“Reverse brokering” and the consumption of accounting: A broker desk ethnography of an investment case

Graaf, Johan; Johed, Gustav

doi:10.1016/j.aos.2020.101154

Cited by 5 publications

(7 citation statements)

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“…Interestingly, this – imagining profits – is exactly what equity sales brokers can be said to do. It is important to them to be able to, in an effort to create transactions, construct contrarian investment recommendations, which can be fed to fund managers for them to trade on (Graaf and Johed, 2020). According to Graaf and Johed (2020), “the brokers in [their] analysis continually added and abandoned accounting items to maintain a distance from consensus, remain subjective and interesting to clients, and achieve recognition” (p. 1).…”

Section: Previous Researchmentioning

confidence: 99%

“…It is important to them to be able to, in an effort to create transactions, construct contrarian investment recommendations, which can be fed to fund managers for them to trade on (Graaf and Johed, 2020). According to Graaf and Johed (2020), “the brokers in [their] analysis continually added and abandoned accounting items to maintain a distance from consensus, remain subjective and interesting to clients, and achieve recognition” (p. 1). Their job can hence be described as being creative with accounting numbers so as to imagine novel, yet possible and probable, future profits.…”

Section: Previous Researchmentioning

confidence: 99%

“…How could it be? At some point, the information that is aggregated and later presented as line items in the financial statements must be inscribed (Robson, 1992), and at some point thereafter, the financial numbers must be presented both for internal use and external consumption (Graaf and Johed, 2020). This presentation will affect various divisions, projects and managers differently.…”

Section: Introductionmentioning

confidence: 99%

“…Encouragingly, a number of studies have recently been published that take an interest in how profits are imagined (Graaf and Johed, 2020), reimagined (Himick and Ruff, 2019), produced at the responsibility center level (Laguecir et al , 2020) and problematized (Lowe and Nama, 2020; Lowe et al , 2020). These studies can be seen as part of a stream of studies on how financial reporting is produced through, and simultaneously affects, management work (Huikku et al , 2017; Leung, 2011; Chahed and Goh, 2019; Johansen and Plenborg, 2018; McCracken et al , 2008), where management work refers to, for example, the production of information in the firm and the interaction with management and auditors (Himick et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

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The politics of profit production

Carrington

Alander

2022

QRAM

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Purpose This paper aims to analyze the process of producing a reported profit number to understand how different actors overcome the tensions arising from the often conflicting value frames that apply in different situations during this process and how the actors can benefit from the ensuing friction. Design/methodology/approach The tensions found in the profit production process are theorized in terms of dissonance (Stark, 2009), emphasizing how multiple voices, drawing on different value frames, contribute to the search for a profit number. The authors study this by means of a case study of a large listed company in the construction industry, where, because of how judgment pervades the profit production process, the search for profit is particularly exposed. Findings The authors find three important value frames – caution, control and compliance – which managers, accountants and auditors draw on in the profit production process, depending on the situation they find themselves in. With this finding, the authors contribute to the previous research on financial reporting and management work and the production of profits by demonstrating how the relationships between the involved actors – primarily the auditor–client relationship – can be characterized by principled and constructive rivalry in which competing value frames can coexist alongside each other and how the dissonance created in these situations can produce generative and productive friction. Originality/value Previous research has mostly focused on profit measurement, taking the existence of a “true” profit number for granted. The auditor–client negotiation literature typically suggests that actors endeavor to solve situations in a zero-sum game where different value frames are present. This paper, drawing on an incipient theoretical approach to accounting research which emphasizes multivocality and perspective, contributes to the nascent research on financial accounting and management work in general and the profit production process in particular. With empirical illustrations of the dissonance found in this process, this paper suggests that tensions resulting from dissonance (Stark, 2009) may be a resource in situations like the profit production process.

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Section: Previous Researchmentioning

confidence: 99%

Section: Previous Researchmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The politics of profit production

Carrington

Alander

2022

QRAM

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“…Atkins et al (2015) consider integrated reporting through the lens of autoethnography and other original methodological approaches, including analysis of dialogue, a utopian metaphor of an ecologically sound society and oral disclosures. Graaf & Johed (2020) use an ethnographically inspired approach to study how equity sales' brokers use accounting to make investment decisions. They examine how brokers understand accounting through their diverse activities.…”

Section: Introductionmentioning

confidence: 99%

Introduction to Special Issue on Innovations in Research Methods in Accounting and Governance

Brennan

Martyn

2021

Accounting, Finance &Amp; Governance Review

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Throwing in the towel: What happens when analysts' recommendations go wrong?

Lee

Aleksanyan

Harris

et al. 2023

Contemporary Accting Res

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Every analyst will experience stock recommendation failures during their career. Unlike many other professions, these pivotal moments occur in the full glare of clients, colleagues, equity‐sales teams, and the media. This research explores the practices of analysts up to and beyond the point where, faced with a failing recommendation, they contemplate “throwing in the towel” on their recommendation. Based on empirical evidence gathered from interviews with sell‐side analysts and their key interlocutors—equity‐sales specialists, investors, and investor relations officers—this paper uncovers several new empirical insights into the recommendation practices of analysts. The main argument made in the paper is that capitulation practices emerge from the specific contextual framework of individual recommendations and the analyst's conduct as a knowledgeable, emotional human agent. We identify several contextual contingencies of stock recommendations that underpin how a capitulation episode unfolds, including the temporal proximity of the capitulation to the original recommendation; the importance and profile of the stock to the analyst's reputation (“franchise intensity”); the level of interest/reaction from clients, equity‐sales teams and corporates; the nature/cause of recommendation failure; and recommendation boldness. Our study provides evidence that what an analyst does when faced with a failing recommendation cannot be reduced to a predictable, rational process and informs our understanding of observed practices such as the reluctance of analysts to capitulate and why “recommendation paralysis” often follows a recommendation capitulation.

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“Reverse brokering” and the consumption of accounting: A broker desk ethnography of an investment case

Cited by 5 publications

References 47 publications

The politics of profit production

The politics of profit production

Introduction to Special Issue on Innovations in Research Methods in Accounting and Governance

Throwing in the towel: What happens when analysts' recommendations go wrong?

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