Doing the books with blinkers on

Introduction to Accounting and Finance. First Edition - Accounting - Financial Accounting - Business Accounting and Finance. Second Edition
February 24, 2006

Despite numerous scandals, these are boom times for accounting, finance and business departments at universities. Students are flocking to learn about the arcane art of money and what is done in its name. Such an interest should create new emancipatory opportunities to reposition the academic discipline and citizens. However, this is not evident from the books currently available.

All of the books reviewed here are clearly written and contain concise definitions, learning objectives and plenty of worked examples and illustrations. They provide material for self-testing and useful diagrams to advance learning and are supported by a variety of teaching aids on their respective publishers' websites.

Geoff Black's Introduction to Accounting and Finance provides 18 multicoloured chapters of introduction to financial and management accounting. It provides a conventional introduction to double-entry book-keeping, profit and loss accounts, balance sheets, cash flow, budgeting, break-even and elementary costing. It is probably aimed at beginners on undergraduate and BTec courses. It primarily introduces a variety of techniques, but with no theory of any organisational or social context to make sense of these techniques.

The weighty tome by Eddie McLaney and Peter Atrill devotes seven chapters to selected topics in financial accounting, six to management accounting and three to financial management. It covers topics such as preparation of conventional financial statements, cash-flow statements, analysis and interpretation of published company accounts, cost-volume-profit analysis, budgeting, investment appraisals and sources of finance and management of working capital. Some further readings are also suggested. The book would be useful for introductory courses but neglects the organisational and social context of accounting.

The lively Financial Accounting: An Introduction by Tony Davies and Tony Boczko covers a lot of ground by introducing readers to conventional financial statements. This is supplemented by a focus on the analysis of published company accounts and some discussion of corporate governance codes, sources of finance, information technology and e-business. This has the merit of connecting readers to some contemporary themes and provides a useful introduction to the subject matter on accounting, finance and business studies degrees. The case studies remain technique oriented.

However, the book does not locate business and accounting practices in any theory of society (for example capitalism) or organisations.

The second book by Davies and Boczko, Business Accounting and Finance , is problematical. Although it is clearly written and presented, its content overlaps considerably with the introductory book. In a number of places, the exact contents of the introductory book are repeated, albeit in different colours. Even the illustrations and diagrams are the same. At times it is difficult to distinguish between the contents of the two books as the same chapters and worked examples are encountered. The only difference seems to be that the second work contains some additional chapters on management accounting and working capital that the introductory book does not. Business Accounting and Finance could have been made more distinctive by critiquing accounting and corporate governance, but it does not do this. Perhaps the two titles are aimed at different markets, but why one book would not have sufficed is not self-evident. In these hard-pressed times, debt-ridden students are unlikely to buy both.

Though all of the books try to be distinctive, there are a number of common elements. As in a number of other contemporary texts, the authors aim to teach and inform students about techniques rather than any context of accounting. In many ways the books are formulaic and stick to the model that has existed for the past 30 to 40 years. There seems to be marked reluctance to move beyond the conventional and to contextualise accounting.

The ad hoc rationalisations for accounting are all self-referential and appeal to what the regulators or professional bodies demand, rather than responding to critics or referencing any theory of justice, ethics, fairness, accountability or any social formation. What is puzzling is whether this is due to some self-imposed censorship by the authors or to deeply ingrained conservatism or both.

Perhaps publishers are simply content to produce good replicas of other mainstream textbooks. Maybe we are witnessing a phenomenon created by the economics of publishing:publishers persuade authors to write books that are likely to get the approval of the relevant professional bodies rather than to challenge conventional wisdoms.

Prem Sikka is professor of accounting, Essex University.

Introduction to Accounting and Finance. First Edition

Author - Geoff Black
Publisher - Pearson/Prentice Hall
Pages - 385
Price - £33.99
ISBN - 0 3 68870 7

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