The role of accounting in corporate governance in a developing country

Institutional political economy perspective

Athula Ekanayake, Sujatha Perera*

*Corresponding author for this work

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Conceptualisation of corporate governance in mainstream accounting research seems to be based on the assumption of pure economic type governance which is characterised by control systems and political neutrality. This study examines institutional and socio-political dynamics of the role of accounting in corporate governance in a government-owned commercial bank in a developing country. Using data from semi-structured interviews and document analysis, the study draws on the theory of institutional political economy to examine the socio-political and institutional complexities associated with using accounting as a mechanism of governance. Findings reveal that although the bank meticulously complied with various professional and regulatory requirements in internal and external reporting in response to normative, coercive and mimetic pressures, such compliance was mainly to gain legitimacy, appearance and society's support, rather than to enhance good governance. Further, the paper clearly demonstrates the political complexity of corporate governance in developing countries and how accounting becomes less effective within such political complexities.

Original languageEnglish
Pages (from-to)109-132
Number of pages24
JournalInternational Journal of Accounting, Auditing and Performance Evaluation
Volume10
Issue number2
DOIs
Publication statusPublished - 2014

Keywords

  • Banks
  • Corporate governance
  • Developing countries
  • Government business enterprises
  • Institutional complexities
  • Institutional political economy theory
  • New institutional theory
  • Role of accounting
  • Socio-political
  • Sri Lanka

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