32 - Management and Accounting

Summary

Accounting is one of the most influential forms of quantification of the late twentieth century. It creates the apparently objective financial flows to which certain Western societies accord such significance, and it makes possible distinctive ways of administering and coordinating processes and people. For a vast range of occupations, from shop floor workers and divisional managers to doctors and teachers, the calculative practices of accounting seek to affect behavior and to constrain actions in a manner and to an extent unimagined a century ago. Yet accounting is also one of the most neglected and least visible of all the quantifying disciplines. While the concepts and practices of the economist, the statistician, and the actuary have received detailed academic scrutiny, those of the accountant have been left in the shadows or relegated to a subsidiary role within a larger story. Only recently has this begun to change.

When accounting does become the object of public scrutiny, this typically concerns the external face of accounting, the reporting of the financial condition of business enterprises to shareholders and other outside parties, and the auditing of such reports. But accounting also has a “hidden” dimension: the financial monitoring, reporting, and evaluating that takes place inside an organization, and is typically treated as confidential even within the firm. This aspect, called management or cost accounting, is made up of practices such as budgeting, costing, and investment evaluation. It is the focus of the present chapter.