Rethinking the Influence of Agency Theory in the Accounting Academy

26 Pages Posted: 13 Oct 2005 Last revised: 27 Sep 2009

See all articles by Jeffrey R. Cohen

Jeffrey R. Cohen

Boston College - Department of Accounting

Lori Holder-Webb

Western New England University - Department of Accounting and Finance

Abstract

The business press is showering criticism on business academics, citing failure in teaching relevant skills to students and a perceived increasing irrelevance of research streams. This criticism is echoed by some academics, who assert the need for serious consideration of the direction of the academy. This dialogue is especially salient for members of the accounting academy, who must train students to join a profession whose value rests on a foundation of ethical behavior and the public interest. It is also salient to the accounting research, which has informed the construction of intra-firm contracts and thus effected significant changes in the way firms are managed. In this essay, we examine and extend this body of criticism and explore its implications for accounting research and education. We discuss how our discipline has borrowed methodology freely from the physical sciences and how this importation has led to the adoption of excessively simplified economic theories. We also consider the self-fulfilling attribute of social science theories and how this has led to formulations of models of behavior, instantiation of those models in the business environment, and eventual conformity of manager behavior with the underlying assumptions of the models. We then examine agency theory in light of this dynamic and explore how the discipline-wide espousal of this theory may have led our accounting education system to unwittingly introduce and then normalize narrowly self-interested behavior. Finally, we suggest ways to improve accounting education that embrace multiple perspectives to prepare our students for act truly in the public interest.

Keywords: agency theory, models, methodology, models

JEL Classification: C49, M41

Suggested Citation

Cohen, Jeffrey R. and Holder-Webb, Lori, Rethinking the Influence of Agency Theory in the Accounting Academy. Issues in Accounting Education, Vol. 21, No. 1, pp. 17-30, 2006. Available at SSRN: https://ssrn.com/abstract=814025

Jeffrey R. Cohen (Contact Author)

Boston College - Department of Accounting ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-3165 (Phone)
617-552-2097 (Fax)

Lori Holder-Webb

Western New England University - Department of Accounting and Finance ( email )

United States

Register to save articles to
your library

Register

Paper statistics

Downloads
1,784
Abstract Views
6,857
rank
8,778
PlumX Metrics