Melbourne Accounting Research Seminar - Professor Wai Fong Chua

Melbourne Accounting Research Seminars
Melbourne Accounting Research Seminars

Deans Boardroom, L12 The Spot
198 Berkeley St, Carlton

Map
  • Melbourne Accounting Research Seminar

Professor Wai Fong Chua from the University of Sydney will present a MARS seminar.

Topic: Capital Investment in Action: A Study of the Construction of the Credibility of a Long-Term Capital Proposal

Abstract:  Developing an investment proposal for a thirty-year capital project means engaging with an imagined future and inherently imprecise accounting estimates that inscribe this uncertain future. Imprecision can, nevertheless, be worked on and estimates made credible enough. Drawing on practice theory, this paper analyses the production of credibility and details the components involved – the nexus of people, their general understandings, know-how and the people-material arrangements (infrastructural rules, devices and resources). The credibility of accounting numbers is shown to be influenced by, and influences, the credibility of the imaginary referent of the project itself. Also, building credibility is shown to be emergent and ‘stretched’ over space-time, connected to relatable practices and events located in other spaces and times. Credibility is built by experts (internal and external), authorizers, and the enrolment of supporters and potential critics. And, because the referent imaginary, it is sought through the laborious following of institutionalised rules and the circulation of numbers through iterative calculation and diverse tests. The study also highlights how calculators become committed to their accredited future and numbers, changing the present to protect this future in the name of risk mitigation. Because of the capacity for the present to be changed and the inherent uncertainty of estimates, a long-term capital budget does not function as a passive feedback control tool. Instead, it is a “regime of hope” and an affordance for continuous improvisation and negotiation. The empirics are based on the development of the investment proposal for a large housing public-private-partnership in Australia.