Industry self-regulatory institutions, accounting and imitation mechanisms: the case of the ‘Unione Commercianti in Manifatture di Milano’

Carmelo Marisca, Gustavo Barresi and Nicola Rappazzo

Accounting History Review, 2022, vol. 32, issue 1, 31-57

Abstract: This study investigates the role that the analysis of accounting books can assume for the functioning of an industry self-regulatory institution. If industry self-regulatory institutions have been extensively studied, scholars have neglected the role that accounting can have in their functioning, as well as an imitation mechanism. This research is focused on the ‘Unione Commercianti in Manifatture di Milano’, created in 1898. The Union contributed towards preserving fair and honest trade in the textiles industry, and to protecting the credit rights of members involved in the bankruptcy proceedings of their customers. Between 1898 and 1902, the Union examined the accounting books of more than 1700 proceedings. According to institutional theory, for each organisation the analysis of accounting books represents a mechanism for arbitrating, a tool to evaluate whether or not to try to recover credit rights. Considering the difficulty for organisations to arbitrate, the need to acquire and analyse the financial information of customers involved in bankruptcy proceedings represented a key factor for the creation of the Union. Its ability to evaluate bankruptcy proceedings through the investigation of accounting books – conducting ‘accounting and legal autopsies’ in many proceedings – generated imitation mechanisms that pushed new members to join the institution.

Date: 2022
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DOI: 10.1080/21552851.2022.2089703

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