The roles of financial asset market failure denial and the economic crisis: Reflections on accounting and financial theories and practices

McSweeney, Brendan

doi:10.1016/j.aos.2009.04.007

Cited by 59 publications

(49 citation statements)

References 99 publications

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“…Through the legitimisation of accounting (Craig, 2007), cronyism may therefore create a tiny wealthy class of capitalists in such countries (Stiglitz, 2002). This further suggests that accounting is not an innocent activity (McSweeney, 2009), especially in crony capitalist societies such as Nigeria (Bakre, 2011).…”

Section: Introductionmentioning

confidence: 99%

“…Sikka (2015) notes that "in legitimising economic reality, accounting becomes an exchanger, which stabilises certain procedures, but simultaneously helps them to evolve". In modern (and particularly crony capitalist) states, fair value accounting may reinforce the illusion of an asset's continued growth or distress by fuelling speculation of importing upward or downward asset valuations into the balance sheet and then exporting those valuations through various processes in which accounting is influential (McSweeney, 2009).…”

Section: Introductionmentioning

confidence: 99%

“…In line with the concept of fair value accounting, financial regulatory bodies in both developed and developing countries have therefore required that assets and liabilities be valued using fair value (FASB, 2006;Obuh, 2012). However, some have argued that accounting numbers, techniques and practices have become technologies for legitimating the privatisation of SOEs in developed (McSweeney, 2009;Sikka, 2015) and developing countries (Morales et al, 2014;Rahaman et al, 2007;Uddin & Hopper, 2003;Zhang et al, 2012). Scholars have been actively involved in examining the mobilisation of accounting to legitimise privatisation in developed and developing countries.…”

Section: Introductionmentioning

confidence: 99%

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Privatisation and accountability in a “crony capitalist” Nigerian state

Bakre

Lauwo

2016

Critical Perspectives on Accounting

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A B S T R A C TNigeria is richly endowed with oil and gas resources, but the country's continued reliance on loans from international financial institutions raises questions about the transparency and accountability of its utilisation of the huge revenues resulting from these two resources. In order to attract international capital to bolster its revenues from sales of oil and gas, a huge proportion of which continues to be used corruptly, the World Bank has encouraged the Nigerian government to subscribe to neoliberal economic policies by enlisting accounting firms and privatising state-owned enterprises. Key justifications for this have included enhancing accountability, reducing public-sector corruption, promoting market efficiency and attracting international capital. However, this paper presents evidence of the role of accounting in the undervaluation of assets, concealment of possible malpractice, and subversion of the accountability that it should have delivered in the privatisation process. The assumption that accounting will enhance accountability, reduce public-sector corruption and promote market efficiency in privatisation, and ultimately attract investment into a crony capitalist Nigerian state, appears to be an illusion created partly through the apparent legitimacy of accounting.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Privatisation and accountability in a “crony capitalist” Nigerian state

Bakre

Lauwo

2016

Critical Perspectives on Accounting

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“…Reasons for the attractiveness of IFRS for stock markets have not been explored in this paper, but briefly one can point to the increased volume of trading stock markets anticipated widescale adoption of IFRS would generate and the somewhat less conservative underpinning of IFRS seen as especially desirable during the period of focus on boosting shares prices secure in the "knowledge" that financial market failure was impossible (McSweeney, 2009a).…”

Section: Conclusion and Discussionmentioning

confidence: 99%

The Transnationalization of Financial Reporting Standards

McSweeney

2010

SSRN Journal

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2The School of Management Working Paper Series is published to circulate the results of on-going research to a wider audience and to facilitate intellectual exchange and debate. The papers have been through a refereeing process and will subsequently be published in a revised form. Requested for permission to reproduce any article or part of Working paper should be sent to the publisher of this series. Specifically it considers how the status of International Financial Reporting Standardsconstructed and issued by a private organization: the International Accounting Standards Board (IASB) -changed from being highly marginal to almost global adoption. A range of explanations (rather than just one) for the transformation are examined and contrary (or rather disruptive) evidence, not just supportive, is considered. Having examined a variety of explanations, the paper then considers whether or not the now extensive transnationalisation of financial reporting can be regarded as evidence that the period of national or regional varieties of capitalism (or business systems) is ending. The

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“…Most authors stress the systemic inter-relation of factors that led up to the events of 2008, but also highlight issues they regard as especially pertinent. Jain (2009) explores the problem of poor regulation, while Arnold (2009), Hopwood (2009), McSweeney (2009 and Sikka (2009) examine the role of accounting and audit practices in the lead up to the crisis. Using somewhat different lenses, Klimecki and Willmott (2009) study the use of derivatives and bonds by institutions such as banks and hedge-funds, Morgan (2010) examines the role of credit default swaps in particular, while Tett (2009) focuses specifically on the innovation of these products at J. P. Morgan and their diffusion to other investment banks.…”

Section: Introductionmentioning

confidence: 99%

A culture of mania: a psychoanalytic view of the incubation of the 2008 credit crisis

Stein

2011

Organization

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In this theoretically informed study I explore the broader cultural changes that created the conditions for the credit crisis of 2008. Drawing on psychoanalysis and its application to organizational and social dynamics, I develop a theoretical framework around the notion of a manic culture, comprised of four aspects: denial; omnipotence; triumphalism; and over-activity. I then apply this to the credit crisis and argue that the events of 2008 were preceded by an incubation period lasting for over two decades during which a culture of mania developed. Then, focusing especially on the Japanese and South East Asia/LTCM crises, I argue that a series of major ruptures in capitalism during this incubation period served not as warnings, but as opportunities for a manic response, thereby dramatically increasing the risks involved. I also argue that this mania was triggered and strengthened by triumphant feelings in the West over the collapse of communism. I suggest therefore that this manic culture played a significant role in creating the conditions for the problems that led to the credit crisis.

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The roles of financial asset market failure denial and the economic crisis: Reflections on accounting and financial theories and practices

Cited by 59 publications

References 99 publications

Privatisation and accountability in a “crony capitalist” Nigerian state

Privatisation and accountability in a “crony capitalist” Nigerian state

The Transnationalization of Financial Reporting Standards

A culture of mania: a psychoanalytic view of the incubation of the 2008 credit crisis

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