AN INSTITUTIONAL ANALYSIS OF ACCOUNTING GROWTH AND REGULATION IN THE UNITED-STATES

The accounting profession in the United States has experienced rapid g rowth in the past two decades, and growth is likely to continue in the foreseeable future. Although the U.S. Securities and Exchange Commiss ion possesses explicit statutory authority to regulate accounting and financial reporting, die profession is largely self regulated, an arra ngement widely supported by the corporate business community. Yet no s ingle current accounting theory provides a full understanding of these two very basic phenomena. This paper examines organizational models b ased on contractualism (agency theory and transaction cost analysis), hierarchy (radical) and Fligstein's ''organizational fields'' concepti on, and evaluates their application to the accounting process. It is p roposed that institutions are central to an understanding of accountin g growth and regulation. The essay then offers a theoretical critique based on the internal and external aspects of economic organizations.