George O. May's (1952) prescient statement that "if accounting had not already become, it was well on its way to becoming a political phenomenon" provides the motivation for this study. Changing socioeconomic relationships in the post-World War II period make it an ideal period to examine the politicalization of accounting. Keynesian economic policies justified active government intervention in the economy to manage demand and ensure full employment. No longer could it be assumed that competitive market forces would ensure that corporations produced goods and services at a socially optimal level or that income would be distributed equitably. Claims that accounting profit provides a measure of managerial efficiency are based on these premises. This dissertation examines the political dynamics of one particular accounting measurement debate--the debate over the determination of business income. Policies, such as wage/price controls, the excess profits tax, and the undistributed profits tax, brought the accounting income determination debate to center stage. The perseverance of the historic cost allocation model in the face of significant economic changes presents a fascinating glimpse of the important role accounting played in justifying continued reliance on the private property rights paradigm. I use retrodiction (reasoning from present to past) to examine why the historic cost allocation model has been so enduring. In my examination, I use personal correspondence, transcripts of Congressional hearings, published financial statements, and relevant journal articles. My analysis indicates that, while accountants empathized with managers who claimed that inflation distorted reported earnings and recognized that a serious measurement scale issue existed, they also recognized that abandonment of historic cost would not be politically feasible. If accountants had adopted a strongly partisan position that favored management with respect to bargaining with labor, this could have undermined the profession's claim to neutrality and opened the standard-setting process to closer political scrutiny. Accountants responded to management in a less visible way. Standard setters adopted techniques that gave managers maximum flexibility in managing income while retaining the aura of objectivity that attached to historic cost.
| Identifer | oai:union.ndltd.org:unt.edu/info:ark/67531/metadc279147 |
| Date | 12 1900 |
| Creators | Pence, Diana Kay |
| Contributors | Merino, Barbara Dubis, Pickens, Donald K., Coe, Teddy L. (Teddy Lewis), Luker, William A. |
| Publisher | University of North Texas |
| Source Sets | University of North Texas |
| Language | English |
| Detected Language | English |
| Type | Thesis or Dissertation |
| Format | iv, 179 leaves, Text |
| Coverage | 1945-1952 |
| Rights | Public, Copyright, Copyright is held by the author, unless otherwise noted. All rights reserved., Pence, Diana Kay |
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