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The language of accounting

  • 1. Introduction
  • 2. Literature review
  • 3. Accounting language and standardisation
  • 4. IFRS and their consequences
  • 5. Conclusion

Introduction

Accounting terminology, like that of finance, is rightly seen as one of the central elements of modern business language. This special status of accounting within the various functional fields of business is also reflected by the fact that accounting itself is frequently referred to, metaphorically, as a language. Indeed, it is quite common - if just a bit cliched - to refer to accounting as “the language of business” in popular parlance, while it is difficult to imagine this honour being bestowed on other fields such as human resources or distribution.

An important field like accounting is, of course, of interest as an object of research beyond the business field itself. Scholars from fields such as sociology or political studies have taken an interest in analysing various aspects of accounting, including the language and terminology used. These analyses are not conducted from a purely linguistic perspective by any means, but nonetheless show how language is seen as an important aspect of this discipline even by non-linguists. The existing literature will be examined in the earlier part of this chapter.

Inevitably, a major consideration in research has been accounting terminology Over time, this seems to be more rigid than other specialist business terminologies, even that of general finance. Given the importance of companies’ financial reporting to internal and external stakeholders alike, it is not surprising that, in line with ever stricter standards, the terms used in an accounting context change less quickly than in, say, marketing. Ongoing harmonisation in accounting standards in a globalising world further adds to this trend, as does the dominance of English as the language of business and finance.

However, for a number of reasons this standardisation in language is not quite as clear-cut and comprehensive as might be expected. As demonstrated by the convergence between Generally Accepted Accounting Principles in the U.S.A. (US-GAAP) and International Financial Reporting Standards (IFRS),1 standardisation 1 The term IFRS is the general term used here for all standards deemed to be part of IFRS, even though the old term IAS is still in use for many of the individual standards as these are not automatically renamed but slowly replaced over time.

DOI 10.1515/9781614514862-021

in terminology is turning into an extremely long-winded process. This becomes all the more apparent when considering not just English as the predominant language of accounting, but other languages as well. In view of the increasing importance of IFRS and accounting standards in general, this does come as some surprise and merits a closer analysis of potential factors inhibiting linguistic convergence. The second part of this paper, therefore, focuses on one particular area of research: language issues in connection with standardisation, specifically in IFRS. It tries to illustrate some of the reasons for the lack of standardised language, which is due partly to translation problems, but also to some peculiarities inherent in IFRS themselves.

The remainder of this chapter is structured as follows. Section 2 provides an overview of the various lines of research into the linguistic and terminological aspects of accounting. For practical reasons it is restricted to the English-language literature, where most of the pertinent research is to be found, although this is not to deny that further insight could be obtained from consideration of works in other languages. Section 3 then discusses language and standardisation, while Section 4 examines language issues in IFRS, as a particularly pertinent case of standardisation. Finally, Section 5 briefly summarises the paper’s main points and findings, and provides a short outlook.

 
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