Behavioral Research in Accounting

Volume 1. 1989
Printed in USA

Behavioral Accounting in
Retrospect and Prospect*
Anthony G. Hopwoodt
London School of Economics and Political Science

ABSTRACT
This introductory essay comments on the four subsequent reviews of the
behavioral accounting literature. The essay emphasizes the factors that
have been implicated in the emergence of the behavioral accounting
literature, the cumulative progress that has been achieved and the need for
further work. Accepting the diversity of the human sciences, the discussion
also notes the problems that can emerge when one perspective is used to
encapsulate the perspectives and approaches of another. Hoping that in the
future behavioral accounting researchers will be able to articulate a more
mature intellectual stance, the essay elaborates on some of the ways in
which this might be achieved.

Accounting has come to be recognized as a phenomenon whose

form, functioning and consequences are interdependent with the
contexts in which it operates. From an economic perspective, the roles
and function ing of acc ounting are now seen as being cen tra lly
implicated in both the governance of enterprises and the operation of
the financial markets. Equally, from a behavioral and organizational
perspective, accounting is now recognized as being a practice whose
consequences are mediated by the human and social contexts in which
it operates and the ways in which it intersects with other o rganiza-
tional and social phenomena. A conception of a technical autonomy for
accounting is one that both behavioral and economic researchers have
made more difficult to sustain. From both pespectives, accounting is
now seen as a phenomenon that both infu ses and is infused by the
contexts in which it functions and the issues and agendas with which
it becomes involved.
• Invited Paper.
t My introductory comments for this inaugural issue of Behavioral Research in
Accounting only focus on the review papers that follow. This paper was drafted in 1988
during a visit to the Department of Accounting and Management Information Systems
at The Pennsylvania State University. I would like to thank my colleagues at Penn State
for the facilitative environment which they provide during my summer visits and. on
this occasion, for their helpful comments at a seminar during which the main
arguments in this paper were presented. I would particularly like to acknowledge the
many helpful comments provided by Mark Dirsmith and C. J. McNair.

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2 Anthony G. Hopwood

The achievement of such a perspective is something of recent origin.

Although there were earlier scholars who articulated such a stanc e, be
it from the perspective of accounting's involvement in shifting forms of
social control, or on the basis of an awareness of the possibilities for
accounting calculations to disturb and disrupt processes of economic
decision mak ing, the majo rity view, even with in the academic
co mmu n ity, wa s o f a mo re a u to no mo u s and seemin g ly n eu tral
technical practice, whose role was merely to illuminate what is. Seen in
such terms, the potential for a behavioral and organizational, l et alone
a social, analysis of its functioning was a distant one. Although
economic perspectives certainly were appealed to by earlier scholars,
their role was almost invariably one of enhancing the underlying
technical rationality of accounting, thereby striving to make it an even
more adequate representational practice.' In this way, conceptions
drawn from economic theorizing pervaded analyses of costing, income
measurement, and divisional performance measurement, but they did
not at that time provide a basis for either a normative or a descriptive
appreciation of the functioning of accounting in organizational and
market settings.
The rise of an interest in both the economic and the behavioral and
organizational functioning of accounting required a radica l shift in
the conception which researchers had of both accounting and the task
of accounting research. Rather than taking accounting for granted,
the development of such perspectives required a more problematic
view of the accounting endeavor. People had to start worrying about
how the functioning of accounting related to the competitive provision
of other sources of information on corporate economic performance.
They had to ask questions about how accounting information was
actually used and how it sometimes seemed to generate seemingly
undesirable and often quite unanticipated consequences. They had to
ponder on the re la tion ship b etween bu dgets and the process o f
budgeting. Questions related to the capital market consequence s of
accounting disclosures also needed to be raised, as did others which
focused on the relationship between accounting and other characteris -
tics of corporate performance.
Rather than reflecting an acceptance of the accounting status quo or
the conventional wisdoms associated with it, such questions, the like
of which provided the basis for the modern behavioral and economic
analysis of accounting, started to reflect more restless, questioning,
analytical, and even worrying minds. Instead of only seeing a ccounting

Often the economists whose work was drawn upon in these contexts had more complex
views of the organizational and social possibilities for economic calculative practices
such as accounting. Accounting writers tended only to utilize the more techn ical
aspects of such works, however, ignoring the often quite rich and subtle insights into
their organizational and social functioning.

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Behavioral Accounting in Retrospect and Prospect 3

research as a means for improving the technical rationality of

accounting as currently conceived, such a wider questioning of
accounting was emerging from an increasing willingness to conceive of
it in a broader organizational, managerial, and economic set ting. In
some sense, it was as if the academic community needed to start
distancing itself from the conventionality of accounting (even if later to
return to it, as often happened) in order to ask questions of it, probe
into it, and to start worrying about it before there could be a basis for a
more serious examination of both the behavioral and economic
functioning of accounting.
The incentive for such a reorientation came from outside the
accounting academic community. As Caplan makes clear in his
personal view of the development of behavioral accounting, the
external appraisal and criticism of the state of American business
education provided the basis for a major restructuring of the
intellectual life and expectations of business schools. Rather than
merely propagating current practices and the conventional wisdoms
associated with them, the Pierson and Gordon and Howell reports
suggested that business education needed to be conceived of in a more
scientific manner, in the process drawing on the perspectives of the
wider behavioral and social sciences. As a result of these reports, more
emphasis started to be put on business research, academics from the
social sciences started to be recruited into the faculties of business
schools, and the expectations for both the quantity and nature of
scholarly research started to change.
Accounting research was to be greatly influenced by these develop-
ments, initially perhaps more indirectly than directly. Although there
were few possibilities for recruiting a new breed of accounting
researchers at that time, bases were established for at least new
dialogues between accounting academics and their colleagues in
psychology, economics, the new finance, quantitative analysis, and so
on. In this different environment, people could even start to reflect on
those nonaccounting studies of old, such as the investigations of
Argyris, Dalton, Roy and Whyte of the Chicago School of Sociology, and
Simon and his colleagues, which had focused on accounting but had
until then been relatively unappreciated by the accounting academic
community. More importantly, the changing intellectual life of
American business schools provided a basis for a more serious,
thorough, and scholarly approach to doctoral research. In this way,
students were brought into contact with the intellectual and research
traditions of the social sciences, be they behavioral or economic in
nature. Indeed, an amazing number of the significant early develop-
ments noted in the subsequent review papers occurred in the context
of doctoral programs at Berkeley, Carnegie Tech, Chicago, Ohio State,
Stanford, and elsewhere. Likewise for the rise of a new economic

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4 Anthony G. Hopwood

interest in accounting. By the late 1960s the external pressures for the
reorientation of American business schools were starting to result in a
new generation of accounting scholars.
Seen in such terms, the origins of both the new behavioral and
economic research traditions in accounting were very similar. Neither
represented a mainstream. Both were viewed with suspicion in many
circles, at least initially. It is worth remembering that one of the most
significant of the new economic papers (now honored by the American
Accounting Association) was rejected by The Accounting Review, only
to be published in the Journal of Accounting Research,* a journal
which owed its origin to the same set of institutional changes. From
these related origins, however, the behavioral and economic research
traditions were to diverge, albeit never completely. There are times
such as now when a certain complementarity of interests exists in a
few areas, and in times past the decision rationality of an economic
perspective has provided an influential basis for behavioral research.
The divergence, moreover, was seemingly not to be an even one
because an economic approach to accounting was quite rapidly in a
position where many could perceive it as the mainstream research
orientation of the accounting academic community.
The reasons for the nature and form of the divergence have not been
explored in any systematic manner and all the subsequent reviews of
the behavioral research literature are silent on this point. In all
probability, quite a number of interesting factors were involved.
The new economic tradition was initially established in relatively few
institutions, in large part because the necessary configurations of
intellectual influences for efficient capital market based research were
themselves in relatively short supply. The institutions were themselves
prestigious ones, occupying central and influential positions in the
accounting academic community. Moreover, so focused, the research
tradition became more easily susceptible to the orchestrating rationality
of economics, a discipline that strictly polices both intellectual
innovations and its own boundaries. Quickly resulting in complex
empirical work and statistical testing, the new body of research also
provided a seemingly more meaningful haven for the growing number
of accounting academics who had a quantitative orientation. The
perspective also was emerging in accounting at a time when modes of
economic rationality and theorizing were becoming of more general
significance in institutional and social governance. In contrast, as the
review papers themselves demonstrate, behavioral research emerged
in a wide variety of institutions. It was thereby subjected to a diversity

*Editor's note #1: The paper being referred to is Roy Ball and Philip Brown, "An
Empirical Eva luation of Acc ounting Incom e Numbers," Journal of Accounting
Research (Autumn 1968), pp. 159 -178.

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Behavioral Accounting in Retrospect and Prospect 5

of intellectual influences and, as a result, a much more heterogeneous

research tradition emerged. Moreover, many of the early innovating
institutions occupied less central positions in the invisible college that
constitu ted the acc ou nting academic co mmunity a t that time.
Although born in a similar context, the behavioral and the economic
research traditions were to be subject to different paths of develop -
ment, paths which themselves were to influence the forms that the
respective traditions were to take.
In the intervening period, however, the behavioral and organiza -
tional research tradition has progressed such that it now has a
substantial specialized literature, specialized journals and its own
professional groupings. A great deal has been achieved. More in fact
than is often realized. The unfocused discipline reviewed by Burgs -
Seerminw, seaVent as ALL sett miags5 'is "

and "continuing weaknesses," stands in stark contrast to the

cumulative and substantive literatures reviewed by Birnberg and
Shields. Whilst no discipline is without shortcomings, and many are
indeed evident in the behavioral accounting area, one nevertheless
suspects that the former judgment has as much, if not more, to do
with the development of stereotypes than the exploration of a complex
and moving field. It is therefore extremely appropriate and useful that
the first issue of Behavioral Research in Accounting provides a
number of reviews and commentaries on the area. It is a most
appropriate and very helpful way for the new journal to start.

A RICH, COMPLEX AND MOVING FIELD OF INQUIRY

Birnberg and Shield's careful and systematic review of the behav -
ioral accounting literature portrays a rich and complex area of
research. They focus on the range of questions which behavioral
accounting research has come to address, illustrating in each case not
only the insights that have emerged but also the cumulative processes
of inquiry. Although the concerns that constitute behavioral research
in the accounting area are diverse, and no doubt will remain so,
Birnberg and Shields nevertheless present a portrait of the area which
emphasizes both the modalities of inquiry which have come to
structure the field and the very real learning that has taken place.
Moreover, they usefully illustrate the various stimuli which have
provided a means for behavioral and orga nizational inquiry to
advance, often by a process of cross-fertilization between the various
aspects of the field.
Choosing to focus on what might be termed the high points of the
literature they surveyed, the analysis which Birnberg and Shields offer
admittedly tends to be a generous one. With others illuminating the
problems that still abound in the more lowly sections of the field, it is

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6 Anthony G. Hopwood

useful to have an informed discussion of the insights that have been

gained and how, over time, cumulative progress has been achieved.
The state-of-the-art of the field is, as Birnberg and Shields openly
and positively acknowledge, quite a rapidly moving one. New emphases
are emergent and, as with other dynamic areas of inquiry, new issues,
problems, perspectives, and methods are being incorporated into the
field. The present state of development, however, is one such that
Birnberg and Shields feel justified in offering a positive character-
ization of the area, indeed it is now one that contrasts with many of the
stereotypes which others often want to impose on its achievements.
Although much undoubtedly remains to be done and although
research is still too variable in quality, Birnberg and Shields are
justified in emphasizing the observational nature of behavioral
accounting research, its systematic nature, not least with relationship
to behavioral variations and comparisons, and the increasingly
theoretically orientated nature of the research process. They also
stress the applied nature of much of the work. Perhaps in contrast
with many views which are held by those outside the field, they point
to the mobilizing role that worries, questions, and problems c on-
cerning accounting have played, and still do play, in shaping the
nature of behavioral and organizational inquiry in the accounting
area. Although methodological innovations have been particularly
important for the investigation of at least some problem areas, the
review presented by Birnberg and Shields attempts to demonstrate
how over time methods per se have not become a concern in their own
right. Rather they have played an active and productive role in
enabling more thorough, more focused, and more valid explorations of
substantive problems of interest to the accounting community.
Possibly for the first time, Birnberg and Shields present a view of the
field that shows the coherent and cumulative progress that has been
achieved. Although the area is a complex one that is difficult to
characterize precisely, subject as it is to differing perspectives and
even rationalities, and although others might emphasize different
topics and conceptual frameworks, Birnberg and Shields nevertheless
show that over the years of its development behavioral and organiza-
tional research in accounting has not progressed in a random manner,
merely consisting of a very large number of isolated studies.
Researchers in the field have been conscious of the activities of both
their predecessors and contemporaries. Learning has taken place.
Cumulative emphases and distinctions have developed. Shared
interests and perspectives, if not planned research, have helped to
forge what is now a richly patterned field of inquiry. In these ways, a
systematic body of knowledge has been emergent.
That body of knowledge remains far from adequate, not least
because of the more intuitive processes that have resulted in its

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Behavioral Accounting in Retrospect and Prospect 7

growth. Important areas remain under-researched. In many areas

there is still not a sufficient degree of theoretical awareness. A lack of
vision permeates too many of the research efforts. Possibly as a result,
there remain too many inadequate studies, although, it has to be said,
this is not a feature of this area alone.
The research that has been undertaken thus far can provide an
interesting and indeed useful interpretative basis for understanding
and changing accounting in action. It is now possible to offer a
meaningful appreciation of the human and organizational context of
accounting. At the individual level, be it in a management accounting
or an auditing context, we are now in a position to make sensible and
potentially useful comments on the functioning of accounting
information systems. Phenomena such as budgeting, standard setting
and the interpretation of management accounting information can
now be conceived of in ways that integrate them with the human and
organizational contexts in which they are embedded. The technical
need no longer be perceived in isolation of its setting. Whilst a great
deal still remains to be achieved at the organizational level of analysis,
we are nevertheless able to offer appreciations of the accounting
context that can provide a sensible basis for considering the design of
accounting systems in different environmental terrains, and that can
facilitate discussions about their human and organizational conse -
quences, be they anticipated or not.
Much of what Birnberg and Shields characterize as the "organiza-
tional sociology" school of research is orientated to the latter set of
issues. Perhaps more than most behavioral accounting researchers,
those working in this tradition have been fascinated by the sheer
diversity of accounting in practice and the heterogeneous ways in
which it can be implicated with organizational and social action. Being
uneasy with the universalizing techniques and rationales that pervade
many discussions of accounting, they have sought to probe into the
factors which influence how accounting is as it is, how it becomes
intertwined with the processes of organizing, and how it gives rise to
the behavioral, organizational, economic, and social consequences
that it does.
Adopting such a different research agenda, the organizational
researchers in accounting have appealed to a range of different
intellectual perspectives, research literatures, and modes of research
inquiry. Seen in such terms, it is not quite correct to unprob -
lematically label these as purely interpretative, as Birnberg and Shields
are tempted to do. Recognizing accounting diversity, many such
researchers have focused on enriching the perspectives through which
insights into the organizational practice of accounting can be gained,
but relatively few studies have been conducted in strictly interpretative
terms a s th i s is c o n v e n tio n a lly u n d ersto o d i n th e so cio lo g ica l

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8 Anthony G. Hopwood

literature. Being aware of the epistemological questionings in most of

the human sciences (with the possible exception of economics),
organizational researchers have been prepared to recognize the
constitutive as well as reflective properties of not only accounting itself
but also the knowledge we gain of it. That has also provided them with
a basis on which to distance themselves from the simpler epistemologi-
cal statements that characterize other sections of the accounting
literature. Being concerned with the organizationally embedded
functioning of accounting and the dynamics of its change, they often
have sought to study single cases in quite considerable detail. Rarely
have these methodological, epistemological, and theoretical prefer-
ences been adopted by researchers other than those who have a
substantive concern with enriching our understandings of accounting
in action. Indeed, as Birnberg and Shields recognize, such under -
standings are now emerging.
Developing, as it is, in these and other ways, even the existing body
of knowledge of the behavioral and organizational functioning of
accounting can illuminate accounting as it is and as it might become
in ways that create a useful tension with many of the orthodoxes and
conventional wisdoms of the past. That is a very real achievement.

A VIEW FROM WITHOUT

The review assembled by Burgstahler and Sundem is, in contrast, a
very different one. As outsiders to the field, albeit accounting
outsiders, they provide a view from without. Such a perspective has
the potential to be a useful one. In any field of inquiry, there are
dangers of introspection and it is often challenging to consider the
views of those who perceive developments from a different perspective.
As Burgstahler and Sundem themselves point out, behavioral account-
ing research has been surveyed in the past by distinguished members
of the social science community. And behavioral accounting research
undoubtedly has benefited from that experience.
The task undertaken by Burgstahler and Sundem is a difficult one.
The richness and complexity of the field which emerges from the
Birnberg and Shields survey creates considerable difficulties for an
outsider. It requires a very substantial investment of time to
appreciate the ebbs and flows of the research process, the cumulative
research strategies that have been adopted, the ways in which the field
has come to be structured and characterized, and the full implications
of the diversity of conceptual perspectives at play. It would be a
daunting enough task for a behavioral or organizational researcher to
survey the whole field of economics orientated research in accounting
from the early concerns with income and cost theory through today's
emphasis on efficient capital market studies, agency theory, the

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Behavioral Accounting in Retrospect and Prospect 9

economics of information and organization, and so on. Yet that task is

at least simplified by the presence of a unifying assumption of a
dominant rationality of behavior. Such an orchestrating uniformity is
not present in the behavioral and organizational area, something that
considerably increases the difficulty of the outsider's endeavor. If the
outsider speaks from the specificity of just one of the human sciences,
economics in this case, in trying to disentangle the intellectual
processes at work in the behavioral and organizational analysis of
accounting. he or she must confront the ways in which the intellectual
energies of a wide variety of the other human sciences have infused
and influenced accounting research. Even Birnberg and Shields could
only deal with this difficulty by a strategy of segmentation. The time for
integration and synthesis has not yet come, nor is it near.
Burgstahler and Sundem are therefore to be congratulated on
undertaking the task. Although I will comment on a number of
problems which I see in their approach, there are nevertheless many
aspects of their commentary which are useful and which are worthy of
further consideration by the behavioral accounting research commu -
nity. Not only is it useful to have an explicit statement of how the area
can be perceived from without, but it is also useful to share their views
on at least some possibilities for the behavioral and economic
perspectives to provide a related view. It could well be that the growing
interest in the economics community in explor ing the process of
organizing in a more subtle and nuanced way might further this end.
The review offered by Burgstahler and Sundem is quite explicitly a
subjective and biased one. As their opening statement reveals, they
perceive themselves as looking into behavioral accounting from a more
mainstream perspective, perhaps without realizing that the very
viewpoint from which they speak was itself one that was emergent and
hardly mainstream in earlier times—the times in fact when behavioral
accounting was itself trying to develop. Rather than offering a view of
the institutional and social as well as intellectual processes through
which prevailing conceptions of centrality were shaped, somewhat
unfortunately, I think, they choose to offer an interpretation of a field
that is perceived to be without "focus" from the perspective of one
whose contrasting stability and relative homogeneity is seen in
unproblematic terms.
An understanding of the Burgstahler and Sundem analysis therefore
needs to be undertaken with some care. For one thing, they attempt to
impose on the behavioral accounting field a framework for analysis
emanating from economic reasoning. "Consumers" and "producers"
populate their discourse. They explicitly state that they approach the
review "from the perspective of an information economics view of the
world," only one of a range of possible economics perspectives. It is as if
a behavioral researcher were to appeal to economic sociology to

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10 Anthony G. Hopwood

understand the problems inherent in the notions of economic

rationality implicit in the work of economics orientated accounting
researchers and to intellectual history to ground economic con -
ceptions of behavior in the social and political as well as economic
circumstances out of which they emerged. Both of these strategies
could be useful and interesting. They would provide a way of
grounding conceptions of the absolute and the inevitable that pervade
most areas of intellectual endeavor. Such approaches also have their
dangers, however, not least if the body of knowledge used to review
another merely functions as a way of calibrating the achievements of
the one in terms of the other. Without care such an approach can
provide a basis for a form of intellectual imperialism that fails to
recognize the human and socially constituted nature of all bodies of
knowledge and their own specificities and particular foci.
The present state of development of the behavioral and organiza -
tional appreciation of accounting is now such that it can provide
insights which are not secondary to those of economics. The
behavioral perspective does not start where the economics perspective
can no longer function. It is not a residue. Rather it provides a more
positive and proactive perspective that can offer alternative insights
and analyses, even analyses of the organizational and social nature of
the economic and the specific rather than generalized circumstances
under which organizations might appeal to economic reasoning to
elaborate and shape their modes of calculation and visibility.
Care also needs to be exercised in accepting the epistemological
premise that Burgstahler and Sundem would like to see underlying
their evaluative perspective. Although it might be tempting to
characterize their rejection of the applicability of notions of truth in
terms of their acceptance of postmodern philosophies of knowledge
which have, at the very least, introduced more complex notions of
truth into intellectual discussions, an analysis of their arguments
shows that much less is at stake. Not only is their stance towards the
real and the true a most equivocal one, pushing them at times to
question its applicability in an accounting context but also moving
them towards a concern with the validity of behavioral accounting
research, but they also pursue their mode of economic reasoning
beyond the confines pursued by economists themselves. Whilst
economics has come to provide a way of interpreting an extremely
broad spectrum of activities from love and marriage to crime,
economists very rarely apply economics to economics itself. The
discipline has not been noted for its reflexivity. To do so would make
economic pronouncements a mere temporary equilibrium of the
demand for and supply of economic understandings. Somehow
economists generally presume that more is at stake than that. Even
those economics orientated accounting researchers who have per-

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Behavioral Accounting in Retrospect and Prospect 11

ceived of the demand and supply of accounting theories in market

terms have been most careful not to see their own theoretical activities
in terms of their own theories, claiming, albeit silently and implicitly, a
more privileged epistemological position.*
Burgstahler and Sundem's theoretical position is therefore one of
some originality although unfortunately it is not one that is fully
developed in the subsequent review essay. Whilst it is useful to portray
accounting as an artifact subject to the contingencies of the human
and social world, including those of an economic nature, Burgstahler
and Sundem provide little insight into the nature of their extension of
a mode of economic reasoning to the analysis of the knowledges that
have arisen around accounting (including presumably their own,
unless they too claim exemption from their own theories). They also
show little awareness of the epistemological problems that this might
create. The issue is one of some significance because the modern
strands of both behavioral and economic research in accounting
emerged when the academic community started to raise questions of
accounting rather than being merely content to apply knowledge to
improving the technical rationality of the accounting craft. Although
the distinction is certainly never a clear one, behavioral and economic
knowledge of accounting and of how it emerges and functions do not
have a one to one relationship with accounting itself.
Perhaps fortunately such perspectives, although quite explicitly
articulated by Burgstahler and Sundem, are only loosely related to the
review which they provide of the behavioral accounting literature. That
review was commissioned to be primarily a methodological and
thematic one rather than a substantive one of the type provided by
Birnberg and Shields.
Some interesting trends certainly emerge from the detailed analyses
undertaken by Burgstahler and Sundem, including some that confirm
and elaborate upon some of the developments analyzed by Birnberg
and Shields. And on a quite personal level, I found myself fascinated by
the insights they provided on the roles played by Accounting,
Organizations and Society. If nothing else, it shows that the
stewardship of the means of publication can be important, an
observation of some interest at a time when we celebrate the launch of

*Editor's note #2: The reader may find the following useful reading in regard to the
argument presented by Hopwood:
Charles Christenson, "The Methodology of Positive Accounting," Accounting Review
(January 1983), pp. 1-22.
Ross L. Watts and Jerold L. Zimmerman, "The Demand for and Supply of Accounting
Theories: The Market for Excuses." Accounting Review (April 1979), pp. 273-305.
Ross L. Watts and Jerold L. Zimmerman, "Towards a Positive Theory of the
Determination of Accounting Standards," Accounting Review (January 1978), pp.
112-134.

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12 Anthony G. Hopwood

a new journal and can witness the implications of changes in the

editorship of others.
Burgstahler and Sundem's review then goes on to comment on some
"inherent difficulties of BAR." However, as Burgstahler and Sundem
themselves note, although they perceive that all the difficulties apply to
behavioral accounting research, most are not unique to it. That is
indeed the case. Even economics orientated research in accounting
now covers quite a broad field, having only a partial understanding of
the interrelationships within itself. Agency theory, the economics of
information, capital market studies, investment theory and so on are
all based on a unifying presumption of a certain mode of rationality
but their interdependencies and potential for providing mutual
insight are much underexplored, as most economists realize.
The specific difficulties noted by Burgstahler and Sundem reflect a
number of evaluative stances. Within the diversity of the human
sciences, the difficulties of one discipline are sometimes perceived as
the strengths of another. Concerns with theoriz ing complexity are
high on the agenda of some disciplines whilst others have invested
heavily in theoretical simplicity. In some of the human sciences, there
have been growing concerns about the potential for generalizable
theories in recent years, their intellectual energies being devoted to
increasing the extent to which specific circumstances can be made
intelligible and amenable to human interpretation. Other disciplines
have invested instead in increasing the rigor of their generalizing
theories. Burgstahler and Sundem's evaluative concerns seemingly
show little appreciation of such intellectual diversity or the rationales
lying behind it. Even some of Burgstahler and Sundem's areas for
further improvement in behavioral accounting research need to be
considered with some care. Different human sciences place different
emphases on the role of prediction. Interpretative and nonpositivistic
research traditions can and do play a role in more than merely
"exploratory" research. And different disciplines also tolerate differing
degrees of diversity.
One also senses that some of the emphases given by Burgstahler and
Sundem reflect the inherent difficulty of observing a complex field of
inquiry from without. Certainly they contrast with the albeit generous
but nevertheless more cumulative and substantive review provided by
Birnberg and Shields.
Be that as it may, Burgstahler and Sundem offer some telling
criticisms which, even when modified by their own more encouraging
outline of the more recent progress that has been achieved, I, as an
editor, recognize. Not least of these from my point of view is the sheer
extent to which behavioral accounting research has been shaped by
the academic control system. Despite all the signs of improvement, a
concern with ease, speed and the immediate publishability rather than

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Behavioral Accounting in Retrospect and Prospect la

the substance of the research still bedevils the area, although in this
respect it certainly is not unique.
As should be quite clear, I have adopted a specific stance in
commenting on the views articulated by Burgstahler and Sundem. My
rationale for doing this is an internally orientated one for the
behavioral and organizational accounting area, although not a
defensive one. It is important for behavioral and organizational
researchers in accounting to receive, ponder on and, on suitable
occasions, act on the views of outsiders. The field should not be
isolated. Nor should it be seen as being isolated. Equally, however, I
think that it is extremely important for behavioral and organizational
researchers to be conscious of the nature and specificity of their own
endeavors, of the intellectual traditions upon which they draw and of
the positions which they occupy or should attempt to occupy within
the spectrum of the diverse human sciences. Indeed, if I am critical of
behavioral accounting researchers it is that they do not live up to this
ideal. Too many appear to be unaware of their own intellectual
position. Too few can relate their research interests to substantive
developments in the human sciences. Insufficient attention is given to
increasing at least their awareness of their epistemological position
and the roles which can be attributed to the research endeavor.
If behavioral accounting research were to invest more in appreciat -
ing its own nature and position, I think that it would be a stronger
field. It could then listen with sympathy and understanding to the
views of outsiders. It could have a sounder appreciation of their
relevance or not for its own endeavors. It even might be able to extend
its own appreciations to complement and intersect with those
emanating from w ithout, in the process even developing some
understandings of the organizational and social preconditions that
give rise to an interest in the economic and its translation into modes
of economic calculation, such as accounting.

MOVING THE RESEARCH AGENDA FORWARD

Caplan's personal commentary on the emergence and present state
of behavioral accounting provides some further useful insights into
both the forces mobilizing the development of the area and what has
been achieved to date. Not only does he stress the influential role
played by the wider intellectual restructuring of American business
education and research, but he also correctly notes that the emergence
of the behavioral study of accounting needs to be seen in the context of
the rise of an organizational interest in the behavioral and social
sciences. Seen in such terms, it was not a fragmented and isolated
development but rather one whose intellectual ancestry needs to be
related to a wider understanding and management of the human and
social aspects of the enterprise.

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14 Anthony G. Hopwood

Turning to an analysis of the current state-of-the-art, Caplan offers a

more cautious view than Birnberg and Shields, even though a
behavioral accounting insider. Like Burgstahler and Sundem, he puts
a fair amount of emphasis on the narrowly conceived, method driven
and quickly undertaken studies that appear to result from at least
parts of the American academic culture. As I have said already, they do
tend to pervade parts of the area (although colleagues in other fields of
inquiry are prone to make the same comment). Even so, we need to be
careful about placing too much emphasis on the mass of studies,
disturbing though some of them may be. As Birnberg and Shields and
also the review by Lord made clear, progress in a field is more
frequently determined by a smaller number of innovative studies. In
the behavioral accounting area, like others, these have t ended to
reflect learning, a cumulative process of research and a healthy
interdependency with other disciplines in the human sciences. It
would appear that many of these studies then represent a new ideal
against which numerous other more focused and less innovative
studies are compared. Moreover, it is my experience that journal
review processes speedily adjust to the new states of knowledge,
quickly making it more difficult for the more marginal studies to enter
into the public domain. Of course, the process is not perfect, but it is
very similar to those operating in other fields of intellectual endeavor.
Seen in this way, there is not necessarily a conflict between the
substantive and cumulative review offered by Birnberg and Shields,
and the frustration articulated by Caplan and others. One reflects the
real achievements of the field, whilst the other may unfortunately still
reflect a large percentage of the studies undertaken, many of which
increasingly have difficulty getting published, however.
Even so, as Caplan quite rightly states, there is no need for
complacency. Behavioral accounting research is in need of improve -
ment and can be improved.
Mapping out any route for the future of behavioral and organiza -
tional research in accounting is bound to be a difficult and hazardous
task, easily reflecting personal preferences rather than likely substan-
tive developments in the field.
Caplan offers a quite cautious view of the future, being aware of the
continuing relative paucity of "individuals capab le of doing high
quality behavioral research." In a related manner, Burgstahler and
Sundem put the emphasis on the need for an improved methodological
orientation, providing, in the process, a specific list of areas where
improvement is called for.
Birnberg and Shields point to both methodological and substantive
trends, being somewhat less evaluative of either. As far as method -
ological developments are concerned, they highlight the growing
significance and likely future development of expert systems and, like

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Behavioral Accounting in Retrospect and Prospect 15

Burgstahler and Sundem, experimental economics based research.

Both of these strands of development are indeed already emergent, as
is the substantive area emphasized by Birnberg and Shields, namely
the research being conducted within what they term the "organiza -
tional sociology school." Although I am not as sure as Birnberg and
Shields that such patterns of development are likely to result in a
division of behavioral accounting research into a "rational school" and
"a subjectivistic school" since such a distinction tends to prioritize a
particular conception of rationality, I nevertheless agree that there is
some likelihood that such developments will result in quite clearly
differentiated and even divergent research traditions. Not only might
behavioral research then be confronted more starkly with the problems
of understanding aggregation issues and the relationship between the
individual, organizational, and social levels of analysis that confront
all the human sciences, but also more of a tension might emerge
between those who emphasize the appreciative and interpretative
functions of research and those that put the stress on its mo re
immediate instrumental potential for facilitating the design of
accounting practices and systems.
The nature of such tensions is likely to be influenced in part by the
extent to which behavioral and organizational researchers move more
towards addressing, albeit in quite different ways, the problems of
practice. I, at least, think that the time is now right for research in the
area to try to grapple with the problems of understanding the technical
practice of accounting as well as its human and organizat ional
context. Existing research now provides an adequate basis for doing
this. Be it through studies of the factors replicated in the emergence of
different technical regimes of accounting, attempts to gain a richer
insight into the socio-technical functioning of accounting, or im-
proved understandings of the different human and organizational
consequences stemming from different technical practices, a lot of
accounting orientated knowledge is more likely to be gained by
research which systematically attempts to study the interdependency
a nd in terpe ne tra tion of th e te ch n ica l and th e hu ma n a nd the
organizational.
Indeed some, at least, of Caplan's concerns with the potential impact
of such research on practice might be addressed this way. Although
the relationships between research and practice are complex and
rarely direct, more concerns with understanding the technical practice
of accounting in its human and organizational context might result in
frameworks, categories for analysis, and interpretative schemas that
might help at least to structure our understandings of practice. A more
instrumental body of knowledge is as likely, if not more likely, to
develop in this way than through attempts to use behavioral and
organizational insights to design more specific technical innovations.

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 16 Anthony G. Hopwood

The former more appreciative approach does more to recognize the

inherent complexities of practice, the need for the new to intermingle
with the old, the intellectual and linguistic as well as technical bases
th rou gh wh ich ch a ng e is p ro du ced an d th e ways in wh ich n ew
conceptions and ideas have diffused into practice fro m other areas of
organizational research.
I therefore also find myself in sympathy with the calls of Caplan and
others for research to delve into accounting as it is, or at the very least
to start addressing questions of a greater order of complexity and
interdependence. In auditing research, for instance, I think it could be
argued that now would be the appropriate time to broaden the focus of
behavioral research from its current concern with judgmental - issues
to address other behavioral and organizationa l components of the
auditing task. That is not to argue that the existing work on audit
judgment has not achieved a great deal. Indeed the opposite is the
case. But the focus to date nevertheless has been a partial one. There
even is a danger that the exclusivity of the focus might increase the
context to which auditing is perceived as just a judgmental endeavor.
In practice, however, we know that such cognitive issues are
intermingled with both the ways in which the auditor copes with a
highly structured and time paced context and a task that often calls for
q u ite co mp le x n eg o tiatio n s an d the exercisin g o f con siderab le
bargaining skills. The cognitive, in other words, is infused with both
the bureaucratic and the political. Caplan calls f or a very similar
broadening of focus, perhaps more positively suggesting that auditing
r e s e a r c h mi g h t p r o b e i n t o " t h e e x t e n t t o w h i c h a u d i t i n g f i r m
personnel practices tend to drive out of the organization the very
individuals...who would be most likely to contribute to solving the
immense problems facing the audit profession today."
Of course gaining access for such research is not going to be easy. 2
For a variety of reasons, providing realistic research settings is often
something of only partial interest to the practitioner community. But
it might well be an area where a careful use of experimental settings or
organizational simulations might provide suitable contexts in which
to investigate at least some of the possible interactions between
different elements of the audit environment and task and the factors
influencing their relative significance.
Such broadenings of the domain of behavioral and organizational
inquiry are not going to be easy and unproblematic. As Caplan points
out, case stu die s and presu mab ly similar sites for more co mp lex
2
Even if access is granted to actual audit situations, the research task might still not be
an easy one. Speaking from the perspective of my personal experiences as a member of
an audit committee, even insider status often provides only a very partial insight into
the processes involved in audit verification and particularly the negotiated final set of
attested accounts.

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Behavioral Accounting in Retrospect and Prospect 17

inquiry require not only new research skills but also "considerable
expertise in identifying appropriate behavioral concepts and applying
these concepts to specific situations." That is a point that cannot be
emphasized sufficiently. Research orientated case studies can never be
atheoretical exercises in mere description and to assume that they can
be is to risk wasting the quite considerable theoretical sophistication
that all the reviewers of the area admit has developed in recent years.
Whether the task is seen as a descriptive one, the telling of a story or
an indepth explanation of the embedding of accounting in the contexts
in which it operates, it must be recognized that the resultant analysis
is one which emerges through a particular conceptual lens. There is no
such thing as mere description or just "telling it as it is." Descriptions
of necessity appeal to categories, distinctions and linguistic emphases
that provide them with a specificity and a partiality. However implicitly
the process may occur, accounts of accounting are always based on
prior understandings and emphases. Like Caplan, I think that
researchers need to realize this and, on this basis, to attempt to make
such interpretative frameworks as explicit as is possible, even using
them proactively to trace out particular insights into the functioning
of accounting in practice.
It should not be necessary to reiterate such points, but with all the
current excitement about the possibilities for case research, this
fundamental point is often overlooked. The emphasis can easily be
placed almost exclusively on establishing the legitimacy of the exercise
rather than on its intellectual bases and the contexts it of necessity
creates for an infusion of theories into practice.
Already there are some signs of the dangers that might arise from
such an unproblematic stance. In investigations of the relationships
between cost accounting and new manufacturing technology, for
instance, there are some indications of what could emerge from such
an unreflective perspective. Without care, too accounting orientated a
view is likely not only to focus on the accounting topics of old
irrespective of their significance in the overall context in which they
now operate, but also ignore the ways in which new technologies can,
rather than must, change the very contexts in which accounting
operates. The present accounting emphasis often fails to locate the
accounting changes in the context of the often quite major shifts
occurring in organizational forms as a response to both technologies
and markets. There seemingly is often a failure to realize the
significance of the ways in which new technologies and market
pressures individually and jointly can provide a focus for changes in
modes of organizational control and thereby the functions attributed
to particular information flows, including that of accounting. As a
result, case study analyses can sometimes seem to o partial, too
implicated in the previous accounting order, too readily supportive of a

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18 Anthony G. Hopwood

traditional view of accounting as a relatively isolated and inward

looking technique, and too distanced from the original pragmatic
problems which gave the impetus for current research.
If such perspectives of the past are to be changed, more conceptually
oriented case studies will need to have a much greater appreciation of
the organizational contexts in which accounting operates. Rather
than trying to isolate and contrast the accounting of the past and that
of the future, research needs to probe into the full range of ways in
which technological perturbations can ripple through organizational
domains, disturbing and shifting organizational practices and per -
spectives, and creating possibilities for new alignments of both
practices and functionalites, including those of accounting itself. The
likelihood is that such a perspective would not so readily find a
compatibility between the accountings of the past and those of the
new, more likely raising more fundamental questions about account-
ing's embodiment in forms of organized action. At the very least, the
interrelationship between the technical practice of accounting and its
organizational context would have to be addressed quite systematically.
One final issue aired by Caplan is worthy of further comment,
namely his concerns with accounting texts, particularly those in the
management accounting area. I could not agree with him more. Like
h im, I a lso th in k th at th is is n ow a ma jo r co n stra in t o n th e
development of the behavioral and organizational analysis of account-
ing and the recognition of its potential. As I see it, however, the
problem is a deeper one than the mere fact that most texts currently
give little or no coverage of behavioral and organizational issues. The
world of the textbook writer is too frequently that of textbooks. Very
few would appear to have much conception of accounting as it is
practiced.
Budgeting is characterized as a technical exercise rather than a
multifaceted organizational phenomena offering numerous opportu-
nities, other than the narrowly technical, for managerial influence.
Similarly, standard setting, investment appraisal, and the mo -
bilization of accounting information around patterns of managerial
responsibility are discussed as technical exercises omitti ng their
broader behavioral and organizational impact.
Seemingly, having very little understanding of the organizational
nature of accounting as it is practiced, most management accounting
textbook writers also seem to have very little basis on which to
recognize the relevance, as distinct from current acceptability, of
behavioral and organizational insights. Accordingly, I think that they
often find it genuinely difficult to introduce such materials into their
volumes.
The result is a very constraining one for the field of management
accounting itself, however. With their emphasis on purely the

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Behavioral Accounting in Retrospect and Prospect 19

technical, important though that may be, the texts can only constitute
the equivalent of the bricklaying and plumbing manuals of the
accounting craft. Giving little or no insight into how the technical
elements are mobilized and brought together in an orga nizational
context, they can never provide a more managerially orientated design
approach to accounting that might constitute the equivalent of an
accounting architecture. That is not to deny the necessity for the
accounting equivalents of the bricklaying and plumbing crafts. Such
technical skills are absolutely essential. On their own, however, they
remain very partial in a world where accounting intersects with the
processes of organizing in complex and variable ways. Constrained as
such skills are, they can never provide a basis for the evaluation,
diagnosis, design and reform of organizational accounting systems,
factors that form an important part of the managerial as distinct from
the technical task. Indeed, that is why new bases of expertise are
arising alongside accounting in organizational and consultancy
settings. New skills are emergent and behavioral and organizational
understandings are even sometimes informing them. More could be
done, however, and that could be facilitated if the educational texts
through which we attempt to train the accountants of the future could
at least start to reflect some of the understandings of the present
rather than only those of the past.
The continuing isolation of the management accounting textbook
writer from the world of accounting practice makes me pessimistic of
the likelihood of substantial change, at least in the foreseeable future.
The problems in the financial accounting area are no less seve re. In
both cases, the narrowly defined technical orientation represents a
major constraint on the wider recognition and potential of research
understandings. With these in mind, I am sure that this topic is
worthy of further consideration by members of th e Accounting,
Behavior and Organizations Interest Section.

THE EBBS AND FLOWS OF PROGRESS

Lord's review of the development of behavioral thought in account -
ing reinforces many of the findings of the other surveys. However, its
particular approach also results in a number of observations on the
way in which the field has emerged that are worthy of some further
reinforcement.
Interestingly, for instance, quality and originality of research alone
apparently are not sufficient to incorporate specific thrusts of
behavioral and organizational research into the path of cumulative
progress. In this respect, the fact that the early series of organization -
ally oriented studies undertaken at Ohio State University did not
generate a continuing momentum is of some interest. Clearly of great

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20 Anthony G. Hopwood

originality and recognized as being of high quality, the organizational

orientation was not to result in a sustained school of inquiry at that
time. The reasons for this still remain far from clear.
In contrast, Lord's review usefully gives more consideration to the
comparative scale of the development of psychologically orien ted
studies in accounting in the U.S.A., particularly those reflecting a
cognitive and human information processing approach, something
that is more implicit in Birnberg and Shield's view of the intellectual
content of the research literature rather than its numerical distribu-
tion. The reasons for this are no doubt numerous, including not only
cultural predispositions but also the early presence of psychologists
within the American business school community, the accelerating
pace of change in that discipline, the degree to which it is perceived as
a science, and the circumscribed nature of its methodologies. Lord
also usefully emphasizes the way in which such behavioral accounting
research emerged in the context of the more general rise of interest in
the decision making roles of accounting, thereby illustrating how
behavioral accounting research's development has intermingled with,
rather than being completely isolated from, conceptions of decision
rationality that at least have some compatibility with those underlying
economic theorizing. Seemingly, it was such shifts in the intellectual
terrain of accounting itself that provided a significant context in which
behavioral inquiry could develop rather than the earlier work of
Argyris, Simon and others.
Not least in significance for the behavioral accounting research
community are Lord's observations on the significant roles played by
the institutional structures of the accounting academic world. He
emphasizes the importance for the development of human information
processing research of its early acceptance by the Journal of
Accounting Research (whilst Burgstahler and Sundem comment on
the apparent more recent decline of such interest) and its incorpora -
tion into the highly visible and influential Chicago empirical research
conferences. Both he and Birnberg and Shields comment on the
intellectual significance of key conferences for the wider development
of the area, pointing not only to those organized at Chicago but also to
the early Ohio State conferences and the later ones organized in
conjunction with Accounting, Organizations and Society. Interest-
ingly in the present context, Lord also stresses the important role
which access to journals has played in both the emergence and the
subsequent shaping of the field.
Although it is tempting only to emphasize intellectual trends,
achievements and difficulties, Lord's review suggests that much more
is at stake in the emergence of new bodies of knowledge. That in itself
is a useful and humbling thought.

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Behavioral Accounting in Retrospect and Prospect 21

CONCLUSION
If it is true that Becker originated the term "behavioral accounting"
in 1967, the birth of a new specialist journal is indeed a fitting
occasion on which to celebrate its 21st birthday. *
In the intervening years, progress has been real, possibly more than
many realize. That, however, is no reason for complacency. Difficulties
and problems, as well as challenges, remain, many of very real
significance. In facing the future, researchers in t he area need to
continue to learn from the experiences of the past, improve upon them
and carry on conceiving of new possibilities for enriching our
appreciation of the ways in which accounting functions in a behavioral
and organizational context.
In doing so, perhaps some greater recognition of the very progress
that has been achieved makes now an appropriate time also to reflect
on how the field of study is perceived from without. The Burgstahler
and Sundem review illustrates that there are many nonbehavi oral
researchers who still have quite a profound uncertainty about the
area.
In part, this is justifiably based on specifit worries and concerns
with particular methodologies, conceptual formulations and studies.
One also senses that the worries go deeper than this. Often it seems as
if the area itself gives rise to a frustration, if not an anxiety.
The reasons for this remain far from clear. There are those who
might be tempted to see the problem in psychological terms, possibly
pointing to a prevailing intolerance of ambiguity and diversity in the
accounting academic community, but that fails to acknowledge what
is ambiguous and what is not. A fascination with, and therefore a
prioritization of, the technical might also be relevant at this level.
I, however, am more inclined to put the emphasis in part, at least,
not only on the significant contextual factors which sustain and
reinforce concerns with the economic but also on an intellectual
orientation that seemingly wants to delimit and restrict the proble ms
with which the research agenda can grapple. Somehow it really does
seem that many academic accountants have great difficulty position -
ing themselves within the broader community of the human sciences
rather than being only the guardians of a specific technique. That in
itself is revealing, however. If it were to be the case, it might well
suggest that one problem with behavioral and organizational research
in accounting is that it is possibly quite correctly seen as being capable
of providing a basis on which not only to question accounting but also
to do so in a way that starts to shift the autonomy of accounting
technique, making it a less independent phenomenon. And that could
be very threatening to many.
'Editor's note #3: The volume went to press in 1988.

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22 Anthony G. Hopwood

Clearly, behavioral research is not the only form of intellectual

endeavor that can do this. Accounting research undertaken within the
context of an efficient capital markets tradition of inquiry also has that
very same potential. Interestingly, however, I sense that that potential
was never realized. Accounting remained accounting. Behavioral and
organizational research, on the other hand, is already providing a
means to see accounting in much more interdependent terms. Whilst
there are those who would celebrate the broadened agenda of concern,
equally there are those who are more profoundly troubled about where
this will take them, seemingly being extremely reluctant to make the
technical core of accounting into one that takes on a socio -technical
form.
Behavioral and organizational researchers in accounting cannot
hope to take on board such a vast evaluative agenda. In any event, the
problems of others are best left to themselves. Increasingly, however, I
think that the behavioral accounting research community ought to
recognize quite explicitly the nature of some o f the broader perspec-
tives from which they might be perceived. While striving to improve
their own research stance, I also think that behavioral accountants
increasingly need to adopt a less apologetic and referential stance.
More confidently articulating the positivity of their intellectual
position, they can both point to and play a role in developing its
substantive grounding in the wider domain of the human sciences.
As behavioral and organizational research moves forward into its
years of majority, I, at least, would hope that it not only continues to
refine the skills and perspectives developed in its earlier years, but
also , in th e p ro c e ss, a d o p ts a mo re matu re an d self -co n f id en t
intellectual stance. To me, both are possible and both are desirable.

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