ABSTRACT
In the mid-1990s, several accounting scholars emphasised the importance of extending the domain of accounting across the traditional boundary taken-that of the fi rm. Two important contributions were those of Hopwood (1996) and Otley et al. (1995). Hopwood (1996) stressed that, historically, accounting has been concerned with the management of vertical relationships within fi rms and that its key functions have been to constitute the boundary of the fi rm and reinforce the organisational hierarchy. Further, he stated that even the accounting innovations that were developed in the 1980s and early 1990s share this concern with the hierarchy. This historical picture of the vertical focus of accounting is in contrast with the contemporary and often confl icting changes in the organisational arrangements between companies, such as outsourcing, which emphasises the horizontal relations between legally independent fi rms rather than the vertical activities within fi rms.
