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Title: Sequences of change in financial reporting : the influence of financial economics
Author: Morley, Julia
ISNI:       0000 0004 2715 1685
Awarding Body: London School of Economics and Political Science (LSE)
Current Institution: London School of Economics and Political Science (University of London)
Date of Award: 2011
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In this thesis, I analyse the influence of financial economic theory on financial reporting practice. This influence has manifested itself in the increasing use of economic methods introduced into practice by the publication and implementation of certain economics-based accounting standards. I provide three illustrative case studies in the areas of pensions, financial derivatives and contingent liabilities, focusing on projects by the FASB, IASC/B and the ASC/B. To explain the increase in the use of economic methods in financial reporting practice, and their pattern of emergence, I draw on the genealogical and political economy approaches. I supplement these methodologies with a theory of causality by developing a qualitative causal model. This model, which I call the Causal Constellation Model, aims to explain the success of projects to introduce economics-based standards in terms of five individually necessary and jointly sufficient conditions. These conditions relate to the economic environment, the conceptual aims of financial reporting, the legitimacy of economic methods, the absence of institutional opposition and the effectiveness of advocates on the boards of standard setting institutions. The primary sources of evidence for my research are documents published by standard setting institutions, academic research and a number of interviews with high-level individuals, many of whom were directly involved in the development of the standards in question. An unexpected finding is that interactions between different projects appear to generate sequences of change in financial reporting practice, spanning different areas of accounting and different regulatory jurisdictions. Thus, outcomes of earlier projects seem to create possibilities for later projects and shape their outcomes. In spite of the inevitable limitations of such case-study based, qualitative work, the model offers a plausible and apparently robust explanation of the overall pattern of influence of financial economics on the practice of financial reporting.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: HG Finance