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Inside Accounting examines how accountants and non-accounting managers construct their company's earnings. As well as considering the accounting structure such as budgeting and financial control, David Leung looks at how people prepare for and facilitate the audit, and how a person's professional experience influences their view of the process and its results. His research into the theory and practice of accounting will be of interest to professionals and academics in the field, and to sociologists and academic researchers.
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A Gower Book Inside Accounting For my mother and father Inside Accounting The Sociology of Financial Reporting and Auditing David Leung University of York, UK First published 2011 by Gower Publishing Published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © David Leung 2011 David Leung has asserted his moral right under the Copyright, Designs and Patents Act, 1988, to be identified as the author of this work. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data Leung, David. Inside accounting : the sociology of financial reporting and auditing. 1. Accounting--Practice. 2. Accounting--Decision making. 3. Accounting--Case studies. 4. Corporate culture. I. Title 657-dc22 Library of Congress Cataloging-in-Publication Data Leung, David. Inside accounting : the sociology of financial reporting and auditing / David Leung. p. cm. Includes bibliographical references and index. ISBN 978-1-4094-2049-1 (hardback) 1. Accounting--Social aspects. 2. Auditing--Social aspects. I. Title. HF5636.L48 2011 657--dc22 2011016172 ISBN: 978-1-4094-2049-1 (hbk) ISBN: 978-1-3155-8870-4 (ebk) Contents List of Abbreviations vii About the Author ix Acknowledgements xi Preface xiii Chapter 1 Introduction 1 Chapter 2 Finitism 7 Chapter 3 Fox River 21 Chapter 4 Creating Numbers 29 Chapter 5 Software 53 Chapter 6 The Year-end Accounts 77 Chapter 7 The Audit 93 Chapter 8 Truth and Fairness 111 Chapter 9 Conclusion 127 Bibliography 133 Index 139 This page has been left blank intentionally List of Abbreviations ACCA BSA CIMA FASB FRS FRS 3 FRS 5 FRS 18 FRSSE IAS IAS 18 IASB IASC SOP SSAP SSAP 9 UITF UITF 40 WIP Association of Chartered Certified Accountants British Sociological Association Chartered Institute of Management Accountants Financial Accounting Standards Board Financial Reporting Standards Financial Reporting Standard 3: ‘Reporting financial performance’ Financial Reporting Standard 5: ‘Reporting the substance of transactions’ Financial Reporting Standard 18: ‘Accounting policies’ Financial Reporting Standard for Smaller Entities International Accounting Standards International Accounting Standard 18: ‘Revenue’ International Accounting Standards Board International Accounting Standards Committee Foundation Standard Operating Procedure Statement of Standard Accounting Practice Statement of Standard Accounting Practice 9: ‘Stocks and longterm contracts’