Accounts and counter-accounts: accounting and accountability for asbestos-related liabilities

Sarath Lal Ukwatte Jalathge, Hang Tran, Lalitha Ukwatte, Tesfaye Lemma and Grant Samkin

Meditari Accountancy Research, 2023, vol. 32, issue 1, 64-94

Abstract: Purpose - This study aims to investigate disclosure of asbestos-related liabilities in corporate accounts and counter-accounts to examine whether and how accounting contributes to corporate accountability for asbestos-contaminated products. Design/methodology/approach - This study uses the Goffmanesque perspective on impression management to examine instances of concealed asbestos-related liabilities in corporate accounts vis-à-vis the revealing of such liabilities in counter-accounts. Findings - The findings show counter-accounts provide significant information on liabilities originating from the exposure of employees and consumers to asbestos. By contrast, the malleability of accounting tools enables companies to eschew accounting disclosures. While the frontstage positive performance of companies served an impression management role, their backstage concealing actions enabled companies to cover up asbestos-related liabilities. These companies used three categories of mechanisms to avoid disclosure of asbestos-related liabilities: concealing via a “cloak of competence”, impression management via epistemic work and a silent strategy of concealment frontstage with strategic reorganisation backstage. Practical implications - This study has policy relevance as regulators need to consider the limits of corporate disclosures as an accountability tool. The findings may also initiate academic and practitioner conversations about accounting standards for long-term liabilities. Originality/value - This study highlights the strategies companies use both frontstage and backstage to avoid disclosing asbestos-related liabilities. Through analysis of accounts and counter-accounts, this study identifies the limits of accounting as an accountability tool regarding asbestos-induced diseases and deaths.

Keywords: Asbestos; Carcinogenicity; Accounting; Counter-accounts; Impression management; Accountability (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:medarp:medar-05-2023-2006

DOI: 10.1108/MEDAR-05-2023-2006

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