Abstract
M.Comm. (Accounting)
To date, a comprehensive theory of accounting has not been developed by accounting academics. This absent theoretic basis for the practice of accounting has created uncertainty within the field amongst both academics and practitioners resulting in practitioners having taken over the role of developing accounting standards. As a result, a number of practical problems have arisen within the sector.
In addressing this problem, a body of literature has emerged proposing institutional thinking as a viable basis for the development of an academically sound base for the practice of accounting. This study assesses whether further academic merit can be given to this proposal by establishing whether or not accounting practice does indeed function as an economic institution, specifically within a South African context. Owing to the sophisticated structures that govern the practice of accounting in South Africa, a South African context is considered appropriate for setting international precedence.
In fulfilling the research objective, this study follows a three-step, qualitative approach of an exploratory nature. The first step identifies who the major role-players within the field of accounting in South Africa are and explains what their roles consist of. The second step develops a set of criteria which are generally agreed amongst institutional economists to be present in most functioning macro-economic institutions. The third step then applies these criteria to accounting practice in South Africa to assess whether or not this practice functions as a macro-economic institution.
The outcomes of the study indicate that accounting practice in South Africa does indeed function as an economic institution with strong interdependencies existing between the key role-players thereby granting further academic credibility to exploring the development of accounting theory from an institutional perspective.