New Institutional Accounting: Old Wine in New Bottles

Accounting has been regarded as a social and institutional practice, one that is intrinsic to, and constitutive of social relations, rather than derivative or secondary. The manner in which accounting has integrated with so many aspects of social and economic life has long been a continuing concern. Specific accounting events have been examined regarding their conditions of possibility and consequences. The expression “new institutional accounting” is used to capture research advances from the literatures of institutional economics and accounting on how the interactions of market forces, laws, regulations, standards, enforcement activities and other “institutions” affect corporate financial reporting and disclosure outcomes. Recent studies focus on the links between institutions and IFRS. One of the key objectives of the latest studies on IFRS adoption is to explore the differential impact of IFRS adoption across different types of firms and different institutional regimes. This paper explores the links between institutions and financial reporting outcomes with the focus on the links between institutions and IFRS adoption. The main argument proceeded in this paper is that the term “new institutional accounting” is coherent with the institutional nature of accounting while the word “new” denotes the new context in which such nature embeds. In other words, “new institutional accounting” is a new expression for the conventional knowledge about accounting. This new combination indicates an emphasis on the context associated with IFRS adoption, in which accounting is currently deployed.