In This Article Expand or collapse the "in this article" section Accounting Communication

  • Introduction
  • Research Perspectives and Theories
  • General Overviews
  • Special Journal Issues and Sections
  • Organizations Communicating Accounting (Who?)
  • Accounting Communication Focus (What?)
  • Audiences (To Whom?)
  • Accounting Communication Purpose (For What Purpose?)

Communication Accounting Communication
Niamh M. Brennan, Danial R. Hemmings, Doris M. Merkl-Davies
  • LAST MODIFIED: 26 May 2023
  • DOI: 10.1093/obo/9780199756841-0289


Non-accounting (and some accounting) scholars tend to view accounting narrowly as a technical practice focusing on recording economic transactions via financial statements for financial decision-making. By contrast, Garry Carnegie, Lee Parker, and Eva Tsahuridu view accounting as “a technical, social and moral practice concerned with the sustainable utilisation of resources and proper accountability to stakeholders to enable the flourishing of organisations, people and nature” (“It’s 2020: What Is Accounting Today?,” Australian Accounting Review 31.1 [2021]: 69). Accounting involves measurement, processing, and communication of financial and nonfinancial information. “Accounting communication” refers to the communication of quantitative and qualitative information in a variety of formats (i.e., financial statements, corporate reports, corporate press releases, etc.) and media (i.e., corporate websites, social media, etc.) by organizations to external audiences (i.e., shareholders, stakeholders, financial analysts, the media, etc.) to either comply with legal or stock exchange requirements or on a voluntary basis. Accounting research uses the term “reporting” (i.e., annual reporting, corporate reporting, corporate social responsibility [CSR] reporting) to refer to organizational communication on financial, social, and environmental performance to external audiences outside the financial statements and includes mandatory and voluntary aspects. Research refers to the reports and documents outside financial statements as “accounting narratives” or “disclosures.” They include documents focusing on communicating social and environmental practices, policies, and performance, such as CSR reports. However, we only tangentially refer to CSR reporting, as it is a distinct stream of research in the accounting literature (see Muzammal Khan, Abeer Hassan, Christian Harrison, and Heather Tarbert, “CSR Reporting: A Review of Research and Agenda for Future Research,” Management Research Review 43.11 [2020]: 1395–1419, for a literature review). The more recent theoretical literature adopts the term “accounting communication” to highlight the dynamic and reciprocal aspects (i.e., two-way dynamic interactive communication between organizations and their audiences), oral forms (e.g., conference calls, CEO speeches, and media interviews), and nontraditional forms of communication (e.g., social media). Accounting communication is a multifaceted and complex phenomenon. It is inherently problematic due to the important role large organizations, particularly listed companies, play in society as employers, providers of goods and services, and investment vehicles. This multifaceted nature gives rise to a diverse set of audiences with often competing interests and diverse views on the purpose of accounting communication. Accounting communication ultimately provides the basis for the debate on how to distribute the wealth generated by firms among managers, shareholders, stakeholders, and society. Therefore, it is not surprising that evidence suggests that accounting communication is often strategic, with companies trying to balance disclosure and transparency with concealment and obfuscation.

Research Perspectives and Theories

Accounting communication research has grown over the last decade, particularly in the United States, the United Kingdom, and Australia. Two research streams, based on different research perspectives on accounting communication, have developed concurrently. North American–style disclosure research views accounting information as an economic good and applies economic and psychological theories to explain motivations and demands for and responses to accounting communication. Such researchers view accounting communication as providing decision-relevant information to capital market participants in the context of information asymmetry and potential agency conflicts between company managers and investors. This disclosure research stream is mainly quantitative and focuses on information content, quantity, quality (particularly readability), or frequency of disclosures. By contrast, European-style narrative research draws on diverse theories from various academic disciplines (sociology, media studies, linguistics, etc.) to explore meaning-related aspects of accounting communication, including storytelling, sense-making, and discourse (Merkl-Davies and Brennan 2017, cited under General Overviews). This narrative research stream uses a variety of qualitative methods, such as rhetorical or visual analysis or critical discourse analysis and focuses on accounting communication by a wide variety of organizations, including listed companies and public-sector and not-for-profit organizations, such as charities, social movements, and nongovernmental organizations (NGOs). It adopts a broad view of the purpose of accounting communication as providing relevant information to various external audiences, discharging accountability to both stakeholders and society, and a means of legitimation and managing conflict in society (Merkl-Davies and Brennan 2017, cited under General Overviews). Ferry and Slack 2022 (cited under Organizations Communicating Accounting (Who?)) research “counter-accounting,” which involves challenging and critiquing organizational accounts of practices, policies, and performance by providing an alternative version. The article commences with a general overview, including overviewing special issues/sections. The subsequent sections discuss six aspects of accounting communication, namely (i) who is communicating (ii) what, (iii) to whom, (iv) how, (v) when, and (vi) for what purpose, and summarizes the findings and conclusions of relevant empirical and conceptual studies.

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