explored and rationalised through appropriate audit evidence. Concluding comments Specic audit discourses gain momentum at particular points in time, reecting and privileging the current aims of the audit profession and dominant conceptions of key problematics in the wider organisational eld of audit. Talk of change, in and of itself, however, needs to be treated carefully: As Power (2000) asserted, in one of the quotations that opened this paper, it is dangerous to equate talk of change with change at the level of audit practice. We agree with this in the sense that what people
KPMG1997 Auditor Value Quality 478 36 38 KPMG2005 874 8 65

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Table V. Keyword differences in two KPMG audit methodology monographs: value and quality Table VI. Keyword differences in two KPMG audit methodology monographs: quality concordances

KPMG1997 Audit quality Service, product or support quality 0 14

KPMG2005 30 4

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do and what they say they do are not the same. Audit practices and methodologies are, however, constructed partly through discourse (Philips et al., 2004). This paper demonstrates the value of studying how the pursuit of practice change is conveyed, presented, reected in and, potentially, enabled through discursive, textual constructions. By comparing discourses of audit methodologies pre- and post-Enron, it has situated the changing categories and concepts of audit methodologies in their wider, organisational eld and highlighted signicant dimensions of, or pressure points for, change in audit practices. In studying how audit is shaped within networks of relationships in the audit eld and how these shift across time, our analysis of the content, concordances and narratives contained in the 1997 and 2005 KPMG methodological monographs is particularly pertinent. It demonstrates how wider shifts in the audit eld are reected in discursive (re)constructions of audit at the level of the audit rm and shows how audit discourse has switched from one of business value to one of audit quality. As such, the paper provides strong evidence that methodological discussions and developments in audit during the last decade have not always focused centrally on audit quality, as has been claimed elsewhere (e.g., see Peecher et al., 2007). To recall just one nding of our textual analysis, in KPMG1997, the word quality is never used in the context of audit quality, while the latter term appears 30 times in KPMG2005. Our study has also illustrated how conceptualisations of risk are now clearly appended to the term audit risk, as opposed to the business or strategic risks which were central to the mid-1990s methodological leanings of most of the big audit rms. A concern with adding value has been replaced by a discursive emphasis on an evidence-led audit process, with the core rationale centred on achieving audit quality. The emphasis on choices of testing, evaluation of sources, triangulation of evidence, and completion of documentation are all symptomatic of a wider institutional shift from the potentialities of value creation in audit to the afrmation of compliance, process and documentation and the production of audits that can themselves be auditable by todays reinforced inspection and regulatory regimes. The re-invention of audit pursued through BRA may well have offered a useful source of internal legitimacy to the audit services for several of the Big Four rms (see Robson et al., 2007). However, a developing body of evidence suggested that BRA methodologies have struggled in practice to displace reliance on prior audit approaches or have proved less popular in particular geographical regions, notably in Europe (see Curtis and Turley, 2007; Tofer and Reingold, 2003). Additionally, Jeppesens (2005) analysis of the internal organisational structures of the larger accounting rms has argued that BRA methodologies are not particularly compatible with audit approaches claiming to be rooted in the core conceptual space of business strategy (Power, 2000, p. 2). Jeppesen (2005, p. 27) went on to conclude that the profession and its regulators may ultimately decide that:BRA is not the future for auditing and return to an audit approach that relies more on testing transactions, an Audit Classic to paraphrase the recent marketing fad of reintroducing old products.Revised international auditing standards have chosen a form of wording that also accommodates more traditional audit-risk methodologies (see IAASB, 2003a, b, c, d, e; Robson et al., 2007; Curtis and Turley, 2005). Nevertheless, the unsettled or competing form of the discursive arena is well illustrated by regulatory reports from the PCAOB (2005, 2007) which have been critical of the lack of application by some audit rms of a risk-based approach in assessing company internal controls.

It remains open what impact such efforts and initiatives are having on the operational conduct of day-to-day auditing practice. There is a continuing need for more light to be cast on the everyday practices not just of auditors but also of those regulating the production of auditing services. Our ideal for this paper is that it may stimulate new lines of inquiry into the conceptualisation and recognised fundamental dimensions of audit practice. We hope that it will promote investigations and enhanced understanding of the contemporary audit arena not just in terms of the practical utilisation of audit methodologies and associated techniques, but also in relation to the discourses that serve to carry them and help to promote (or hinder) changes in practice. The discursive analysis provided in this paper has shown the particular value of combining neo-institutional assessments of the organisational eld of audit with the study of key auditing texts enabling a clear delineation of shifting patterns of methodological development and demonstrating the signicance of the relationship between discourse and practice. It is evident that talk of business risk and the value added audit are no longer the terms through which changes in the audit eld are likely to be enabled, even if audit practitioners and theoreticians retain a residing belief in the strength of related methodological approaches and associated economic or business justications. Audit talk and texts are now dominated by a discourse of audit quality and to be a serious actor in the audit eld one has to draw upon the audit quality discourse to promote or resist specic agendas, whether they be proposed audit practices, new regulations, changes in market or rm structures, or educational and training initiatives.
Notes 1. Of these 70 interviews, 15 date from 2001-2002 and the immediate aftermath of a group of scandals perhaps best considered collectively under the phrase Enron (but not conned simply to that one company). The remaining 55 interviews have been conducted from September 2005 to date. 2. The textual analysis software package we used to examine keyword counts and concordances was TextSTAT-2. The two texts that we examine closely (see Bell et al., 1997, 2005), each have a word count of around 28,000 words (KPMG1997 27411; KPMG2005 29033) and, hence, the individual word counts serve adequately as numerical bases for comparisons across the two texts. 3. An approach similar to that used by Gephart (1993). 4. The work here was facilitated by the use of textual analysis software, Nud *Ist. As well as counting words and concordances, this software allowed us to conduct a relational analysis to interrogate clustering (thematic groupings) of words and concepts across the two texts. Nud *Ist also allows the generation of concept maps that provide a visualisation of the centrality (relative frequency) of concepts and the interrelationships between key concepts in a text. 5. Interviewees are coded to protect anonymity, where AP refers to rank within the organisation (i.e. Audit Partner), the rst number denotes the reference to the individuals rm and the second refers to the individual. Thus AP1: 3 refers to an audit partner in rm 1 who was the third person we interviewed in this rm. 6. The foundations for introducing sampling (Carpenter and Dirsmith, 1993) as an audit procedure do not seem very different to that of business risk auditing. The narrative offered in the case of sampling was that: as businesses grew in sise so did the number of transactions they conducted. Auditors quickly realised that they could not audit, except in

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7. 8. 9.

848

10.

11. 12. 13.

14.

15.

16.

the most supercial manner, every transaction. The audit would simply be expensive. Furthermore, there was no need to look at all transactions if the company itself was engaged in a process of self-checking through its own internal control systems (Power, 1992, p. 71). This former audit partner now worked in corporate recovery. Formerly known as the Professional Oversight Board for Accountancy (POBA). In focusing on internal audit quality reviews, the AIU called for more rigour in grading systems, so that audits with signicant deciencies were more readily highlighted and recommended the introduction of a mechanism for identifying audits of genuinely high quality (as against adopting a relatively low threshold above which audits would score the highest quality grade) (para. 4.5). The AIUs most recent inspection report (see AIU, 2007, p. 6) notes an improved quality of documentation on reviewed les but, signicantly, emphasises that there has been no clear improvement in the sufciency of documentation supporting key audit judgments. This emphasised good leadership in the delivery and maintenance of quality audits, requiring audit rms to appoint a senior partner to set the rms quality control policy and procedures and to monitor compliance. For a practical guide covering implementation issues for accounting rms implementing ISQC 1, see ICAEW (2006). AD refers to the position of audit director which is this rm was at a level between senior manager and partner. The AICPA, together with eight of the largest US accounting rms, recently set up the Center for Audit Quality to serve investors, public company auditors and the markets. . .(and).. to foster condence in the audit process..(and)..make public company audits even more reliable and reliable for investors (see http://www.thecaq.org/about/index. htm). Following this consultation process, the FRC established a market participants group to advise it on possible ways by which market participants could mitigate risks arising from the nature of the market for auditing services. The interim report of the group (see FRC, 2007) emphasised that any action taken to improve the degree of choice in the audit market must be subject to the overriding need to protect audit quality. It also emphasised that the FRC should continue in its efforts to promote understanding of audit quality and enhanced transparency regarding the capabilities of individual audit rms (FRC, 2007, p. 7). See www.asic.gov.au/asic/asic.nsf/byheadline/Meeting of the International Forum of Independent Audit Regulators, Tokyo, 23 March 2007?open Document). Our choice of KPMGs methodology is not intended to highlight or judge this rms role in particular in audit changes. Rather to their credit, KPMG seem to the most open of the Big Four to discussion of their audit methodologies and hence the key issue in our choice is one of access.

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Suddaby, R., Cooper, D.J. and Greenwood, R. (2007), Trans-national regulation of professional services: governance dynamics of eld level organizational change, Accounting, Organizations and Society, Vol. 32 Nos 4-5, pp. 333-62. Swidler, A. (1986), Culture in action: symbols and strategies, American Sociological Review, Vol. 51, April, pp. 273-86. Tofer, B.L. and Reingold, J. (2003), Final Accounting: Pride, Ambition, Greed and the Fall of Arthur Andersen, Broadway Books, Random House, New York, NY. Ventresca, M. and Mohr, J. (2002), Archival methods in organization studies, in Baum, J.A.C. (Ed.), Companion to Organizations, Blackwells, Oxford. Winograd, B., Gerson, J. and Berlin, B. (2000), Audit practices at PricewaterhouseCoopers, Auditing: A Journal of Practice & Theory, Vol. 19 No. 2, pp. 175-82. Zeff, S.A. (2003a), How the US accounting profession got where it is today: part I, Accounting Horizons, Vol. 17 No. 3, pp. 189-205. Zeff, S.A. (2003b), How the US accounting profession got where it is today: part II, Accounting, Horizons, Vol. 17 No. 4, pp. 267-86. Further reading Czarniaswka, B. (1998), A Narrative Approach to Organization Studies, Sage, Thousand Oaks, CA. Feldman, M., Skoldberg, K., Brown, R. and Horner, D. (2004), Making sense of stories: a rhetorical approach to narrative analysis, Journal of Public Administration Research and Theory, Vol. 14 No. 2, pp. 147-71. Franzosi, R. (1998), Narrative analysis or why (and how) sociologists should be interested in narrative, Annual Review of Sociology, Vol. 24 No. 1, pp. 517-54. Grant, D. and Hardy, C. (2004), Introduction: struggles with organizational discourse, Organization Studies, Vol. 25 No. 1, pp. 5-13. Iedema, R. and Wodak, R. (1999), Introduction: organizational discourses and practices, Discourse and Society, Vol. 10 No. 1, pp. 5-19. Knechel, R. (2004), The business risk audit: origins, obstacles and opportunities, Accounting, Organizations and Society, Vol. 32 Nos 4-5, pp. 383-408. Power, M. (1996), Making things auditable, Accounting, Organizations and Society, Vol. 21 Nos 2/3, pp. 289-315. Corresponding author Rihab Khalifa can be contacted at: rihab.khalifa@wbs.ac.uk

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Social and environmental reporting and hegemonic discourse

Crawford Spence
School of Management, University of St Andrews, St Andrews, UK
Abstract
Purpose The purpose of this paper is to explore the construction/reproduction of capitalist discourse through social and environmental reporting (SER) and, from this, to consider the implications that this may have for the function that SER serves. Design/methodology/approach The paper employs the discourse theory of Laclau and Mouffe to frame SER as a hegemonic practice. Laclau and Mouffes discourse theory is also used as a lens by which to interpret the ndings of an empirical study exploring managerial perceptions of SER motivations and organisational-socio-environmental interactions. Findings The paper nds that both SER and corporate social responsibility (CSR) are driven by numerous motivations, although these motivations essentially form part of a business case. In turn, the necessity of this business case appears to shape and constrain the ideologies that underpin and are communicated through SER. Research limitations/implications The debate within the SER literature around which set of motivations best explains the existence of SER is challenged here by the notion that the vast majority of these motivations may be understood as falling into some sort of business case. Moreover, this business case is one that constrains the perceived function of practices such as SER and CSR. One limitation of the study relates to the importance of SER in wider processes of ideology construction and dissemination. SER may be peripheral in this regard. Practical implications A practical implication of this paper is the recognition of the structural and ideological impediments to fuller accountability that are faced by corporate managers. Originality/value The paper explores SER combining both critical theory and qualitative eldwork. It is one of very few papers to interpret SER explicitly through the lens of discourse theory. Keywords Social environment, Audit reports, Language, Myths Paper type Research paper

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Received December 2005 Revised November 2006, March 2007 Accepted April 2007

Ideologies are historical facts which must be combated and their nature as instruments of domination revealed . . . in order to make the governed intellectually independent of the governing (Gramsci, in Sassoon, 1988, p. 196).

Introduction Social and environmental reporting (SER), although having a long history (Hogner, 1982; Maltby, 2004), has become particularly more entrenched as an organisational
The author would like to thank Jan Bebbington, David Carter, John Ferguson, Rob Gray, Ian Thomson and John McKernan and participants at the 2005 CSEAR Conference, St Andrews for comments on earlier drafts of this paper. The comments of two anonymous referees also improved the paper signicantly. The nancial assistance of the ACCA is warmly acknowledged.
Accounting, Auditing & Accountability Journal Vol. 20 No. 6, 2007 pp. 855-882 q Emerald Group Publishing Limited 0951-3574 DOI 10.1108/09513570710830272

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practice in the last 20 years or so. Several thousand companies, including many of the worlds largest, now report social and environmental information. UNEP/SustainAbility (2004, p. 8) assert that in the ten years since they rst launched their annual SER survey the number of reporting companies has exploded, the overall quality of reporting has improved considerably and the range of issues addressed has broadened spectacularly. That survey goes on to state that we are in the midst of a transparency revolution (UNEP/SustainAbility, 2004, p. 11). However, many academics and civil society organisations are critical of the extent to which SER renders organisations transparent, instead suggesting that SER is driven more by concerns with legitimacy, stakeholder management and masking conict than by accountability (see, for example, Bebbington, 1997, 2001; Birkin et al., 2005; Deegan et al., 2002; Gray et al., 1987, 1995, 1996; Lehman, 1999, 2001; Milne and Patten, 2002; ODwyer, 2002, 2003; Owen et al., 2000, 2001; Thomson and Bebbington, 2005; Tinker and Neimark, 1987; Tinker et al., 1991; Unerman and Bennett, 2004). As Gray (2002, p. 689) notes, the principal argument for Corporate Social and Environmental Reporting (SER hereafter) must lie in its emancipatory and radical possibilities. This potential is conceived here in terms of SERs ability to expose and problematise the conicts and antagonisms inherent in advanced capitalism (see, for example, Arnold and Hammond, 1994; Bebbington, 1997; Gallhofer and Haslam, 1997a, b; Thomson and Bebbington, 2005; Tinker and Neimark, 1987; Tinker et al., 1991). Given current predictions surrounding the ecological crisis (see, for example, Meadows et al., 2003; Porritt, 2005; WWF, 2004), the active obfuscation of these conicts and antagonisms presents itself as a serious obstacle to any attempt to move humanity back within ecological limits. Nevertheless, some authors suggest that even though SER has been captured by business, it retains some democratic potential, opening up a space for some sort of organisational change to take place and creating possibilities for social movements to increase pressure upon corporations (Gray, 2006; Levy, 2005; Livesey, 2002; Livesey and Kearins, 2002). This paper attempts to explore the motivations that underlie SER and, in doing so, explore the ideological implications of these motivations. More specically, the paper seeks to link the motivations underlying SER with the images and representations of organisational socio-environmental performance that are projected by SER. This is attempted by virtue of an empirical study that consisted of interviews with representatives of 25 large capitalist enterprises in the UK who produce a stand-alone SER. These interviews explored the perceived motivations for producing SER and managerial perceptions of conict between economic and socio-environmental criteria. This empirical work was then interpreted using discourse theory, which, as a result of the empirical and theoretical analysis underlying the paper, characterises SER here as an organisational practice that discursively aligns business interests with extra-business interests. As such, and in line with prior literature (see above), it is posited from the outset of the paper that SER attempts to reduce antagonism toward business from various social segments, obtaining consent for its actions and thereby (re)producing its ideological hegemony. The results of the paper represent an attempt to elucidate how SER comes to be a hegemonic practice. That is, what are the key discursive and material axes which frame SER within organisations and which shape the way in which individuals think about SER. From these insights into the construction of SER discourse, which may illuminate to some extent what drives the

process, it then may be possible to infer something about the structural constraints on corporate accountability and the ability of individuals within organisations to escape the ideological hegemony that supports those very same structures. The paper proceeds as follows. The following section introduces Laclau and Mouffes discourse theory and places it within the context of Gramscian thought. The term Neo-Gramscian is used subsequently throughout the paper to indicate that Laclau and Mouffe represent a development on Gramscis thought rather than a doctrinaire reproduction. This section also interweaves Laclau and Mouffes discourse theory with the SER literature, positing SER as a practice whose function is to disseminate sanitised portrayals regarding business-socio-environmental interactions. This conception of SER provides a context for the remainder of the paper and frames the empirical study[1]. The subsequent section delineates the research methods and methodology employed in the paper. Semi-structured interviews were undertaken with corporate managers and directors, exploring both corporate motivations to report socio-environmental information and managerial perceptions regarding conicts between economic and socio-environmental criteria. This section describes the way in which these interviews were carried out and how the data were analysed, with particular attention being placed on the relationship between theory and data. The section titled CSR discourse describes the results of the empirical study in conjunction with a theoretical interpretation of these results. In short, the results are broken down into two main sub-sections: the motivations underlying SER and corporate social responsibility (CSR); and perceived conicts underlying organisational-socio-environmental interactions. These results are then synthesised in the nal discussion section along with consideration of the implication of these results for the study of SER. SER and language A discourse is, at its simplest, a particular way of talking about and understanding the world (or an aspect of the world) (Phillips and Jrgensen, 2002, p. 1). The eld of discourse analysis is characterised by a number of different schools of thought and methodological tensions (see, for example, Grant et al., 2004; Phillips and Jrgensen, 2002; Torng, 1999). However, underlying all forms of discourse analysis is the belief that our ways of talking do not neutrally reect the world, but play an active part in shaping it. The discourse theory used in this paper is that of Laclau and Mouffe, who are of interest principally because of their positioning within the Gramscian tradition of theorising hegemony. One of Gramscis contributions to Marxist theory lay in emphasising that social relations were reproduced via the cultural realm. In particular, Gramsci highlighted the inuence of civil society institutions such as the church, academe and the media in cultivating ideological consent among the masses for the hegemonic, or dominant group. Hegemony rests not simply on domination or coercion, but on the ability of the hegemonic group to demonstrate moral and intellectual leadership (Levy and Egan, 2003; Gramsci, 1971). Thus, hegemony is much more sophisticated and resilient than authoritarian political systems because it rests on the consent of the masses. This Gramscian notion of hegemony is the departure point for Laclau and Mouffe, who look at the particular role of language in forming consent. The insights of Laclau and Mouffe in this context are of particular interest in making sense of the language

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that permeates SER and in inferring any hegemonic character from SER. Language is viewed by Laclau and Mouffe as constitutive of social reality. That is, discourse actively shapes the world around us by providing conceptual guidance for actions, policy prescriptions, institution building etc. In this sense, Laclau and Mouffe suggest that discursive elements cannot be viewed as separate from non-discursive material elements. Mouck (1995), for example, uses Laclau and Mouffe to argue that the discourse of nancial accounting has become so dominant that its implicit assumptions about property rights, market exchange and the corporation as a legal entity are talked into reality. One could extend this to argue that if nancial accounting reduces all problems to economics, activities that have malign social and environmental consequences begin to appear rational and desirable. In ignoring these social and environmental consequences nancial accounting actively shapes social reality. This is a radically different view from that which presupposes that nancial accounting reects reality in an objective or truthful fashion. The post-structuralist conception of reality that is being put forward in this paper is at odds with any notion of truthful or faithful representation. It is presumed here that reality is overdetermined[2], meaning that there are no two planes: that of underlying essence and that of appearance, because there is no possibility of xing an absolute literal meaning for things (see Laclau and Mouffe, 1985, p. 98). In Laclau and Mouffe, these two planes are conated and it is presumed, for example, that people or social groups have no real essence beyond the precarious identities that they adopt in relation to the establishment of a particular order. Moreover, and this is where we see Laclau and Mouffes departure from structural Marxism, the identities that people adopt are not pre-given or necessarily class-based, but contingently constructed. That is to say that there are a plurality of identities that agents could adopt (e.g. working class, environmentalist, feminist, gay, etc.) but those which are adopted depends on particular historical and social circumstances. From this contingent notion of (over-determined) identity we can quickly move towards the notion of an over-determined reality, implying that there are more interpretations of the world than could possibly be communicated through one totalising conceptualisation. The persistence of competing claims and mutually exclusive political projects indicates an excess of meaning that society[3] is unable to master. Indeed, Laclau and Mouffe point towards the impossibility of the notion of society because of this innitude of meaning: consequently, society as a unitary or intelligible object which grounds its own partial processes is an impossibility (Laclau, 1990, p. 90). There is a continual competition between different discourses striving to dominate and exclude other interpretations of the world. This perpetual antagonism and contestation implies that these discourses can never succeed completely in xing meaning. However, meaning can be relatively xed and is so when certain discourses come to dominate others and become the main guide for action. Therefore, the social is constituted through a war of competing discourses, each of which is a simplication of an over-determined reality. This simplication is both impossible and necessary. It is impossible because the construction of any discourse entails the ctitious presentation of a coherent story; the denial of the over-determined nature of reality; of ltering the excess of meaning that characterises the social. These processes will always nd political opponents that subject such a discourse to contestation and preclude the possibility of that discourse ever xing meaning

absolutely. At the same time, however, such simplication is also necessary in order to produce a coherent and digestible vision of the world that can tractably constitute identity and create attachments. In this sense, simplication is an unavoidable part of human communication: without that ctitious xing of meaning there would be no meaning at all (Laclau, 1996, p. 205) Thus discourses are formed by excluding certain realities and including others. For example, nancial accounting excludes the social and environmental consequences of organisational activity insofar as they cannot be captured in nancial terms, thereby allowing these to continue and even be justied in the name of economic rationality. In the discursive eld of accounting where the discourse of nancial accounting dominates, SER is a marginal discourse and is therefore not the primary guide of organisational actions. Nonetheless, as an established discourse in constant antagonism with nancial accounting, the existence of SER holds open the possibility that organisational life might be engulfed with a different logic and shaped in new ways. This paper is an attempt to explore the rationales that organisational participants articulate for SER. In doing so it is hoped to shed light on the motivations underlying SER and on the potential that SER holds for organisational transformation. Although it is often argued that SER has transformative potential in that it could render organisations transparent and accountable for their social and environmental impacts (Gray et al., 1987, 1996), it has thus far failed to achieve this in a meaningful form. A number of critiques of SER suggest that it is based on partial environmental reporting[4], cherry-picked social information, and a very limited notion of sustainability (see, for example, Adams, 2004; Erusalimsky et al., 2006; Fayers, 1998; Gray and Bebbington, 2000; Gray and Milne, 2002, 2004). Indeed, viewed from a post-structuralist perspective, the notion that SER could ever portray a complete social and environmental reality is itself impossible. Gray and Milne (2004) point towards the impossibility of organisations ever being able to produce a sustainability account[5]. At best, SER could only ever present a partial and simplied view. Notwithstanding this a priori limitation, SER could still problematise and illuminate the contradictions and conicts that permeate organisational activity by showing how and where the pursuit of economic objectives conicts with social welfare and exacerbates the ecological crisis. However, discursive and interpretive analyses indicate that current SER practice achieves the opposite. The notions of sustainable development and CSR are presented by companies as largely congruent with business-as-usual and that, in fact, it makes good business sense to pursue these things. For example, Laine (2005) shows how SERs treat the potentially radical notion of sustainable development as something that is entirely manageable and consistent with current institutional arrangements. In addition to this, Milne et al. (2006) suggest that SERs portray sustainable development as a journey, a metaphor which is deployed in conjunction with descriptions of abstract management systems in order deect attention from companies actually dening what sustainability entails and outlining how companies might have a part to play in its achievement (see also Tregidga and Milne, 2006). Essentially, these arguments suggest that through partial and skewed reporting business attempts to present itself as socially and environmentally responsible and, in some cases, sustainable, thereby projecting the argument that there are no fundamental conicts between business and society/the environment and that our future is safe in their hands (Gray and Bebbington, 2000).

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Given the mounting evidence on the state of the ecological crisis (see, for example, Meadows et al., 2003; WWF, 2004) as well as the profound social dislocations engendered by modern corporations, these representations of organisational socio-environmental interactions are highly contestable. However, they are also actively decontested by organisations, which present their SERs as objective realities (Thomson and Bebbington, 2005) and by permeating disclosures with metaphors of transparency and accountability (Livesey and Kearins, 2002). A number of studies have suggested that SER is employed as part of a change-resistance strategy aimed at curtailing accountability pressures (see, for example, Gray et al., 1995; Larrinaga-Gonzalez et al., 2001). Nevertheless, Larrinaga-Gonzalez et al. (2001) note that it is in such situations that transparency emerges as a key phrase in the discourse of organisational actors. SER motivations These sanitised portrayals of socio-environmental performance are presumed here to have the intent of aligning extra-business interests around the fundamental concerns of business, coercively brought about by pressure from the nancial markets to send risk management signals (see, for example, Deegan and Rankin, 1996; Freedman and Patten, 2004; Gray, 2006; Neu et al., 1998; Patten and Trompeter, 2003; Solomon and Solomon, 2006). Although this hegemonic conception of SER paints a somewhat bleak picture, a number of scholars imply that the motivations that underlie SER are actually more complex. For example, Adams (2002) infers that different organisational processes, somewhat independent of risk management motivations, affect the way in which companies report social and environmental information. Adams (2002, p. 223) suggests that a number of internal contextual factors specic to each organisation may explain the diversity in SER practice. Bansal and Roth (2000) also argue that corporate responses to dealing with environmental issues generally are not homogenous. In addition to competitiveness and legitimacy concerns, Bansal and Roth (2000) suggest that corporate ecological responsiveness can be driven by ethical concerns also. Furthermore, Bansal and Roth (2000) show that rms can arrive at a state of ecological responsiveness from different initial conditions, via a variety of different paths and driven by different congurations of motivations. This conclusion is supported by Buhr (2002), who investigated the initiation of environmental reporting in two Canadian companies. It was found that changing environmental disclosure practices is a long and complicated process, and that it varied across the two rms studied. In one case the strong domination structures of capitalism were used by a proactive institutional investor to inuence the reporting practices. However, in the other case, agency played a bigger role in that someone inside the company was championing the process. The motivations underlying SER may therefore be somewhat more multifarious and complex than sending risk management signals to investors. Neither would it appear that SER construction within organisations is a smooth or entirely successful process. For example, ODwyer (2003) investigated managerial conceptions of CSR in Irish rms. Overall, ODwyer (2003) describes a process of managerial capture whereby social and environmental responsibilities are articulated insofar as these are achievable within conventional business frameworks. However, these Enlightened Self Interest (ODwyer, 2003) conceptions of CSR were met with signicant resistance by the

managers interviewed who expressed personal ethical concerns that diverged from the corporate line. Bebbington and Thomson (1996) similarly describe how managerial conceptions of Sustainable Development were somewhat more radical than the ofcial conceptions projected by their organisations. These two studies do not directly address the potential for agency to bring about transformative potential, although they do suggest that even if instrumental criteria do dominate corporate strategies, how this comes to be the case may be ridden with conict, internal struggles and contradiction[6]. Livesey (2002) suggests that SER serves multiple, contradictory functions. Even though captured and self-serving, SER can change organisations and open them up to new criticism. Livesey (2002) and Livesey and Kearins (2002) both characterise SER as a means of restoring the discursive regularity of business which has been ruptured by radical environmentalism. Livesey (2002) in particular argues that organisations have responded to the environmental agenda by proliferating win-win discourse which, although fundamentally conservative, represents an advance on the conventional business viewpoint and may have greened organisations by accident. Thus, it is implied that SER, in spite of its apparent capture[7], maintains some sort of Trojan horse capacity (see also Gray, 2000). This paper is an attempt to explore whether organisational participants conceive of a broader role for SER than to satisfy the risk management concerns of investors. This paper responds to Liveseys (2002, p. 253) call for more research into the way in which tensions are playing out in SER between narrow denitions of economic progress and wider notions of social and environmental justice. In particular, this paper explores whether these tensions have been sufciently obfuscated by business as to render SER insignicant in some wider struggle for social justice or whether it does indeed retain some Trojan horse capacity in this respect. This was explored through interviews with managers in UK companies. Through a series of interviews, the motivations underlying SER in various organisations were explored. Additionally, conceptions of organisational relationships to society[8] and the environment were discussed in order to probe into the perceptions that are held by the individuals responsible for producing organisational SER. In particular, the combination of these two exploratory themes is to shed light on the limits to agency in the context of SER. ODwyer (2003) and Bebbington and Thomson (1996) both suggest that there is some degree of ideological dissonance between managers and their organisations. However, these two studies do not explore the extent to which this dissonance is successfully tempered by organisations or the extent to which the personal ethical concerns of managers translate into organisational actions. Method and methodology A series of in-depth interviews were undertaken between June and September of 2004 with representatives of 25 large commercial organisations in the UK. The rms interviewed were generally in the FTSE100 and were drawn from various industries. Each rm produced a SER on either an annual or bi-annual basis. A letter and/or follow up phone call was made to the organisations requesting an interview with the individual responsible for preparing the SER. Of the 25 positive responses, ve of these individuals were directors who oversaw the SER process but whose responsibilities extended into areas other than the SER. The remaining 20 were managers below board

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level whose primary responsibility was to produce their organisations SER. The vast majority of individuals (20) therefore worked in environment, CSR or sustainability departments. The remaining ve comprised two individuals below board level (public affairs and business policy) and three directors (purchasing and internal affairs; marketing; and human resources) whose remit partly covered CSR issues and SER. All of the individuals were ultimately accountable to the board of directors who had the responsibility to sign-off the accounts before they were disseminated. The interviews explored a number of themes, although the main focus was on exploring motivations to SER and on exploring managerial perceptions of conict. As regards to motivations, interviewees were asked what were the key motivations underlying their decision to report socio-environmental information in the form of a socio-environmental report. As regards to conicts, interviews were asked two questions: rstly to describe any conicts that they had come across between economic and socio-environmental issues; and secondly, interviewees were presented by the researcher with the notion that business growth and environmental stewardship were in fundamental conict and were asked to respond with their own views and thoughts on this. The interviews themselves were conducted in a semi-structured fashion. An interview protocol was used to structure what may be thought of as guided conversations (Llewellyn, 2001), where the views of the interviewees were sought in relation to the derived themes of theoretical interest. This semi-structured approach has been described as one that empowers respondents, enabling them to speak in their own voices (Llewellyn, 2001, p. 599). Interviewee responses to questions were at times challenged by the researcher during the interview, in an attempt to interrogate the theoretical issues identied by the researcher prior to the interview setting. The questioning was therefore not entirely open-ended, but guided by concerns to understand interviewee perceptions of conicts and organisational motivations. Although the theoretical lens used to illuminate and interrogate the empirical material was explicitly Neo-Gramscian (see below), the wider methodological approach to the research study can be understood as hermeneutic. More specically, the philosophical hermeneutics of Hans-Georg Gadamer as an approach to social science research was followed. Key to Gadamers philosophical hermeneutics is the ontological framework of the hermeneutic circle. Tracing its origins to the protestant-catholic conict of reformation times, the hermeneutic circle is based on the Lutheran idea that passages can only be understood with reference to the whole text, and vice versa. Little excerpts give the reader an idea of the whole. The reader iterates between excerpts to the whole repeatedly, until understanding is reached. The part and the whole exist in an interpenetrative duality rather than a dualism:
A person who is trying to understand a text is always projecting. He projects a meaning for the text as a whole as soon as some initial meaning emerges in the text. Again, the initial meaning emerges only because he is reading the text with particular expectation in regard to a certain meaning. Working out this fore-projection, which is constantly revised in terms of what emerges as he penetrates into the meaning, is understanding what is there (Gadamer, 1989, pp. 266-267).

Gadamer likens this process of textual interpretation to the way we live our lives and come to understand the world generally. Essentially, Gadamers work can be seen as an attempt to rehabilitate the notion of prejudice. The Enlightenment sought to rid man

of prejudice in order to generate a presuppositionless reason (Gadamer, 1989). However, Gadamer argues that prejudice is a necessary condition of understanding. Without some sort of fore-understanding, we could not begin to comprehend the world. The challenge for the social scientist is to be reective about our fore-understanding and open to its re-articulation. The way in which this reection can be carried out in social science research is to be explicit about the role of prior theorising. Hermeneutics provides the methodological framework within which to understand the way in which theory has been mobilised during the study. Thus, hermeneutics is not a specic theoretical lens through which to provide rich descriptions of empirical phenomena but is the ontological canvass on which different theoretical interpretations may be painted. Within the hermeneutic circle, theorising can be employed from various schools of philosophical thought. Gadamer (1989) argues that hermeneutic consciousness is a precondition for even functionalist work. In the case of the present research study, the lens mobilised in order to provide a rich description of the empirical phenomena was Neo-Gramscian discourse theory. As the interrogation of fore-understanding is an iterative process of projection and reection, the theorisation of the project also took an iterative form. Initially, the exploration of perceptions of conicts was informed loosely by the Neo-Gramscian work of Levy and Egan (2003) that emphasised the importance of discursive frameworks that actively constitute perceptions of mutual interests (Levy and Egan, 2003, p. 653) in maintaining business hegemony. However, it should be emphasised that Levy and Egans (2003) work served as a heuristic with which to approach the study rather than a fully edged theoretical position. The more intricate theoretical position of Laclau and Mouffe, also Neo-Gramscian theorists who go into more detail on the use of language than Levy and Egan (2003), was developed later on in the study as the data analysis process progressed. The relationship between the different methodological elements of the study is represented in Figure 1. The analysis of the interview data was informed initially by Levy and Egans (2003) notion of mutual interests. Matrices were formed in order to systematically record the streams that were observed in the data (see ODwyer, 2004). Both the motivations and the conict rationalisations articulated by the interviewees (see below) were systematically categorised and formed the basis of a largely descriptive narrative. It

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Figure 1. The hermeneutic approach in action

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was only after this initial process of analysis and the construction of the descriptive narrative that the data was interrogated using Laclau and Mouffes discourse theory. Laclau and Mouffe were employed in order to provide more depth to the analysis than Levy and Egans (2003) broad heuristic. The analysis of the data with Laclau and Mouffes discourse theory was carried out iteratively, with the descriptive narrative that emerged from the data being interrogated with the theory and vice versa. This was a process that entailed rigorous self-critique and one which the researcher has built-up in reexive fashion. Undoubtedly the theory has illuminated certain elements of the narrative and left others submerged, as any theoretical framework does. The ensuing account attempts to give a sense of the views of the interviewees themselves and, in doing so, lay out as transparently as possible the way in which the data cohere with the theory. In other words, the discourse of the interviewees itself (albeit a condensed and organised version) is laid out below. CSR discourse Before discussing in-depth the principal themes of motivations and conicts, an incidental nding regarding SER and its relationship to CSR will be discussed. Although asked explicitly about their SER motivations, the vast majority of interviewees did not discuss their SER in isolation. Rather, SER was conated with CSR: reporting with the actual activities undertaken by organisations; discursive with non-discursive elements. More specically, SER itself appeared to be understood within the context of CSR, as one manifestation of responsible behaviour:
I think for us it [the report] reinforces existing conversations. So this shouldnt be the only piece of information that people get. It should be an additional piece of information in the course of a conversation, an ongoing set of conversations, something that the person you are talking with can use to complete their picture of what [company X] looks like (CSR Manager, Oil and Gas).

Henceforth, this paper talks about an overall discourse of CSR, of which SER is a part. This reects the interviewees language which indicated that SER was a subsection of a wider conceptual framework of CSR. Rather than conceiving of SER as primarily a form of communication and CSR as a set of organisational actions, the way in which these two elements interpenetrate each other suggests that they are part of one overall discourse that, in Laclau and Mouffes terms, makes no distinction between discursive and non-discursive material elements. This discourse is both material, in that it shapes actions, and ideological in that it constructs images (whether through formal SERs, other media or simply by perceptions of organisational activities) of organisations as green, responsible, sustainable, etc. (see also Lehman (2001) for a similar argument regarding the material and ideological nature of environmental management). Motivations The overwhelming majority of motivations for SER and CSR that were outlined by interviewees referred to some sort of commercial imperative, articulated around the notion of the business case[9]. Indeed, socio-environmental[10] motivations did not feature at all in the articulations of 14 of the interviewees. The majority of interviewees articulated motivations for their organisations SER and CSR purely in terms of strategic considerations. For example, four interviewees talked about the need to be transparent as a driver for their reporting:

What we just want to do is represent a real and accurate picture of where we are. That is what we are trying to achieve (Environmental Manager, Extractive).

Where socio-environmental concerns were articulated, these were generally inter-linked with business case arguments. In a limited number of cases it was difcult to discern from the arguments of interviewees whether socio-environmental drivers or desires to be transparent were entirely free from commercial concerns:
I think a lot of that is basically risk management for us. But it is sometimes difcult to disentangle that from what we would regard maybe as moral values and being responsible. I think very often it is quite difcult to place marked boundaries on this (Sustainability Manager, Extractive).

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However, other interviewees who evoked socio-environmental drivers did so whilst recognising the boundaries in a somewhat clearer fashion. For example, it was only in one instance that the socio-environmental case was held up explicitly as the primary driver for what a company does as regards to its reporting and responsibility. In that case, the interviewee repeated persistently that CSR was the right thing to do. However, in that instance, it would appear as though the right thing to do was not entirely detached from the business case:
One of our worst nightmares would be to nd out that somewhere in our supply chain would be to nd out that child labour is used. Because that is a reputational matter and [company X] is a company that just wont truck any of that. It is against the ethic of the company (Purchasing and Internal Affairs Director, Publishing, emphasis added).

Even where socio-environmental concerns were evoked at all as partial drivers underlying organisational SER and CSR (and this was in 11 of the interviews), these were generally permeated by, or at the periphery of, commercial concerns. Laclau and Mouffe outline how discourse is not simply the imposition of one ideology onto subordinate groups. Moral and intellectual leadership is created by synthesising various interests around a fundamental articulating principle (Mouffe, 1979, p. 192) or a nodal point (Laclau and Mouffe, 1985). That is, business discourse does not ignore or refute the demands and criticisms made of it by marginal social movements. Rather, these demands are brought into business discourse insofar as they can be made to cohere with businesss fundamental aims of prot and growth. What has been inferred from the empirical data here is that the discourse of CSR is constructed around the nodal point of the business case, whereby notions of responsibility are married to commercial concerns, where ethics are conated with reputational issues (as above). How this nodal point manifests itself in various ways will be outlined below in detail. However, more important for the purposes of this paper than the multifarious nature of the business case is the dominance per se of a business case. That is, although the motivations for SER and CSR and specic stakeholder pressures appear to vary across rms, these all seem to be understood within some more general conception of a business case. For example, in response to probing on whether any CSR or SER initiative that was undertaken by the organisation had to yield some sort of business benet, interviewees matter-of-factly responded in the afrmative, almost as if one could take for granted that there would have to be an underlying business motivation. Indeed, in one extreme example an interviewee even

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talked about how their attempts to eradicate bribery (the eradication being a social initiative) were hampered by commercial concerns:
It is not something that we have talked too much about, but getting bribes out of places like China is extremely difcult, but that is what happens. We have to make it absolutely clear that it is not something as a global company that we could accept. But on the other hand . . . you have to be mindful of the competitive implications of doing that (Marketing Director, Pharmaceuticals).

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Even where managers were trying to push through socio-environmental initiatives to satisfy their own ethical concerns, there was a business case lter for those:
That [recycling] was done for environmental reasons but to sell it [to the board], nancial benet to the company (Environment Manager, Water and Waste).

Even philanthropic activities had to be aligned with an organisations core business activities, implying that some sort of synergistic relationship was being sought in those areas. For example, one manager described how their previous support for a cancer charity was being discontinued because it did not deliver as tangible and visible a reputational benet as support of another charity would. Thus, the need to nd a business case appeared to dominate the concerns of interviewees. This was obvious also as they discussed the various components of the business case for SER as it manifested itself in their organisations. Each component was underpinned by commercial concerns. These will now be briey outlined in turn. The business case for CSR appears to be multifarious within each rm interviewed, as shown in the list of manifestations as follows: . risk and reputation management; . stakeholder management; . peer pressure; . business efciency; and . internal champions. Each interviewee outlined a variety of motivations for their CSR and SER. For example, SER and CSR can bring about tangible nancial benets, quantiable through cost-benet analysis. Improving energy efciency or fuel eet consumption can bring about signicant cost savings at the same time as showing per unit improvements in emissions and resource consumption. However, such business efciency arguments surrounding direct nancial benets were limited in number and depth, being articulated only by a minority of interviewees and in scant detail. Rather, the business benets of CSR and SER were articulated largely in terms of less concrete and quantiable terms. The business case, it was argued, lay more in soft issues such as managing relationships and responding to social pressures. These are things that were not necessarily amenable to cost-benet analysis, but which were presumed to yield an advantage in the long-term. One of the more signicant drivers would appear to be as a signal of risk or ` reputation management vis-a-vis the nancial markets. In particular, the demands of the ethical investment community were at the forefront of demanding more disclosures from organisations as regards their management of social and environmental issues (or risks):

Now that we are listed, that has had a big impact, not just the report. . .but also in terms of the amount of questionnaires that we get in, interest from investors. So now we are doing the Dow Jones Sustainability index, FTSE4Good, Insight investment, there is a biodiversity index and we have been asked to do a health and safety one. So there are now more demands on us than there were before we were listed (Sustainability Manager, Utilities).

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This pressure to provide information to the (largely ethical) investment community was often recognised with reluctance:
What we wanted to do was produce one [a report] every two years, with more stories, more time to collect the information. But such are the pressures of risk management that we need to be producing it more and more often (Environment Manager, Extractive).

Going beyond the specic, and seemingly very powerful, concerns of the investment community, interviewees talked at length about managing relationships with wider stakeholder groups and stakeholders generally. The pressures from stakeholder groups clearly had an inuence on organisational approaches to both CSR and SER. Reporting in particular was cited by a number of interviewees as a reaction to stakeholder demands:
Stakeholders expect it, employees expect it, the communities expect it, our peers expect it, the government expects it. There is an awful lot of people out there who are watching. Because we are such a big company out there. Because we supply a lot of people with their life assurance, they want to know that we are a good company. And that is why we do a lot of what we do out there (CSR Manager, Financial Services).

In addition to outlining reactions to specic stakeholder pressures, interviewees also talked about how being pro-active with stakeholder management could reap benets:
Because when you have good relations with the community when you put in a new mast, then when you want to put in another mast, you wont have problems (CSR Manager, Mobile Phones).

As with the discussion of other drivers, stakeholder management issues were wrapped up with both SER and CSR. It was not always easy to separate a reporting response to stakeholders from an actual change in organisational activities response that was prompted by stakeholders. In this respect, we can see the intertwining of both discursive and non-discursive material elements, the two fusing together inextricably to create a more holistic organisational response:
If climate change is the biggest problem we face and if regulation is going to gradually increase, and not just regulation but I rmly believe that there will be other constraints on us, ultimately from consumers and our customers, the people who buy our materials, to use the natural environment more responsibly and to try and reduce emissions, then I think it is as well that we take, where we can, a leadership role on that and present the company as a responsible environmental player. So it is responding to future and existing pressures (Sustainability Manager, Extractive).

Isomorphic pressures to mimic competitors and peers also appeared to play an important role for around nine of the companies interviewed. The following quote exemplies how reporting itself was perceived to be a trivial activity by the interviewee but because of peer pressure, it actually became important to produce one:

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I think that it is a shame because it costs tens of thousands of pounds to produce it whereas what we could do is take everybody who is interested in our business in this way, take them all into a room and talk to them about the contents of this report, for about 10% of the cost on an annual basis. Still get the same information across but then every time a list of the top 250 companies comes out that produce reports you would be at the wrong end of it. So you have almost got this very basic peer pressure that says: you need to have one of these. So every year we spend about 40,000-50,000. But we produce about 15-20,000 copies of it (Environment Manager, Extractive).

This interviewee then went on to describe the malign reputational effects that his company would suffer if they were the only company in the industry to not produce a report, mentioning high prole lists of shame that would put them in the spotlight. The importance of articulating initiatives and activities within a business case discourse was also expressed by a small number of interviewees who recognised the rhetorical nature of that discourse when employed by CSR champions. In this respect, one interviewee pointed out how the internal power dynamics within her organisation were more important in establishing what constituted a business case than any tangible representation or proof of what business benets would accrue as a result of a particular course of action:
The board came back to me and said . . . right, we want to report on our Human Rights situation after August. That was the rst time the board have actually fed back to me and said look into this issue and feed into us again . . .They can do that. If the board say that, it is a business case already, if I come up with it I have to prove that it is a business case. That is a bit of a discrepancy at the moment, but that is the way business is, I just get on with it (CSR Manager, Financial Services).

Thus, the personal agendas of senior management themselves may be legitimised through business case rationalisations. There would also appear to be some discretion for CSR managers to push through their own initiatives:
There has to be added value in doing what we are doing. We couldnt just go and do something for the environment or the community just because we wanted to. There has to be an added benet to that [for the business]. Now you can be as clever as you want in dening what that added value is. We have ve core values that are useful in this area. One is the environment but also customers, people, competitiveness, reputation. So if you are doing a project, you can make a business case for it in terms of how it adds value against those ve things (Sustainability Manager, Utilities).

These zones of discretion suggest that the business case is something that can be manipulated to achieve various ends. However, rather than undermining the importance of the business case to CSR and SER, the potentially rhetorical nature of that business case may actually re-enforce its importance, demanding business case arguments and logic for initiatives that may have originally had more altruistic motivations. With the need to articulate initiatives around the nodal point of the business case, perhaps it is becoming more difcult for managers to pursue socio-environmental initiatives for their own sake, although there were some who appeared to be working around these constraints to some extent:
Waste minimisation, no one has really driven it as a business case. I am saying that it should be done as an environmental case with a business spin off (Environment Manager, Utilities).

Whether these zones of discretion that either senior management or management lower down the corporate hierarchy have are peripheral as regards to the overall socio-environmental impact of the company was not further explored in the interviews. However, in the context of the vast majority of business case motivations that were articulated with some clarity, there was little to suggest that there was huge scope for individuals to covertly reduce environmental impacts or satisfy wider stakeholder concerns. Conicts Whilst it may be hardly surprising that business will do things for only business reasons, what is of interest from a discourse theory perspective is how this seemingly blunt self-interest was fused with notions of responsibility and transparency. Or, to phrase it the other way around, how a discourse that expresses notions of community, responsibility and transparency is underpinned by a somewhat more partial set of motivations. These representations of relative harmony between business and socio-environmental concerns were offered following questioning around whether interviewees had come across any conicts between commercial and socio-environmental criteria. Many interviewees initially denied that there were any such conicts:
I am certainly not aware of any (CSR Manager, Energy). I dont think there are conicts (Purchasing and Internal Affairs Director, Publishing). I havent encountered any so far (CSR Manager, Energy).

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On reection, it appears that these interviewees were responding within the context of the previous discussion on motivations and the business cases that they articulated. Thus, the interviewees saw no conict between commercial and socio-environmental criteria because everything that they did on the CSR front tted within a business case. They were operating within a win-win paradigm of thought (see, for example, Levy, 2005; Levy and Egan, 2003; Prasad and Elmes, 2005; Welford, 1997). Any socio-environmental issue outside of a business case did not immediately enter the discourse of the interviewees. All socio-environmental concerns had to be harnessed to a business case in some fashion to the extent that it seemed as though the starting point for CSR is not any notion of social responsibility as such, but that anything that organisations do in the CSR eld must bolster their own interests in some way. It therefore generally required further probing from the researcher to encourage interviewees to consider potential conicts. The researcher thus presented the interviewees with the business growth/environmental impact conundrum. The interviewees were asked whether they saw business growth imperatives to be in fundamental conict with environmental impact. A few respondents initially responded to this conundrum by making it very clear that economic considerations were pre-eminent:
For us, to continue to be a successful company, and achieve the sort of returns that we are looking for, if that means burning oil and gas, which inevitably impacts on the environment, then we will do that, so long as we remain within the limits imposed upon us in terms of those emissions (CSR Manager, Energy).

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The implication here is that climate change is an important issue to address because it presents real and practical constraints on companies. However, even then the extent to which business would address the issue of climate change appears to be tempered by shorter-term commercial concerns. Some interviewees said more specically that it was fundamentally important that they made a prot, without which they could not begin to be sustainable in non-nancial terms. However, all of the interviewees went on to qualify this with further explanations as to how the pre-eminence of nancial interests was not necessarily a bad thing. That is, they justied the pursuit of business goals in terms of the social and environmental benets that emerged from that pursuit. For example, many of the interviewees questioned the growth/impact conundrum in terms of eco-efciency. Two interviewees actually remarked that growth helped in this regard because of the economies of scale that it brought:
If you are making spoons, if you are making ten thousand spoons, you can make them much more efciently than if you are making three spoons. So you will be looking at less resources to do it (CSR Manager, Specialty Chemicals).

Efciency on its own is a necessary but insufcient condition for sustainability (Bebbington, 2001). Efciency gains can potentially be undone by business growth, thus leaving the business with an overall greater environmental footprint in spite of per unit eco-efciency improvements. Other interviewees who stressed the positives of improved efciency invoked slightly more sophisticated arguments. They described how efciency meant an overall improvement for society or the environment, rather than being outdone by growth, because they were competing on increasing their share of a market that was perceived as static:
And it is OK for me to say that we should be sustainable [nancially] because if we are doing stuff that is better than other people in the arena, then it is better that we should be here, than we should not be here. At the moment we are seen to be amongst the organisations that are doing this stuff in terms of construction design, the way that we are training and developing people, looking at community activities and things like that. If we werent doing it, the average would step down wouldnt it? (Engineering and Environment Director, Construction). This business is quite different to a more consumer oriented industry. So, for example, you can sell lots more televisions by doing lots more marketing or by changing the product in a way that you are creating a new market . . . Now with raw materials it is basically like government build stuff and people build stuff, and they build at a certain rate. You cant, there is very little that you can do to make people build quicker . . . Basically what everyone is trying to do is compete in terms of differentiating service and value added: so producing existing products that do the same job. So you have just got product substitution going on all the time and competition around differentiation to take a bigger slice of the cake. So the point of the argument is that if the cake has an environmental impact of x, if we take a bigger slice of the cake, then the overall impact of the industry drops (Environment Manager, Extractive).

A few interviewees questioned the validity of the growth/impact conundrum on the grounds of technological development. They argued that if growth was coupled with the introduction of more environmentally friendly technology, then their business could grow without increasing its overall impact:
Well it is all to do with, well if you become more protable it may be because of new technology. It is probably more likely to be. Any big changes in the future and if anything

changes in building, it is going to be big. The way we are building today hasnt changed for thousands of years. We are still using brick and blocks. There is a lot of scurrying around going on in the construction industry . . . We could get more busy and have a lower footprint because of technology. It could be pre-fabrication on site, use of different materials . . . So that traditional adage that if you become more protable, then you are going to have a greater impact . . . unless new technology comes into the equation. Without that new technology, it would be correct (Environment Manager, Property Developer).

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A few interviewees redened the conundrum between commercial and socio-environmental considerations in terms of the conicts that exist between the social (or the socio-economic) and the environmental, almost as if the economic had no part to play:
The most difcult thing is to get the balance between the conict of social and environmental isnt it? If we are building, the architect wants to put nice granite cladding on the building; do we buy the granite cladding from Cornwall? There are a small number of people employed, we have got to ship the stuff up from Cornwall and it is probably quite expensive. Or do we ship the stuff up from China? Import it and incur all those transport things, things like that. In China you might be employing 1,500 people in a quarry whereas in Cornwall you are employing ten people. It is very difcult to make these sorts of judgements, very difcult (Engineering and Environment Director, Construction).

A number of interviewees argued that although their organisation had an environmental impact there were social positives at the same time:
If we close down, there will be no[environmental] impact. But what about the jobs? You know, you have to take it to the logical extreme (Communications Manager, Property).

The variety of social benets outlined by interviewees included, not just employing people, but the products or services that the company offered as well. This interviewee referred to the social and economic benets that were made possible by the activities of her organisation, and her sector generally:
Ultimately the UK is an island. People use the plane because it is cheap and you can get there much quicker than by train or car so I think the social and economic benets are greater for air travel . . . Environmental costs are obviously really important and we are doing all we can within the industry . . . but ultimately we cant take away peoples demand to air travel . . . peoples right to travel regardless of the environmental cost (Public Affairs Manager, Aviation, emphasis added).

Although conicts were actively rationalised and tempered by interviewees, they were not completely refuted. Rather, they were articulated in a way that suggested that the organisation had found some way of balancing competing claims in a rational and measured fashion, thereby pleasing most parties. This is explored below through the metaphor of achieving a balance. Achieving a balance Many interviewees talked about conicts in the context of sustainability, in particular the three pillars of sustainability: economic, environmental and social. Although not denying the existence of conicts, interviewees did suggest that their organisation found a balance between the economic, the social and the environmental:

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As long as they are all being considered, it is trying to get a balance between them. I work on the Sigma project. I sit on the committee to make that into a standard. That is looking at how do you have evidence that sustainability: environment, social and economic, are being integrated into decision-making processes? I think that provides a framework for the decisions that the management team make. I think it allows for decisions to be made on a more balanced perspective (Sustainability Manager, Utilities).

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Conicts between different interest groups were not completely denied, but they were presented, in the main, as manageable:
So you have got these three pillars: the business needs to satisfy investors and other stakeholders; you got environmental needs; and you have got customer needs. OK we charge customers what is an agreed gure. What more can we put back into that community to benet it? We do run charitable funds to actually support activities like that. We try to put back into the sector what we can. These are the tensions that you get all the time (Environment Manager, Utilities).

This interviewee said that because of these tensions, sustainability was actually unachievable. He preferred to think of sustainability as a constant journey rather than a steady state. Milne et al. (2006) suggest that the sustainability as a journey metaphor is used to deect attention away from any attempt to envisage what a sustainable corporation might look like and onto abstract notions of business processes, thus mystifying the social and environmental impacts of organisations. Another interviewee was quite clear about the environmental impacts that his organisation had, but still argued that there was a sustainability case for them continuing their activities on the grounds that the alternatives were problematic and that rapid change could be destructive:
If we switched off and went into wind power, well look at the resistance to wind planning for wind farms in the UK, and increasingly for offshore developments as well. We are undertaking to make enormous investments in renewables in the next six months but it is still very much the case, and it is a case that can be made within the SD [Sustainable Development] agenda, to continue operating conventional power stations. The reality is that, yes they have an impact but if we stopped using them then that impacts on us economically as a company. Again, looking at it from an SD point of view (CSR Manager, Energy).

Nevertheless, even where interviewees did recognise that it is impossible to satisfy all parties, they did imply that they had achieved some sort of workable balance:
What we try to do is provide a balanced approach to reporting that answers as many of our stakeholder demands as possible. Where a stakeholder wants more information we are happy to provide it. But I think that with an organisation such as ours where we have got so many stakeholders it is quite difcult to say that you are pleasing everybody 100 per cent (Public Affairs Manager, Aviation).

Another interviewee described how nancial considerations were pre-eminent, but that they still manage to come out positive overall in terms of social and environmental responsibility. Rather than a win-win, he described a mixture of various wins and loses:
We cant invest like Shell or BP in hydrogen cells, renewable energy. We have looked at all of these things but it is not something that is commercially viable at the moment. So are we contributing to sustainability? I take that are we balancing what we take out? No it is

impossible. I dont think there is any small or medium company who can balance what they take out. We create jobs for people and contribute to various oil provinces, West Africa for example (CSR Manager, Oil and Gas).

He then went on to describe how this mix of wins and loses could be turned into an overall win:
I think it is impossible to have a commercial activity, certainly in our sector, without an environmental impact. It is impossible. You will impact on the environment, full stop. Whether you manage that, and leave a net positive impact or at least put in place the type of plans that make your impact not just acceptable, but preferably minimum or zero, if that is possible at all, but always strive to have a positive impact. Then I think you have a licence to operate (CSR Manager, Oil and Gas).

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These discursive constructions of corporations balancing the three pillars of sustainability can be understood as acts of distortion. In a post-structuralist theory of discourse where meaning is presumed to be over-determined, the notions of truth and falsity lose all traction. However, Laclau (1996) suggests that we can retain the notion of distortion. Because of over determination, meaning has to be manipulated, concealed and deformed in order to form a relatively coherent discourse. Thus, distortion is concerned with closure, with the projection of a non-illusory nature, with myth. At the same time, because meaning can never be completely xed, this act of distortion has to be visible. There are thus two processes underway during an act of distortion. First, the contingent nature of distortion must be concealed; secondly, this act of concealment itself must be made visible. Although these two processes appear to be somewhat contradictory, this is only the case when we are talking about purer notions of truth or of the establishment of a xed meaning. In the discourse of the interviewees above, we are not talking about stark dichotomies. The interviewees rationalise the conicts between business and society but never come to the conclusion that there is complete conict nor complete coherence between these notions. Rather, through the metaphor of achieving a balance interviewees rationalise the conicts in such a way as to present a picture of relative coherence between business and society. Conicts do exist, but overall the role of corporations in modern society is a positive sum game. Indeed, the notions of business and society are not completely fused together or dissolved into one notion where we see no difference between the two. Rather, interviewees maintain the analytical distinction between these two notions and therefore also maintain their inherent particularity and antagonism towards each other. The relative dissolution of this antagonism is achieved by joining these two elements together in a chain of equivalence[11], where they are presented as mutually re-enforcing in the broad sense. Because two analytically distinct notions (in this case societal welfare and business) cannot, by virtue of their having different signiers, be completely equivalent to each other, the act of distortion, which is the relative equivalence between the two notions, always remains visible (see in particular Laclau, 1996). What is being explored here is how business myths are constructed and reproduced. Around the nodal point of the business case (which given current structures and institutions is the only feasible nodal point for business) extra-business interests or demands from social movements will be joined together with business interests in a (precarious and contestable) chain of equivalence. The objective of which is to show

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that there is no stark or worrisome conict between business and social welfare or environmental sustainability. Indeed, through such chains of equivalence the very notion of there being interests that are out with the scope of business is called into question, or at least not recognised within the discourse. This would require an articulation that was not grounded within the business case, something that was notably absent from the discourse of the interviewees who appeared to interpret all socio-environmental acts and initiatives through a business case lens. The hegemonic nature of this discourse will now be discussed below. Discussion and conclusions The discourse of the interviewees is one that may be thought of as providing the platform by which SER is constructed. Therefore, in exploring perceptions, we can explore the messages that are sent through SER. By way of synthesising the above arguments, the discourse of the interviewees performs an act of distortion, a simplication of an over-determined reality that results in a relatively sanitised picture of business-society relations. Moreover, it is through this distortion that such reports present themselves as objective realities (Thomson and Bebbington, 2005). It is this denial of the contingent and partial nature of reporting that ascribes to SER an ideological and hegemonic character. According to Laclau (1996), ideology becomes so when a particular discourse shows itself as more than itself, when it projects a non-illusory image. Ideology is the denial of the illusory nature of things. When a discourse denies its own partiality and incompleteness and claims to represent the transparency or fullness of the community (Laclau, 1996, p. 206) then we can call it ideological. Such closures that take place under the illusion of transparency/objectivity/completeness are referred to by Laclau (1996) as myths. The very function of myth is to hegemonise. Even though SER is a marginal discourse and perhaps limited in how much it actually inuences subordinate groups, it is hegemonic because of the form that it takes. Through the metaphor of balance, SER attempts to present the interests of business as largely congruent with social and environmental wellbeing. Thus, it tries to synthesise the interests of various social groups around the fundamental aims of business. What is not immediately obvious from the discourse, although this paper has tried to illuminate it, is that this image that is projected is constructed primarily around a partisan notion of business self interest, expressed in the form of the business case. Thus, whilst there has been much discussion in the SER literature around what the motivations are that underpin SER, what is being suggested here is that perhaps the vast majority of these different motivations can be understood within this context of the business case. Although there is some evidence to suggest that this business case may be used rhetorically, especially by individuals within organisations who have more discretion in their decision making, the ability to deviate from a business case dominated strategy is likely to be limited. Whereas individual managers may have some discretion to exercise their ethical concerns at the local level, this discretion is limited by macro power structures that place business case parameters around CSR. Although the notion that business will do things because they make business sense is itself hardly surprising, this has not been expressed concretely in the SER literature in this way, instead having perhaps been concerned with exploring and describing different manifestations of the business case.

Furthermore, the discussion around conicts makes transparent the way in which this discourse is constructed and how it may have changed over time. The centrality of the business case implies that, in spite of new rhetoric concerning responsibility, accountability and transparency, the same fundamental system of power relations has existed since the birth of the corporation. However, interviewees are expressing a new language to describe this old hegemony. Bebbington and Thomson (1996) show that business conceptions of sustainable development in the 1990s contained a greater acceptance of conicts between business and society than was found in this study. The sustainable development agenda initially took business unexpectedly and its conceptual frameworks were shown to be inadequate for even articulating what sustainable development means. The work of Milne et al. (2006) and Tregidga and Milne (2006) in particular shows how business still struggles to develop plausible denitions of sustainable development. However, even in the absence of coherent and plausible denitions, business manages to talk condently about sustainable development and its ability to deal with it. What has changed in the last decade or so could be hypothesised to be a rearguard action from business. Through organisations such as the World Business Council for Sustainable Development (WBCSD) business has worked hard at convincing policy makers and governments around the world that business can deal with sustainable development (Gray and Bebbington, 2000). An obvious fall-out from this process is the development of an ever more expounded business case for sustainable development, CSR and SER. The importance of the development of this business case should not be underestimated. Without this nodal point around which to articulate business-society relations, business appears incapable of dealing with social and environmental issues and thus arguments for regulation or more profound means of redesigning the current economic system would present themselves. By subverting the initially radical notion of sustainable development to t the business case; by actually conating it with the less ambitious notion of CSR (see Milne et al., 2006); and by projecting these notions discursively through SER and other means, ideologies with other nodal points become increasingly marginalised. Indeed, the cognitive dissonance between interviewees and their organisations that was reported by Bebbington and Thomson (1996) and ODwyer (2003) was not in evidence in the discourse of the interviewees above. This may be because the business context has changed. Because of the seemingly pervasive nature of the business case, the transformative potential of SER would appear to be severely limited. CSR discourse opens up business to conversations that were not possible some 20 years ago. As such, the frames of reference have changed. No longer is it a question of whether business should be responsible, it is a question of how responsible business is. Recognising this, some authors (Gray, 2002; Levy, 2005; Livesey, 2002; Livesey and Kearins, 2002) suggest that SER therefore has some sort of Trojan horse capacity, implying that this concession offered by business is sowing the seed of its own ultimate downfall. This may be true, although it may be equally true that with the development of the business case as the nodal point for CSR discourse the Trojans are effectively kept inside the horse. A new discursive space has been opened up by CSR and SER, but it is lled with primarily those articulations that are grounded within the business case. If it is to be believed that fundamental conicts exist between corporate economic activity and socio-environmental welfare, then this nodal point sets a profound limit on how

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responsible organisations can actually be. Indeed, the CSR initiatives that organisations now undertake may hardly be considered concessions or successes at all if they are conducive to bolstering the ideological consent of business to exploit labour and destroy the environment. One limitation of the study, and perhaps of the SER literature generally, is ascribing an importance to SER in wider processes of ideology construction. The way in which SER is received by society, if at all, is an area that has not been subject to a great deal of research. The people interviewed in this study are not the primary intellectuals of capital[12]. They are individuals whose structural position demands that they construct or reproduce such an ideology. Whether they are even expressing their own true beliefs is not something that the researcher could ascertain[13]. Thus, it would be somewhat heroic to presume that SER was the means by which organisations made sense of their socio-environmental dimensions, and that from this discursive practice business activities and communications were shaped accordingly. Equally, it would be too easy to dismiss SER as an irrelevant activity that is undertaken primarily so that the report preparers themselves can feel good about what they are doing (Morsing, 2006). There may be some value in the Gramscian conception of how ideas develop and are disseminated throughout society. Ideas are not pumped out by some central ministry of truth. Rather, they are constructed and reproduced at various levels throughout society, and by a variety of social groups. In this sense, SER may be both the reproduction of an existing ideology that is articulated by organisations such as the WBCSD and the ICC and the construction of ideology that in some way, however marginally, feeds back into wider discourses. Either way, the message that is communicated by this discourse is one which attempts to deect attention away from the ecological crisis and some of the more profound social dislocations that permeate our societies. In this sense, it should be resisted and debunked wherever it manifests itself. In this sense, there might be value in future research identifying other communication outlets where such corporate ideological disclosures manifest themselves in order that a richer picture of corporate hegemonic discourse be built up.
Notes 1. As is noted in the method section below, this theoretical framework was not present at the beginning of the study in this form. However, the necessarily revisionist form that the paper adopts does not suggest this. 2. The concept overdetermination was made popular by Althusser although it has roots in psychoanalysis and linguistics. Laclau and Mouffe try to move beyond Althussers more essentialist use of the term, showing how identity is more uid and open than Althusser suggested. 3. Laclau and Mouffe prefer the term the social to society. Although the two will often be used interchangeably throughout this paper, it is Laclau and Mouffes conception of the social that is used as a guide. 4. In particular, Gray (2000) and Gray and Milne (2002) suggest that organisations should attempt to calculate overall environmental impact in the form of an Ecological Footprint. The Ecological Footprint is a comprehensive calculation of the environmental impact of an organisation, region or economy rendered in terms of productive land area. Full cost accounting is another methodology that may be used to make such an assessment of environmental impact, albeit rendered in nancial terms.

5. Because sustainability is a systems level concept, Gray and Milne (2004) suggest that organisations who produce a sustainability account would have to include all of the social and environmental impacts of any organisation that they have ever worked with. This, Gray and Milne suggest, would be impossible. 6. It should be noted that the comparison between ODwyer (2003) and Bebbington and Thomson (1996) does not entirely compare like with like. ODwyer (2003) interviewed nance directors and CEOs whilst Bebbington and Thomson (1996) interviewed CSR managers and directors. These two studies therefore looked at two different sets of managers as well as different geographical contexts. However, this might actually make the similarity in the ndings of these two studies all the more interesting, implying that the ideological effects/struggles around the notions of CSR and sustainable development within organisations are more widely spread than simply one managerial sub-group or geographical context. 7. For more detail of the capture thesis, see Cooper (1992; 2002); Cooper et al. (2005); Lehman (1999, 2001); and Tinker et al. (1991). 8. The word society is used throughout the paper as it refers to the type of language used during interviews. However, Laclau and Mouffes conception of the social underpins any theoretical interpretation or allusion to societal implications. 9. This phrase the business case emerged strongly from the discourse of interviewees in a pilot study which consisted of 11 interviews with corporate managers. It was therefore brought forward into the main study in order to explore its pervasiveness with a bigger sample interviewees being asked whether or not their SER/CSR activities needed to be grounded within a business case. Although the actual terminology in the main study was used by the researcher initially, it is not believed that the subsequent business case articulations of the interviewees have been imposed by the researcher. Non-business case motivations were actively sought by the researcher, although these were generally not articulated by the interviewees. 10. Socio-environmental driver is used here to refer to motivations that seem not to be primarily commercial or business case oriented. That is, where the main driver is articulated in terms of social or environmental welfare considerations and seemingly unrelated to strategic or commercial concerns. 11. Chain of equivalence refers to the way in which hegemony is formed discursively. Rather than absorbing other movements or signs within a dominant movement or sign, the logic of equivalence entails joining movements together, side by side. This serves to retain the particularity of each social movement or sign whilst diffusing their antagonism by making them equivalent to each other to some extent. This uniting of distinct groups is how hegemony is constructed. 12. Meaning that the interviewees are not at the forefront of articulating and formulating capitalist ideology, although they do play some role in its transmission. 13. However, their was no indication given by the interviewees that their own views diverged from that of the corporation at all. This can be contrasted with Thomson and Bebbington (2005) and ODwyer (2003). References Adams, C. (2002), Internal organisational factors inuencing corporate, social and ethical reporting: beyond current theorising, Auditing, Accounting & Accountability Journal, Vol. 15 No. 2, pp. 223-50. Adams, C.A. (2004), The ethical, social and environmental reporting-performance gap, Accounting, Auditing & Accountability Journal, Vol. 17 No. 5, pp. 731-57.

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Prasad, P. and Elmes, M. (2005), In the name of the practical: unearthing the hegemony of pragmatics in the discourse of environmental management, Journal of Management Studies, Vol. 42 No. 4, pp. 845-67. Sassoon, A.S. (1988), Gramscis Politics, Hutchison, London. Solomon, J. and Solomon, A. (2006), Private social, environmental and ethical disclosure, Accounting, Auditing & Accountability Journal, Vol. 19 No. 4, pp. 564-91. Thomson, I. and Bebbington, J. (2005), Social and environmental reporting in the UK: a pedagogic evaluation, Critical Perspectives on Accounting, Vol. 16 No. 5, pp. 507-33. Tinker, T. and Neimark, M. (1987), The role of annual reports in gender and class contradictions at General Motors: 1917-1976, Accounting, Organizations and Society, Vol. 12 No. 1, pp. 71-88. Tinker, T., Lehman, C. and Neimark, M. (1991), Falling down the hole in the middle of the road: political quietism in corporate social reporting, Accounting, Auditing & Accountability Journal, Vol. 4 No. 2, pp. 28-54. Torng, J. (1999), New Theories of Discourse: Laclau, Mouffe and Zizek, Blackwell, Oxford. Tregidga, H.M. and Milne, M.J. (2006), From sustainable management to sustainable development: a longitudinal analysis of a leading New Zealand environmental reporter, Business Strategy and the Environment, Vol. 15 No. 4, pp. 219-41. UNEP/SustainAbility (2004), Risk and opportunity: best practice in non-nancial reporting, The Global Reporters 2004 Survey of Corporate Sustainability Reporting, UNEP, London. Unerman, J. and Bennett, M. (2004), Increased stakeholder dialogue and the internet: towards greater corporate accountability or reinforcing capitalist hegemony?, Accounting, Organizations and Society, Vol. 29 No. 7, pp. 685-707. Welford, R. (1997), Hijacking Environmentalism: Corporate Responses to Sustainable Development, Earthscan, London. WWF (2004), Living Planet Report, WWF, London.

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Further reading Bakan, J. (2004), The Corporation: The Pathological Pursuit of Prot and Power, Constable, London. Deegan, C. (2002), The legitimising effect of social and environmental disclosures: a theoretical foundation, Auditing, Accounting & Accountability Journal, Vol. 15 No. 3, pp. 282-311. Deegan, C. (2004), Environmental disclosure and share prices a discussion about efforts to study this relationship, Accounting Forum, Vol. 28 No. 1, pp. 87-97. Gadamer, H.-G. (1976), The universality of the hermeneutical problem, in Ormiston, G.L. and Schrift, A.D. (Eds), The Hermeneutic Tradition from Ast to Ricoeur, State University of New York Press, New York, NY. Gadamer, H.-G. (1998), Praise of Theory: Speeches an Essays, Yale University Press, New Haven, CT and London. Hughes, S.B., Anderson, A. and Golden, S. (2001), Corporate environmental disclosures: are they useful in determining environmental performance?, Journal of Accounting and Public Policy, Vol. 20 No. 3, pp. 217-40. Hughes, S.B., Sander, J.F. and Reier, J.C. (2000), Do environmental disclosures in US annual reports differ by environmental performance?, Advances in Environmental Accounting and Management, Vol. 1, pp. 141-61.

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Larrinaga-Gonzalez, C. and Bebbington, J. (2001), Accounting change or institutional appropriation? A case study of the implementation of environmental accounting, Critical Perspectives on Accounting, Vol. 12 No. 3, pp. 269-92. Laughlin, R. (1995), Methodological themes: empirical research in accounting: alternative approaches and a case for middle-range thinking, Accounting, Auditing & Accountability Journal, Vol. 8 No. 1, pp. 63-87. Levy, D.L. (1997), Environmental management as political sustainability, Organization and Environment, Vol. 10 No. 2, pp. 126-47. Milne, M.J., Tregidga, H. and Walton, S. (2005), Playing with magic lanterns: the New Zealand business council for sustainable development and corporate triple bottom line reporting, working paper, Department of Accountancy and Business Law, University of Otago, Dunedin. ODwyer, B. (2005), The construction of a social account: a case study in an overseas aid agency, Accounting, Organizations and Society, Vol. 30 No. 3, pp. 279-96. ODwyer, B., Unerman, J. and Bradley, J. (2005), Perceptions on the emergence and future development of corporate social disclosure in Ireland: engaging the voices of non-governmental organisations, Accounting, Auditing & Accountability Journal, Vol. 18 No. 1, pp. 14-43. Patten, D.M. (1992), Intra-industry environmental disclosures in response to the Alaskan oil spill: a note on legitimacy theory, Accounting, Organizations and Society, Vol. 17 No. 5, pp. 471-5. Roberts, R.W. (1992), Determinants of corporate social responsibility disclosure: an application of stakeholder theory, Accounting, Organizations and Society, Vol. 17 No. 6, pp. 595-612. Rockness, J. and Williams, P.F. (1988), A descriptive study of socially responsible mutual funds, Accounting, Organizations and Society, Vol. 13 No. 4, pp. 397-411. Ullmann, A.A. (1985), Data in search of a theory: a critical examination of the relationships among social performance, social disclosure and economic performance of US rms, Academy of Management Review, Vol. 10 No. 3, pp. 540-57. Corresponding author Crawford Spence can be contacted at: cs384@st-andrews.ac.uk

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Enrolling discourse consumers to affect material intellectual capital practice

Suresh Cuganesan
Macquarie Graduate School of Management, Macquarie University, North Ryde, Australia

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Received 7 December 2006 Revised 24 May 2007 Accepted 10 July 2007

Christina Boedker
University of New South Wales, Sydney, Australia, and

James Guthrie
The University of Sydney, Sydney, Australia
Abstract
Purpose The purpose of this paper is to provide an empirical account of the discourse-practice nexus relating to an accounting for intellectual capital (IC) at an Australian public sector organisation (LandsNSW). Design/methodology/approach The paper is a case study. Data collection techniques comprised semi-structured interviews, in situ observation of meetings and internal presentations, and reviews of documents such as internal memos, strategic plans, IC statements and business performance and annual reports. Findings Although ambiguity in discourse may reduce its ability to prescribe particular practices, the paper argues that such qualities allow discourse producers greater exibility in attempting to shape action. At LandsNSW, IC discourse was given shape by those mobilising it. Specically, constructing IC as a potential solution to practical concerns made IC more attractive to discourse consumers. By interesting and enrolling users in this manner, IC discourse was taken up where it had previously been discarded. Research limitations/implications External factors that comprised IC discourse outside the organisation have only been given limited attention. It is also acknowledged that discourse consumers extend beyond practice manager level to also include employees in lower level operational positions and that these have not been explored in this study. Purpose The paper provides useful information on enrolling discourse consumers to affect material intellectual capital practice. Keywords Language, Intellectual capital, Consumers, Australia Paper type Research paper

I think theres been mixed success. I think it is early days. I think intellectual capital itself has a difculty in articulating what it is, and who it is, and that is part of the difculty. . . If you cannot articulate within a framework of an organisation, public or private, in clear, distinct, and objective terms, you cannot expect it to be readily adopted (LandsNSW Director-General, 27 September 2005). The authors would like to thank the NSW Department of Lands for participating in the project; the Faculty of Economics and Business at The University of Sydney for their support; the Australian Government Consultative Committee on Knowledge Capital and the Society for Knowledge Economics for their ongoing support; and John Dumay, Melissa Jamcotchian and Fiona Crawford for their research and editorial assistance.
Accounting, Auditing & Accountability Journal Vol. 20 No. 6, 2007 pp. 883-911 q Emerald Group Publishing Limited 0951-3574 DOI 10.1108/09513570710830281

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1. Introduction The study of organisational discourse, in which organisations are conceived as material practices of text and talk (Boje et al., 2004, p. 571), has reframed accepted ideas about organisations and their management (Hardy, 2001; Boje et al., 2004). More recently, studies concerned with explicating the relations between discourse and material management practices have emerged (see for example, Hardy et al., 2000; Phillips et al., 2004). In the accounting literature, there are also several studies examining discourse and material practice, as witnessed by the papers in this AAAJ special issue. For example, Kahlifael et al. (2007) study discourse and audit methodological change, while Spence (2007) explores the motivations that underline the construction of social and environmental reporting and provides insights into hegemonic discourse. Two observations from these management and accounting studies are worthy of note. First, they are few in number and thus the nexus between discourse and material practice remains a somewhat unexplored area. Second, many studies privilege the codication of discourse in their narratives of how discourse inuences practice. This paper addresses these issues by providing an empirical account of the discourse-practice nexus, and by presenting a narrative of how an ambiguous discourse affected material practices through being exible enough to be connected to the interests and concerns of discourse consumers. Specically, the paper highlights alternative possibilities for the discourse-practice relationship and illustrates the effects of ambiguity in discourse and its possibilities in shaping material practice. The context for this paper is the still formative discourse of intellectual capital (IC) and its importance for organisations competing in the information age and knowledge-based economies (Guthrie et al., 2001; Bukh et al., 2005). Two main factors suggest that such an investigation within the accounting discipline is timely. First, the impacts of IC discourse on material practices (including accounting practice) appear signicant. In addition to prescriptions that organisations invest in resources such as employee competencies, external relationships and innovation-inducing processes (Edvinsson and Malone, 1997; Sveiby, 1997), it is argued that traditional modes of accounting are incapable of inscribing the many intangible resources that are important for competition, resulting in a need for alternative forms of accounting for IC (Mouritsen et al. 2001a). Second, IC discourse is still formative and has yet to achieve a coherent and codied structure, especially in its ability to prescribe practice (Mouritsen et al., 2001b; Guthrie et al., 2001). As such, its effects are still unclear and have been identied as requiring empirical examination (Petty and Guthrie, 2000; Mouritsen, 2006). Hence, in investigating ambiguity and exibility in discourse, this paper examines the effects of IC discourse for material practices as reected in how an organisation accounts for IC. The research site is an Australian public sector organisation. At the time of the study, the organisation studied (labelled LandsNSW) faced the effects of new public management (NPM) reforms characterised by: tight budget environments, changes in structure and mode of operation due to the introduction of government business enterprise status, and more stringent accrual accounting performance reporting requirements and accountabilities demanded by funding agencies and the wider community (Guthrie et al., 1998; English et al., 2005). At LandsNSW, this resulted in the production of IC discourse within the organisation as its executive management sought

to make sense of how it could create value for its stakeholders and the Australian public and then communicate it and the resources that would enable this to happen. Over time, novel ways of accounting for IC manifested, most tangibly in the form of IC statements that comprised part of LandsNSWs annual reports and in systems of key performance indicators that operated within the organisation. The paper is structured as follows. Section 2 provides an overview of the relevant prior work on discourse and practice. This is followed by section three, which presents a brief overview and characterisation of IC discourse. Section 4 details the research method, while section 5 presents the research ndings. The paper concludes with a discussion and synthesis of ndings and conclusions in section 6. 2. Discourse ambiguity and the interests of discourse consumers The study of discourse within organisations is signicant and growing (Oswick et al., 2000). Within this literature, applications of the term discourse have been many and varied (Keenoy et al., 1997; Alvesson and Karreman, 2000). This paper follows Hardy (2001, p. 26) in conceiving of discourse as practices of talking and writing, which bring objects into being through the production, dissemination and consumption of texts[1]. Situated in particular socio-economic and political contexts, discourse both constitutes and is constituted by social phenomena (Chia, 2000). Thus, a social constructivist ontology is adopted (Hardy, 2001). Of particular relevance to this paper is how discourse located in particular points in space and time shapes material practices. While a number of organisational discourse studies have implied a link between discourse and practice, or built on this notion in their arguments, only a few studies have explicated the discourse-practice relation in organisations in detail (refer to Hardy et al., 2000; Phillips et al., 2004). These studies are reviewed in some depth below. For Hardy et al. (2000), discourse is a resource for individuals to enact strategy and achieve particular outcomes. In this way, discourse is conceptualised as a strategic resource utilised by interested participants within organisations to shape and constitute organisational realities. The authors model of discourse as a strategic resource comprises three iterative and overlapping circuits. The rst circuit involves the activity of the individual(s) engaging in discourse to further their interests. This involves the making of new discursive statements to shape organisational meaning, the use of symbols, narrative and metaphor in this process, and the production of texts that link material referents to concepts about how reality and the relations within are organised. The second involves the circuit of performativity, where other organisational actors are engaged. Here, the concepts produced through circuits of activity must be related and made meaningful to others. In this, the authors argue that the subject position of the actor engaging in the discursive activity and the texts produced through this activity are important, the former needing to be inuential and the latter receptive to those being acted on. The third involves a circuit of connectivity where circuits of activity and performativity intersect. This is where the texts and the concepts produced are attached to material referents and begin to shape organisational reality more broadly, in turn inuencing future discursive activity. Phillips et al. (2004) focus on the process of institutionalisation, arguing that institutions are constituted by discourse and the texts that are comprised within the

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discourse. Thus, actions produce texts that contribute to and are embedded in discourse, and it is this discourse which gives rise to institutions that constrain and enable future actions. In presenting their discursive model of institutionalisation, Phillips et al. (2004) develop a series of propositions about the factors that inuence this process. For the authors, actions that require organisational sense making and/or affect perceptions of organisational legitimacy are more likely to result in texts that are widely disseminated and consumed. These texts are then more likely to become embedded in discourse if the text producer holds a position of power or formal authority, if the text is generally meaningful and recognisable and if the text links to other texts and discourses. Finally, the characteristics of the discourse (its structure and coherence, and whether supporting or competing discourses exist) inuence whether it produces institutions that then shape future actions. While the above works are important contributions in an area that has received insufcient theoretical and empirical attention, they are decient in two signicant ways. First, they privilege codication and structure in discourse to the detriment of ambiguity and exibility. Hardy et al. (2000, p. 1236) promote the need for discourse producers to reduce both potential ambiguities and the need for sense-making in explaining how the relevant concepts must have meaning for the individuals to whom they are directed. Similarly, Phillips et al. (2004, p. 644) propose that texts that take the form of genres, which are recognisable, interpretable, and usable in other organisations are more likely to become embedded in discourse than texts that do not. The authors argue further that the extent to which discourse is able to produce institutions that prescribe practice is contingent on its coherence and unied structure, the presence of supporting discourse and the absence of competing ones. Overall, the implication is that ambiguity impinges upon the sense-making ability of consumers of discursive texts (Markham, 1996). Although ambiguity in discourse may well reduce its ability to prescribe particular practices, we argue that such qualities allow discourse producers greater exibility in attempting to shape action. A central challenge for discourse producers is to ensure that others (discourse consumers) act in accordance with the practices that are prescribed and proscribed. This requires that discourse consumers be interested in ` taking up the discourse. Here, the advantage of loosely specied vis-a-vis highly codied discourse is that the producer has greater degrees of freedom in translating it in different ways to interest, persuade and mobilise consumers to enact it. Less coherence and structure, and the non-articulation of concepts may thus be preferred in order for consumers to buy-in. These alternative possibilities are not discussed or dealt with in the discourse theory frameworks presented earlier and comprise one part of the theoretical focus for the paper[2]. This leads to the second deciency in the extant work. Both models fail to consider the interests of discourse consumers in taking up particular texts and discourse and changing their practices in accordance with these. As discussed, Hardy et al. (2000) focus on the activities of the discourse producer, their subject position and characteristics of the discourse. The closest the authors come to acknowledging the agency of discourse consumers occurs when they observe that the symbols, narratives, metaphors employed by the enunciator must . . . resonate with other actors, otherwise they will fail to convey the meaning intended by the enunciator (Hardy et al., 2000, p. 1236). In similar fashion, Phillips et al. (2004) focus on the actions and

characteristics of the discourse producer and the properties of the resultant texts and discourse. Thus, consumers of texts are rendered passive and their agency removed. They become enveloped in the discursive activity provided certain conditions are met, with their practices changing accordingly. However, as noted previously, discourse consumers have their own interests that may or may not be in accordance with those of the discourse producer. Here, we depart from prior studies that attribute the ability of discourse to inuence practice primarily to the characteristics of the discourse producer as well as those of the discourse itself (Hardy et al., 2000; Phillips et al., 2004). While acknowledging the relevance of these factors for the discourse-practice relation, we seek to explain how discourse consumers become sufciently interested and mobilised to perform discourses through the enactment of material practices. Our primary focus is thus not on the discourse per se, but the changing subject positions of those that consume the discourse in terms of their acceptance and adoption, and the subsequent effects of this for organisational practice. To this end, we borrow from actor-network theory (ANT) and in particular Callons (1986) work on the sociology of translation to understand how potential discourse consumers become persuaded and interested in the statements of discourse producers. We use ANT to conceptualise the mobilisation and advancement of discourse as a fragile process of network building, enrolling allies and overcoming dissenters. ANT applies a relational approach in prescribing an examination of how the elements in a network, be these human or non-human, material or immaterial, are translated as part of their connections with other entities in the network (Latour, 1987; 1999, 2005; Law, 1999). Thus, discourse, its fate and its effects are to be understood as a collective, and its elements operating in a mutually constitutive fashion (Law and Callon, 1988; Law, 1992). Callons (1986) moments of translation, in particular, enable the conception of how potential discourse consumers become interested in the activity of discourse producers and enact practice accordingly. Applied to this context, Callons (1986) moments of translation are as follows[3]: . Problematisation and interessement. Actors are identied, their interests established and potential concerns problematised. The discourse producer(s) works to convince discourse consumers that the roles it has dened for them are acceptable. Text and discourse producers seek to make the discourse indispensable to discourse consumers by dening the nature and problems of the latter and presenting the take-up of the discourse produced as an obligatory passage point to the achievement of their interests. This may include processes by which the discourse producer(s) seek to lock discourse consumers into the roles that are proposed for them. . Enrolment. The discourse consumers accept the interests / roles that have been dened for them by the discourse producer(s). If enrolment is successful, then discourse consumers become enrolled in the network through which the discourse producer(s) is seeking to act and through which the texts and discourse ow. The discourse producer(s) has ensured that discourse consumers interests are displaced and translated into those that have been proposed for them. The discourse consumers via process of enrolment become co-producers of discourse. . Mobilisation and continuous stabilisation of allies. The methods used by discourse producer(s) to ensure that key elements of the network continue to act

Enrolling discourse consumers 887

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in the roles intended for them and the alliances constructed by the discourse producer(s) with these other network elements continue to hold. Processes of enrolment, stabilisation and translation never end. Rather they are ongoing processes whereby interests and alliances continuously need to be held in place and stabilised. Through this perspective, considering these moments of translation, the production of IC discourse at LandsNSW and how consumers are enrolled, is examined. 3. The discourse of IC IC discourse can be characterised as still in its formative stages and uid. Several international guidelines, international and national policy bodies, green papers and other reports (see, EC, 2006; SKE, 2005; METI, 2004, 2005; Mouritsen et al., 2003; NIF, 2003; MERITUM, 2002; OECD, 1999) have argued that in the past few decades the world has rapidly moved from an industrial economy (in which economic growth was considered to be mostly determined by the use of tangible resources) towards a knowledge-based economy. In academic circles, several studies have highlighted organisational practices in regards to managing and measuring knowledge-based resources (e.g., Boedker et al., 2005; Cuganesan, 2005; Mouritsen and Flagstad, 2005; Leitner and Warden, 2004; Habersam and Piber, 2003), while a number of recent books on the topic have been released (e.g., Unerman et al., 2007; Roos et al., 2005; Andriessen, 2004; Bonfour, 2003). Importantly for accounting, IC discourse has long been associated with criticism of nancial accounting as a means of measuring and communicating the value of organisations (Sveiby, 1997). Claims have been made that alternative accountings for IC (such as IC statements) are required which provide a more meaningful narrative and ` visual account of organisational performance vis-a-vis traditional accounting inscriptions of organisations (Mouritsen et al., 2001a,b, 2003). IC statements are seen as a means to overcome limitations in traditional accounting representations of organisations and specically, the intangible resources of the rm and their capacity to create value (Fincham and Roslender, 2003)[4]. Thus as a separate (albeit multi-disciplinary) eld of management inquiry, IC has undergone rapid development. However, despite the published research and discussion surrounding IC, there is still a signicant lack of consensus on how it should be managed, measured and reported. Apart from the notion that IC can be usefully characterised in terms of human, relational and structural capital or external and internal capital (refer to Edvinsson and Malone, 1997; Roslender and Fincham, 2004; Stewart, 1997; Sveiby, 1997)[5] there is little agreement on much else. There is also diversity in prescribed measurement methods (Andriessen, 2004), with over 30 alternative approaches being identied (Sveiby, 2006), and beyond illustrations of the process of developing an IC statement, there is little specic recommendation or uniable prescriptions[6]. Moreover, observations of international practices in relation to IC are scant and generally observable but not in a singular framework (Guthrie et al., 2007), suggesting that hitherto the vocabulary of IC has been established in only the most supercial way (Mouritsen, 2006, p. 821). The perceivably disparate, ambiguous and non-cumulative nature of IC discourse to date, however, continues to result in widespread calls for conceptual renement, methodology consolidation and more empirical research (Andriessen, 2004; Marr et al., 2003; Petty and Guthrie, 2000). As

888

such, the discourse of IC represents a relevant context for the examination of how ambiguity in discourse inuences its ability to affect material organisational practices (including, as outlined above, the practice of accounting).

Enrolling discourse consumers 889

4. Research methods The research site is the New South Wales Department of Lands (LandsNSW), an Australian public sector organisation. The organisation was created in April 2003, and consists of the Land and Property Information Division (LPI), Crown Lands Division, and Soil Services Division[7]. In addition, LandsNSW has a number of departments that provide corporate support to the three divisions. In total, actors, events and the production of texts were followed at LandsNSW for a period commencing in 2003 and ending in early 2007. The analyses of the empirical evidence obtained yielded for the researchers a chronological ordering into three overlapping phases as follows[8]: (1) Phase I: 2003 to late 2004 problematisation and IC discourse production. (2) Phase II: late 2004 to late 2005 an accounting for IC and an absence of interessement and enrolment of discourse consumers. (3) Phase III: late 2005 to early 2007 enrolment and effects on material practice. Data collection techniques comprised semi-structured interviews, in-situ observation of meetings and internal presentations, and reviews of documents such as internal memos, strategic plans, IC statements and business performance reports. Interviews were conducted with the director-general, the executive management team and the next level of management comprising practice managers with accountability and responsibility for particular activities of the three divisions that comprise LandsNSW. Interviewees were chosen at these levels as these were where IC discourse and initiatives that had permeated throughout LandsNSW during the course of the data collection period. Selection was also designed to ensure adequate representation across all three divisions as well as corporate support areas. Interviews were typically one to two hours in duration and were tape-recorded, transcribed and coded using NVivo qualitative data analysis software[9]. In total, 46 interviews were conducted during Phases I, II and III as indicated in Table I. In addition, approximately 50 days were spent in aggregate over the four-year period in in-situ observation. During this time, several meetings were attended that typically comprised executive managers as well as practice managers. In summary, the use of semi-structured interviews, documentary analysis and in-situ observation enabled a triangulation of empirical observations relevant to our concern with: . the production of IC discourse; . the positions of consumers in relation to their take-up of IC discourse; and . the subsequent effects on material practice. Rather than analysing the discourse of IC itself, the empirical analysis focuses on those organisational participants that produce and consume the exible discourse of IC[10].

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Position title Director-General, Lands NSW Chief Technology and Information Ofcer General Manager, Land and Property Information General Manager, Soil Services General Manager, Crown Lands General Manager, Corporate Support Senior Policy Ofcer Chief Valuer, Land and Property Information Valuation Services Business Development Manager, Land and Property Information Manager, Registration and Titling Services, Land and Property Information Area Manager, Soil Services Finance Manager, Soil Services Finance Manager, Crown Lands Manager, People and Performance Manager, Learning and Development Manager, Land and Property Information Manager, Communications Solutions Manager, Business Consulting Soil Services

Management level Executive manager Executive manager Executive manager Executive manager Executive manager Executive manager Executive manager Practice manager Practice manager Practice manager Practice Practice Practice Practice Practice Practice manager manager manager manager manager manager

Label EM-1 EM-2 EM-3 EM-4 EM-5 EM-6 EM-7 PM-2 PM-3 PM-4 PM-5 PM-6 PM-7 PM-8 PM-9 PM-10 PM-11 PM-12

Phase interviewed Phase I, Phase II, Phase III Phase I, Phase II, Phase III Phase I, Phase II, Phase III Phase Phase Phase Phase Phase I, Phase I, Phase I, Phase I, Phase I, Phase II II, Phase II, Phase II, Phase II, Phase III III III III

890

Phase I, Phase II, Phase III Phase I, Phase II, Phase III Phase Phase Phase Phase Phase Phase I, Phase I, Phase I, Phase I, Phase I, Phase I, Phase II II, Phase III II II, Phase III II, Phase III III

Table I. Interview listing

Practice manager Practice manager

Phase I, Phase III Phase III

5. IC discourse and material practices at LandsNSW In this section, empirical material obtained through the LandsNSW case study is presented. The presentation follows Callons (1986) overlapping phases of interessement, enrolment and stabilisation, discussed in Section 4 above. 5.1. Phase I: 2003 to late 2004 problematisation and IC discourse production Like many Australian public sector organisations, LandsNSW operates in an environment characterised by NPM philosophies (Guthrie et al., 1998). As a newly amalgamated organisation in 2003, LandsNSW was created as a government business enterprise (GBE) and tasked with improving organisational performance, both in regards to cost savings and revenue development (Boedker et al., 2004, 2005). The introduction of a GBE business model, in which revenues pay wages, placed increased pressure on the department to justify the value it creates for the Australian public. Texts produced within the organisation reected the rhetoric of the changing public sector and greater concerns for the organisations IC. For instance, a service-oriented target model was formulated, which was described in internal documents as focusing on the better management of the organisations structural capital to improve its stakeholder relations:
Focal point: Satisfy customer needs through integrated services, customers ease of interaction via channel of choice (Target Business Model document, 2003, p. 11).

Concurrently, a business strategy map for LandsNSW emphasising the following responsibilities were developed:
Internal efciency: Elimination of duplicated effort, rationalisation of activities, improved coordination between divisions, streamline systems; Customer focused product innovation: Cross-sell products, improve reliability of products, partner with suppliers, concentrate on valuable products/services; [and] Dependable [land titles] register fullment: Ease of access to register, safeguard register, ease to interact with register (Target Business Model document, 2003, p. 12).

Enrolling discourse consumers 891

Similarly, the LandsNSW publicly released 2003-06 Corporate Plan (2003, p. 6) highlighted the values of the newly created organisation as being customer service, accountability, innovation, respect, integrity, teamwork and leadership. At this point in time, the director-general appeared to be particularly interested in enacting changes within the newly constructed organisation that related to improved management of its IC. In this, two factors were relevant[11]. The rst was the imperative to better manage and make visible organisational knowledge resources and specically to improve retention of the knowledge of an ageing workforce (Boedker et al., 2005), Change would help the organisation transform itself through being able to make sense of its IC and how the organisations knowledge-based resources, including its ageing workforce, were managed internally. A second factor was the need to communicate how LandsNSW created value through knowledge and IC to external constituents such as funding agencies (e.g., NSW Treasury) and the community. This second point was inuenced by funding scarcity and the need to persuade central agencies of the value of LandsNSW, and specically the totality of its assets including its knowledge of indigenous lands and land titling not accounted for on the balance sheet or in other performance reports. In executive and public meetings, the need for LandsNSW to report its IC was repeatedly emphasised by the director-general. This led to early discussions about the possibility of introducing an IC statement into the organisation. Enacting these changes would require a shift from management practices that were focused on short-term materialistic gains and would inuence the sustainability of LandsNSW. In the words of the director-general:
The greatest value of organisations in todays business environment is in intangible assets. However, in most organisations, senior executives pay little attention to the greatest asset in their organisations, that is the knowledge or intellectual capital. Decision making is skewed towards short term materialistic gains, which undervalues the real value and inuences whether an organisation is sustainable or not (EM-1, emphasis added).

During this initial period, talk and text were produced that emphasised value for money, efciency, customer service, innovation and transparency. Specically, discursive statements constructed an image of an organisation that was throwing off the shackles of its public-sector origins and becoming an innovative and efcient GBE instead. However, if LandsNSW was to pursue the changes envisioned by its director-general, changes in management practices throughout the organisation were required. This was highlighted by a practice manager from the human resource department when reecting back on the effects of becoming a GBE:
The nancial arrangements introduced by the GBE model, where revenue pays wages and where the business is no longer funded by Treasury is a very signicant issue and requires a

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very different mindset . . . Current values, which are based on loyalty and stability, conict with the increase in the rate of change (PM-8).

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Enacting changes in management practices throughout the organisation required the participation and persuasion of executive and practice managers across the various divisions of the organisation. To help achieve this, the director-general sought to problematise LandNSWs management, measurement and reporting of IC as a means of changing decision making that was skewed towards [the] short term and delivering organisational sustainability (as per the director-generals observations noted earlier). To this end, the director-general initiated the Intellectual Capital Project with academics from three Australian universities to examine existing IC management, measurement and reporting practices at LandsNSW. The IC project became the obligatory passage point (Callon, 1986) for enacting change within the organisation. This initial study was intended as an inquiry into the status quo focusing on existing IC practices within the organisation[12]. Through this, talk about IC (and also later on practices related to IC, see sub-section 5.2), was produced within LandsNSW. The director-general in particular was a key initiator and producer of IC discourse during this period. When asked what the key enablers were of IC discourse at LandsNSW, the following responses from LandsNSW Managers were commonplace:
I think weve got a director-general who is clearly committed to it, thats the rst thing (PM-4). Well undoubtedly it would have been the DG, and the executive level management (PM-6). It has to be driven, I guess, from the top, and the director-general has been, I guess, a big driver in this (EM-3).

With the director-general himself acknowledging his role as an important producer of IC discourse:
Well Ive been driving it from the top. Ive driven it in regard to strategic executive meetings; I gave a public undertaking in my previous annual report, and at public meetings, that I was going to report on intellectual capital in the next annual report. So thats a demonstrable example of leadership from the top. So Ive used it very much as a lever, a tool, and a rallying point (EM-1).

The director-general also attempted to problematise the management, measurement and reporting of IC through initiating an intellectual capital project. IC discourse encapsulated and provided structure and a potential solution to much of the changes he was seeking to enact, as his comments below indicate:
The application of IC is a journey within the organisation. And Ive used it as a part of the broader awakening of an awareness towards unlocking the intangibles within the organisation, which I regard as being the most valuable part of the organisation . . . and were only at the start of the journey. Its enabled me to put some more structural constructs around the principles, philosophies, and the concepts that Ive had for many years, that are now espoused within the concept of intellectual capital (EM-1).

Subsequently, the director-general made a public announcement in the LandsNSW 2003-04 annual report, released in November 2004, that the organisation would prepare an IC statement for disclosure in the next years annual report. The 2003-04 annual report contained the following statement by the director-general:

We . . . will seek to achieve a quadruple bottom line where capacity building, organisational knowledge, staff health and development are equally valued. We will seek to identify, value and demonstrate the knowledge capital within the business. (Annual Report 2003-04, Director-Generals Foreword, emphasis added).

Enrolling discourse consumers 893

The director-generals position as a main discourse producer was important. Evidence indicated that the subject position of the enunciators was an important and warranted voice (Hardy et al., 2000), with the discourse producers perceived as having legitimate rights and authority to speak (Phillips et al., 2004). Not only was the director-general a central discourse producer, with formal authority over LandsNSW and its charter as a GBE, he was also responsible for setting its direction. His position of seniority meant that his role as IC discourse producer was strengthened and the likelihood of IC discourse taking hold was greater; however, the discourse itself was an important actor in determining its fate. The call to action by the director-general led to a series of IC-related activities at the organisation, as discussed in the following sub-section. 5.2. Phase II: Late 2004 to late 2005 an accounting for IC and an absence of interessement and enrolment of discourse consumers 5.2.1. An accounting for IC emerges. While during Phase I IC discourse had been primarily talked about and promulgated by the director-general, during phase II, IC discourse began to take a more tangible form with the production of the IC statement commencing. This was supervised by the director-general with the main activities undertaken by the policy ofce. In late 2005, LandsNSW released its rst IC statement as part of its 2004-2005 annual report. Within this 11- page document, LandsNSW explained its interest in IC reporting to the public (LandsNSW 2004-05 IC Statement, p. 7):
Traditionally, like many organisations, our reporting processes have focused on the nancial aspects of our business. We acknowledge that changes in reporting are occurring in the private sector, particularly in relation to intangible assets, and recognise that this style of reporting brings added value to the way in which we manage and plan for the future.

The IC statement also contained a framework described in Figure 1[13] where three areas of focus were identied and articulated as part of managerial challenges and efforts, comprising employee demographics, service delivery and external relationships. As Figure 1 depicts, doing so would allow the generation of nancial results, and also public trust, value and condence. Performance was redened to include intangible elements as well as just nancial results. The statement also talked about the organisations internal, external and human capital (LandsNSW 2004-05 IC Statement, p. 7) and provided examples of how these resources were managed (LandsNSW 2004-05 IC Statement, p. 10):
In this rst Lands Intellectual Capital Statement we seek to report on the three areas of managerial effort employee demographics, service delivery and the management of external relationships. As indicated earlier, it is our intention that, over time, these indicators will change to reect our improved understanding of these areas of management focus. Innovation, public trust, value and condence and the signicance of nancial results are also key reporting criteria. In the case of innovation, public trust, value and condence these issues are addressed briey later in this Intellectual Capital Statement. The nancial results are outlined later in the Annual Report.

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Figure 1. Lands intellectual capital framework

Examples of how the knowledge-based resources (employees and their demographics, service delivery through technology and external relationships) were performing were also provided in the form of performance measures and trend lines (see, LandsNSW 2004-05 ICS, pp. 11-12). Thus, IC was described in terms of its underlying knowledge-based resources, and IC discourse constructed LandsNSW as being able to better manage and plan for the future. In addition, signicant benets of doing so were to result, with IC discourse highlighting the consequences of managing, measuring and reporting IC in terms of innovation, public trust, value and condence. 5.2.2. An absence of interessement between discourse producers and consumers. By late 2005, the discourse of IC that hitherto had been talked about was supported by an IC statement that dened and attempted to report on LandsNSWs IC. Despite this, there was little evidence during this period of its take-up across a broader constellation of organisational participants or inuence over organisational relationships or practices. Indeed, the discursive statements and texts appeared to be limited in space-time due to disinterest, with many executive and practice managers not persuaded of the need to engage with an accounting for IC. Some questioned the value of IC and remained sceptical of the practical use of the IC statement. Furthermore, the concept of IC remained ambiguous and had not (as yet) been translated into activities of relevance to a broader audience of discourse consumers within the organisation. Illustrating these sentiments, an executive manager commented on the perception that IC was merely another management fad:
All senior managers probably below [the director-general], operated with some scepticism initially. What caused that initial scepticism? I guess the management fad issue. All the managers I spoke to said Oh its another one of these things that come along and I think I was probably one of those as well (EM-6).

Others were more critical of the organisations already extensive reporting and business planning attempts and activities, as illustrated by the observation of one of the practice managers:

. . . many people have spent countless hours in workshops coming up with planning documents that t into those particular frameworks, and not seen them . . . make any positive contribution to either their business or their life with their staff. So theres a degree of cynicism I think out there, and realistic I might say (PM-8).

Enrolling discourse consumers 895

As a result, the initial discourse produced by the director-general remained questionable and isolated to a small group of people. Comments by a practice manager summarised these feelings:
I guess despite the fact that it has sort of been driven by the DG, to my knowledge it hasnt really been picked up and fully embraced by any of the general managers, because theyre so busy on running the day to day businesses. I just think its probably not a high priority for any of them (PM-9).

The consequence of this was that practice managers within the individual divisions and even some members of the executive team (in spite of the preparation of the IC statement) saw little practical uptake of the IC discourse within LandsNSW during this period. When they were asked to reect on IC, the following comments were indicative of its lack of resonance and connection to the concerns of discourse consumers. Viewed in terms of Callons (1986) moments of translation, there was an absence of interessement. IC had not been linked to the specic concerns of executive and practice managers, and had not materialised as a solution or passage point to the achievement of their interests:
In relation to how Ive done my job, it has very little effect on it, or anything like that. Its just an additional task that has to be undertaken, and its nothing onerous or anything like that. And it hasnt own down to anything lower than the management level . . . IC is just like doing the annual report, its an input, we have to do it, its an obligation that falls upon us (PM-6). So far I havent found a specic denition of intellectual capital. I nd people at LandsNSW use IC with different meanings, such as knowledge capital, IP and training and development . . . There is no common understanding. It hasnt affected us at all (PM-3).

As the previous comments suggest, aspects of IC discourse that were considered a barrier to its take-up were its lack of specic prescription for organisational practices and the ambiguity in its meanings and concepts. IC discourse, despite the IC statement which attempted to summarise the value and performance of the organisations knowledge resources and provide a denition of IC, was still perceived to be ambiguous, and its value to the organisation remained questionable to many. When asked to reect on the impacts of IC discourse during this period, many actors commented on its lack of clear denition or coherence. For example, a practice manager reected on IC and the difculties in applying it:
I suppose one of the more difcult things in looking at intellectual capital is to actually get a clear denition. I understand where the Director-General is coming from in what hes trying to report, and hes trying to, as I understand it, include intellectual capital in the bottom line gures for the organisation, to try and value it and its contribution to the organisation. But I suppose youve got a lot of mixed signals . . . where youve got a number of different views on what it means, what it actually means (PM-4).

This perception of the looseness of IC discourse also resonated amongst executive management. An executive manager, who had been involved with IC discourse from a

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technology perspective, explained how a lack of denition created problems in making sense of what IC comprised and its implications for the task of managing at LandsNSW:
. . . there has been no one clear denition of what it [IC] means. The second thing is, not having a clear concept of denitions, is how do you apply it in our organisation? Our organisation is made up of three divisions, each division is at a different level of maturity, and each view of how it could embrace intellectual capital will vary from one to the other, and one shoe doesnt t all, so that is the second point (EM-2).

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In summary, during phase II, evidence at LandsNSW indicated that the low level of prescription and codication of the IC discourse constrained its possibilities for shaping material practice. The perceived ambiguity of IC discourse, including the IC statement, meant that potential consumers struggled to make sense of IC concepts and their meaning (Hardy et al., 2000) and the texts that were produced did not appear to be genres that were recognisable and usable (Phillips et al., 2004). Indeed, many were unsure of what IC meant for them, being unable to see the connections between IC discourse and their managerial concerns (at both an executive and practice level) and interests at LandsNSW. Despite being emphasised by the Director-General, and in spite of the initial preparatory activities associated with the IC statement, there was an absence of interessement (Callon, 1986) amongst the actors at LandsNSW, some of whom suspected that IC could possibly become another management fad. However, while IC discourse appeared to be destined for short-lived prominence due to its relative ambiguity, the same characteristics simultaneously imbued it with a looseness and exibility. This meant that the discourse of IC had the potential to be connected to the problems of the organisation and gain relevance for both executive and practice managers, as follows. 5.3 Phase III: late 2005 to early 2007 enrolment and effects on material practice During late 2005 to early 2007, two main instances of enrolment were observed which advanced the perceived attractiveness of IC to LandsNSW managers, resulting in the enrolment (Callon, 1986) of both executive and practice managers. In this, the exibility of IC discourse was signicant, for ambiguities within IC discourse and what it comprised ensured that it could be connected to the interests and concerns of a multitude of organisational members. IC discourse was connected to specic management problems at LandsNSWs, including: . an ageing workforce and impending knowledge loss; and . reductions in nancial resources allocated by the central funding agency[14]. Each of these resulted in the IC being constructed as addressing specic managerial needs, as discussed below. 5.3.1. Enrolment 1: IC to manage knowledge loss. As illustrated in phase I, one of the main challenges facing LandsNSW was that of an ageing workforce, and a perception that signicant knowledge and organisational memory would be lost as employees were soon due for retirement. It was estimated that up to 44 per cent of LandsNSW employees would retire over the forthcoming ve to ten years. Many of the retiring members of the organisation possessed unique knowledge of, for example, Australian indigenous land ownership and traditions, which were not easily codiable

and thus subject to loss upon retirement. Thus, the ageing workforce and impending knowledge loss was a management crisis for LandsNSW as there were perceived risks to the future of the organisation and its sustainability. One practice manager explained:
. . . Ive been with, well not this department, but its predecessor . . . coming up for 39 years . . . Its been, I guess, of concern to me that we do lose a lot of knowledge, a lot of skills that we have within our workforce and particularly in my division of Soil Conservation Service, where there is a lot of practical knowledge more than just the written word (PM-12).

Enrolling discourse consumers 897

The loss of organisational knowledge was especially concerning in the LPI department, the main revenue generating entity of the organisation, which was responsible, inter alia, for land valuations and processing land title. Casting into stark relief the crisis of knowledge loss was the observation in the department that close to 60 per cent of its valuers would retire in the short- to medium-term. To the extent that errors were made in the process, LandsNSW could be liable for compensating the public for any nancial loss together with associated credibility effects. Thus, there could be signicant nancial and reputation consequences for LandsNSW. As explained by a practice manager:
. . . Whilst you have a high level of direct transaction, straight transactions if you like, vanilla [non-complex] transactions, you also have a large enough number of different transactions. And the knowledge that surrounds those is very scarce, and thats something weve really got to work on to capture them tightly, because at the end of the day if you dont understand that part of the process, youre [sic. ] assurance fund is at huge risk. So theres a big dollar risk to the organisation if you dont get that right (PM-4).

Another practice manager explained:

The ne detail around legislation and principles and practices of public valuation, or writing a taxing valuation in particular, is a real core knowledge set that we hold within this organisation, and is much more difcult to replicate. So I see that as being a real knowledge intellectual capital issue. Hows this an issue for us? Well I guess we face succession planning issues in that a lot of our staff are, in fact 22 per cent of our valuers are due to retire within the next two years, and 44 per cent over ve years (PM-2).

Against this backdrop, IC was translated into a potential solution. Often referred to as knowledge management within the organisation, discourse about IC and its claim to formally manage human capital was seen as helping management to overcome these issues. Indeed, solving the impending knowledge loss was seen as inevitable given that IC represented a formal and managerial response to these issues. The executive manager charged with driving the IC initiative and compiling the IC statement explained how she sought to ensure IC connected with practice managers and how the issue of the ageing workforce issue enabled this:
The strongest area for getting traction here is the age prole of the organisation. It is the one thing that every manager can connect to, and which they say yes I understand why wed do what were doing, because thats an important aspect. We need to reinvest in our staff, the need to develop with the need to involve them. To help them grow and feel their way within the organisation. Intellectually they can understand, practically they can put some elements in place (EM-7).

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As a result, executive as well as practice managers within LandsNSW began to see how IC might benet their division despite its ambiguity and looseness and how it could become tied to practical solutions. IC discourse was starting to be seen as a language with which to articulate the issues of knowledge loss. One executive manager explained how intellectual capital had:
. . . helped highlight and bring it more into awareness that we need to do something about that [knowledge loss] in a more formal structured way (EM-3).

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While one of the practice managers highlighted the business and nancial benets that IC could possibly bring to the organisation:
So I suppose overall were moving towards documenting our information more precisely, and understanding what we do to a far greater degree than what weve done in the past. And at the end of the day that has to me, as Ive said, tremendous benets nancially to our organisation because it takes a lot of the guess work out. It allows you to structure your organisation with the resources that you actually need to operate the business properly . . . (PM-4).

Thus, during the 2006 period, the problem of knowledge loss, and the potential solution of IC discourse as a language to both articulate and formally manage this problem, began to connect with user interests. As a result, the initial scepticism seen during the 2005 period started to wane. Indeed, the impending retirement of many LandsNSW employees was a management crisis issue that was important for many executive as well as practice managers and, which concerned the sustainability and future well-being of all members of the organisation. One of the most signicant outcomes of the translation of IC into addressing the ageing workforce issue was the Vision 2013 document prepared by managers in LPI in 2006. This was a seven-year plan to prepare the business for the future and specically for the forthcoming seven to ten years[15]. As a result of this construction of IC as a solution to practical management issues, IC discourse started to resonate and connect with the interests of a multitude of discourse consumers across different levels of management, not merely the director-general and his close afliates. Indeed, connected as it was to the crisis of knowledge loss, IC discourse had been strengthened. 5.3.2. Enrolment 2: IC to acquire nancial resources. Concurrent with the connection of IC to the ageing workforce crisis, IC was being constructed as a potential solution to the challenge of attracting funding from central agencies. As indicated previously, perceptions of inadequate nancial resource allocations by the centralised funding agency featured prominently at LandsNSW and this was one of the main reasons for the Director-General embarking on the IC journey back in 2003-04. Reductions in budget allocations and the move towards GBE structures where revenue pays wages during previous years had consequences for the various parts of LandsNSW, as indicated in the following comments by participants. Executive managers were attempting to manage their businesses in new ways:
The recent tightening of budget and increased budget control calls for new ways of running the business. In this respect, there is an increased focus on business planning, a function which is new to the department (EM-5).

While practice managers in charge of nance within the divisions observed funding reductions:
The division is currently living off capital reserves as it receives no funding and no support from Treasury (PM-6).

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And their counterparts with human resource management responsibilities witnessed changes in employee management practices:
[The move to a GBE structure] meant hiring freezes, layoffs, including voluntary redundancies, and imposed a growing threat to job security amongst staff (PM-8).

Overall, insufcient funding was seen as contrary to the changes that were required at LandsNSW if the future envisioned by its director-general was to be realised. The comment by one of the executive managers within LandsNSW in charge of policy was a concise summary of this perception:
Were still on one hand, reporting back on a very nancial basis, where our agreements with government are about dividend payments, about how many staff we can reduce, and what savings we can prove, or prot increase, income we can improve. And yet on the other hand were talking to staff and management about investing in the future, about sustainability, about developing new ways of communicating new products, all of which require time and therefore money. And therefore it sounds like a bizarre thing to be doing when theyve got a formal [nancial accounting] mechanism on thats requiring them to go in a different direction (EM-7).

Again, an accounting and management of IC was connected with user interests and came to be seen as a potential solution to the funding problem. IC was seen as a new language of communicating performance, objectives, required activities and hence budget requirements. When asked to explain why people were interested in IC, one LandsNSW executive manager responded:
. . . and I think were thinking now of different ways of reporting to Treasury, convincing Treasury to look at us differently as an organisation (EM-6).

While a practice manager expanded on the theme of IC as being a new language that better represented the organisation:
Im not sure how far the concept [intellectual capital] has penetrated within the halls of Treasury, who are really dictating the activities [of Lands]. But I think its a very sound strategy to try and present a much broader base of what an organisation is worth, rather than just very simplistic nancially (PM-8).

Indeed, IC was imperative if external funding agencies were to understand that investment was required for organisational sustainability and the continued creation of public value, according to one LandsNSW practice manager:
But I think that would be the immediate message that politicians and others will understand, Treasury will understand. If we dont invest in these items now, it will cost more to re-establish the loss of experience and . . . databases, community trust, those items that the public value that were also trying to come to terms with how to articulate what that is, and how we can measure or demonstrate progress in creating public value (EM-7).

In contrast to the disinterest in IC observed during the earlier period in which the IC discourse (and the rst IC statement) was perceived mainly as an isolated activity

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involving only a few elite actors in 2006, the connection of IC to a better ability to conduct operational activity by acquiring more resources enlivened and enlisted more organisational participants. Rather than just another management fad, IC was now increasingly seen to have the potential to result in real consequences. The comments of a practice manager summarised these sentiments:
. . . ensuring that into the future Ive got people here who have sufcient resources, not necessarily be trained, but have sufcient resources to access, to be able to make the decisions and to be able to process the transactions that they are required to do in their daily work (PM-4).

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An executive manager echoed similar perspectives:

. . . the bean counters need to be convinced that there is an amount of reinvestment that we need to do in the people of the organisation . . . The focus has always been you know what we can cut, how we can cut costs, and theres never been a holistic look at how that might happen effectively (EM-6).

Changes in how IC discourse owed within LandsNSW help explain these changes in sentiment, and will be discussed next. 5.3.3 Enrolment and mobilisation of discourse consumers. Through both instances of enrolment narrated above, more actors at LandsNSW started to be persuaded of the need to account for IC and became enrolled into the actor-network through which IC discourse travelled and proliferated. While the uid nature of IC discourse had been a problem in the earlier stage, it was ameliorated by discourse consumers constructing IC as resonating with their interests and of practical use. As the executive manager responsible for the IC initiative and producing the IC statement explained more broadly:
Internally, Ive been involved in discussions with managers and staff, particularly around their confusion of the terminology in intellectual capital. Interestingly enough often we come back to the fact that most of the members of staff or managers can identify items that would t within intellectual capital reporting, but they dont conceptualise them, they dont view them through that particular lens I suppose (EM-7).

In identifying aspects of their business that related to IC, users themselves became promulgators of IC discourse. An executive manager commented about the initial ambiguity, in part due to the academic language of the researchers, and how people had made it resonate:
I think initially it was too academic; it was far too hard for people to translate down to the nuts and bolts of their day to day issues . . . Lets say I was fairly cynical six months ago, but Im quite happy to progress the project. Its got to be embedded in the culture of the organisation. Its got to become part of the day to day, not seen as something thats an exception, and nice to have (EM-5).

Similarly, the executive manager who had previously highlighted the ambiguous nature of IC discourse as problematic went on to observe how it had gone from the outside of the organisation to becoming more attuned to the inside, and a construction of management practice:

As key players in the organisation had immersed themselves in the literature, they started to have a body of language, and to talk about some concepts, which initially was just academic, but now we understand and we consider the practice (EM-2).

As a reection of the resonance that IC discourse had gained amongst practice managers in particular, a number of those who had previously been disinterested in IC, or claimed that IC was potentially a management fad, commented as follows:
I was very sceptical initially when it was rst mooted. But seeing the value as its progressed has been good. I think the role for IC in the future of LandsNSW is going to be quite signicant, especially with the age prole of the organisation. A lot of corporate knowledge will be walking out the door, unless theres some mechanism to transfer that knowledge (PM-6).

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Another manager explained:

. . . If youve got that ongoing knowledge, and you can do your business in a smart, efcient and accurate way, your organisation continues to have relevance. If you cant do that, then a government has got to look and say well should this remain in government hands . . . (PM-4).

By mid 2006, IC discourse and the network that constituted it had gained strength and stabilised (albeit not permanently). In terms of Callons (1986) moments of translation, a greater number of executive and practice managers had become enrolled into the network through which IC travelled. With an actor-network now comprising multiple elements (the director-general as well as executive and practice managers), it was observed that IC discourse began to inuence management practices and, specically, the way in which LandsNSW accounted for its IC. 5.3.4 Continuous stabilisation of IC and effects on material practice. As a result of the enrolment of more actors, stabilisation of IC continued to occur within LandsNSW. Personnel at executive and now also at practice managerial levels started to highlight the relevance of IC for managing the organisation:
I think were now starting to nd some direction, in terms of translating it into things like our annual reporting frameworks, and the draft intellectual capital report. I think were trying to turn it into something concrete, but were trying to also turn it into a strategic direction that assists the businesses [to] move forward (PM-8).

And:
. . . [it] has got us over the, I guess, the mentality of reporting nancially only; and got us thinking about how the organisation can be more successful. And how we can use the knowledge, but on a grander scale, by the way that we actually manage the organisation (EM-6).

However, with IC, actions that could be interpreted as investing in intellectual capital were more attractive than they had been in the past, to the extent that nancial resources were provided. Another practice manager commented about the garnering of nancial resources for developing knowledge resources within his division:
. . . I think its just a very supportive environment for it, and you encourage within it, and funding is made available when I need it. So Ive never had any problem getting funding to do the things I want (PM-4).

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There were thus instances of IC discourse beginning to co-exist alongside conventional accounting practices as the calculus of managerial action. It would orient LandsNSW managers as to which activities to encourage and, within the business, IC was starting to be seen as an appropriate language for how LandsNSW could operate into the future. Its image of creativity, knowledge and innovation were all ideals that the director-general wanted LandsNSW to aspire to and move towards. According to the director-general, the process of bringing IC within the organisation was part of a reconstruction of its identity:
. . . and Ive used it [the intellectual capital project] as a part of the broader awakening of an awareness towards unlocking the intangibles within the organisation, which I regard as being the most valuable part of the organisation. In particular, the focus on human capital and also unlocking the value in our data sets (EM-1).

Other executive managers also linked IC discourse to the future and sustainability. One executive manager alluded to the inadequacies of conventional accounting mechanisms for enabling this, criticising in particular snapshot in time and year by year performance views:
Well what I see the difference in intellectual capital would be that its really just another way of putting it all together, a lot of the things that were already doing, viewing it in a slightly different way. That whilst we have in many ways been doing elements of the practice that is needed for intellectual capital, what we havent done is really looked into the long term future in terms of the sustainability of the organisation. Thats where weve been failing, weve been focusing on a snap shot in time, on a year by year basis (EM-3).

As part of the growing perception that alternative accountings of IC were required, initiatives were commenced to broaden the responsibility for the development and management of the IC statement within LandsNSW and to change internal information practices accordingly. An internal group labelled the Organisational Capability Improvement Group (OCIG), led in part by the deputy director-general and the Senior Policy Ofcer, was tasked with an objective to:
. . . facilitate the implementation of a reporting and feedback system for the Department. This will underpin the development of the Lands Intellectual Capital Statement for 2005-2006. The result of this reporting process is to facilitate communication of the signicance of intangible assets within the organisation, to provide data on a quarterly basis to the Executive Team as to progress being made and to facilitate the development of the annual Intellectual Capital Statement.

With representatives from the various area of LandsNSW, the OCIG decided that more measurements were required to measure the performance of IC. All OCIG representatives were required to:
Identify key measures, relevant to the business and consider what needs to be done (if anything) to collect this data on a regular basis . . . [and that] The selected metrics or indicators ought to be accompanied by a narrative or explanation of the signicance of these measures (OCIG meeting minutes).

The quantitative measures of IC that were developed as a result were to ultimately inuence the construction of LandsNSW that was made possible through its IC statement as a text about the organisation.

In late 2006, LandsNSW released its second IC statement as part of its 2005-06 Annual Report. While the overall IC framework was similar to the previous statement, the second IC statement included more performance measures and was shortened to a four-page statement, down from the initial eleven pages. The IC statement continued to contain narratives about the management efforts and challenges faced by the organisation, discussions of the initiatives undertaken to address these, and how these were being progressed and measured (p. 8):
Management Challenges: During 2005/06 management and staff have worked together to analyse and develop solutions to the management challenges identied through our earlier research partnerships. These challenges were identied as employee demographics, service delivery and external relationships. These issues are being addressed through corporate initiatives such as workforce planning, administrative and process reviews and development of partnerships and networks which will assist Lands in delivering organisational and community outcomes now and in the future.

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The 2005/06 IC statement (p. 10) also reported on its activities relating to the ageing workforce crisis:
Employee Demographics: Lands began by analysing existing data within the organisation in different ways to assist managers in identifying areas of risk. For example, information concerning the age prole is reported in the KPI table on page 17 as an average across the organisation . . . During the reporting year LPI took signicant steps to integrate strategies relating to staff prole and skills development, internal process and improved partnerships into its corporate and operational plans ensuring that all aspects of their operations are involved and have the opportunity to participate in nding solutions . . . Several projects have already commenced including reviewing and documenting processes, engaging graduates from secondary and tertiary schools and working with staff to identify issues and potential remedial actions.

And it reected on the effects of IC reporting (p. 8):

The process of preparing and developing our strategic and corporate initiatives has contributed to Lands intellectual capital. By strengthening our focus upon our staff, our internal processes and our relationships and partnerships with other organisations we believe that we will create a more efcient, effective and sustainable organisation.

The director-general continued to emphasise that this reporting of IC was critical in ensuring that a longer-term perspective was employed in managing organisations and securing their sustainability:
Too many managers get rewarded for creating corporate anorexic organisations that cease to value the core intellectual capital of the organisation. Its easy to, or much easier, to meet short term bottom lines by eating away and treating your intellectual capital as disposable. Yet its the one core set of capital that shouldnt be considered as disposable . . . If were going to build sustainable organisations as we go forward in a competitive world, well only do so by riding on the back principally of the investment, past and in the future, of the intellectual capital, not through the eroding of it (EM-1).

In contrast to the previous year, the views of the director-general were now shared by executive managers and practice managers, who also saw benets in producing IC texts through informing future governments of the importance of LandsNSWs functions and helping to justify its existence as a public agency:

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I think the whole approach to intellectual capital will help us manage the whole organisation better. But I see it as convincing people outside the agency who havent had interest in the organisation, whether it be the government, whether it be treasury, the ones that make decisions about us. It might broaden their decision making to look at some of the functions that we do, rather than arbitrarily say you know X amount of dollars has got to be cut out this year, and X amount of people. Because there is not much scientic [method] about the way that thats done from central Government (EM-6). And that will . . . allow us to tell that story to the public, which is critical to maintaining the legitimacy, if you like, around the whole system (PM-2).

Thus, along with the translation of IC into specic user needs and the emergence of a diversity of activities connected to IC discourse, IC had become more prominent in relationships within LandsNSW and also possibly between LandsNSW and its external constituents. Accounts of performance were now multiple, combining diverse narratives and numbers and less constructed through codied accrual accounting discourse alone. Indeed, an alternative accounting for IC had taken hold, articulated in terms of a looser and more ambiguous IC discourse. Importantly, these did not mean that IC had permanently taken hold. Enrolling a multitude of actors and discourse consumers (and making them co-producers) across different levels of management in the network through which IC discourse owed was an ongoing and precarious process[16]. The practice manager who had been an internal producer of IC discourse on behalf of the director-general explained:
Some of our managers have progressed fairly quickly and understood concepts very quickly, and others have come back to me and said I thought I had that idea last week, but now I think about it this week Ive lost that focus again. And thats been fairly consistent over the year (EM-7).

Here, the exibility of IC discourse that enabled connections to the interests of discourse consumers was relevant. Its uid core meant that the links to some users interests needed to be stabilised repeatedly. One executive manager commented on the difculties he was having and the link back to the lack of codication in IC discourse:
I mean one of the things Ive been having difculty with in all of this is exactly what we mean . . . And I understand at some stages where were going and exactly what were doing, and then at other times I go hang on now, Im lost again . . . (EM-3).

The research teams nal encounter with the organisation took place during an OCIG committee meeting on 30 April 2007, in which the deputy director-general announced that central funding agencies had approved 30 additional staff positions for LandsNSW. This was attributed to the risk posed by the ageing workforce to the sustainability of the organisation and linked to its IC reporting activities. In summary, by the conclusion of the eld study, a number of executive and practice managers had become enlisted and enrolled into the LandsNSW actor-network through which IC discourse was performed. New texts had been produced that reproduced IC discourse, and changes in management practices were observed as the organisation sought to account for and retain its IC, secure funding from central agencies and re-create its identity and image to the public eye. However, the durability and extent of these effects was contingent on the ongoing efforts of IC

discourse producers to mobilise the interest of more actors and enrol more discourse consumers to become active co-producers of IC discourse. 6. Discussion and conclusions The motivation of this study was to explicate the relations between discourse and practice. Its focus was on the effects of ambiguity and exibility in discourse, and the context for this investigation was the relatively recent and still uid discourse of IC. Through presenting a case study over four years on the production of IC discourse, tracing the actual practices of a multitude of discourse producers and consumers within LandsNSW, several effects on organisational practices were observed. In presenting this narrative, a number of contributions are made to the extant literature. First, in relation to the organisational discourse literature, prior studies on discourse and practice relations have highlighted aspects of codication and the consequent ability to prescribe practice (see Hardy et al., 2000; Phillips et al., 2004). Concepts that have meaning, a coherent and unied structure, all combine to ensure practice that is directed towards the outcomes of the discourse producer. The corollary position to this is that low levels of codication in discourse reduce the ability to prescribe practice. While we do not argue with this, we highlight how ambiguity in discourse allows its producers greater exibility in connecting to the interests of discourse consumers such that the material practice is affected. At LandsNSW, IC discourse had at its heart a loose core rather than being relatively rigid and codied from previous practice. However, this did not limit its possibilities at LandsNSW. Rather, it was this very uidity and looseness that enabled its translation and take-up by a variety of actors who previously had not engaged in this form of discourse. We thus argue, in contrast to prior studies, that ambiguity and exibility may be preferred attributes for discourse producers as these may enable, rather than constrain, their ability to interest others and succeed in shaping material practice. Second, drawing on actor-network theory and specically Callons (1986) moments of translation, the paper highlights the important role of discourse consumers, their agency and the role they play in inuencing how discourse affects practices. While factors such as the characteristics of the discourse itself and the position and attributes of the discourse producer have been identied as important inuencing factors in the discourse-practice relationship, discourse consumers and their interests have hitherto been ignored. At LandsNSW, executive and practice managers were not passive in acting or not acting according to the director-generals discursive statements. Rather, they connected the discourse to problems that were perceived relevant to their management activities. Resonance and relevance was thus co-generated by both the director-general and the LandsNSW executive and practice managers through instances of problematisation and interessement, with the subsequent enrolment and stabilisation resulting in changes to material practices (Callon, 1986). We thus call for a greater consideration and investigation of discourse consumers and their agency in future research on organisational discourse and discourse-practice relations in particular, specically examining how this might vary across discourses of different levels of codication. Finally, we highlight the codication-ambiguity paradox for discourse producers. Codication of discourse provides specic prescriptions for practice. While this

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reduces the need for sense-making amongst potential discourse consumers, it also limits the opportunities the discourse producer has to interest and enrol them. Thus, limited take-up of the discourse may eventuate. In contrast, ambiguity indicates that the producer can make sense of the discourse in such a way that it connects to the interests of potential consumers and the problems that they perceive themselves facing. However, the same exibility also allows a degree of sense-making by the consumer, leading potentially to effects on practice that are other than those intended by the producer of the discourse. Indeed, at LandsNSW, interesting discourse consumers in IC was an ongoing and precarious process as they often got lost again. Hence, on the one hand, codication allows prescription, and potentially the achievement, of the intended strategic consequences by the producer. However, it may constrain the ability to interest and enrol consumers, especially where their interests diverge. On the other hand, ambiguity enhances problematisation and interessement possibilities. However, it too allows greater interpretation of discourse and intended effects by the consumers. The management of this tension by discourse producers will inuence the extent to which discourse is able to inuence practice and how this manifests. As such, we propose this as another avenue that further research on organisational discourse should examine. In addition to the above, we contribute to the accounting literature on IC by observing specic implications of IC discourse for accounting. At LandsNSW, practices emerged as part of its accounting for its IC. IC discourse became evident as a language and calculus for managing the business that was somehow consistent with organisational sustainability and less skewed towards short-term materialistic gains. However, IC discourse complemented rather than replaced traditional accounting practices as a means of inuencing management practice. We did not observe a curtailment of accounting practice as has been observed elsewhere (Vaivio, 1999; Ezzamel et al., 2004) or, as might be suggested within the IC literature. Traditional practices had not been sidelined by narrative, performance measures and imagery but had been translated into a language that together with existing performance accounts would be used to exemplify the director-generals quadruple bottom line. In addition, in contrast to much of the literature on IC that is concerned with its lack of specic prescription and unitary structures, this paper observes that strength may derive from exibility and diversity in IC practices (see, Mouritsen and Flagstad, 2005; Morgan, 2006). IC discourse may indeed travel and inuence practice across diverse organisational sites due to its exibility, being connected and made relevant to local concerns as it does so. Future research might investigate how IC discourse is mobilised and performed in unique ways by actors in local settings, how IC mutates when used across different organisational sites, and how discourse consumers play an active role in IC translation and fact fabrication (Mouritsen, 2006). In closing, it is important to acknowledge the limitations of the paper. In addition to the use of the case study method, we acknowledge that external factors that comprised IC discourse outside the organisation inuenced our observations within, and that only limited attention was given to these in the study. We also acknowledge that discourse consumers extend beyond the practice manager level to also include employees in lower level operational positions, and thus opportunities exist to further observe the plethora of agents involved in discourse co-production and fact fabrication.

Notes 1. For our purposes, we are interested in how management discourse produces objects such as ideas, concepts and policies and shapes management practices within organisations as a result. 2. Phillips et al. (2004) do hypothesise that texts which are novel and require greater sense-making may receive wider dissemination and consumption. However, as discussed above, any associated lack of codication is simultaneously seen as detracting from the production of institutions. 3. While Callon (1986) presents four moments in the sociology of translation, he notes their overlapping nature. For ease of empirical exposition, we combine his rst and second moments. 4. For example, in relation to human capital in a research and development department, one might measure the resource itself (the number of employees with relevant qualications), an enhancement activity (the amount of training dollars spent per employee) and the effects of the resource or training (the number of successful new projects). See also Mouritsen et al. (2003) who suggest that IC statements include measures of: the attributes of the IC resource; the activities performed to enhance the resource; the effects of the resource and/or the enhancement activity for the business; or some combination thereof. 5. Examples of structural elements include the rms management philosophy, organisational structure, management processes and information systems. Relational elements are its image, brands, alliances, partnerships, licensing and franchising arrangements, distribution channels and customer/supplier relations to name a few. Examples of human capital involve attributes of the rms workforce such as its diversity, education, training, demographics, and industrial relations work-related qualications (see SKE, 2005). 6. Importantly, we do not argue here that more recommendations or prescriptions are required. We simply wish to characterise its low level of codication and standardisation thus far. 7. LPI operates as a NSW Government Business Enterprise providing land, property and valuation information and services. Crown Lands Division manages and administers Crown lands held under lease, licence or permit for a vast array of public, private and community-based uses. Soil Services Division is a specialist conservation soil consultancy business. 8. While the phased ordering suggests discrete time periods, we acknowledge that these overlap in practice. However, the phases were constructed for ease of exposition. 9. In one instance, the interviewees did not consent to the interview being tape-recorded. In this case, detailed hand-written notes were taken by two interviewers and typed up shortly after the interview was conducted. 10. Refer to Tregidga and Milne (2006) for an example of discourse analysis studies where the meaning of language in use and the discourse itself is the primary focus of attention. 11. We acknowledge the potential for multiple inuences here, but focus on those that were demonstrated empirically to be more important. 12. The objectives of this study were as follows (see, Boedker et al., 2004, 2005): IC Management: How does the organisation prioritise, enact, manage and develop its knowledge resources? IC Measurement: How does the organisation measure the composition and performance of its knowledge resources and KM activities (or does it?)? IC Reporting: What is the type and level of IC reported in the organisations internal business management and strategy documents and annual reports? During the IC project, the researchers gave two presentations to senior and practice managers from the various divisions. These presentations provided examples of IC

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13.

14.

15.

16.

measurement and reporting from other organisations, especially those in Europe and notably Denmark (Denmark was at that time well on the way with the reporting of IC through IC statements and the Danish Guideline on Intellectual Capital Reporting had also recently been issued (see, Mouritsen et al., 2003). Various denitions of IC and relevant prior works in the area were also talked about by the researchers. The initial phase of the research study concluded with a presentation by the researchers to the LandsNSW executive team on July 21, 2004, summarising, among others, the knowledge resources talked about in the organisations business documents and voiced as important by the interviewees during this initial phase, and also discussing LandsNSW existing measurement and reporting practices (see Boedker et al., 2004, 2005). IC was thus not the creation of the organisation alone. The experiences of IC from other organisations including the work of organisations such as the Australian Government Consultative Committee on Knowledge Capital and members thereof inuenced activities and events at LandsNSW. Given our focus on explicating how consumers of IC discourse became interested in enacting it, we eschew a further and more detailed discussion of these external considerations, although it is important to note that knowledge about IC came into the organisation via a wider network of Australian and international actors with an interest in and expertise of IC management. Prior to introducing this framework, the IC statement also attempted dening IC (p.7, Lands NSW 2004-05 IC Statement): What is intellectual capital? Intellectual capital been dened by Thomas Stewart as the sum of everything everybody in an organization knows that gives it a competitive edge... Intellectual Capital is intellectual material, knowledge, experience, intellectual property, information... that can be put to use to create wealth (or value). Intellectual capital is described as having three aspects: Human capital the knowledge, motivation, abilities and skills of the employees with the organisation. External capital also generally known as relational capital, which reects the value of external relationships with the Department. Typically this would include stakeholders, customers, suppliers and other government and non-government agencies. Internal capital knowledge which has become embedded in the organisational structure such as commonly held values, culture, processes, digital data systems, policies, procedures and organisational structures. The value of internal relationships between employees and with management is also relevant to this aspect. It should be noted that these problems did not surface during Phase III but were also voiced by interviewees as issues within Phase I, as mentioned previously. Indeed, the intent of the director-general in initiating the IC project is evidence of this. Of interest here is how IC in 2006 becomes (re)connected to these pre-existing problems. Source: Vision 2013: A Seven Year Business and Workforce Plan for LPI (Douse, 2006). This 60-page document used a combination of performance measures and narrative to dene the ageing workforce issue, explain the forces driving it and proposing solutions for addressing it. A concurrent study of LandsNSW provides further evidence of this, observing in late 2006 that not all organisational participants were equally persuaded by the translations of IC discourse and the production of the IC statement (for more detail, refer to Morgan, 2006).

References Alvesson, M. and Karreman, D. (2000), Varieties of discourse: on the study of organisations through discourse analysis, Human Relations, Vol. 53 No. 9, pp. 1125-49. Andriessen, D. (2004), IC valuation and measurement: classifying the state of the art, Journal of Intellectual Capital, Vol. 5 No. 2, pp. 230-42.

Boedker, C., Guthrie, J. and Cuganesan, S. (2004), The strategic signicance of human capital information in annual reporting, Journal of Human Resources Costing and Accounting, Vol. 8 No. 2, pp. 7-22. Boedker, C., Guthrie, J. and Cuganesan, S. (2005), An integrated framework for visualising intellectual capital, Journal of Intellectual Capital, Vol. 6 No. 4, pp. 510-27. Boje, D.M., Oswick, C. and Ford, J.D. (2004), Language and organisation: the doing of discourse, Academy of Management Review, Vol. 29 No. 4, pp. 571-7. Bonfour, A. (2003), The Management of Intangibles: The Organizations Most Valuable Assets, Routledge, London. Bukh, N., Nielsen, C., Gormsen, P. and Mouritsen, J. (2005), Disclosure of information on intellectual capital in Danish IPO prospectuses, Accounting, Auditing & Accountability Journal, Vol. 18 No. 6, pp. 713-32. Callon, M. (1986), Some elements of a sociology of translation: domestication of the scallops and the sherman of St Brieuc Bay, in Law, J. (Ed.), Power, Action and Belief: A New Sociology of Knowledge, Routledge, London, pp. 196-223. Chia, R. (2000), Discourse analysis as organisational analysis, Organisation, Vol. 7 No. 3, pp. 513-18. Cuganesan, S. (2005), Intellectual capital-in-action and value creation, Journal of Intellectual Capital, Vol. 6 No. 3, pp. 357-73. Douse, B. (2006), Vision 2013: A Seven Year Business and Workforce Plan for LPI, Version 4.0, Draft, NSW Department of Lands, Lands and Property Information Consultation, Sydney, July. Edvinsson, L. and Malone, M.S. (1997), Intellectual Capital, Piatkus, London. English, L., Guthrie, J. and Parker, L. (2005), Recent public-sector nancial management change in Australia: implementing the market model, in Guthrie, J., Humphrey, C., Olson, O. and Jones, L. (Eds), International Public Financial Management Reform: Progress, Contradictions and Challenges, Information Age Press, Greenwich, CT, pp. 23-54. European Commission (EC) (2006), Reporting intellectual capital to augment research, development and innovation in SMEs, available at: http://ec.europa.eu/invest-in-research/ pdf/download_en/2006-2977_web1.pdf Ezzamel, M., Willmott, H. and Worthington, F. (2004), Accounting and management-labour relations: the politics of production in the factory with a problem, Accounting, Organizations and Society, Vol. 29 Nos 3/4, pp. 269-302. Fincham, R. and Roslender, R. (2003), The Management of Intellectual Capital and Its Implications for Business Reporting, The Institute of Chartered Accountants of Scotland, Edinburgh. Guthrie, J., Olson, O. and Humphrey, C. (1998), International experiences with new public nancial management (NPFM) reforms: new world?, in Olson, O., Guthrie, J. and Humphrey, C. (Eds), Global Warning: Debating International Developments in New Public Financial Management, Cappelen Akademisk Forlag, Bergen, pp. 17-48. Guthrie, J., Petty, R. and Johanson, U. (2001), Sunrise in the knowledge economy, Accounting, Auditing & Accountability Journal, Vol. 14 No. 4, pp. 365-82. Guthrie, J., Petty, R. and Ricceri, F. (2007), Intellectual Capital Reporting: Lessons from Hong Kong and Australia: Research Monograph, The Institute of Chartered Accountants of Scotland, Edinburgh. Habersam, M. and Piber, M. (2003), Exploring intellectual capital in hospitals: two qualitative case studies in Italy and Austria, European Accounting Review, Vol. 12 No. 4, pp. 753-79.

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Hardy, C. (2001), Researching organisational disclosure, International Studies of Management and Organisation, Vol. 31 No. 3, pp. 25-47. Hardy, C., Palmer, I. and Phillips, N. (2000), Discourse as a strategic resource, Human Relations, Vol. 53 No. 9, pp. 1227-48. Keenoy, T., Oswick, C. and Grant, D. (1997), Organisational discourses: text and context, Organisation, Vol. 4 No. 2, pp. 147-57. Latour, B. (1987), Science in Action, Open University Press, Milton Keynes. Latour, B. (1999), On recalling ANT, in Law, J. and Hassard, J. (Eds), Actor Network Theory and after, Blackwell, Oxford, pp. 1-14. Latour, B. (2005), Reassembling the Social: An Introduction to Actor-Network-Theory, Oxford University Press, Oxford. Law, J. (1992), Notes on the theory of the actor network: ordering, strategy and heterogeneity, Systems Practice, Vol. 5 No. 4, pp. 379-93. Law, J. (1999), After ANT: complexity, naming and topology, in Law, J. and Hassard, J. (Eds), Actor Network Theory and after, Blackwell, Oxford, pp. 1-14. Law, J. and Callon, M. (1988), Engineering and sociology in a military aircraft project: a network analysis of technological change, Social Problems, Vol. 35 No. 3, pp. 284-97. Leitner, K.-H. and Warden, C. (2004), Managing and reporting knowledge-based resources and processes in research organisations: specics, lessons learned and perspectives, Management Accounting Research, Vol. 15 No. 1, pp. 33-51. Markham, A. (1996), Designing discourse: a critical analysis of strategic ambiguity and workplace control, Management Communication Quarterly, Vol. 9 No. 4, pp. 389-421. Marr, B., Gray, D. and Neely, A.D. (2003), Why do rms measure their intellectual capital?, Journal of Intellectual Capital, Vol. 4 No. 4, pp. 441-64. MERITUM (2002), Guidelines for Managing and Reporting on Intangibles Intellectual Capital ` ` Report, Fundacion Airtel Movil, Madrid. Ministry of Economy, Trade and Industry, Japan (METI) (2004), Reference Guideline for Intellectual Property Information Disclosure: In the Pursuit of Mutual Understanding between Companies and Capital Markets through Voluntary Disclosures of Information on Patent and Technology, METI, Tokyo. Ministry of Economy Trade and Industry, Japan (METI) (2005), Guidelines for Disclosure of Intellectual Assets Based Management, METI, Tokyo, October. Morgan, J. (2006), Weak technologies and strong objects at the New South Wales Department of Lands, Honours thesis, UNSW, Sydney. Mouritsen, J. (2006), Problematising intellectual capital research: ostensive versus performative IC, Accounting, Auditing & Accountability Journal, Vol. 19 No. 6, pp. 820-41. Mouritsen, J. and Flagstad, K. (2005), Intellectual capital and paradoxes of managing knowledge, in Czarniawska, H. and Hermes, T. (Eds), Actor-network Theory and Organising, Liber and Copenhagen Business School Press, Malmo, pp. 208-29. Mouritsen, J., Larsen, H.T. and Bukh, P.N. (2001a), Intellectual capital and the capable rm: narrating, visualising and numbering for managing knowledge, Accounting, Organizations and Society, Vol. 26 Nos 7-8, pp. 735-62. Mouritsen, J., Larsen, H.T., Bukh, P.N. and Johansen, M.R. (2001b), Reading an intellectual capital statement, Journal of Intellectual Capital, Vol. 2 No. 4, pp. 359-83. Mouritsen, J., Bukh, P.N., Flagstad, K., Thorbjrnsen, S., Rosenkrands Johansen, M., Kotnis, S., Larsen, H.T., Nielsen, C., Kjrgaard Jensen, I., Krag, L., Jeppesen, G., Haisler, J. and

Stakemann, B. (2003), Intellectual Capital Statements The New Guideline, Danish Ministry of Science, Technology and Innovation, Copenhagen, available at: www.vtu.dk/ icaccounts (The) Nordic Industrial Fund (NIF) (2003), Nordic Harmonized Knowledge Indicators Harmonized Guidelines for IC Reporting in the Nordic IT Industry, NIF, Copenhagen. Organisation for Economic Co-operation and Development (OECD) (1999), Guidelines and instructions for OECD symposium, International Symposium on Measuring and Reporting Intellectual Capital: Experiences, Issues, and Prospects, OECD, Paris, June. Oswick, C., Keenoy, T.W. and Grant, D. (2000), Discourse, organisations and organising: concepts, objects and subjects, Human Relations, Vol. 53 No. 9, pp. 1115-23. Petty, R. and Guthrie, J. (2000), Intellectual capital literature review, Journal of Intellectual Capital, Vol. 1 No. 2, pp. 155-76. Phillips, N., Lawrence, T.B. and Hardy, C. (2004), Discourse and institutions, Academy of Management Review, Vol. 29 No. 4, pp. 635-52. Roos, G., Pike, S. and Fernstrom, L. (2005), Managing Intellectual Capital in Practice, Butterworth-Heinemann, Oxford. Roslender, R. and Fincham, R. (2004), Intellectual capital accounting in the UK: a eld study perspective, Accounting, Auditing & Accountability Journal, Vol. 17 No. 2, pp. 178-209. Society for Knowledge Economics (SKE) (2005), Australian guiding principles on extended performance management a guide to better managing, measuring and reporting knowledge intensive organisational resources, Draft, SKE, Sydney. Stewart, T.A. (1997), Intellectual Capital: The New Wealth of Organisation, Doubleday/Currency, New York, NY. Sveiby, K.E. (1997), The New Organisational Wealth: Managing and Measuring Knowledge-based Assets, Berrett-Kohler, San Francisco, CA. Sveiby, K.E. (2006), Methods for measuring intangible assets, available at: www.sveiby.com/ Portals/0/articles/ IntangibleMethods.htm (accessed 28 January 2007). Tregidga, H. and Milne, M.J. (2006), From sustainable management to sustainable development: a longitudinal analysis of a leading New Zealand environmental reporter, Business Strategy and the Environment, Vol. 15 No. 4, pp. 219-41. Unerman, J., Guthrie, J. and Striukova, L. (2007), United Kingdom Reporting of Intellectual Capital, Research Monograph for ICAEW Intellectual Capital Reporting Project, ICAEW, London. Vaivio, J. (1999), Examining the quantied customer, Accounting, Organizations and Society, Vol. 24 No. 8, pp. 689-715. Corresponding author James Guthrie can be contacted at: j.guthrie@econ.usyd.edu.au

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Analysing accounting discourse: avoiding the fallacy of internalism

John Ferguson
School of Accounting & Finance, University of Dundee, Dundee, UK
Abstract
Purpose The purpose of this paper is to elaborate on John B. Thompsons tripartite approach for the analysis of mass media communication, highlighting how this methodological framework can help address some of the shortcomings apparent in extant studies on accounting which purport to analyse accounting texts. Design/methodology/approach By way of example, the paper develops a critique of an existing study in accounting that adopts a textually-oriented approach to discourse analysis by Gallhofer, Haslam and Roper. This study, which is informed by Faircloughs version of critical discourse analysis (CDA), undertakes an analysis of the letters of submission of two business lobby groups regarding proposed takeovers legislation in New Zealand. A two-stage strategy is developed: rst, to review the extant literature which is critical of CDA, and second, to consider whether these criticisms apply to Gallhofer et al. Whilst acknowledging that Gallhofer et al.s (2001) study is perhaps one of the more comprehensive in the accounting literature, the critique developed in the present paper nevertheless highlights a number of limitations. Based upon this critique, an alternative framework is proposed which allows for a more comprehensive analysis of accounting texts. Findings The critique of Gallhofer et al.s study highlights what is arguably an overemphasis on the internal characteristics of text: this is referred to by Thompson as the fallacy of internalism. In other words, Gallhofer et al. draw inferences regarding the production of the letters of submission from the texts themselves, and make implicit assumptions about the likely effects of these texts without undertaking any formal analysis of their production or reception, or without paying sufcient attention to the social and historical context of their production or reception. Originality/value Drawing on Thompsons theory of mass communication and his explication of the hermeneutical conditions of social-historical enquiry, the paper outlines a range of theoretical considerations which are pertinent to researchers interested in studying accounting texts. Moreover, building on these theoretical considerations, the paper delineates a coherent and exible methodological framework, which, it is hoped, may guide accounting researchers in this area. Keywords Accounting, Discourse, Text, Hermeneutics Paper type Conceptual paper

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Received December 2005 Revised August 2006, March 2007 Accepted March 2007

Accounting, Auditing & Accountability Journal Vol. 20 No. 6, 2007 pp. 912-934 q Emerald Group Publishing Limited 0951-3574 DOI 10.1108/09513570710830290

Introduction Interest in language and discourse, and in particular, in how language is linked to wider social processes, has spread across a range of social science disciplines over recent years (Fairclough, 1992). However, whilst interest in discourse has become fashionable, the term is often used indiscriminately without being dened or clearly explained (Phillips and Jorgensen, 2002, p. 1). As Fairclough (1992, p. 3) notes, discourse is a difcult and contested concept, with many conicting and overlapping denitions formulated from various theoretical and disciplinary standpoints (see also, Phillips and Jorgensen, 2002). For example, in linguistics the

term discourse is most commonly taken to refer to instances of written and spoken dialogue, although it is sometimes used exclusively to refer to spoken dialogue as opposed to written text (Fairclough, 1992). Another use of the term within linguistics is to refer to the various types of language employed in different social situations; for example, newspaper discourse, medical consultation discourse (Fairclough, 1989, 1992, Van Dijk, 1998; Wodak and Meyer, 2001). Outside of linguistics, the term discourse has been predominantly associated with the work of Michel Foucault. Foucaults work on discourse is more abstract than the textually orientated approaches associated with linguistics. In other words, Foucault is not concerned with the analysis of spoken and written language texts, but with the rules which determine which statements are accepted as meaningful and true in a particular historical epoch (Phillips and Jorgensen, 2002, p. 12; see also, Fairclough, 1992). Whilst the studies of discourse outlined in the literature may be different in terms of their approach and focus of analysis, most share the assumption that our ways of talking (and writing) about the world, do not neutrally reect our world, identities and social relations but, rather, play an active role in creating and changing them (Phillips and Jorgensen, 2002, p. 1). In this sense, these approaches to discourse analysis are premised on, to a greater or lesser extent, social constructionism[1]; for example, Phillips and Hardy (2002, p. 2) state, the things that make up the social world including our very identities appear out of discourse . . . without discourse, there is no social reality, and without discourse, we cannot understand social reality (see also, Grant et al., 2004; Heracleous, 2004). The increasing interest in language and discourse throughout the social sciences has had a notable impact on accounting research: numerous studies in accounting reect the different approaches to analysing discourse and language that dominate the area. As Gallhofer et al. (2001) point out, many of these studies may not necessarily draw on explicit methods associated with discourse analysis, but they all share an interest in examining aspects of accounting language or language used in relation to accounting. These wide ranging analyses are predominantly textually oriented, focusing on specic accounting texts such as annual reports (Abeysekera and Guthrie, 2005; Beattie et al., 2004; Freedman and Stagliano, 2002), social and environmental reports (Buhr and Freedman, 2001; Freedmanm and Jaggi, 2005; Laine, 2005; Livesey, 2002; Livesey and Kearins, 2002; Tregidga and Milne, 2006) and textbooks (Davidson, 2005; Ferguson et al., 2005). In keeping with its prevalent use in the accounting literature, the term discourse will be employed in the current study to refer to instances of written or spoken language. In other words, the majority of studies in accounting use the term discourse in the same sense in which it is most commonly employed in linguistics: i.e. to refer to instances of written or spoken text (Fairclough, 2003). In this respect, the terms discourse and text are often used interchangeably[2] and can be taken, as they are in this paper, to broadly refer to written text, but may also include transcripts of interviews, web-pages and visual images (Fairclough, 2003). While there is much which is commendable in extant studies of accounting discourse and language, this paper argues, drawing on Thompson (1990), that they have one major limitation: they assume, or speculate upon, the likely effects of accounting texts, without thoroughly investigating how these texts are interpreted by the individuals who encounter them in their everyday lives, or considering, in any

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specic detail, the social-historical contexts of text production, transmission and reception. Thompson (1990, p. 105) describes any attempt to read off issues regarding the production or reception of texts by attending to the text alone as the fallacy of internalism[3]. For example, he states:
It is a fallacy because it cannot be assumed that the characteristics which the analyst discerns in a particular cultural product will have a given effect when the product is received and appropriated by individuals in the course of their everyday lives. The reception and appropriation of cultural products is a complex social process which involves an ongoing activity of interpretation and the assimilation of meaningful content to the socially structured background characteristics of particular individuals and groups. To attempt to read off the consequences of cultural products from the products themselves is to neglect these ongoing activities of interpretation and assimilation; it is to speculate about the impact of these products on the attitudes and behavior of individuals without examining this impact in a systematic way (Thompson, 1990, emphasis added)[4].

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The theoretical considerations advanced by Thompson (1990), and the conjoining methodological framework he develops, have found advocates in the accounting literature (for example, Arnold, 1998; Oakes et al., 1994)[5]. Most notably, Oakes et al. (1994) examine cost benet studies in the medical literature, drawing on Thompsons (1990) depth-hermeneutical framework. Their study emphasises the importance of not only focusing on the text (i.e. the cost-benet study) but expanding the focus beyond the accounting context of individual studies to look at the production and distribution of cost benet studies in health care . . . [and] the reception and appropriation of these studies (Oakes et al., 1994, p. 20). Consideration of both the reception and appropriation of text is, according to Oakes et al. (1994) of fundamental importance in an accounting context given the (codied) nature of accounting discourse. They state:
Others may protest that the author is not responsible for the reception or use of the message, and the message stands apart from the receiver of the message . . . This argument may make more sense to those who consider themselves artists than to accountants who represent themselves as being explicitly concerned with the users of accounting numbers. However, the relationship between the text, the author and the reader presents problems that we do not often think about (Oakes et al., 1994, p. 22, emphasis added).

In this respect, Thompsons framework for analysis requires a shift in emphasis; not only is the text or discursive event the focus of analysis but also the institutions and structures surrounding their production and reception, and the understanding of individuals involved in their production and reception (Arnold, 1998; Oakes et al., 1994). This paper focuses on Thompsons framework for the analysis of mass media communication. It proceeds as follows: the next section outlines some theoretical considerations applicable to the study of accounting texts. In particular, this section draws attention to important aspects of culture and social enquiry that highlight the signicance of considering aspects of production and reception when analysing discourse. Drawing on these theoretical concerns, the subsequent section develops a critique of an existing study in accounting, Gallhofer et al. (2001), which undertakes a textual analysis of the written submissions made by the New Zealand Business Roundtable and the Institute of Directors regarding a proposed takeovers Code. Gallhofer et al.s (2001) analysis is informed by Norman Faircloughs version of critical discourse analysis (CDA): a review of the extant literature which is critical of CDA and, in particular, Faircloughs version of it, is presented, and followed by a critique of

Gallhofer et al.s (2001) study. This section is then followed by a delineation of Thompsons tripartite approach for the analysis of mass communication, highlighting how this methodological framework addresses a number of the limitations apparent in Gallhofer et al.s study, and moreover, in the extant accounting literature in general. The nal section concludes. Analysing accounting texts: some theoretical considerations When analysing various forms of discourse, such as annual reports, social and environmental reports or accounting textbooks, a range of theoretical concerns relating to the nature of culture, communication and social enquiry should be considered. These concerns are addressed in this section under the sub-headings, Culture and The nature of mass communication. This section therefore serves two related purposes: rstly, it will form the basis for developing a critique of existing studies of accounting texts; secondly, the theoretical issues outlined here have extremely important methodological implications, which will be further developed in the penultimate section of the paper. Culture Drawing on anthropological concepts of culture, Thompson (1990, p. 123) distinguishes between what he describes as descriptive and symbolic conceptions of culture. A descriptive concept of culture refers to the army of beliefs, customs, laws, forms of knowledge and art etc. which are acquired by individuals as members of a particular society and which can be studied scientically (Thompson, 1990, p. 128). This concept is associated with, in particular, the work of E.B. Taylor, who stipulated that the culmination of a societys different beliefs and customs formed a complex whole which could be studied as the object of a systematic scientic enquiry (Thompson, 1990, p. 128). In this regard, a descriptive conception of culture is concerned with the classication of different elements of a culture, which would enable comparisons with other cultures and the formulation of laws, often with the view to re-assembling the steps that led from savagery to civilized life (Thompson, 1990, p. 129). By contrast, the symbolic conception of culture takes the view that culture is a shared system of symbols and signs. Underpinning this concept of culture is the idea that human beings not only produce and receive meaningful linguistic expressions, but also bestow meaning on non-linguistic constructions on actions, works of art, material objects of various kinds (Thompson, 1990, p. 130). Thus, it is through the ordered clusters of signicant symbols that man makes sense of the events through which he lives (Geertz, 1973, p. 363). In this sense, a symbolic conception of culture requires a shift in analysis from the classication and comparison associated with the descriptive concept, to a focus on the interpretation of meaning ascribed to symbolic forms[6]. According to Thompson (1990, p. 138), symbolic forms are expressions of a subject . . . for a subject (or subjects) and may include images or written text as well as actions and utterances. In this respect, accounting reports may be conceived of as symbolic forms, and a cultural analysis of accounting may focus on the interpretation and meaning ascribed to such reports. As Thompson (1990, pp. 131-2, emphasis added) states, a symbolic conception of culture has little to do with the formulation of laws and predictions . . . it is more like interpreting a literary text.

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In formulating his own conception of culture, Thompson (1990) takes a symbolic approach, drawing in particular on the work of anthropologist Clifford Geertz. In a widely quoted passage, Geertz (1973, p. 5) argues that:
[. . .] man is an animal suspended in webs of signicance he himself has spun. I take culture to be those webs, and the analysis of it to be therefore not an experimental science in search of law, but an interpretative one in search of meaning.

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Accordingly, the role of the researcher is to unravel layers of meaning, describing actions and expressions which are already meaningful for the very individuals who are producing, perceiving and interpreting these actions (Thompson, 1990, p.131, emphasis in original). However, Thompson (1990) outlines a number of difculties with Geertzs conception, in particular, his failure to give sufcient consideration to issues of power and conict, or to the social context within which cultural phenomena are produced, transmitted and received. In building on Geertzs symbolic conception, Thompson (1990, p.136, emphasis in original) develops what he calls a structural conception, which stresses the symbolic character of cultural phenomena and the fact that such phenomena are always embedded in structured social contexts. In other words, cultural phenomena are produced, transmitted and received within particular social contexts which may be characterised by asymmetrical relations of power [or] by different access to resources and opportunities (Thompson, 1990, p. 136). Two key issues emerge from Thompsons (1990) structural conception of culture, which are important for researchers interested in engaging in the analysis of symbolic forms (such as accounting texts). First, symbolic forms already have meaning for actors involved in their production, transmission and reception; i.e. such cultural phenomena will be routinely interpreted by actors in the course of their everyday lives. Therefore, to understand the meaning of symbolic forms, or to interpret their signicance, the analyst must consider what these forms mean to the actors who encounter them. Second, the historically specic and socially structured contexts in which the symbolic forms are produced, transmitted and received should not be neglected i.e. the relations of power, institutions, available resources and forms of authority. The nature of mass communication Modern culture, according to Thompson (1990) has emerged from, and is closely interwoven with, the development of mass communication. Hence, Thompsons (1990) view of the development of the modern state is markedly different from the grand narrative of cultural transformation which stems from the work of Marx, in particular, and which underpins much contemporary social theory. According to this grand narrative, the rise of industrial capitalism in Europe is attributed to the decline of religious beliefs and the emergence of secular belief systems. While Thompson (1990, p. 11) acknowledges the important insights this grand-narrative has provided, he argues that such theories have mis-identied the major cultural transformation associated with the development of modern societies; i.e. the proliferation of institutions of mass communication (a process which Thompson(1990) refers to as the mediazation of modern culture. Given the importance Thompson (1990) ascribes to the emergence of mass communication in modern culture, he outlines a number of characteristics of this phenomenon that are important for researchers to consider when analysing symbolic

forms (such as accounting texts). First, the term mass communication can be misleading in some respects; especially since it conjures up the image of a vast audience comprising many thousands, even millions of individuals (Thompson, 1995, p. 24). While in some sections of the media industry (for example, mass circulation newspapers) audiences are large, in other sectors, such as some book and magazine publishing, the audience can be relatively quite small and specialised (Thompson, 1990, 1995). In this respect, the term mass communication should not be construed in narrowly quantitative terms but more broadly taken to refer to media messages produced for a plurality of recipients (Thompson, 1995, p. 24; see also, Thompson, 1990). In other words, mass communication refers to messages which are available in principle to a number of recipients (Thompson, 1995, p. 24). Given that most accounting texts (for example, annual reports or social and environmental reports), tend to be explicitly communicated to a range of users (Oakes et al., 1994), one could argue that such examples of accounting communication accord with Thompsons (1990, 1995) denition of mass communication i.e. available in principal to a number of recipients. The term mass communication can be misleading in another respect, in that it suggests the recipients of media messages constitute a vast sea of passive, undifferentiated individuals who fail to question, or engage critically with mass communication (Thompson, 1995, p.24). However, such a view fails to consider the complex ways in which symbolic forms are appropriated by individuals. Furthermore, the term communication can also be potentially ambiguous, since it can be taken to refer to a dialogical situation like a conversation. However, the communication in mass communication refers to a one way ow of messages from the transmitter to the receiver (Thompson, 1990, p. 220). Therefore, Thompson (1990) suggests that the terms transmission or diffusion are more appropriate terms. In this respect, mass media institutes a fundamental break between the producers and receivers (Thompson, 1990, p. 220, emphasis in original); i.e. mass media messages are produced for recipients who are absent from the site of production, and therefore have a limited capacity to contribute to the communicative process. Again, this structured break is a feature of most accounting communication, whereby reports (for example, annual reports or social and environmental reports) are produced in the absence of the users of such reports. As a consequence of this break Thompson (1990, p. 220, emphasis in original) states that the process of transmission is characterised by a distinctive form of indeterminacy, whereby audience responses are largely absent. In this respect, producers employ a range of strategies to secure the effectiveness of symbolic forms, for example, by conducting market research, monitoring audiences or by using well-tried formulas which have a predictable audience appeal (Thompson, 1990, p. 221). In the context of accounting, such tried and tested formulas may be employed in the production of symbolic forms such as the annual report; for example, the abstractions articulated in accounting language which are often a feature of the chairmans statement (Amernic and Craig, 2006, p. 81). Similarly, companies may seek to reduce indeterminacy by undertaking stakeholder engagement as part of their social, ethical and environmental reporting activities. By canvassing stakeholder opinions, companies are then able to appropriate the information they disclose in the public domain (Cummings, 2001, p. 45; Owen et al., 2001). However, what is key regarding these techniques and strategies employed by producers to reduce indeterminacy is that they are institutional mechanisms and employed in a way

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which concurs with the overall aims of the institutions concerned (Thompson, 1990, p. 221). This structured break between producer and recipient has important methodological implications for the analysis of symbolic forms that will be discussed further in the third section of this paper. Drawing on the theoretical considerations outlined above, we can discern two key issues that are relevant to the study of mass mediated symbolic forms (such as annual reports or social and environmental reports). These are: (1) According to Thompsons structural conception of culture, culture is characterised by the production and reception of symbolic forms. Therefore, the analysis of symbolic forms requires consideration of their production, transmission and reception, as well as the social and historical contexts of this activity. (2) Mass communication institutes a structured break between producer and recipient. Therefore, consideration should be given to the institutional mechanisms of production and diffusions as well as the nature of the audience and their appropriation of symbolic forms. Therefore, while discourse or formal analysis will shed light on the patterns and devices which structure texts, it is not possible to read off the characteristics of production or the consequences of such texts by recourse to this form of analysis alone (Thompson, 1990, p. 291; see also, Thompson, 1984). This failure to consider the processes of both production and reception, and the social historical conditions of these activities is referred to by Thompson (1990, p. 291) as the fallacy of internalism. The following section critiques a study in the accounting literature which undertakes a textually orientated approach to the analysis of accounting discourse: Gallhofer et al. (2001); by drawing on the theoretical concerns outlined above, this critique will argue that Gallhofer et al. (2001) overemphasise the internal characteristics of the text, and pay insufcient attention to issues of production and reception as well as to the social and historical conditions in which they are embedded. In this sense, and despite the merits of the work, Gallhofer et al.s (2001) analysis falls into the fallacy of internalism. Prior research into aspects of accounting discourse Gallhofer et al. (2001) The extant literature on accounting discourse and language is extremely diverse, covering many different foci of analyses (for example, annual reports, social and environmental reports, Chairmens statements, etc), and considering many different aspects of language and approaches to text analysis (for example, content, rhetoric, narrative, metaphor, etc.). While the present paper restricts its critique to one such study (Gallhofer et al., 2001) the criticisms that are advanced are applicable to the wide-range of research that purports to undertake a textually oriented approach to the analysis of accounting discourse. While any one of these studies could have been subjected to a more developed critique, Gallhofer et al. (2001) was selected because the framework from which they draw (Faircloughs version of critical discourse analysis) explicitly considers the production and reception of texts. In this respect, Gallhofer et al.s (2001) study could be considered to be more comprehensive than other textually orientated approaches in the accounting literature, and less likely to fall foul of the

fallacy of internalism. However, as I seek to argue, there are serious problems with Faircloughs framework which prevents a full consideration of issues of production and reception; problems which also apply to Gallhoffer et al. (2001). The following section provides an overview of CDA and is followed by a synopsis of Gallhoffer et al.s (2001) paper. A two-stage argumentative strategy is then developed: rst, to review the extent literature which is critical of CDA, and second, to consider whether these criticisms apply to Gallhofer et al. (2001). CDA CDA has emerged as a major eld of research over the last 20 years, reaching a mature stage of incorporation into academic journals (McKenna, 2004, p.9). CDA draws on traditions within linguistics, such as classical rhetoric, text linguistics, pragmatics and sociolinguistics, and can be viewed as a continuation of the work carried out in the 1970s and 1980s at the University of East Anglia by Fowler, Trew and Kress: the work of these pioneering authors laid the foundations for critical linguistics (Fowler et al., 1979; Wodak, 2001). The principle aim of CDA is to highlight the relationship between language use and unequal relations of power (Fairclough, 1989). There exist a number of approaches within CDA, which, like approaches to discourse in general, range from textually orientated research to more abstract work, drawing on social theory (Fairclough, 1992; Meyer, 2001). However, as Blommaert (2005) notes, the use of Hallidayan systemic functional linguistics is prominent across a number of approaches. In fact, the pervasiveness of Hallidays inuence in CDA has led Wodak (2001, p. 8) to stipulate that an understanding of the basic claims of Hallidays grammar and his approach to linguistic analysis is essential for a proper understanding of CDA.[7]. As mentioned previously, Gallhofer et al. (2001) take an approach to CDA which draws on the work of Norman Fairclough, whose version of CDA is often considered to fall between textually orientated and social theory approaches to discourse (referred to by Meyer (2001, p. 22) as a middle-range theory position). Faircloughs version of CDA aims to develop an approach to language analysis which combines methods from linguistics with insights from social and political theory. In this regard, Fairclough cites Hallidays systemic functional linguistics as being inuential regarding the former, and a range of social theorists, including, Antonio Gramsci, Loius Althusser, Michel Foucault, Jurgen Habermass and Anthony Giddens with regard to the latter (Fairclough, 1992, p. 1). In sketching his social theory of discourse, Fairclough (2003, p. 205) emphasises the dialectical relationship between discourse (including language but also other forms of semiosis, e.g. body language or visual images) and other elements of social practice. In this sense, Fairclough (1992, p. 64) views discursive practice as being shaped and constrained by social structure such as class, institutions, norms and conventions, as well as contributing to the constitution of all those dimensions of social structure which directly or indirectly shape and constrain it. In conceptualising the norms and conventions that underlie discourse practice, Fairclough adopts the Foucauldian term order of discourse. For Fairclough (1993, p. 135) the order of discourse of a social domain is the:
[. . .] totality of its discourse practices, and the relationships (of complementarity, inclusion/exclusion, opposition) between them- for instance in schools, the discursive practices of the classroom, of assessed written work, of the playground, and of the staff room.

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And the order of discourse of a society is the set of these more local orders of discourse, and relationships between them (e.g. the relationship between the order of discourse of the school and those of the home or the neighbourhood).

920

In categorising types of discourse practice, Fairclough (1993, p. 135) distinguishes between discourses (discourse as a count noun), which refer to areas of experience from a particular perspective (for example, patriarchal versus feminist discourses of sexuality) and genres, which refer to the uses of language associated with a particular social activity such as a job interview. In order to explore the relationships between discursive events, Fairclough (1992, p. 72) develops a three-dimensional framework, each dimension of which is indispensable for discourse analysis: (1) discourse as text; (2) discourse as discourse practice; and (3) discourse as social practice (see also, Fairclough, 1989; 1995). Each aspect of this framework is briey summarised below. At the level of analysis of discourse as text, the focus of analysis is on written or transcribed text. As mentioned, Faircloughs analysis of the structural features of text is inuenced by Hallidays systemic functional linguistics, although the work in other elds linguistics also plays a role. Broadly speaking, Fairclough (1992, 1995) organises his analysis according to vocabulary, grammar, cohesion and text structure. At the level of analysis of discourse as discourse practice, the focus is on the production, distribution and consumption of text, in particular, socio-cognitive aspects of text production and interpretation. Discourse practice, according to Fairclough (1992, p. 80) is constrained by members resources which are effectively internalised social structures, norms and conventions, including orders of discourse, and conventions for the production, distribution and consumption of texts (see also, Fairclough, 1989, 1993, 1995). Drawing on the work of Bakhtin and Kristeva, the concept of intertextuality plays a prominent role in the consideration of aspects of production, transmission and reception. This concept and its application by Fairclough will be considered in more detail below in the section that discusses existing criticisms of CDA. At the level of discourse as social practice, analysis is concerned with context, including the institutional context and the wider societal context. Of particular concern to Fairclough (1989, 1992, 1993, 1995) is the relationship between power and discourse and, more specically, how control of discursive practice can be viewed as hegemonic struggles over orders of discourse. Gallhofer et al. (2001) takeovers legislation in New Zealand Gallhofer et al. (2001, p. 130) explain that New Zealands western economy and society has followed other countries by moving in the direction of neo-liberalist economic polity. The New Zealand National Partys pursued an agenda of updating company law (including regulation, nancial institutions and takeovers) in light of updates which had occurred in other Anglo-American countries. However no denite legislative regulatory agenda was pursued by the National Party just a general increased openness to neo-liberal economic policy (Gallhofer et al., 2001). With regard to takeovers, a Bill was drafted which proposed a Takeovers Code and Takeovers

Panel. A Takeovers Panel Advisory Committee was charged with drawing up the Code that was to be used in governing the conduct of takeovers. Submissions were sent to the committee so that the views of interested parties could be considered. The submissions sent to the committee evidenced signicant differences (Gallhofer et al., 2001, p. 132); in particular, the New Zealand Business Roundtable (NZBR) opposed the code, and the Institute of Directors (IOD), supported it. The analysis undertaken by Gallhofer et al. (2001) concerns the letters of submission sent by prominent spokespersons from these two organisations. Gallhofer et al. (2001) point out that, although both groups are free market advocates, analysis shows the IOD to be more traditional and the NZBR to be pushing for a response to demands of international capitalism. At the level of textual analysis, Gallhofer et al. (2001) focus on the vocabulary of the texts and the use of keywords such as regulation and code which differed markedly between the two submissions. For example, in the NZBR texts, takeovers are presented as value creating whilst the IOD denies that the legislation poses any threat to takeover activity, stating that the code, does not prevent takeovers. The NZBR text denotes that takeover activity engenders economic efciency and economic welfare and that the takeovers code is therefore a threat to these perceived benets. The IOD on the other hand, emphasises that takeover activity can be unfair to minority shareholders, and that the code is a welcome increase in fairness (Gallhofer et al., 2001, p. 134). At the level of discourse practice, Gallhofer et al. (2001) place emphasis on the production of texts, where signicant differences are found. In particular, the IOD emphasise practical experience, whereas the NZBR emphasise the support of experts. Therefore, it was the type of support that [each group] deemed appropriate to mobilize their case which was the marked difference between the two submissions (Gallhofer et al., 2001, p. 136). For example, the NZBR evidences expert research (which they commissioned), whilst the IOD submission details past abuses in takeovers (drawing on a supporting letter from the Securities Comission). Gallhofer et al. (2001, p. 137) add that the type of research mobilised to buttress the NZBR case is US mainstream nance research, which is presented in a manner which appears scientic and neutral. At the level of analysis of discourse as social practice, Gallhofer et al. (2001, p. 138) analyse the texts in terms of hegemonic struggle, stating that discourse can be located in a hegemonic struggle to effect a subtle shift in hegemony further towards neo-liberalist polity. According to Gallhofer et al. (2001, p. 139), this is apparent in the perspectival differences in the submissions made by both the IOD and the NZBR; in particular, while the IOR reected New Zealand traditional values the NZBR emphasised international capitalism. Whilst these perspectives may reect the self-interests of both organisations, Gallhofer et al. (2001) maintain that they also reect wider social struggle. Gallhofer et al. (2001) also point out that, in mobilising their case, the NZBR closely aligned themselves with other sympathetic groups (for example, the Centre for Independent Studies (CIS) who sponsored a lot of the academic research used in the NZBRs submission). In their concluding remarks Gallhofer et al. (2001) suggest that the IOD could have done more to win the battle over research resources, as a means of taking advantage of language and discourse in the struggle over polity.

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Criticisms of CDA In order to adequately assess Gallhofer et al.s (2001) study it is rst of all imperative to consider the extant literature which is critical of CDA and, in particular, Faircloughs version of it. Criticisms of CDA are wide ranging: for example, commentators have noted that the interpretations offered by CDA tend to be politically motivated as opposed to linguistically motivated (Stubbs, 1997); rely on a nave sociological model based on a macro-sociological theory in which there only two parties - the oppressors and the oppressed (Hammersley, 1997, p. 245; see also, Hammersley, 2003); offer little justication or rational regarding the texts which are selected for analysis (Widdowson, 2004) and; do not consider any sense of history (Blommaert, 2005). However, one criticism is notable for its pervasiveness: that CDA does not analyse how a text can be read in many ways, or under what social circumstances it is produced and consumed (Blommaert, 2005, p. 31). Perhaps the most resonant of these critiques comes from Henry Widdowson, whose expertise lies in applied linguistics (Haig, 2004). For Widdowson (2004) the central problem with CDA is that it fails to make a distinction between text and discourse, and the two terms tend to be used synonymously in the eld. Widdowson (2004, p. 8) draws a clear distinction between the two terms: text is the overt linguistic trace of a discourse process and thus, the product of discourse, whereas discourse refers to the process of communication and interpretation whereby language is used to engage our extralinguistic reality. Therefore, while discourse is the pragmatic process of meaning negotiation, text is the product (Widdowson, 2004). Blommaert (2005, p. 32) also comments on this issue, stating that CDA collapses semantics and pragmatics: pragmatics is, in fact, reduced to semantics. This becomes a problem when one considers the structured break which Thompson (1990) refers to. Indeed, Widdowson (2004, p. 12) also anticipates these difculties, where he notes that in the case of written texts, the participants in the discourse process are separated, giving rise to the following:
[. . .] discourse which the writer intends the text to record as output . . . [which is] always likely to be different from the discourse which the reader derives from it. In other words, what a writer means by a text is not the same as what a text means to a reader.

Despite the explicit consideration of the production and reception of texts in Faircloughs three dimensional framework, it has been widely observed that this routinely fails to play a part in Faircloughs analysis of text (Blommaert, 2005; Pennycook, 2003; Stubbs, 1997; Widdowson, 2000, 2004). In Faircloughs work we nd the insistence that:
[. . .] analysis of a particular discourse as a piece of discursive practice focuses on processes of text production, distribution and consumption. All the processes are social and require reference to the particular economic, political and institutional settings within which discourse is generated (Fairclough, 1992, p. 71; see also, Fairclough, 1989, 1993, 1995).

This leads to the necessary questions: Why is it important to focus on text production and reception?, and How does one approach this in analysis?. According to Stubbs (1997), despite having been asked these questions in respect of CDA for a long time, answers are not forthcoming. One reason was proffered by a leading proponent of critical linguistics (and to whom Fairclough acknowledges an intellectual debt) Fowler (1996, p. 7), who notes that the reader simply is not theorized.

By Faircloughs (1992, p. 72) own admission, one can [not] reconstruct the production process purely by reference to texts. Fairclough (1992, p. 72) attempts to get round this problem by suggesting that one way of linking this emphasis on discursive practice and processes of text production, distribution and consumption of the text itself is to focus on the intertextuality of the latter (see also, Fairclough, 1989, 1993, 1995) According to Fairclough (1992, p. 84) intertexuality is basically the property of texts having snatches of other texts. Fairclough outlines three features of intertexuality to correspond with the processes of production, distribution and reception. For production, intertexuality refers to the historicity of texts, and how they consist of remnants of prior texts. In terms of distribution, intertextuality explores the networks that texts move along and the transformations they undertake as they move from one text type to another, for example, a political speech to a news report (Fairclough, 1992, p. 84; see also, Fairclough, 1989, 1993, 1995). In terms of interpretation, an intertextual perspective implies that interpreters bring a range of texts to the interpretative process which will shape their understanding of a text. It seems clear that intertextuality represents only a very partial step towards the analysis of the process whose importance Fairclough repeatedly emphasises the production, distribution and reception of texts. What is more, Fairclough does not make it clear how the analyst is to explore such intertextual features (beyond the use of conjecture and speculation). Again, Fairclough (1992, p. 86) is quick to acknowledge the limitations of his work, stating, how people interpret texts in various circumstances is a question requiring separate investigation, although he also notes that such empirical work does not appear in his own book. Such qualications are familiar features of Faircloughs work; for example, Fairclough (1993) sets out to illustrate his three dimensional model with samples of discourse from higher education (including advertisements for a lectureship, course materials and a CV). Again, while emphasising the need to apply all three analytical elements of his framework, Fairclough (1993) himself, for reasons of space only undertakes a systematic analysis (i.e. applying all three levels) to one of the three examples: the advertisement. However, this illustration tells us very little about production, distribution or consumption. In fact, only one small paragraph is devoted to the discussion of discourse practice (drawing primarily on intertextuality), which tells us that the advertisements are interdiscursively complex, articulating a variety of genres and discourses, including elements of advertising and other promotional genres (Fairclough, 1993, p. 146). It seems hardly surprising that an advertisement for a job should draw on elements of advertising genres moreover, beyond mere speculation, Fairclough (1993) offers no formal analysis of how this is so, what an advertising genre looks like, and what features of such a genre are explicit in each advertisement. In short, not only is Faircloughs application of intertextuality remarkably unconvincing, it tells us virtually nothing about aspects of the production, distribution and consumption of text. In a more recent work (Fairclough, 2003), the reader again is told that the causal effects of texts and the ideological effects of texts can not be got at by recourse to text analysis alone. In this sense, Fairclough (2003, p. 15) suggests that one needs to look at interpretations of texts as well as texts themselves . . . which suggests that textual analysis is best framed within ethnography. However, no examples of this ethnographic research are offered in his text, neither is there a clear exposition of what it might entail nor the theoretical justication for its need. As Haig (2004, p. 16) points out: here again we nd a gap between the talk of CDA and the walk: lip service is paid to the importance

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of such matters but the sleeves rolled-up, dirty handed business of actually producing the work is severely lacking. Similarly, speaking specically of Faircloughs version of CDA, Widdowson (1998, p. 143) vehemently stresses that the intentions of producers and consumers of texts are vicariously inferred from the analysis itself, by reference to what the analyst assumes in advance to be the writers ideological position. Therefore, despite Faircloughs explication of a three dimensional framework, where the second dimension (discourse as discourse practice) claims to consider the production, distribution and consumption of a text and how it is interpreted by individuals, as Widdowson (1998, p. 143) argues, the producers and consumers of texts are never consulted [and] no attempt is ever made to establish, empirically what writers might have intended by their texts (see also, Pennycook, 2003). Extending the critique Gallhofer et al. (2001) Despite CDAs emergence as a distinct eld of study which has become widely adopted in a range of social science disciplines, it has received little attention in the accounting literature. In this respect, as well as others, Gallhofer et al.s (2001) paper is praiseworthy. Whilst there have been a few studies in the general area of business, management and accounting which have adopted a CDA approach, these studies have often amounted to little more than a close critical reading of text (Laine, 2005) or have restricted their analysis to one aspect of CDA, such as recontextualisation (see Thomas, 2003)[8]. In this respect, Gallhofer et al. (2001) represents the rst (and only of which the author is aware) real attempt to fully apply CDA in an analysis of accounting discourse. In doing so, as mentioned previously, Gallhofer et al. (2001) utilise all three dimensions of Faircloughs framework for analysis. The critique of Gallhofer et al. (2001) developed in this section will focus on one specic aspect of their analysis - the level of discourse practice. This level in Faircloughs framework is the one which explicitly addresses the production, transmission and reception of text. However, as noted in the preceding section, a number of commentators have highlighted a range of problems associated with the adoption of this analysis- in particular, the lack of consultation with the actors involved in the production, transmission and reception of texts. Drawing on these criticisms, the present paper will assess the extent to which they apply to Gallhofer et al.s (2001) study. As discussed above, at this level of analysis, Gallhofer et al. (2001, p. 136) focus on the credibility of argumentation employed by the two lobby groups and, in particular, the mode of argumentation of those engaged in the debate. In terms of production, Gallhofer et al.s (2001) analysis focuses on the other texts on which both submissions draw in constructing their arguments i.e. the intertextuality of the submissions. It is both interesting and important to note the intertextual aspects of the submission letters; in particular, that we are informed that the IODs submission emphasises practical experience (for example, by attaching to their submission a Securities Commission letter detailing past abuses) and the NZBR draw on mainstream nance research which they commissioned, is both informative and illuminating. However, this aspect of text production is inferred entirely from the text itself, and therefore, tells us little of the opinions, beliefs and understandings of the individuals involved in the production process, and only a limited amount about the social-historical conditions of production. Furthermore, Gallhofer et al. (2001, p. 139) note that the NZBR submission constitutes a more powerful discourse and that the

IODs submission was weak in terms of its position in the hegemonic struggle. In other words, while Gallhofer et al. (2001) do not explicitly speculate on the consequences of the submissions, there is an implicit assumption that the NZBR submission would be more effective, even though no formal analysis of the reception of the letters of submission were undertaken. In terms of the social-historical aspects of production, there are a range of issues that seem pertinent to the analysis which are not considered due to the limited focus on aspects of intertextuality; for example, whether the two organisations are characterised by denite hierarchies, whether or not membership is limited, what their status is in relation to other lobby groups, what their resources are like in comparison to each other and other lobby groups, etc. In terms of the everyday understanding of individuals involved in the production process, again, pertinent issues are neglected due to a focus on intertextuality for example, How do they perceive their role within the organisation? How do they perceive the role of the organisation? What is it they hope to achieve? As Thompson (1990) stresses, a fundamental feature of social enquiry is that the object domain (the letters of submission) are a pre-interpreted subject domain and, therefore, their analysis should attempt to interpret the understanding of the individuals involved in the production process. By engaging with the actors involved in the process of production the researcher is not simply trying to understand the intentions of the authors/producers; as Thompson (1990, p. 138) reminds us, intentionality should not be taken as the touchstone of interpretation. Considering too the understanding of actors involved in production may help illuminate the rules and assumptions implicit in the production process, including assumptions about the audience and its needs, interests and abilities (Thompson, 1990, p. 305). Therefore, by consulting with those involved in text production, Gallhofer et al. (2001) would have perhaps gained insights into the assumptions held by producers regarding the Takeovers Panel Advisory Committee, and why NZBR felt that commissioned empirical research was so important and how commissioning decisions were made. However, and to their credit, Gallhofer et al.s (2001) analysis is not completely restricted to intertextual features of production. We nd, tucked away as an endnote to the paper, that the analysis of the submissions was supported by interviews of the Chief Executive of the NZBR, the Chairman of the Security Commission and the Executive Director of the IOD (Gallhofer et al., 2001, p. 147). But what of these interviews? It is not clear from the body of the paper what insights these interviews provided, or what light they shed on the analysis of discourse practice. Unfortunately only snippets of insights are provided in a couple of endnotes. For example, we are told that a senior director of the IOD mentioned that the IOD argued for takeovers legislation of moral and ethical grounds (Gallhofer et al., 2001, p. 150). But on what ethical grounds? Was the directors judgement informed by the ethical perspective of what Gray et al. (1994) refer to as nancial utilitarianism, whereby a society as a whole benets from individuals pursuing their own nancial self interest- and if so, what does this inform us about the hegemonic relations of production? In another endnote, we are told that an NZBR representative believed that the work which they commissioned was heavy duty research and that the submission of their opponents was not based on good research or good professional analysis. This appears to be quite a telling quote, and one wonders why these issues were not more fully developed in the body of the paper. However, as stated, we only get a couple of

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snippets of such insights as opposed to any real attempt to develop the perspectives and understanding of the producers of the texts. Given the criticisms outlined in the previous section of the paper regarding Faircloughs version of CDA, at least Gallhofer et al. (2001) make some attempt to consult with the producers of texts- which is more, it could be noted, than could be said for Faircloughs own analysis. Despite Gallhofer et al.s (2001) brief attempt to take on board the understanding of the producers, this consideration is not extended to the recipients of the texts. In another endnote, Gallhofer et al. (2001, p. 150) inform the reader that the consumption of texts is not explicitly analysed in the case study as it is deemed to extend the analysis beyond what is appropriate within the connes of the study. While it could be argued that Gallhofer et al. (2001) pay insufcient attention to the role of production and reception of the texts they analysed, it should be noted that compared to other textually orientated approaches to the analysis of discourse in the accounting literature, Gallhofer et al.s (2001) study is much more comprehensive, and represents an attempt to acknowledge, and to some extent, incorporate issues of production and reception which are severely lacking in other papers. The following section outlines Thompsons (1990) depth-hermeneutical framework, which he describes as the tripartite approach, illustrating how this framework can help address the shortfalls identied above. The tripartite approach In order to address the implications of the theoretical considerations outlined earlier in this paper, Thompson (1990) proposes a methodological framework for the analysis of mass communication which he refers to as the tripartite approach[9] (see Figure 1). The three object domains to be considered in this approach are:
1. The production and transmission or diffusion of symbolic forms. 2. The construction of the media message. 3. The reception and appropriation of media messages (Thompson, 1990, emphasis in original).

Figure 1. The methodological development of the tripartite approach

As Thompson (1990, p. 304) states, a comprehensive approach to the study of mass communication requires the capacity to relate the results of these differing analyses to one another, showing how the various aspects feed into and shed light on one another. According to Thompson, the rst stage of analysis, the production and transmission or diffusion of symbolic forms, is most appropriately carried out by combining social-historical analysis with an interpretation of doxa[10] (ethnographic research). In exploring the social-historical dimension of production or diffusion, the researcher may consider the characteristics of the institution within which the media message is produced, the patterns of ownership and control within the institution, the relationship between media and non-media institutions, the technologies employed in production and the procedures carried out by individuals (such as marketing, promotion, etc.). When discussing the social-historical dimensions of production, Thompson (1990, 1995, 2005) usefully draws on Bourdieus concept of elds of interaction. Bourdieu uses the concept of eld to highlight how actions are carried out in structured social contexts; i.e. in pursuing aims and objectives, individuals act within sets of circumstances which are given in advance, and which provide different individuals with different inclinations and opportunities (Thompson, 1995, p. 12). In other words, individuals are differently positioned within elds according to the quantities of resources or capital available to them (Thompson, 1990, p. 282). With reference to the capital available to individuals, (Thompson, 1990, p. 282) notes:
These schemata are not so much explicit and well-formulated precepts as implicit unformulated guidelines. They exist in the form of practical knowledge, gradually inculcated and continuously reproduced in the mundane activities of everyday life.

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According to what Thompson (1990) describes as the hermeneutic conditions of social enquiry, the object domain of analysis (for example, accounting texts) is also a pre-interpreted subject domain. Given this condition, it is imperative that any analysis of symbolic forms must consider how they are interpreted by the subjects who comprise the subject-object domain (Thompson, 1990, p. 279). Such an approach is referred to by Thompson (1990) as an interpretation of doxa: i.e. an interpretation of the opinions, beliefs and understandings which are held and shared by the individuals who comprise the social world (Thompson, 1990, p. 279). Interpretation of doxa is essentially ethnographic in nature, and may be undertaken through interviews, participant observation and other kinds of ethnographic research (Thompson, 1990, p. 279). An interpretation of doxa, with regard to production and transmission of symbolic forms, requires an interpretive approach that seeks to elucidate the understanding of the individuals involved in producing and transmitting media messages . . . the ways in which they understand what they are doing, what they are producing and what they are trying to achieve (Thompson, 1995, p. 305). Such an approach helps to illuminate the rules and assumptions implicit in the production process, including assumptions about the audience and its needs, interests and abilities (Thompson, 1995, p. 305). By combining both aspects of production (the social-historical context and the understandings of the individuals involved in the production process), the researcher is in a stronger position to interpret how the media message is produced as a meaningful symbolic construction (Thompson, 1995, p. 305).

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Whilst Thompson (1990, p.280) stresses that it is important for researchers to pay attention to the production and reception of symbolic forms, he acknowledges too that symbolic forms are also meaningful constructs which are structured in denite ways. Accordingly, for the second object domain, internal structure of text, Thompson (1990, p. 305) views the media message as a complex symbolic construction which displays an articulated structure. In order to analyse the articulated structure, Thompson (1990, p. 305) recommends formal or discursive analysis, acknowledging that there are various ways this can be carried out, depending upon the objects and circumstances of enquiry. Thompson (1990) alludes to several methods of enquiry that may be applied to this domain, including: semiotic analysis; conversation analysis; syntactic analysis; narrative structure; and argumentation analysis. The third object domain, the reception and appropriation of media messages, is similar to the rst, in so far as both social-historical analysis and an interpretation of doxa are undertaken. In this case, the interpretation of the doxa considers how recipients, as opposed to producers, of symbolic forms interpret and appropriate them. This aspect of analysis draws attention to the specic circumstances and socially differentiated conditions within which media messages are received by particular individuals (Thompson, 1990, p. 305). For example, analysis may consider the contexts within which messages are received, the degree of attention accorded to their reception, whether reception varies according to gender, class or race, etc. While Thompson (1990, p. 313) acknowledges that there has been a signicant amount of research on the size of audiences or which consider the gratications which they derive from [media messages], he argues that such research gives scant attention to the social-historical context of reception. In considering the social-historical aspects of appropriation, Thompson (1990) draws attention to a number of criteria that may be usefully explored by researchers. These include: the typical modes of appropriation; the social-historical conditions of reception; the meaning of messages as interpreted by recipients; and the discursive elaboration of messages. The typical modes of appropriation will often be circumscribed by the technical nature of transmission. For example, novels will most likely be read alone, whereas a television soap opera may be watched amongst friends and family. However, Thompson (1990, p. 315, emphasis added) warns that:
[. . .] the technical media of transmission do not determine the typical modes of appropriation, as these modes are also dependent on the conditions, conventions and competencies which characterize the contexts of reception and the recipients. It is only by analysing the technical media of transmission in relation to the actual circumstances in which mass-mediated products are received and taken-up that we can attempt to elucidate the typical modes of appropriation of these products.

The social and historical characteristics of reception refer to the fact that reception and appropriation are situated practices; i.e. activities which take place in particular times and places. Analysis may consider: the spatial and temporal features of reception (where the activity takes place and for how long); the relations of power (who controls the media message or has the technical means of reception); the rules and conventions which govern reception; and, the social institutions within which receptive activity takes place. For example, the reception of a social and environmental report by an environmental NGO is likely to differ from that of an analyst in a nancial advising rm (Deegan and Rankin, 1997). Alternatively, the reception of accounting textbooks

on undergraduate courses is determined by an institutionalised aspect of the higher education eld: namely, the adoption system (Thompson, 2005). In this sense, the use of a recommended accounting textbook by students will most likely depend on whether the text has been recommended for a course by the lecturer. In other words, there are distinct relations of power that will determine the particular accounting textbook used by students. Furthermore, the textbook may be used by the course lecturer to structure lectures and tutorial activity, and may therefore have direct implications for where and how the textbook is used (Ferguson et al., in press). The meaning of messages as interpreted by recipients may be considered an aspect of the interpretation of doxa, and is concerned with the ways in which symbolic forms are interpreted and understood by individuals who receive them. This aspect of analysis will consider whether individuals accept or reject media messages, and aims to make explicit the implicit conventions which they employ when decoding messages. For example, nancial analysts who have studied a particular industry will typically be able to interpret quite terse company announcements in light of the background knowledge they already posses. When linked to the social-historical characteristics of appropriation, it is possible for the researcher to establish whether understanding differs systematically in relation to, for example, class, gender, race, etc. (Thompson, 1990). The discursive elaboration of media messages recognises that as well as being transmitted and received by individuals in particular settings messages are also commonly discussed by recipients in the course of reception or subsequent to it, and are thereby elaborated discursively and shared with a wider circle of individuals who may or may not have experienced the process of reception (Thompson, 1990, p. 317). In other words the appropriation of a media message may not necessarily coincide with the initial reception of the message. This process may have implications in terms of how individuals understand and appropriate messages. Conclusions This paper has argued, by referring to Gallhofer et al. (2001) as an exemplar, that the formal analyses of textual discourse reported in the accounting literature are limited to the extent that they only focus on the internal structure of texts. That is not to say that such analysis is misplaced, but rather that it could be used in conjunction with other methods of investigation which consider the everyday understanding of the individuals involved in the production and reception of accounting texts, as well as the social and historical conditions of the production and reception processes. As outlined, there are several important theoretical and methodological reasons for this. These key issues are often unacknowledged in extant studies of accounting texts; they are usually not considered as a potential area of analysis, or as a limitation to the studies. Even where they are mentioned, the analysis tends to ignore the issue raised. One reason for this neglect might be a lack of awareness on behalf of the researcher. In this respect, the current paper makes a contribution to the accounting literature by increasing awareness of important methodological issues associated with the analysis of accounting texts. The current paper makes a further contribution, by outlining Thompsons (1990) tripartite framework which addresses each of the theoretical concerns discussed in the second section of the paper.

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A more comprehensive analysis of accounting texts is not without challenges; for example, access to organisations, the authors/producers, or stakeholders/intended audiences of accounting texts may not always be possible. Nevertheless, this should not prevent a consideration of the social-historical aspects of the production or the appropriation of texts. A further limitation of the tripartite framework is that by widening the scope of research to include individuals and social-historical context, it would be difcult to undertake large scale studies which included numerous samples of accounting texts (for example, Unerman, 2000)[11]. Other pragmatic issues may also be relevant here; in addition to managing such large-scale studies, the sizeable output may prove difcult to publish given the necessary space constraints in academic journals. However, the output does not necessarily have to be published in a single article; each strand of the research could be published separately with reference made to each of the other components. Furthermore, since there is much less material in the literature that considers the use of, or the motives for producing, accounting texts, perhaps large-scale studies into the internal structure of texts should not be a priority for accounting researchers. Despite these limitations, the approach outlined in this paper has value for a number of reasons; in particular, by increasing understanding of production and use, as well as social historical conditions, we can develop a more comprehensive understanding of how relations of power are manifest in accounting texts and, about how the use of symbolic forms may be utilised to serve the interests of certain constituents to the detriment of others. Furthermore, by illuminating relations of power this research approach may hold emancipatory potential; for example, the interpretation of symbolic forms using the tripartite approach may be different from the interpretations of individuals who are already enmeshed in the processes of production or reception. This may provide the opportunity for them to question or revise their prior understanding . . . [and] to alter the horizons of their understandings of themselves and others (Thompson, 1990, p. 333).
Notes 1. For example, Fairclough (2003, p. 8) differentiates between construction and construal, arguing that though we may textually construe the social world. . . whether our representations or construals have the affect of changing its construction depends upon various contextual factors. In this sense, Fairclough accepts a moderate view of social constructionism as opposed to an extreme version. 2. However, see Widdowson (2004) for an objection to the synonymous use of these two terms. 3. It is the authors view that the term fallacy of internalism may often be inappropriate, and the less pejorative term limitation be more applicable in some circumstances. Thompsons (1990) term will be used in this study to encompass both interpretations. 4. The Derridean counterpoint Il ny a pas de hors texte (There is nothing outside the text), might appear to refute Thompsons statement. However, as Derrida (1988, p. 148) has himself noted with regard to this statement: that does not mean that all referents are suspended, denied, or enclosed in a book, as people have claimed, or have been nave enough to believe and to have accused me of believing. But it does mean that every referent, all reality has the structure of a differential trace, and that one cannot refer to this real except in an interpretive experience. The latter neither yields meaning or assumes it except in a movement of differential reading. Thats all.

5. There are a wide range of studies in accounting which draw on particular aspects of Thompsons framework without necessarily incorporating the framework in its entirety. For example, Arnold (1999) and Ferguson et al. (2005) employ Thompsons concept of ideology, whilst Harrison and McKinnon (1999) draw on his structured concept of culture. 6. Thompson (1990, p. 59) uses the term symbolic forms to refer to a broad range of actions and utterances, images and texts, which are produced by subjects and recognised by them and others as meaningful constructs. These may include linguistic utterances, either spoken or inscribed, as well as visual images: hence, written accounting texts are a symbolic form. In this respect, the denition of discourse provided in the present study, as written or spoken text which may include web pages, visual images, etc, equates with Thompsons use of the term symbolic form. Culture then consists of symbolic forms, actions, utterances, etc. or in other words discourse. 7. Hallidays work is characterised by his emphasis on the relationship between the grammatical system and the social and personal needs that language is required to serve (Wodak, 2001, p. 8). 8. Other studies have employed the use of CDA to analyse accounting texts, although this research tends to stand outside the literature normally classied within accounting. For example, Livesey (2002), and Livesey and Kearins (2002) employ CDA in the analysis of sustainability reports (Royal Dutch Shell and the Body Shop) and are published in the communication and in the environmental literature respectively. 9. This is an extension of Thompsons (1990) depth-hermeneutics methodological framework for the cultural analysis of symbolic forms. Whilst the depth-hermeneutics framework is concerned with symbolic forms in general, the tripartite approach considers mass-media forms in particular. Since the tripartite approach is derived from the depth-hermeneutics framework, both approaches share a number of features in common (for example, both frameworks emphasise the need to combine social-historical analysis, an interoperation of individuals everyday understanding of the social world, and formal/discursive analysis). The tripartite approach differs in terms of the emphasis accorded to the production and reception of symbolic forms - due to the institutionalised break between producer and recipient in mass communication. 10. The word doxa derives from the Greek language and refers to the opinions or beliefs an individual may hold. Doxa is most often contrasted with episteme, which is taken to refer to truths or genuine knowledge. Whereas episteme can only be achieved through reason, doxa may be the result of persuasion. 11. Although they do not explicitly apply Thompsons tripartite approach (or Faircloughs three-dimensional framework), Tregidga and Milne (2006) undertake a large-scale analysis of the environmental/sustainability reports of one organisation over a ten year period, drawing attention to the social-historical issues which have a bearing on their production. References Abeysekera, I. and Guthrie, J. (2005), An empirical investigation of annual reporting trends of intellectual capital in Sri Lanka, Critical Perspectives on Accounting, Vol. 16 No. 3, pp. 151-63. Amernic, J. and Craig, R. (2006), CEO Speak: The Language of Corporate Leadership, McGill-Queens University Press, Montreal. Arnold, P. (1998), The limits of postmodernism in accounting history: the Decatur experience, Accounting, Organizations and Society, Vol. 23 No. 7, pp. 665-84. Arnold, P. (1999), From the union hall: a labour critique of the new manufacturing and accounting regimes, Critical Perspectives on Accounting, Vol. 10 No. 4, pp. 399-423.

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Beattie, V., McInnes, B. and Fearnley, S. (2004), A methodology for analysing and evaluating narratives in annual reports: a comprehensive description prole and metrics for disclosure quality attributes, Accounting Forum, Vol. 28 No. 3, pp. 205-36. Blommaert, J. (2005), Discourse: A Critical Introduction, Cambridge University Press, Cambridge. Buhr, N. and Freedman, M. (2001), Culture, institutional factors and differences in environmental disclosure between Canada and the United States, Critical Perspectives on Accounting, Vol. 12 No. 3, pp. 293-322. Cummings, J. (2001), Engaging stakeholders in corporate accountability programmes: a cross sectional analysis of UK and transnational experience, Business Ethics: A European Review, Vol. 10 No. 1, pp. 45-52. Davidson, R. (2005), Analysis of the complexity of writing used in accounting textbooks over the past 100 years, Accounting Education: An International Journal, Vol. 14 No. 1, pp. 53-74. Deegan, C. and Rankin, M. (1997), The materiality of environmental information to users of ARs, Accounting, Auditing & Accountability Journal, Vol. 10 No. 4, pp. 562-83. Derrida, J. (1988), Limited Inc., Northwestern University Press, Evanston, IL. Fairclough, N. (1989), Language and Power, Longman, London. Fairclough, N. (1992), Discourse and Social Change, Polity, Cambridge. Fairclough, N. (1993), Critical discourse analysis and the marketization of public discourse: the universities, Discourse and Society, Vol. 4 No. 3, pp. 133-68. Fairclough, N. (1995), Critical Discourse Analysis, Longman, London. Fairclough, N. (2003), Analysing Discourse: Textual Analysis for Social Research, Routledge, London. Ferguson, J., Collison, D.J., Power, D.M. and Stevenson, L.A. (2005), What are recommended accounting textbooks teaching students about corporate stakeholders?, British Accounting Review, Vol. 37 No. 1, pp. 23-46. Ferguson, J., Collison, D.J., Power, D.M. and Stevenson, L.A. (in press), Exploring accounting educators perceptions of the emphasis given to different stakeholders in introductory textbooks, Accounting. Fowler, R. (1996), On critical linguistics, in Caldas-Coulthard, C.R. and Couthard, M. (Eds), Texts and Practices: Readings in Critical Discourse Analysis, Routledge, London. Fowler, R., Hodge, B., Kress, G. and Trew, T. (1979), Language and Control, Routledge & Kegan Paul, London. Freedman, M. and Jaggi, B. (2005), Global warming, commitment to the Kyoto protocol and accounting disclosures by the largest global public rms from publishing industries, The International Journal of Accounting, Vol. 40 No. 3, pp. 215-32. Freedman, M. and Stagliano, A.J. (2002), Environmental disclosure by companies involved in initial public offerings, Accounting, Auditing & Accountability Journal, Vol. 15 No. 1, pp. 94-105. Gallhofer, S., Haslam, J. and Roper, J. (2001), Applying critical discourse analysis: struggles over takeovers legislation in New Zealand, Advances in Public Interest Accounting, Vol. 8, pp. 121-55. Geertz, C. (1973), The Interpretation of Cultures, Hutchinson & Co., London. Grant, D., Hardy, C., Oswick, C. and Putnam, L. (2004), Organizational discourse: exploring the eld, in Grant, D., Hardy, C., Oswick, C. and Putnam, L. (Eds), The Sage Handbook of Organizational Discourse, Sage, London.

Gray, R.H., Bebbington, J. and McPhail, K. (1994), Teaching ethics and the ethics of teaching: educating for immorality and a possible case for social and environmental accounting, Accounting Education, Vol. 3 No. 1, pp. 51-75. Haig, E. (2004), Some observations on the critique of critical discourse analysis, available at: http;//lang.nagoya-u.ac.jp (accessed April 2006). Hammersley, M. (1997), On the foundations of critical discourse analysis, Language and Communication, Vol. 17 No. 3, pp. 237-48. Hammersley, M. (2003), Conversation analysis and discourse analysis: methods or paradigms?, Discourse and Society, Vol. 14 No. 6, pp. 751-81. Harrison, G.L. and McKinnon, J.L. (1999), Cross-cultural research in management control systems design: a review of the current state, Accounting, Organizations and Society, Vol. 24 Nos 5-6, pp. 483-506. Heracleous, L.T. (2004), Interpretivist approaches to organizational discourse, in Grant, D., Hardy, C., Oswick, C. and Putnam, L. (Eds), The Sage Handbook of Organizational Discourse, Sage, London. Laine, M. (2005), Meanings of the term sustainable development in Finnish corporate disclosures, Accounting Forum, Vol. 29, pp. 395-413. Livesey, S. (2002), The discourse of the middle ground: Citizen Shell commits to sustainable development, Management Communication Quarterly, Vol. 15 No. 3, pp. 313-49. Livesey, S. and Kearins, K. (2002), Transparent and caring corporations? A study of sustainability reports by The Body Shop and Royal Dutch/Shell, Organization & Environment, Vol. 15 No. 3, pp. 233-58. McKenna, B. (2004), Critical discourse studies: where to from here?, Critical Discourse Studies, Vol. 1 No. 1, pp. 9-39. Meyer, M. (2001), Between theory, method, and politics: positioning of the approaches to CDA, in Wodak, R. and Meyer, M. (Eds), Methods of Critical Discourse Analysis, Sage, London. Oakes, L.S., Considine, J. and Gould, S. (1994), Counting health care costs in the United States: a hermeneutical study of cost benet research, Accounting, Auditing & Accountability Journal, Vol. 7 No. 3, pp. 18-49. Owen, D.L., Swift, T. and Hunt, K. (2001), Questioning the role of stakeholder engagement in social and ethical accounting, auditing and reporting, Accounting Forum, Vol. 25 No. 3, pp. 264-82. Pennycook, A. (2003), Critical applied linguistics, in Davies, A. and Elder, C. (Eds), The Handbook of Applied Linguistics, Blackwell, Oxford. Phillips, L. and Jorgensen, M.W. (2002), Discourse Analysis as Theory and Method, Sage, London. Phillips, N. and Hardy, C. (2002), Discourse Analysis: Investigating Processes of Social Construction, Sage, London. Stubbs, M. (1997), Whorfs children: critical comments on critical discourse analysis, in Ryan, A. and Wray, A. (Eds), Evolving Models of Language, Multilingual Matters, Clevedon. Thomas, P. (2003), The recontextualization of management: a discourse-based approach to analysing the development of management thinking, Journal of Management Studies, Vol. 40 No. 4, pp. 775-801. Thompson, J.B. (1984), Studies in the Theory of Ideology, Polity Press, Cambridge. Thompson, J.B. (1990), Ideology and Modern Culture: Critical Social Theory in the Era of Mass Communication, Polity Press, Cambridge.

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Thompson, J.B. (1995), The Media and Modernity: A Social Theory of the Media, Polity, Cambridge. Thompson, J.B. (2005), Books in the Digital Age, Polity, Cambridge. Tregidga, H. and Milne, M. (2006), From sustainable management to sustainable development: a longitudinal analysis of a leading New Zealand environmental reporter, Business Strategy and the Environment, Vol. 5, pp. 219-41. Unerman, J. (2000), Methodological issues: reections on quantication in corporate social reporting content analysis, Accounting, Auditing & Accountability Journal, Vol. 13 No. 5, pp. 667-80. Van Dijk, T. (1998), Critical discourse analysis, in Tannen, D., Schiffrin, D. and Hamilton, H. (Eds), Handbook of Discourse Analysis, Blackwell, London. Widdowson, H.G. (1998), The theory and practice of critical discourse analysis, Applied Linguistics, Vol. 19 No. 1, pp. 136-51. Widdowson, H.G. (2000), On the limitations of linguistics applied, Applied Linguistics, Vol. 21 No. 1, pp. 3-25. Widdowson, H.G. (2004), Text Context, Pretext: Critical Issues in Discourse Analysis, Blackwell, Oxford. Wodak, R. (2001), What CDA is about: a summary of its history, important concepts and its developments, in Wodak, R. and Meyer, M. (Eds), Methods of Critical Discourse Analysis, Sage, London. Wodak, R. and Meyer, M. (2001), Methods of Critical Discourse Analysis, Sage, London. Further reading Cresswell, J.W. (1998), Qualitative Inquiry and Research Design: Choosing among Five Traditions, Sage, London. Fowler, R. (1991), Discourse and Ideology in the Press, Routledge, London. Llewellyn, S. (1999), Methodological themes: narratives in accounting and management research, Accounting, Auditing & Accountability, Vol. 12 No. 2, pp. 220-36. Parker, L.D. (2002), Twentieth-century textbook budgetary discourse: a formalization, normalization and rebuttal in an Anglo-Saxon environment, The European Accounting Review, Vol. 11 No. 2, p. 30. Corresponding author John Ferguson can be contacted at: j.x.ferguson@dundee.ac.uk

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Reply to: Analysing accounting discourse: avoiding the fallacy of internalism

Sonja Gallhofer and Jim Haslam
School of Accounting & Finance, University of Dundee, Dundee, UK, and

Reply to: Analysing accounting. . . 935

Received May 2007 Accepted June 2007

Juliet Roper
School of Management, University of Waikato, Hamilton, New Zealand
Abstract
Purpose The purpose of this paper is to provide a response to Analysing accounting discourse: avoiding the fallacy of internalism, an article by Ferguson in which a work by Gallhofer et al. is critiqued. Design/methodology/approach The paper responds to critique by Ferguson that one of their papers does not consider the social-historical contexts of text production, transmission and reception. It also looks at Fergusons challenge of critical discourse analysis (CDA) and its political motivation. Findings The paper defends Gallhofer et al. in that they chose to promote critical discourse analysis respecting the focus of accounting and nance and that the aim of their work was pedagogical. They chose to focus on the production of the texts rather than their reception because the work wanted to gain insights into how accounting texts are read and mobilised by radical activists in pursuance of their emancipatory goals, especially through CDA. Originality/value The paper provides a defence of a previous paper of the authors, which was concerned with emancipatory change, evident in Faircloughs version of CDA. Keywords Lauguage, Accounting Paper type Viewpoint

In Analysing accounting discourse: avoiding the fallacy of internalism, Ferguson (2007) elaborates a critique of critical discourse analysis (CDA) focusing especially on the work of Norman Fairclough and, as an example of the application of this method to the analysis of accounting text, on our paper Applying critical discourse analysis: struggles over takeovers legislation in New Zealand (Gallhofer et al., 2001). Drawing from a reading of Thompsons (1995) book Ideology and Modern Culture: Critical Social Theory in the Era of Mass Communication, Ferguson points to two limitations of studies of accounting discourse and language: rst, these studies assume, or speculate upon, the likely effects of accounting texts, without thoroughly investigating how these texts are interpreted by the individuals who encounter them in their everyday lives, and, second, these texts do not consider the social-historical contexts of text production, transmission and reception (Ferguson, 2007). In addition to these general points of critique, he also offers some specic points of critique of Gallhofer et al. (2001), which he understands to be an example of such accounting studies. Here, with reference to our own paper, we rst respond to the general points of critique and then turn to consideration of the specic points of critique made with regard to Gallhofer et al. (2001). Beyond CDA in respect of

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the accounting focus, Ferguson also challenges CDA more generally with particular stress on its political motivation. We also briey respond to this point of critique. Thompson (1995) stressed the need to gain insights into the reception of texts in his work on ideology and culture in the era of mass communication. Thompson put an especially strong emphasis on the reception of texts because of what he saw to be a fundamental break between the production and reception of symbolic forms instigated through the emergence of mass communication (Thompson, 1995, p. 23). He proposes a tripartite approach to the analysis of mass communication, which reects the general framework of production-message-reception that underpins theories of communication more generally (Thompson, 1995, p. 304). Ferguson argues that Fairclough, ourselves and many other studies fail to attend to all parts of the tripartite approach in analysis in focusing on the production of texts. There are several ways of responding to this critique. For instance, we could simply point out that one cannot do everything in one academic paper, which is an argument that interestingly both Thompson and Ferguson actually make explicitly in their own work (Thompson, 1995; Ferguson, 2007). Another response would be to point to the motivation for our paper as this frames the analysis in terms of its focus, content and form. It is important to note that a substantive dimension of the motivation for writing Gallhofer et al. (2001, p. 271) was pedagogical, in that the paper is concerned to promote critical discourse analysis respecting the focus of accounting and nance. We sought to realise the pedagogical objective through providing both a summary of our interpretation of Faircloughs method and an illustration thereof. This had to be done within the typical constraint of limited journal space. There still remains the question why we chose to focus on the production of the texts we analysed rather than their reception. Consistent with Faircloughs (1992) recommendation that, while all three dimensions (text, discourse practices, social practices) must be analysed, the primary focus of analysis of discourse should be at the level, or levels, most relevant to the research or research questions, an elaboration of our research interest provides insights here. Our initial choice of text and the subsequent focus of analysis were inuenced by what Habermas has called an emancipatory research interest (Gallhofer and Haslam, 2003). Through an analysis of submissions letters, which constitute an important part of the consultative process of accounting regulation in New Zealand, we aimed to gain insights into how various constituencies developed and articulated their positions in relation to proposed takeovers legislation and the way in which they formed allegiances in the context of prevalent power structures. Such understanding may arguably inform the lobbying process of other constituencies, such as not-for-prot organisations (NGOs), in their pursuance of enabling emancipatory goals; hence, our choice to focus on the production of accounting texts. Gallhofer and Haslam (1991, 2003, 2006) elsewhere focus on the reception of accounting texts, this again reecting a specic aim in this case to gain insights into how accounting texts are read and mobilised by radical activists in pursuance of their emancipatory goals. Our choice to focus on the production of text that is one specic element of the tripartite approach points to another relevant question for any researcher: namely, how should one engage with approaches, frameworks and methods developed to facilitate the analysis of texts? For us, Thompsons tripartite approach and Faircloughs CDA are both broad frameworks for analysis that in principle cover the entirety of the communicative/discursive process of which texts are part. We do not, however, see the need to address in depth all the elements of such a broad framework in one analysis. In focusing on any specic part(s) of

this framework, within the context of the more holistic approach, researchers may thus advance theoretical appreciation guided by their prevalent research interests. That Fairclough accepts this is evident from his own analysis. Thompson alludes to such an approach when he explains that my aim is not so much to prescribe or proscribe particular methods of research, but rather to outline a broad methodological framework (Thompson, 1995, p. 20). In our view, Gallhofer et al. (2001), in focusing on one particular aspect within the broader framework (i.e. the production of texts), reect the spirit of Thompsons theoretical and methodological argumentation. That all elements of Thompsons tripartite approach are not analysed in depth does not render an analysis worthless and is consistent with Thompsons outline approach. In response to Fergusons concern that studies of accounting discourse and language do not consider the socio-historical contexts of text production, transmission and reception, we would agree, of course, with the view that a historical analysis of the economic, social and cultural contexts of accounting discourse and language is an indispensable part of any social analysis of accounting and/or nance. It is possible that some examples of CDA in accounting are restricted by space constraints or fail to amount to substantive contextual analysis. At the same time, we would submit that substantive and relevant contextual insights are elaborated in Gallhofer et al. ` Having responded to Fergusons more generic points of critique vis-a-vis CDA in accounting, we can now turn to a consideration of the specic concerns that he has raised in relation to Gallhofer et al. It is of note that Ferguson in his critique only focuses on one of the levels in Faircloughs version of CDA, namely the level of discourse as practice. This choice reects Fergusons (2007) reliance on Thompsons tripartite approach as the level of discourse practice addresses the production, transmission and reception of text. This raises the interesting question whether Thompson is the appropriate framework for a critique of CDA as in the reading of Ferguson it draws the critics attention to only one level of analysis whereas CDA highlights the interconnectedness of all levels in analysis[1]. On our delineation whereby the IODs submission is understood substantively as reecting practical experience and the NZBRs submission commissioned nance research, Ferguson (2007) comments as follows:
[. . .] this aspect of text production is inferred entirely from the text itself, and therefore, tells us little of the opinions, beliefs and understandings of the individuals involved in the production process [. . .].

Reply to: Analysing accounting. . . 937

On the specic point, Gallhofer et al. (2001, p. 147) indicate that:

[a]nalysis of discursive and institutional practices of the IOD and the NZBR was supported and supplemented by interviews of the Chief Executive of the NZBR, the Chair of the Securities Commission and the Executive Director of the IOD.

These interview insights were elsewhere elaborated in detail (Lowe and Roper, 2000). Again, there was the need to constrain the length of the analysis and the concern to focus constituted important factors in the production of Gallhofer et al. (2001). Ferguson (2007) also questions the way in which we identied differences between the mode of argument of the IOD and the NZBR:
[. . .] Gallhofer et al. (2001, p. 139) note that the NZBR submission constitutes a more powerful discourse and that the IODs submission was weak in terms of its position in the hegemonic struggle . . . In other words, while Gallhofer et al. (2001) do not explicitly speculate on the

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consequences of the submissions, there is an implicit assumption that the NZBR submission would be more effective, even though no formal analysis of the reception of the letters of submission were undertaken (Gallhofer et al., 2001, p. 26).

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Yet the argument we constructed again supported by the interviews namely that the NZBRs submission, which consisted of a letter, an academic report and CVs, all juxtaposed alongside each other, constituted the more powerful discourse, transforming previous conventions (Gallhofer et al., 2001, p. 139), does not negate the further exploration of text reception. We did not focus on this in our analysis although it should be pointed out that outcomes of the processes were delineated and were consistent with our argumentation[2]. Much of the remainder of Fergusons critique is an extension of the above in listing issues that we omitted or underplayed in our analyses. These issues reect what Thompson (1995) calls for in his book on mass communication. A general counter here would stress the need for a reexive approach to theory, methodology and method, which properly interacts and is to some extent shaped by research interests, research question and empirics. Related to this, it is legitimate in our view for particular analyses to give focuses to particular aspects of the communication in process in context, albeit that we acknowledge the need not to lose sight of the more holistic perspective. A more specic counter is integral to our critical reections upon Fergusons choice of Thompsons (1995) mass communication model to critique our work to which we now turn. We were surprised that Ferguson substantively made use of Thompsons (1995) framework, which was developed for the analysis of mass communication, for his critique of Gallhofer et al. (2001), which focuses on communication within quite restricted circles as part of a consultative process in the context of law-making. We would hold that there are signicant differences between mass communication as outlined by Thompson[3] and the type of communication we focused upon in Gallhofer et al. (2001), differences which properly and signicantly impact upon the analysis of such types of communication. An important difference in this respect is in the way in which messages are transmitted. In the case of mass communication, messages are transmitted by the media industries (Thompson, 1995, p. 218). In the case of the submission letters which we analysed, the messages were transmitted by the representatives of the constituencies who made the submission (i.e. The New Zealand Business Round Table and the Institute of Directors). Thompsons 1995 framework emerged out of what he perceived to be general misconceptions of the processes involved in mass communication. Most notably in this respect is that the term mass is misleading in so far as it suggests that the audiences are like inert, undifferentiated heaps (Thompson, 1995, p. 218). Based on this critique, Thompson then puts a strong emphasis on the need to analyse the reception of messages transmitted by the media industries:
[. . .] the messages transmitted by the media industries are received by specic individuals situated in particular socio-historical contexts. These individuals attend to media messages with varying degrees of concentration, actively interpret and make sense of these messages and relate them to other aspects of their lives. Rather than viewing these individuals as part of an inert and undifferentiated mass, we should leave open the possibility that the reception of media messages is an inactive, inherently critical and socially differentiated process [. . .] (Thompson, 1995, p. 218).

The quote indicates specicities of mass communication that do not transfer well to the case of submission letters. This is not to suggest that there is no more general

relevance in Thompson in relation to the analysis of communication. Not withstanding differences, both types of messages here are social communicative processes and thus share general characteristics such as production-message-reception. Indeed, one might argue that all communication is located in a context where mass communication has taken on an enormous signicance. As well as attend to the general characteristics, the task for (accounting) researchers, however, is to carefully consider the type of communication and the particular type(s) of message(s)/text(s) which are the focus of their analyses and then, inuenced by their research interests, to choose appropriate emphases for analysis. Having engaged with Fergusons critique of work on accounting discourse and language and Gallhofer et al. (2001), we now turn to his more general critique of CDA. Although Thompson (1995) is the main basis for Fergusons critique of Faircloughs version of CDA, other writers who have offered critiques of CDA are also referred to. We would argue that some of the more specic points of critique of CDA referred to by Ferguson are questionable. For example, Blommaerts (2005) suggestions that CDA does not analyse the social circumstances of its production or consider any sense of history are simply wrong unless the examples referred to are not actually CDA. Further, Widdowsons (2004) reported suggestion that CDA fails to make a distinction between text and discourse does not resonate with Faircloughs approach. Fairclough would agree that the text is the overt linguistic trace of a discourse process it is in the text that we nd evidence of the wider elements of discourse practices and social practices. This is why we analyse the text. Fergusons suggestion that Fairclough does not explain how to analyse the intertextual features of the text is not reasonable in that these are a key element of the analysis and clearly evident in the example provided by Fairclough and they also feature in our own analysis. Finally, we would like to briey elaborate on one specic point of critique that has variously been made of CDA and that Ferguson (2007, see also Stubbs, 1997) highlights, namely that it is politically motivated as opposed to linguistically motivated. This interpretation of CDA reects the enduring differences between linguistics and socio-linguistics. CDA is denitely in the latter camp. It is important to appreciate that Faircloughs explication of CDA reects an emancipatory research interest. CDA is understood to be both a mode of research and a weapon in social struggle (Fairclough, 1993, p. 134; Gallhofer et al., 2001, p. 123). Fairclough is thus particularly concerned that discourse, which for him is not only a site of power struggle but at the same time a stake therein, should be seized and changed. Fairclough thus suggests that one can better intervene if one critically understands discourse (Fairclough, 1992, pp. 67, 90; Gallhofer et al., 2001, p. 123). It is precisely this concern with emancipatory change, evident in Faircloughs version of CDA, which makes this method so important and relevant for the analysis of accounting texts. Of course, methods may be improved and further developed as new theoretical insights are made and this has already happened in the case of CDA. What is important, however, is that CDA keep its radical orientation.
Notes 1. The three levels of analysis advocated by Fairclough, namely textual analysis, discourse practice analysis and social practice analysis, are interconnected and integral to CDA (Gallhofer et al., 2001).

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2. Moreover, nowhere in our analysis of the level of discourse practice do we, however, claim that the IODs submission was weak in terms of its position in the hegemonic struggle (Ferguson, 2007). 3. Thompson (1995, p. 219) offers the following denition of mass communication: . . . the institutionalized production and generalized diffusion of symbolic goods via the transmission and storage of information/communication. References Blommaert, J. (2005), Discourse: A Critical Introduction, Cambridge University Press, Cambridge. Fairclough, N. (1992), Discourse and Social Change, Polity Press, Cambridge. Fairclough, N. (1993), Critical discourse analysis and the marketization of public discourse: the universities, Discourse and Society, Vol. 4 No. 2, pp. 133-68. Ferguson, J. (2007), Analysing accounting discourse: avoiding the fallacy of internalism, Accounting, Auditing & Accountability Journal, Vol. 20 No. 6, pp. 912-34. Gallhofer, S. and Haslam, J. (1991), The aura of accounting in the context of a crisis: Germany and the First World War, Accounting, Organizations and Society, Vol. 16 Nos 5/6, pp. 487-520. Gallhofer, S. and Haslam, J. (2003), Accounting and Emancipation: Some Critical Interventions, Routledge, London and New York, NY. Gallhofer, S. and Haslam, J. (2006), Mobilising accounting in the radical media during the First World War and its aftermath: the case of forward in the context of Red Clydeside, Critical Perspectives on Accounting, Vol. 17 Nos 2/3, pp. 224-52. Gallhofer, S., Haslam, J. and Roper, J. (2001), Applying critical discourse analysis: struggles over takeovers legislation in New Zealand, Advances in Public Interest Accounting, Vol. 8, pp. 121-55. Lowe, A. and Roper, J. (2000), Share-market regulation in New Zealand: the problematisation of takeovers legislation, Policy Studies, Vol. 21 No. 2, pp. 115-32. Stubbs, M. (1997), Whorfs children: critical comments on critical discourse analysis, in Ryan, A. and Wray, A. (Eds), Evolving Models of Language, Multilingual Matters, Clevedon. Thompson, J.B. (1995), Ideology and Modern Culture: Critical Social Theory in the Era of Mass Communication, Polity Press, Cambridge. Widdowson, H.G. (2004), Text, Context, Pretext: Critical Issues in Discourse Analysis, Blackwell, Oxford. Further reading Gallhofer, S., Haslam, J., Monk, E. and Roberts, C. (2006), The emancipatory potential of online reporting: the case of counter accounting, Accounting, Auditing & Accountability Journal, Vol. 19 No. 5, pp. 681-718. Corresponding author Sonja Gallhofer can be contacted at: s.gallhofer@dundee.ac.uk

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Call for papers

First EIASM Workshop on Imagining Business
Reflecting on the visual power of management, organising and governing practices Sad Business School, University of Oxford, UK 26-27 June 2008 Keynote speakers: Paolo Fabbri, Donald Mackenzie and Nigel Thrift
Organizations are saturated with images, pictures, and signs that impact on many different aspects of everyday organizational life. A moment of reflection can produce a long list of examples relating to: budgets and accounting tools, advertising literature, design specifications, public relations leaflets, standard operating procedures, schedules, reports, graphs, charts, organizational hierarchies, and maps, to name but a few. This raises the question of how we study the role of images in performing all kinds of activities that keep us busy and attentive? Do we focus on images as signs and inscriptions that can be viewed as mediators making others do things (Latour, 2005)? How does this relate to ideas of intensities, affect, engagement, beliefs and passions? Can we explore the difference and multiplicity that underlie such performances in terms of techniques and practices of managing and organizing, and how do images relate to various issues of agency, accountability and responsibility? Furthermore, imagination as representation is not the focus of this call. Rather than limiting the debate to the role that images have in representing businesses of all sorts, we need to explore the role of images as forces in performing business, and enabling possibilities in terms of thinking about and enacting particular orderings. While images, signs and visualization have been studied from a wide range of perspectives and fields of study (e.g. history, religious iconography, art and visual studies, literature and communication studies, philosophy, sociology, geography, visual anthropology, semiotics, architecture, science and technology studies), within the areas of business, management and organization studies the level of interest has been less evident. A particular focus of this workshop therefore involves bringing together an eclectic assembly of scholars to enable an imaginative forum for discussion and debate in this area of enquiry. We welcome papers and extended abstracts (2,500-4,000 words) from scholars from a wide range of disciplines that seek to explore theoretical and empirical issues from a diverse set of themes. Submission deadline: 28 February 2008 For more information go to: www.eiasm.org/frontoffice/ event_announcement.asp?event_id=555 or contact the organising committee: Lucy Kimbell (Lucy.Kimbell@sbs.ox.ac.uk) Christine McLean (Chris.Mclean@manchester.ac.uk) Francois-Regis Puyou (Puyou@em-lyon.com) Paolo Quattrone (Paolo.Quattrone@sbs.ox.ac.uk) For practicalities contact: Graziella.Michelante@eiasm.be

Call for papers

Academy of Accounting Historians
Margit F. Schoenfeld and Hanns Martin W. Schoenfeld Scholarship in Accounting History
The Academy of Accounting Historians invites applications for the inaugural Margit F. Schoenfeld and Hanns Martin W. Schoenfeld Scholarship in Accounting History, 2008. The purpose of the scholarship is to encourage and support research on the history of accounting by doctoral students and recently appointed accounting faculty. The scholarship was initiated by the generous gift of Dr Hanns Martin Schoenfeld and the late Dr Margit Schoenfeld in recognition of their belief in the importance of historical scholarship to accounting education and research. In 2008 an award of $3,000 is available to support research on a doctoral dissertation, or develop publications proceeding therefrom by a recent PhD graduate. Qualifying research topics should address the history of accounting. Projects of an international nature and those pursued by scholars whose first language is not English are particularly invited. The recipient(s) of the scholarship will be determined by the Schoenfeld Award Committee, comprising the President of the Academy of Accounting Historians (Chair), the Editor of The Accounting Historians Journal and Dr Hanns Martin W. Schoenfeld. The Committee has the capacity to share the award equally between two worthy candidates or to make no award in any one year. Applicants must be currently enrolled for a PhD by research, or have completed a PhD by research within the last five years. Applicants should submit a full curriculum vitae and a statement (containing a maximum of 1,000 words) which discusses the doctoral research undertaken on the history of accounting, the stage reached and how the award would prove beneficial to the applicant. A short statement from a supervisor should also be submitted in the case of applicants currently enrolled for a PhD. Applications should be submitted to: Stephen Walker, President, Academy of Accounting Historians, Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive, Cardiff CF10 3EU, Wales, UK. E-mail: Walkers2@cardiff.ac.uk The closing date for the receipt of applications is 31 December 2007.