The purpose of this paper is to review the recent UK contribution to the field of financial
accounting research, set against the backdrop of the global (mainly US) research effort. A systematic
overview of recent research in the field is presented, based upon an analysis of 261 articles published
between 1998 and 2002 in seven general, non-US journals. These are the journals that UK academics
publish in most frequently and 115 of the articles are UK-authored. It is found that the research areas
of MBAR and disclosure currently dominate conventional financial accounting research. The
comparison of findings across institutional settings offers fruitful lines of inquiry for research within
these main areas (i.e. studies of value relevance, analysts’ forecasts, voluntary disclosure and
earnings management). While most research is seen to follow the highly quantitative, economicsbased
US tradition, a significant amount of UK research adopts a more qualitative approach, and
distinctive UK contributions are evident in a number of areas (in particular, the disclosure process
and corporate social reporting). There are signs that UK researchers are helping researchers in other
countries contribute to the global body of scholarly knowledge.
This article undertakes a review of the current state of academic research in the field of
financial accounting. Financial accounting is one of the main fields within the accounting
discipline and it encompasses many distinct research areas. Given that this review is
constrained to the length of a journal article, the discussion must inevitably be relatively
high level. This article is one of a set of such articles, each covering a different field, which
has been commissioned by the editors of the British Accounting Review. Since other
reviews will deal with international accounting and critical accounting, and possibly
accounting history, these areas are specifically excluded from this review. However, the
subject boundaries are not clear cut, as financial accounting has links with fields such as
audit, corporate governance, management accounting and not-for-profit organisations.
These specialist areas are also excluded from this review.
Review articles can serve a number of purposes. Given that this review covers an entire
field, it presents an overview and, therefore, to some extent depth is sacrificed for breadth
of coverage. The primary intended audience is academics at the outset of their research
career. The review offers such individuals a point of entry to the theories, research
methods, key prior and current literature in a particular area. Secondary audiences are
advanced level students and established academics with a thorough knowledge of a given
sub-field. By mapping out the domain of a field, a broad review provides a useful aid to
teachers seeking to provide a broad overview to students, acting as an ‘advance organiser’
to encourage integrated learning (Mayer, 1987, pp. 120–125). Broad reviews allow
researchers experienced in the field to take stock; to evaluate progress and identify gaps
and fruitful lines for future inquiry.
The brief was to focus on the contribution made by conventional1 financial accounting
researchers in the UK over recent years.2 This contribution is set against the backdrop of
research developments elsewhere, particularly in the US and continental Europe. Since the
accounting literature is truly global, it is unhelpful to try to discuss the UK contribution
without recognizing the linkages that the UK research effort has with non-UK research.
Global research is the context within which UK researchers seek to make a contribution.
All reviews of this type are necessarily personal and subjective. However, to guard
against an unduly unbalanced and impressionistic evaluation, this review is grounded in a
systematic analysis of contemporary UK contributions. The scholarly communication
literature identifies the academic journal as the primary medium of scholarly discourse
(Borgman, 1990).3 In the discipline of accounting, academic (i.e. peer-reviewed) journals
accounted for 52% of all publication outputs by UK and Irish academics during 1998 and
1999 (Beattie and Goodacre, 2004; Table 2). Professional journal articles, books, book
chapters and research reports account for most of the remainder. However, most original
research is reported in the academic journal literature, even if it is also reported in other
publication media as well (albeit written in a different style for a different audience). This is
one of the main reasons why the systematic review confines itself to academic journals (the
other reason is that it was necessary to keep the task to manageable proportions). However,
the more subjective, narrative review does include selected books and research reports.
Academic journal publications are highly concentrated in accounting. Beattie and
Goodacre (2004) report that, over a 2-year period, 1141 articles were published spread
across 442 different journals (p. 25). However, the top 10 accounting journals accounted
for 57% of all publications in accounting journals. These journals were systematically
examined to identify financial accounting articles, examine the characteristics of these
articles and assess their contribution. A total of 261 articles, published between 1998 and
2002, were evaluated.
Rather than simply document the development of financial accounting research, this
article seeks to offer some explanation of the current structure of the field. The sociology
of scientific knowledge and scholarly communication literatures examine the development
of scholarly knowledge and the academic evaluation and reward system that underpins the
production of this knowledge. Scholarship is understood to constitute a social system.
Often developments emerge from the interplay of three sources of influence: external
influences, internal cognitive (i.e. intellectual) factors and internal social factors
(Borgman, 1990; Woolgar, 1988). Because financial accounting is a social science
discipline with practical application, it is especially open to influence from the outside.
External events can shift research priorities and create new research areas, helping to keep
the field fresh and exciting.
Developments can also occur due to internal factors, whether cognitive or social in
nature. Obviously, there can be intellectual breakthoughs (minor or major). Such cognitive
aspects are traced through published research documents, which are the formal output of
scholarly activity and the formal channel for the communication of ideas. The social
dynamics of the global academic accounting community (i.e. its structures and processes),
as well as its evaluation and reward structures, can also exert a powerful influence. The
social aspects of scholarly communication are captured by the ‘invisible college’ concept
(Crane, 1972). The social structure of academic communities arises from the different types
of social relationship that can exist between scholars: co-authorship, trusted assessorship,
colleagueship; and apprenticeship (Mullins, 1973). In particular, this review documents the
co-authorship relationships between UK and continental European academics.
The remainder of this paper is structured as follows. Section 2 briefly considers the
historical development of financial accounting research and the reasons why developments
in research occur, distinguishing between external influences, internal cognitive factors
and internal social factors. In Section 3, the journals and articles that were specifically
reviewed for the purposes of writing this paper are described. The main review is
contained in Section 4, which presents the quantitative findings from the analysis of recent
research published in the field and then discusses, in turn, each of the main research areas,
first giving the global scene, then highlighting the UK contribution. Section 5 summarises
and concludes.
