Conceptual shifts in accounting: Transplanting the notion of boundary from financial to non-financial reporting

Journal title FINANCIAL REPORTING
Author/s Laura Girella, Mario Abela, Elisa Rita Ferrari
Publishing Year 2018 Issue 2018/1
Language English Pages 43 P. 133-175 File size 464 KB
DOI 10.3280/FR2018-001005
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

In 1998 Miller, in his paper titled "The margins of accounting" observed that "By looking at the margins of accounting, we can understand how this influential body of expertise is formed and transformed" (Miller, 1998: 618). Drawing on this analogy, the boundaries of reporting and the ways these are defined and re-defined, as a consequence of the relationships organisations form with other entities from time to time, and their substantive nature provide insights about the business and its business model. Accordingly, an examination of reporting boundaries helps to better understand and appreciate the objective of an organisation, the logic that underlies its business model and how that is ‘reflected’ and communicated through the reporting entity’s financial statements - which may or may not align with the boundaries of the ‘organisation’. Despite the relevance of reporting boundaries as a critical aspect of the accounting discipline, it remains a relatively unexplored area in the literature. Accordingly, the aim of this work is to offer an initial overview on how the boundaries of reporting have (not) changed in response to the broadening scope of reporting to address both financial and ‘non-financial’ information (e.g. sustainability, governance and intangibles) and attempts to promote greater integration between both sets of information (IIRC, 2013). In particular, the analysis draws on the interpretative schemes of Zambon (1996) and Zambon and Zan (2000) and is combined with the concept of ‘transplantation’. The manner in which reporting boundaries are defined for both financial and non-financial reporting is investigated and compared. This comparison enables similarities and differences between the definition of the ‘reporting boundary’ to be problematised and explored for both financial and non-financial reporting.

Keywords: Reporting boundaries, financial reporting, non-financial reporting, transplantation.

  1. Abbott A. (1995), Things of boundaries, Social research, 62(4), pp. 857-882.
  2. Accounting for Sustainability Project (A4S) (2017), Essential guide to social and human capital accounting.
  3. Alexander D. (2015), Directive 2013/34/EU, article 6 an analysis and some implications. A research note, Financial Reporting, 1, pp. 5-22, DOI: 10.3280/FR2015-001001
  4. Anderson G. (2010), Transfer of carbon liability under the proposed Carbon Pollution Reduction Scheme, Monash University Law Review, 36(1), p. 304.
  5. Andrei P. (2007), Area di riferimento del bilancio sociale [The scope of social reporting], in M. Andreaus (Ed.) La rendicontazione sociale nei gruppi aziendali [Groups’ social reporting], pp. 75-95 (Milan: McGraw-Hill).
  6. EU Directive no. 34/2013 on The annual financial statements, consolidated financial statements and related reports of certain types of undertakings.
  7. Andrei P. and Pesci C. (2009), L’area di riferimento del bilancio socio-ambientale nei gruppi aziendali: spunti critici di riflessione emergenti da un’indagine empirica [The scope of social-environmental reporting within groups: critical reflections from an empirical analysis], Financial Reporting, 1(2), pp. 45-70.
  8. Annisette M. (2017), Discourse of the professions: The making, normalizing and taming of Ontario's “foreign-trained accountant”, Accounting, Organizations and Society, 60, pp. 37-61,
  9. Anthony R.N. (1975), Accounting for the cost of interest. (Lexington, Mass.: Lexington Books-D. C. Heath and Co).
  10. Archel P., Fernández M. and Larrinaga C. (2008), The organizational and operational boundaries of triple bottom line reporting: a survey, Environmental management, 41(1), pp. 106-117,
  11. Ardemani E. (1968), L’evoluzione del concetto di impresa e dei sistemi contabili in Italia [The evolution of firm concept and accounting systems in Italy], Rivista dei dottori commercialisti, 3 (May-June), pp. 411-430.
  12. Arya B. and Zhang G. (2009), Institutional reforms and investor reactions to CSR announcements: Evidence from an emerging economy, Journal of Management Studies, 46(7), pp. 1089-1112,
  13. Barth F. (1969), Ethnic Groups and Boundaries: The Social Organization of Culture Differences. (Little, Brown).
  14. Baxter W. (1984), Inflation accounting. (Oxford: Philip Allan).
  15. Bensadon D. (2005), La frontière comptable de l’entité groupe: évolution du concept de périmètre de consolidation des comptes du milieu des années 1960 à la loi du 3 janvier 1985 [The accounting frontier of the group entity: evolution of the consolidation scope concept from the mid-1960s to the law of 3 January 1985], Entreprises et histoire, (2), pp. 8-22,
  16. Berle A. and Means G. (1932), The Modern Corporation and Private Property. (New York: Macmillan)
  17. Bhimani A. (1993), Indeterminacy and the specificity of accounting change: Renault 1898-1938, Accounting, Organizations and Society, 18(1), pp. 1-39, DOI: 10.1016/0361-3682(93)90023-Y
  18. Carbon Disclosure Standards Board (CDSB) (2015), CDSB Framework for reporting environmental information and natural capital. London.
  19. Chiapello E. and Medjad K. (2009), An unprecedented privatisation of mandatory standard-setting: The case of European accounting policy, Critical Perspectives on Accounting, 20(4), pp. 448-468,
  20. Christensen J. (2011), Good analytical research, European Accounting Review, 20(1), pp. 41-51, DOI: 10.1080/09638180.2011.559030
  21. Coase R.H. (1937), The nature of the firm. Economica, 4(16), pp. 386-405.
  22. Deephouse D.L. (1996), Does isomorphism legitimate?, Academy of Management Journal, 39(4), pp. 1024-1039, DOI: 10.2307/256722
  23. DiMaggio P., and Powell W. W. (1983), The iron cage revisited: Collective rationality and institutional isomorphism in organizational fields, American Sociological Review, 48(2), pp. 147-160.
  24. Durkheim E. (1911), Les formes élementaires de la vie religieuse. (Paris: Alcan) [1965. The Elementary Forms of Religious Life. Free Press, New York].
  25. Edwards P., Birkin F.K. and Woodward D.G. (1999), Extending the boundaries of annual reporting: A challenge to the accountant and her profession, Journal of Applied Accounting Research, 5(1), pp. 37-67, DOI: 10.1108/96754269980000783
  26. Epstein C.F. (1992), Tinker-bells and pinups: the construction and reconstruction of gender boundaries at work, in M. Lamont, M. Fournier (Eds), Cultivating Differences: Symbolic Boundaries and the Making of Inequality (Chicago: University of Chicago Press).
  27. EU Directive no. 95/2014 on Disclosure of non-financial and diversity information by certain large undertakings and groups.
  28. EU Guidelines (2017) on Non-financial reporting (methodology for reporting non-financial information).
  29. Evans L. (2004), Language, translation and the problem of international accounting communication, Accounting, Auditing & Accountability Journal, 17(2), pp. 210-248, DOI: 10.1108/09513570410532438
  30. Evans L. (2010), Observations on the changing language of accounting. Accounting History, 15(4), pp. 439-462,
  31. Ewald W. (1995), Comparative jurisprudence (II): the logic of legal transplants. The American Journal of Comparative Law, 43(4), pp. 489-510, DOI: 10.2307/840604
  32. Foucault M. (1970), The order of things: An archaeology of knowledge. (New York: Pantheon).
  33. Foucault M. (1972), The archeology of knowledge. (New York: Pantheon).
  34. Gillespie J. (2001), Globalisation and legal transplantation: lessons from the past, Deakin Law Review, 6, 286.
  35. Girard R. (1976). Deceit, desire, and the novel: Self and other in literary structure. (Johns Hopkins University Press).
  36. Global Reporting Initiative (GRI) (2005). GRI Boundary Protocol. Amsterdam.
  37. Global Reporting Initiative (GRI) (2013). G4 Guidelines. Amsterdam.
  38. Haller A. and Stolowy H. (1998), Value added in financial accounting: a comparative study between Germany and France, Advances in international accounting, 11(1), pp. 23-51.
  39. Harding A. (2001), Comparative law and legal transplantation in South East Asia: Making sense of the ‘Nomic Din’ in D. Nelken and J. Feest (Eds) Adapting legal cultures, pp. 199-222 (Bloomsbury Publishing).
  40. Hatfield H.R. (1909), Modern accounting. (New York: D. Appleton & Co).
  41. Haugen E. (1950), The analysis of linguistic borrowing, Language, 26(2), pp. 210-231, DOI: 10.2307/410058
  42. Horwitz M.J. (2009), Constitutional transplants, Theoretical Inquiries in Law, 10(2), pp. 535-560, DOI: 10.2202/1565-3404.1225
  43. International Accounting Standards Board (IASB) (2011), IAS 27 Consolidated and Separate Financial Statements. London.
  44. International Accounting Standards Board (IASB) (2013), IFRS 10 Consolidated Financial Statements, International Financial Reporting Standards. London.
  45. International Accounting Standards Board (IASB) (2011), IFRS 11 Joint Arrangements, International Financial Reporting Standards. London.
  46. International Accounting Standards Board (IASB) (2011), IFRS 12 Disclosure of Interests in Other Entities, International Financial Reporting Standards. London.
  47. International Accounting Standards Board (IASB) (2011), IAS 28 Investments in Associates and Joint Ventures, International Financial Reporting Standards. London.
  48. International Integrated Reporting Council (IIRC) (2013), International <IR> Framework. London.
  49. International Integrated Reporting Council (IIRC) (2016), Statement of Common Materiality. London.
  50. Journet D. (1993), Interdisciplinary discourse and “boundary rhetoric” The case of SE Jelliffe, Written Communication, 10(4), pp. 510-541.
  51. Kaspersen M. (2013), The construction of social and environmental reporting, PhD School of Economics and Management, Copenhagen Business School.
  52. Kell W.G. (1953), Should the accounting entity be personified?, The Accounting Review, 28(1), pp.40-43.
  53. Kester R.B. (1917-1918), Accounting theory and practice, 2 Vols. (New York: Ronald Press).
  54. Lai A., Melloni G. and Stacchezzini R. (2017), What does materiality mean to integrated reporting preparers? An empirical exploration, Meditari Accountancy Research, pp. 533-552, DOI: 10.1108/MEDAR-02-2017-0113
  55. Lamberton G. (2005), Sustainability accounting – a brief history and conceptual framework, Accounting Forum, 29(1), pp. 7-26,
  56. Lamont M. and Fournier M. (1992), Cultivating differences: symbolic boundaries and the making of inequality. (Chicago: University of Chicago Press).
  57. Lamont M. and Molnár V. (2002), The study of boundaries in the social sciences, Annual review of sociology, 28(1), pp. 167-195,
  58. Lamont M., Pendergrass S., and Pachucki M. (2001), Symbolic boundaries, International encyclopedia of the social and behavioral sciences, 23, pp. 15341-47, DOI: 10.1016/B978-0-08-097086-8.10416-7
  59. Lefebvre C. and Lin L. Q. (1991), On the scope of consolidation: a comparative study of the EEC 7th Directive, IAS 27 and the Belgian Royal Decree on Consolidation, The British Accounting Review, 23(2), pp. 133-147, DOI: 10.1016/0890-8389(91)90048-7
  60. Lev B. and Zarowin P. (1999), The boundaries of financial reporting and how to extend them. Journal of Accounting Research, 37(2), pp. 353-385, DOI: 10.2307/2491413
  61. Li D.H. (1960a, April), The nature of corporate residual equity under the entity concept, The Accounting Review, 35, pp. 258-263.
  62. Li D.H. (1960b, October), The nature and treatment of dividends under the entity concept, The Accounting Review, 35, pp. 674-679.
  63. Meyssonnier F. and Pourtier F. (2013), Contrôle du périmètre et périmètre de contrôle-Réflexion sur le système d’information comptable des groups, Comptabilité-Contrôle-Audit, 19(3), pp. 117-146.
  64. Miller J.M. (2003), A typology of legal transplants: using sociology, legal history and Argentine examples to explain the transplant process, The American Journal of Comparative Law, 51(4), pp. 839-886, DOI: 10.2307/3649131
  65. Miller P. (1998), The margins of accounting, The Sociological Review, 46(1), pp. 174-193, 10.1111/j.1467-954X.1998.tb03474.x.
  66. Moonitz M. (1942), The entity approach to consolidated statements. The Accounting Review, 17(3), pp. 236-242.
  67. Moonitz M. (1951), The entity theory of consolidated statements. (Foundation Press).
  68. Moneva J.M., Archel P. and Correa C. (2006, June), GRI and the camouflaging of corporate unsustainability, Accounting forum, 30(2), pp. 121-137,
  69. Nelson T., Wood E., Hunt J. and Thurbon C. (2011), Improving Australian greenhouse gas reporting and financial analysis of carbon risk associated with investments, Sustainability Accounting, Management and Policy Journal, 2(1), pp. 147-157, DOI: 10.1108/20408021111162173
  70. Nobes C. (2002), An analysis of the international development of the equity method, Abacus, 38(1), pp. 16-45, DOI: 10.1111/1467-6281.00096
  71. Nobes C. (2014), The development of national and transnational regulation on the scope of consolidation, Accounting, Auditing & Accountability Journal, 27(6), pp. 995-1025, DOI: 10.1108/AAAJ-03-2013-1287
  72. Paton W.A. (1922), Accounting theory. (New York: Ronald Press).
  73. Perju V. (2012), Constitutional transplants, borrowing, and migrations. Boston College Law School Faculty Papers.
  74. Pesci C. and Andrei P. (2011), An empirical investigation into the boundary of corporate social reports and consolidated financial statements, Social and Environmental Accountability Journal, 31(1), pp. 73-84, DOI: 10.1080/0969160X.2011.556404
  75. Rahaman A. S. (2010), Critical accounting research in Africa: Whence and whither, Critical Perspectives on Accounting, 21(5), pp. 420-427,
  76. Rao H., Monin P., and Durand R. (2005), Border crossing: Bricolage and the erosion of categorical boundaries in French gastronomy, American Sociological Review, 70(6), pp. 968-991.
  77. Saccon C. (2008), Perimeter of Consolidation: Converging regulations and national effects, Revista Economica, 40(3), pp. 75-88.
  78. Sin K.K. and Roebuck D. (1996), Language engineering for legal transplantation: Conceptual problems in creating common law Chinese, Language & Communication, 16(3), pp. 235-254, DOI: 10.1016/0271-5309(96)00017-1
  79. Solomons D. (1978), The politicization of accounting, Journal of Accountancy (pre-1986), 146(5), p. 65.
  80. Sprague Ch. E. (1907), The philosophy of accounts. (New York: published by the author).
  81. Staubus G.J. (1959), The residual equity point of view in accounting, The Accounting Review, 34(1), pp. 3-13.
  82. Suojanen W.W. (1954), Accounting theory and the large corporation. The Accounting Review, 29(3), pp. 391-398.
  83. Sustainability Accounting Standards Board (SASB) (2014). Automobile Sustainability Accounting Standards.
  84. Sustainability Accounting Standards Board (SASB) (2017). Conceptual framework.
  85. Tilly C. (2004), Social boundary mechanisms, Philosophy of the social sciences, 34(2), pp. 211-236, DOI: 10.1177/0048393103262551
  86. Tinker A.M., Merino B.D. and Neimark M.D. (1982), The normative origins of positive theories: ideology and accounting thought, Accounting, Organizations and Society, 7(2), pp. 167-200, DOI: 10.1016/0361-3682(82)90019-8
  87. Walker N. (2007), The migration of constitutional ideas and the migration of the constitutional idea: the case of the EU, in S. Choudhry (Ed) The migration of constitutional ideas, pp. 316-343 (Cambridge University Press).
  88. Walker R.G. (1978), International accounting compromises: the case of consolidation accounting, Abacus, 14(2), pp. 97-111,
  89. Walton P. (2006), A research note: Fair value and executory contracts: moving the boundaries in international financial reporting, Accounting and Business Research, 36(4), pp. 337-343, DOI: 10.1080/00014788.2006.9730031
  90. World Intellectual Capital/Assets Initiative (WICI) (2016), WICI Intangibles Reporting Framework Version 1.0.
  91. Xing L. (2004), Some new insights into legal transplantation: From “history” to “present”, Social Sciences in China, 5, 001.
  92. Young A. (2010), Greenhouse gas accounting: global problem, national policy, local fugitives, Sustainability Accounting, Management and Policy Journal, 1(1), pp. 89-95, DOI: 10.1108/20408021011059269
  93. Zambon S. (1996). Entità e proprietà nei bilanci di esercizio [Entity and Proprietary in Financial Statements]. (Padua: Cedam).
  94. Zambon S. and Girella L. (2016), Accounting theory and accounting practice as loosely coupled systems: A historical perspective on the Italian case (1930-1990), Financial Reporting, 1, pp. 95-133, DOI: 10.3280/FR2016-001006
  95. Zambon S. and Zan L. (2000), Accounting relativism: the unstable relationship between income measurement and theories of the firm, Accounting, Organizations and Society, 25(8), pp. 799-822, DOI: 10.1016/S0361-3682(98)00035-X
  96. Zeff S.A. (1978), A critical examination of the orientation postulate in accounting. (New York: Arno Press - orig. ed., 1961, University of Michigan).

  • Corporate governance: Search for the advanced practices Francesco De Luca, Ho-Tan-Phat Phan, pp.177 (DOI:10.22495/cpr19p9)
  • Paradise Lost: Accounting Narratives Without Numbers Mario Abela, in Accounting, Economics, and Law: A Convivium 20190035/2020
    DOI: 10.1515/ael-2019-0035
  • The level of compliance with the Italian Legislative Decree No. 254/2016 and its determinants: Insights from Italy Valter Cantino, Alain Devalle, Simona Fiandrino, Donatella Busso, in FINANCIAL REPORTING 1/2019 pp.113
    DOI: 10.3280/FR2019-001004
  • Mandatory and Discretional Non-financial Disclosure after the European Directive 2014/95/EU pp.117 (ISBN:978-1-83982-505-7)
  • Informativeness Assessment of Risk and Risk-Management Disclosure in Corporate Reporting: An Empirical Analysis of Italian Large Listed Firms Francesco De Luca, Ho-Tan-Phat Phan, in FINANCIAL REPORTING 2/2019 pp.9
    DOI: 10.3280/FR2019-002002
  • The assurance of non-financial disclosure: A longitudinal analysis of the academic and professional literature Michele Guidi, Marco Giuliani, Maria Serena Chiucchi, Stefano Marasca, in FINANCIAL REPORTING 2/2021 pp.5
    DOI: 10.3280/FR2021-002001

Laura Girella, Mario Abela, Elisa Rita Ferrari, Conceptual shifts in accounting: Transplanting the notion of boundary from financial to non-financial reporting in "FINANCIAL REPORTING" 1/2018, pp 133-175, DOI: 10.3280/FR2018-001005