Accounting Policy Making and "Interests": Accounting for Research and Development

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The construction of accounting regulations is an area of emerging concern to accounting research. In contrast to a priori theorizing on the construction of optimal accounting regulations, research has attempted to examine the context of the development of accounting regulations. Theories of "interest" have often been employed in order to account for the position of groups and individuals on various accounting policy issues. As an exemplar of this approach, the role of self interest in the explanatory model supplied by Watts and Zimmerman (Accounting Review, 1978, pp. 112-134) is explored. Through an examination of the Watts and Zimmerman study, and subsequently through an exploration of discourses associated with the development of a UK accounting standard on "Accounting for Research and Development", this paper argues that general theories of interest and self-interest do not provide adequate explanations of historical events in the development of accounting regulations and standards. Theories of interest tend to be overdetermined with respect to their explanatory subject by adopting forms of argument that interest with outcomes, thus ignoring mistaken calculations and unintended consequences. In contrast, this study argues that the "interest" of actors in accounting policy debates needs to be demonstrated in terms of the forms of calculation and modes of assessment that the actors employ through discourse, rather than asserted.