Contrary to their reputation as a prime example of pedantic meticulousness and boredom, accounting standards, as crystallization points for power relations in society, are crucial for the analysis of capitalist economies. The calculation and notation of prices, payments, assets, and liabilities were long mistakenly conceived of as routines that merely illustrated economic reality, to which at best the criteria of bureaucratic exactness and mathematical accuracy could be applied. But in fact, the practice of accounting is not a passive reflection of economic processes, but rather constitutes the reality of economic activities.
Only a value listed as an asset or a liability can be traded as a commodity on markets, booked as profit and paid out to stockholders, or even be monitored and taxed. Therefore, these values exist primarily as written values within formal economic processes. This insight from many recent studies in accounting sociology is particularly relevant for sociological research and theorization pertaining to the financial system. For the products manufactured in financing—money, credit, derivatives, and capital—have ultimately no other substance than the fact of their registration in the balance sheets of creditors and debtors.
The procedures for producing economic goods through the "writing of value" (Uwe Vormbusch) are highly variable. Scripts, limits, and exceptions are constantly renegotiated at national and international levels, because even seemingly minor modifications of existing accounting principles can have far-reaching consequences for the profitability of investment strategies and entire sectors of the economy. This project will investigate recent and very recent power shifts in the political economy of accounting and their consequences. The cipher "political economy" refers to the assumption of a connection between (societal) authority and (economic) profitability. A sociological perspective considers both the agents involved in changing value-creation processes and those who make profits or losses because of these changes. Here the practice of accounting plays a crucial role, because changes in accounting methods have direct impacts on the profitability of products, business models, and value-creation chains.
The power of decision-making regarding procedures and conditions according to which financial assets are "written" and can be produced has been rearranged in the past two decades. The project will (1) appraise these power shifts from comparative regional and sectoral perspectives and (2) analyze the economic and societal effects of these changed procedures and (3) examine the sociopolitical terms of their resilience.
(Last modified September 2015)