'Transparency' in Accounting and Corporate Governance: Making Sense of Multiple Meanings

56 Pages Posted: 18 Feb 2015

See all articles by Mitchell Stein

Mitchell Stein

University of Western Ontario - Richard Ivey School of Business

Steven Salterio

Queen's University - Smith School of Business

Teri Shearer

Queen's University - Smith School of Business

Date Written: January 20, 2015

Abstract

Calls for greater transparency of accounting information were consistent in media discourse after the accounting crisis early this century. Our analysis of the media suggests different emergent meanings were associated with these calls of transparency and an underlying ‘taken for grantedness’. We examine how this ‘taken for grantedness’ contributed to preserving the status quo rather than greater accountability. We posit that for many observers a loss of meaning of accounting information led to attempts to make sense of what actions are necessary to construct a meaning of accounting information. We find that academic accounting research’s response had a narrow focus relating to representation and accessibility of information to permit decision making, the ocular metaphor of transparency. In contrast, the social science research literature highlights the ‘invisible’ in transparency or the construction of meaning through sensemaking. By extending sensemaking to the macro level we show how stakeholders construct meanings of transparency to rationalize events around the crisis. We find that senior management engaged in high levels of sensegiving via dominant media accounts of vague pledges and actions to increase transparency that provide a plausible story of events and the belief that the necessary actions have been taken, but effectively maintains the status quo. Accountants and regulators provided low and fragmented levels of sensegiving, offering little direction over the discourse of transparency. Our analysis suggests that accountants and regulators need to provide higher forms of sensegiving to create richer accounts and more coherent actions that could provide alternatives to senior management’s accounts.

Keywords: Transparency; Sensemaking; Regulation of accounting; Corporate governance; Media analysis

JEL Classification: M4

Suggested Citation

Stein, Mitchell and Salterio, Steven E. and Shearer, Teri, 'Transparency' in Accounting and Corporate Governance: Making Sense of Multiple Meanings (January 20, 2015). Available at SSRN: https://ssrn.com/abstract=2565833 or http://dx.doi.org/10.2139/ssrn.2565833

Mitchell Stein (Contact Author)

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

Steven E. Salterio

Queen's University - Smith School of Business ( email )

Kingston, Ontario K7L 3N6
Canada
613-5336926 (Phone)

HOME PAGE: http://web.business.queensu.ca/faculty/ssalterio/

Teri Shearer

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

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