The current issue and full text archive of this journal is available at

http://www.emeraldinsight.com/0951-3574.htm

Exploring accounting presence Accounting

presence and
and absence: case studies from absence

Bangladesh
Kerry Jacobs 143
School of Management, University of Edinburgh,
Edinburgh, UK, and
Jeff Kemp
Edinburgh Racial Incidence Monitoring Project,
Edinburgh, UK
Keywords Accounting, Capital, Trust, Bangladesh
Abstract This paper explores accounting presences and absences in the daily life of three
Bangladeshi small traders. By exploring the margins of accounting it is possible to better
understand why we do and do not do accounting. Two different ideas are explored. Based on the
work of Boden it is suggested that the presence or absence of accounting can be explained by the
influence of key social and state institutions. Some support was found for this idea, as there was
no ``external'' demand for accounting. The second factor that was explored was the idea that the
presence or absence of accounting could be explained by literacy. Again, there was some support
for this as two of the cases studied started to keep debtors records once they learnt to read and
write. However, we suggest that levels of social capital, defined as norms of reciprocity and trust,
could also play an important role in understanding accounting absence in this case, an idea which
might be applicable to a wider context.

Introduction
Choudhury (1988, p. 555) suggested that the search for and interpretation of
accounting absence is an essential complement to the study of accounting
presence. However, despite Choudhury's (1988) encouragement this search has
been notably absent in the accounting literature. This paper draws on a
broader anthropological study of life in Bangladesh to illustrate both presences
and absences of accounting in everyday life. By presenting three case studies of
individual traders/storekeepers this paper seeks to explore the relationship
between accounting and business practices in a third world setting where
literacy cannot be taken for granted.
Hopwood (1994, pp. 299-300) criticised existing accounting research for
ignoring ``the importance of the wider cultural and interpretative context of
both accounting and the accountant''. He argued that it should give more
consideration to lay conceptions and discussions of accounting, since these
shape ``the practices and processes'' of daily life which in return ``infuse and
shape'' the ``operation and claims'' of accounting. However, the areas he
Accounting, Auditing &
The authors wish to thank Steve Walker, Trevor Hopper, the participants at the 1999 Accountability Journal,
Vol. 15 No. 2, 2002, pp. 143-161.
Interdisciplinary Perspectives on Accounting Workshop, Manchester, and two anonymous # MCB UP Limited, 0951-3574
referees for their helpful comments. DOI 10.1108/09513570210425592
AAAJ highlighted and the papers which addressed the theme of ``accounting in
15,2 everyday life'' have generally focused on macro-cultural perspectives such as
``the movies'' (Beard, 1994), humour (Bougen, 1994) and architecture
(McKinstry, 1997). Therefore the question of how accounting impacts the
everyday life and practices of individuals remains relatively unexplored.
Fagerberg (1954) challenged accounting academics to take an interest in
144 what he referred to as ``personal accounting''. He claimed that there was a
virtual blind spot in the literature and that accountants were:
. . . preoccupied with measuring capital and income of the producing unit, the business
enterprise, [and] have perforce neglected the accounting for the ultimate unit, the individual
(Fagerberg, 1954, p. 355).

Similarly contemporary research has only really addressed accounting within

an institutional setting (private corporate, the public and voluntary sectors) and
occasionally at a macro-political level and as such has distanced itself from the
individual. It is interesting to note that Morgan and Willmott (1993, p. 14)
suggest that the impact of accounting on the individual is one of ``the three
interlinking foci of new accounting research''. However, their summary of the
research literature also fails to move beyond macro themes such as visibility,
gender, politics and ecology. While it is evident that all of these themes do have
relevance for individuals, they fail to explore the accounting practices of
individuals.
One of the few examples of accounting research that genuinely focuses on
individual concerns and perspectives is Walker's (1998) historical work. His
study suggested that accounting featured prominently in the everyday life and
culture of the middle class family in Britain during the nineteenth century. By
looking at domestic journals, household advice manuals and pro-forma
housekeeping account books, Walker (1998) found that the maintenance of
accounting records was part of the ``private sphere'' and that they contributed
to the operation of masculine domination in the middle class family. However,
he acknowledged that the middle class family of nineteenth century Britain is
rather a narrow focus. He called researchers to:
. . . examine accounting as a social practice in the vast diversity of daily routines experienced
by those that inhabit different social strata in various spatial, historical and contemporary
settings (Walker, 1998, p. 510).

Boden (1999) also focused on the individual in her study of financial reporting
and accountability among the self-employed. Her article provides an initial
framework for the exploration of accounting presences and absences by
illustrating the relationship between individuals, accounting practices and
governmental organisations. She showed that in the UK organisations such as
Inland Revenue, Customs and Excise and the Child Support Agency have the
ability to require self-employed individuals to produce financial information.
For other organisations such as the Department of Social Security, Local
Education Authorities and banks, it may be in an individual's interest to
prepare and present financial information. Therefore in western society key
institutions (particularly institutions of the state) provide both a basis and a Accounting
motive for financial accounting and reporting. However, these institutions and presence and
associated pressures do not necessarily operate in all societies, particularly in absence
countries that are poorer, less literate and less urban than the UK. The first
research question is whether the presence or absence of these institutions
explains the presence or absence of accounting in this study.
Bangladesh offers an interesting alternative to the UK-based studies of 145
Walker (1998) and Boden (1999). An important feature of this site is the literacy
levels. In 1996 Bangladesh had an adult literacy rate of 38 per cent as compared
to the UK that had an adult literacy of 99 per cent (Encyclopaedia Britannica,
1999). Levels of illiteracy are likely to be even higher in rural areas, hence the
contrasting studies of urban and rural traders. Most of the accounting research
relating to Bangladesh has focused on budgeting and accounting practices in
the nationalised industries (Hoque and Hopper, 1994, 1997; Alam, 1997; Uddin
and Hopper, 2001), a setting which has more in common with a literate,
urbanised, western society than the daily life of most Bangladeshi people. The
traditional view has been that literacy was a necessary antecedent to the
emergence of book-keeping. One exponent of this view was Littleton (1933).
However, contemporary evidence would suggest that this is not always the
case, as some forms of accounting predate writing and abstract numbers
(Keister, 1963; Baxter, 1994). Schmandt-Besserat (1992a, b) suggests that a
system of tokens was the immediate precursor to the earliest known form of
writing. The second research question seeks to explore this issue and establish
whether accounting precedes literacy or whether literacy precedes accounting.
In short, does literacy/illiteracy explain the presence/absence of accounting?

Research method
The research approach adopted in this paper is in contrast to the approach
applied in much of the case study research in accounting. Rather than being
based on the collection and analysis of accounts (either interviews or
documents), this study relies on intensive anthropological fieldwork. One
researcher was based in a small village in Bangladesh and in Dhaka where he
interacted with and systematically observed daily life[1]. The processes of
direct observation and informal interviewing have long formed the basis for
anthropological research (Malinowski, 1922; Whiting and Whiting, 1973,
pp. 283-4). Such an approach requires that the researcher spend an extended
time in a given research setting. While the researcher would not record
interviews in a formal sense it is necessary to keep detailed analytical field
notes, recording experiences and observations.

Case studies
Research was carried out in three areas, two neighbouring rural locations and
one in the capital city of Dhaka. The setting was less important than the
relationships with the three key informants who are profiled below, because
without the trust and the spending of long periods of time in their company no
AAAJ research would have been possible. Issues of business practice, accounting and
15,2 profits are very sensitive and are not something that most Bangladeshis would
be willing to discuss with strangers. Therefore prior to research being
undertaken relationships of trust had to be established. While it is nearly two
decades since I first met Abul (the shopkeeper from Dhaka), Mintu and Haru
(living in or near Rosulpur village) are both far more recent acquaintances.
146 There simply was not enough time to build relationships necessary for
qualitative research into sensitive topics. It was only because I lived in the
village with someone that they trusted that I was able to discuss these things
with them. My expertise in Islam also helped, an expertise based both on
theoretical and practical knowledge and an awareness of Bengali culture. In
effect, the social acceptance I needed to purchase information came by
association with a trusted insider, and by my own religious and cultural skills.
Research in and around the village of Rosulpur took place during three
separate visits. The first was in September and November 1996, just after the
monsoon, an agriculturally lax time when people undertake the repairs needed
after the frequent rains and constant humidity. A second visit took place in
March 1997, just prior to the following monsoon, a contrastingly busy period. A
third visit was made in November-December 1997, a moderately busy period
with the first winter vegetables ready for harvest.

Abul ± a shopkeeper in Dhaka

Making friends with a foreigner is never easy for a Bangladeshi. Friendships
can generally be found within an extensive extended family, so why bother
with someone likely to bore you by not having sufficient local knowledge or
embarrass you by being unaware of local sensibilities? For Abul, befriending
me in early 1984 was even more difficult since I had no Bengali at all (much of
my early language learning took place in his small shop).
In retrospect, I wonder how ``foreign'' Abul himself felt in the early 1980s.
Tellingly, the Bengali word generally used to mean ``foreigner'' is bideshi that
can equate to someone from another part of Bangladesh as well as another
country, depending on context. Abul was newly arrived in the capital city. Like
countless others he had left his birthplace, squeezed out by too little land to be
shared amongst too many contenders, but unlike many such immigrants he
came from an area (Jessore) from where few migrate into the capital city. His
father had recently died and there were other children to care for Abul's
mother. This perhaps meant he too was without a network of friends and
supporters, since ``the basic social structure and values of rural Bangladeshi
societies are anchored in a system of kinship relations'' (Aziz, 1979, p. 29).
As Abul's shop has changed over time so have our abilities. My Bengali is
now conversational and even at times transactional (in the cramped store it
may happen that I pass change or serve customers). Abul's commercial skills
have also been honed over the past decade. He no longer works in another's
business but runs his own, which entails ten-12 hours a day spent in his shop.
This is about five meters long and three meters deep, crowded with rice sacks
and supplies such as soap, biscuits and spices. Abul is busy throughout most of Accounting
the day, particularly during periods such as late afternoon when customers presence and
must wait for service (``queuing'' would not be an accurate description, absence
however). At such times he is commonly serving one person, ignoring a
strident child, placating an interrupting elderly man, and weighing rice on a
rudimentary balance all at the same time. From time to time and with seeming
capriciousness, he adds an entry to his account book, an elongated, battered 147
book filled with names and lists of figures that have mostly been crossed out as
settlements have been made. Suppliers arrive throughout the day to deliver
items such as bread, carried by cycled transports (van-garis). Occasionally
Abul leaves the shop to his younger brother's care and travels either to old
Dhaka or a larger market to purchase supplies such as rice.
Abul's ``till'' is two cardboard boxes. The first, shared with cigarettes, has
one-and-two taka notes in one section, small denomination coins in another.
The second has larger notes (fives, tens, less frequent 20s, 50s and 100s). In an
envelope in a drawer he keeps a few more 100s and perhaps a 500, but this
drawer is rarely opened. Transactions usually entail the first cardboard box
with occasional recourse to the second, and no record at all of what was sold,
and how much cash was taken. I once delved into the second box and feigned
putting 200 taka into my pocket while asking ``how long would it be until you
discovered this was missing?'' Abul agreed it would not be quickly. He has an
idea of how much he makes per month and therefore per day, but nothing
exact. A shortfall of what roughly amounts to a day's profit would be noticed,
but not quickly enough to guess how and where it occurred. There did not
appear to be any regular practice of profit calculation and any question of the
level of profitability of the shop was solely in Abul's head. Issues of stock and
cash control were visual and intuitive, a necessary corollary of ``being a good
shopkeeper''. There did not appear to be any creditor arrangements as
shipments to the shop were generally small deliveries or collected from
markets, and payments (in Abul's case) generally were in cash.
From this can it reasonably be argued that Abul's accounting practices were
a response to demands from governmental institutions as described by Boden
(1999). In this case there does not seem to be any real governmental or
institutional demands for any form of accounting. But also there was very little
in the way of ``accounting'' as we would understand it in a western setting. It
was clear that the ability to read and write did lead to some book-keeping
practices, principally a basic form of debtors ledger which was clearly
beneficial in keeping track of who owed him money. However, Abul felt little
need to develop more complex accounting practices for his own benefit, which
would add weight to Boden's (1999) argument that institutions play an
important role in the promotion of accounting practices. There is a structure of
personal, corporate and indirect taxation in place in Bangladesh, but this
generally does not stretch to small traders. Although there have been attempts
to reform the Bangladeshi tax system the collection of direct taxation remains a
problem (Al Mamun, 2001), and the backbone of the system are the indirect
AAAJ import-based taxes such as excise and VAT on imports (National Board of
15,2 Revenue, 2001a). From one perspective the very existence of these direct taxes
could provide a motivation for not having extensive written accounting records
that would provide the basis for a tax assessment (National Board of Revenue,
2001b). However, Abul would not be subject to income tax, as self-employed
individuals engaged in a profession or a business are only legally liable for tax
148 if their income exceeds Tk 100,000 (Ernst & Young International Ltd, 2000) and
this would be two or three times the amount he would earn in a good year.

Mintu
Mintu ran one of the two small shops in Doukin Pouli, which is about two
hours' bus ride away from Dhaka. ``Shop'' is a misnomer inasmuch as the retail
area was simply a walled-off section of the single-roomed house Mintu and his
family live in. Moreover, Mintu only carries a limited range of stock; mainly
cooking oil, soap, kerosene (only some houses in the village have electricity),
rice, onions, and potatoes. The shop is centrally situated along the main path
from which smaller paths lead away to baÂris (clusters of houses) hidden within
their attendant trees. Mintu reported a surprisingly large turnover from his
retailing, estimating that around Tk 45,000 worth of goods came into his shop
every month. He would make a profit of around Tk 3,000, however this was not
a cash return as it was normal for various debtors to be outstanding. By
contrast a day-labourer would earn around Tk 1,200 per month. Therefore over
time these debts mounted and Mintu was owed around Tk 10,000 by the end of
any month. For Mintu perhaps two-thirds of his debt would be paid at the end
of each month with neither fuss nor deferment, while most of the rest would
partially pay and the rest would be carried to the next month. A few customers
had a growing debt that would never be fully repaid. Customers generally
would accept Mintu's word as to their debt. If there were any dispute reference
to a written record would not resolve it. It is much more likely that
eyewitnesses or even relatives would be involved to reach a compromise
(mamangsho). In an extreme case it could escalate and be brought before the
village elders for a matabor judgement. However, in this situation oral evidence
would predominate and Mintu's written records would carry little weight.
Not all of Mintu's supplies were purchased for cash. He had accumulated a
debt of around Tk 6,500 from buying rice on credit (from the local moneylender
at Tk 10 over the market rate). Effectively he was caught in a classical cash
flow crisis; his credit with the supplier was stopped and his shop closed. He
then concentrated on his other economic activities; selling milk from his cow
and nurturing the calf he hoped to sell when fully grown. Occasionally Mintu
would farm some land on a sharecropping basis. Such farming methods are
ubiquitous throughout Bangladesh regardless of ambiguous mentions in the
Qur'an and hadith[2]. Money lending is, if anything, even more commonplace
despite the clear textual prohibitions, with necessity being a major prompt to
the practice. The Grameen Bank is increasingly seen as a potential lender, but
there is no branch located near to Mintu's shop and it is uncertain whether he
would qualify as a borrower anyway (women are normally the recipients of Accounting
Grameen Bank loans). presence and
Until two or three years ago Mintu was illiterate and all his accounts had absence
simply been remembered. Since becoming literate he would write down his
daily debtors' transactions either during the day or at night. When asked how
he had previously remembered he (like other shopkeepers questioned) simply
answered, ``I remembered'' and seemed not to see the point of the question. 149
Somehow I seemed to be asking him to remember what he had forgotten, which
said more about me and my western-literate perspective than it did about him.
Paradoxically Mintu said that keeping accounts was made easier once he
learned to read, and that the few mistakes (i.e. forgetting a debtor) that had
been made were more quickly rectified; and the desire of nearby illiterate
shopkeepers to learn to read and write reinforces the idea that there is a
perceived advantage in literacy.
Mintu would need ``around ten thousand'' taka to re-stock and re-establish
his business, a shrug of the shoulders answers where this is likely to come
from. Where much of it will go is more obvious; he has six daughters, each of
which will demand many thousands of dowry taka (for which he puts aside Tk
100 per month). A preference for sons makes sound economic sense. It also
points towards an additional reason why Mintu's shop has closed. With his
wife's full agreement Mintu made a vow that if a seventh child were to prove a
son he would give a feast. It was, and he did. The occasion involved feeding 40
or 50 people and paying a local religious leader to lead formal prayers of thanks
to God and praise to Muhammad. The cost of the evening was around ten
thousand taka. Since he has closed, others have seized their opportunity, and
within a few months a new shop had opened which makes it more difficult for
Mintu to re-establish himself even if he could borrow enough money to re-start.
Again there is no evidence government agencies played any role in the
presence/absence of accounting practices in Mintu's case. However, there was a
link with literacy and accounting practices as Mintu also developed a basic
debtors record once he learnt how. There did not seem to be any real need to
develop extensive creditor accounts, as both Mintu and his creditors were well
aware of how much was owed. In this situation ``just remembering'' seemed to
pose no real difficulty. One interesting question is why, with increasing cash
flow difficulties, Mintu did not make use of more extensive accounting
practices such as a simple cash-book to monitor his cash flow levels. However,
it is also clear that while it may have helped Mintu to diagnose his problems it
would be insufficient to solve them. In Mintu's case the absence of anything
more than basic debtor records would seem to challenge the assumption that
literacy itself is sufficient to lead to the development of accounting.

Haru
Compared with Mintu, Haru could be considered successful since he has not
gone out of business ± although that may be because he never had a business in
the sense Mintu had. He buys from larger, somewhat distant markets and then
AAAJ will carry his stock in a large flat basket to the regular local markets, which he
15,2 attends five days a week. The basket is unloaded onto a small patch on the
ground that forms his stall. From here he sells soap, spices, and other small
items. This market stall is an advance on his previous trading practices when
he spent the whole day walking from village to village ferrying such items for
re-sale. These regular markets (hats) are important as much for a chance to
150 catch up on local events and opinion as they are for buying and selling (Thorp,
1978, p. 14).
Although most of Haru's livelihood comes from farming and trading he also
is well known locally as a fakir, a flexible term alluding to allegiance to a
recognised holy man (pir) and to the possession of healing powers. Haru
describes his religious interests as a ``night matter'', but the effort he put into
becoming a fakir belies such glib dismissals. Nowadays providing for his
family by farming and trading takes up the majority of his time and efforts, but
there does not appear to be a neat demarcation between the temporal and
spiritual. This is partly because Haru practices his form of medicine while
sitting at the market and also because the marketplace could well provide
visibility and opportunities for his reputation for healing and piety to develop.
This is not to suggest any simplistic linkage between ``God and Mammon'', but
Haru does appear to be financially better off than might be expected for a small
trader since his bari has three huts, two of which have corrugated iron roofing.
This is a clear signal of relative wealth and financial security since, although
more cost-effective than the thatch alternative, it does require high initial
outlay. Such outlay is made more problematic for Haru since, unlike either
Abul or Mintu, almost all his commerce (buying and selling) entails immediate
cash rather than credit.
Haru cannot read and write and does little of what we would call accounting.
Therefore there would seem to be an obvious link between the lack of literacy
and the relative absence of accounting. However, it is also reasonable to argue
that Haru has little need for the written record, as all of his trading transactions
are cash based. The absence of credit transactions would seem to remove any
need to keep a record of debtors and profit would equal the difference in cash
between what he had at the beginning and at the end of the day. This is not to
suggest that Haru does not deal in credit transactions at all, as his farming
practices are dependent on sharecropping arrangements with the local lenders.
While clear accounting concepts such as profit do exist this is not a sufficient
motivation for accounting records. It is also clear that the state (and other
institutions) has little direct interest in regulating the financial transactions of a
rural holy man.

Discussion
Choudhury (1988, p. 550) suggests that by investigating examples of
accounting absences and explaining accounting's non-pervasiveness it might
be possible to create a dialectic between the existence and non-existence of
accounting worlds and thereby achieve a deeper understanding of the nature of
accounting. The first objective and contribution of this paper can be seen as an Accounting
exploration of the accounting world, the limits of accounting and accounting presence and
practice. The obvious question explored in this case is why is there is so little absence
accounting. Choudhury (1988) suggests that there are two different ways in
which an accounting absence can be understood. First, an absence of
accounting could be seen as a pathological non-presence. As such an absence of
accounting represents some failure on the part of ``the management'' and the 151
role of the researcher is to attempt to explain such an absence. From this
perspective the limited and sometimes absent accounting evident in the
practices of Abul, Mintu and Haru would lead to a story about ignorance or
underdevelopment. In referring back to one of our research questions, there did
appear to be a relationship between literacy and accounting. It is argued that in
these cases literacy can be seen as an important pre-condition to the emergence
of accounting. This fits Littleton's (1933) case that writing was an antecedent
for book-keeping. There was no evidence that these individuals practiced some
pre-literate form of accounting as described by Keister (1963), Baxter (1994) and
Schmandt-Besserat (1992a, b). Therefore the absence of accounting is a
pathology and, while literacy was the first stage in the development of
accounting, what these people await is some generous and noble accounting
educator who will teach them how to account. Essentially Choudhury's (1988)
absence as a pathology thesis would explain Mintu's failure as a result of his
poor accounting. This argument clearly has a patronising and imperialistic
aspect, fails to address Mintu's case effectively and is even worse in addressing
Haru who does no accounting at all. However, Choudhury (1988) also suggests
that absence can be seen as a virtue. By this he means that it serves some
functional role. Such absence might be deliberate, or at least beneficial, and
could assist to foster trust, constitute a constructive ambivalence in the face of
a changing environment or play a particular symbolic role. Therefore the
objective of the next part of this paper is to explore the applicability of the
``virtuous'' interpretation of these absences.
In reflection Boden's (1999) arguments would seem to be supported, as in the
absence of the institutional influence we appear to have an absence of
accounting. While many of these institutions exist they appear to have
relatively little impact on the individuals studied. Small businesses rarely
prepare taxation accounts or account for child support. Organisations such as
banks were reluctant to take an interest in such small traders. One exception is
the Grameen Bank, which does not require formal financial statements, but that
individuals attend regular meetings, substituting formal accounting for oral
``accounting'' and peer pressure (Grameen Bank, 1999).
So could there be seen to be a virtue in this absence? Indeed that may be the
case. Essentially there can be seen to be three different ``virtuous'' options. First,
it could be useful not to do accounting, second accounting may not be useful,
and third accounting could be unnecessary. How could it be useful not to do
accounting? Here we could have the inverse of Boden's (1999) observations.
With the existing taxation arrangements in Bangladesh it could be in the
AAAJ interest of small traders not to keep ``full accounting records'' because then it
15,2 would be possible for taxation authorities to determine a tax liability. The very
institutions that in one society lead to the production of accounting could in
another mitigate against it. The second question is whether accounting is or is
not useful. Clearly, maintaining debtor records was seen as useful by both Abul
and Mintu. The central perceived benefit was that it helped them remember
152 what they were owed. However, in their society it is questionable whether a
written record as opposed to the ``memory'' would have been any real
advantage in the settlement of a dispute. It was also clear that there was little
perceived ``decision relevant'' benefit from developing more extensive
accounting practices in this context. Perhaps this is best illustrated by Haru, as
with his completely cash orientated trading activities there was little
motivation to keep a written record. Profit was self-evidently the cash
difference between when he bought his goods and when he sold them. Wealth
or financial position is also self-evidently the value of cash and any other
world-goods (less what ever you happen to owe the money lender). Therefore
one argument is that more extensive accounting practices serve no useful
purpose. Littleton (1933) also argued that credit was a necessary antecedent to
accounting. However, the argument here is that it is not the presence or absence
of credit in a general sense but in an individual sense that determined the
usefulness of accounting practices.
Of all of Choudhury's (1988) suggestions for accounting absence, it is the
issue of trust which is most interesting. Choudhury (1988) suggests that the
absence of accounting could function to increase trust. While interesting, the
impact of an absence of accounting would be difficult to prove in this case.
However, perhaps when there is a level of trust then accounting is simply not
necessary. It is clear that in Bangladesh there is a strong link between trust,
kinship and the ability of individuals to raise and collect debt.
When an individual requires a personal loan in cash or kind, first he may approach his near-
relatives within and outside the village. When an individual has no suitable blood relations
for providing a loan, he normally would ask for the same from his father-in-law . . .
particularly when any loan amount is obtained from affinal relatives, an individual makes
every effort to return the money at the time due, otherwise he feels guilty and ashamed . . . To
the knowledge of the author, in the study area a father-in-law committed suicide by taking
poison after he repeatedly failed to repay a loan amount to his son-in-law who lived in another
village. With a blood relation one usually has . . . liberal extensions of the time limit for
repayment (Aziz, 1979, p. 130).

This quote illustrates that the nature and extent of kinship relationships can
have a significant influence on who is granted credit and how strictly credit
arrangements are enforced. Therefore notions of trust, particularly trust in a
social setting, could be important to understanding the operation of business
practices in contexts of accounting absence. There is already evidence in the
accounting literature that there might be an important relationship between the
presence/absence of accounting and the issue of trust (Seal and Vincent-Jones,
1997; Neu, 1991a, b). To further explore this notion we draw on the work of two
social thinkers, who were both very interested in issues of trust, Pierre Accounting
Bourdieu and Robert Putnam. Both men had a slightly different ideas of social presence and
capital and trust, but it is possible to synthesise these different perspectives absence
and use them as a basis to explore the accounting presence and absences in
these cases. This is not to say that there are not other aspects to trust which
may have implications for accounting (see Seal and Vincent-Jones, 1997).
However, it is the idea of social capital that is the focus of this paper. 153
Bourdieu suggests that individuals are in dominant, subordinate or
equivalent positions to other individuals within a social structure, and that
each individual's place is reflected in the access he/she has to ``capital''. This
capital may be economic, social (centred on relationships), cultural (involving
knowledge) or symbolic (entailing prestige) (Jenkins, 1992, p. 85; Wacquant,
1989, p. 39). Within the accounting literature there have already been a few
attempts to explore the roles of ``other'' forms of capital in economic situations
(Thompson, 1999; Grey, 1992; Jones, 1997). Bourdieu presents social capital as a
network of contacts or relationships. Although it is not clear whether these are
held by an individual or by groups, the implication is that it is the individual.
Putnam (1993), by contrast, sees social capital as the collective resources of a
given community and uses this concept to explain the differential economic
development between the North and the South of Italy. He argues that social
capital facilitates collective action and co-operation. In effect, voluntary
co-operation is easier in a community that has inherited a substantial stock of
social capital. In defining the concept of social capital, Putnam (1993) draws on
the earlier work of Coleman (1990, pp. 302, 304, 307):
Like other forms of capital, social capital is productive, making possible the achievement of
certain ends that would not be attainable in its absence . . . For example, a group whose
members manifest trustworthiness and place extensive trust in one another will be able to
accomplish much more than a comparable group lacking that trustworthiness and trust . . .
where one farmer got his hay baled by another and where farm tools are extensively
borrowed and lent, the social capital allows each farmer to get his work done with less
physical capital in the form of tools and equipment.

From this quote it is clear that social capital can have significant economic
impact on community life. Putnam (1993) goes on to explain that what he
means by social capital are socially accepted norms of trust or reciprocity. The
central question here is not whether we have trust in some absolute sense, but
whether individuals in the community can trust others to keep their end of an
agreement. His prime example of this trust (or social capital) is the rotating
credit association. In a rotating credit association a small group of individuals
agree to make a regular contribution to a common fund. Each month (or other
specified period) a different group member receives the entire fund to fund a
capital investment or to finance a major social commitment. All of the members
are expected to continue contributing to the fund until all of the members have
had their turn. Putnam (1993) argues that these organisations do not represent
a particular form of altruism or an ethic of co-operativism but a concrete and
genuine value to the individuals involved. Because of the co-operative process
AAAJ these individuals are significantly better off. The clear risk is that individuals
15,2 will opt out of these organisations after they have received their distribution.
However, while this is an acknowledged issue, the sanctions against defection
appear to be strong, particularly where in a highly personalised community
individuals face ostracism from the social and socio-economic system. So
strong is the norm that members on the verge of default are reported to have
154 sold daughters into prostitution or committed suicide (Hechter, 1987, pp. 109-
11). Somehow there is a balance between trust and sanction.
While the idea of social capital has a number of different aspects it is
possible to synthesise Bourdieu and Putnam's perspectives to provide a generic
notion. Essentially social capital can be seen as a set of trust relationships,
norms and networks that are built up over time, imbedded in a given social
setting and that have real economic value (see also Civil Practices Network,
2001; The World Bank Group, 2001). While both Bourdieu and Putnam share
this generic notion Bourdieu focuses on a more individualised form where the
relationships are vested in the individual, while Putnam presents a more
socialised or collectivised form where the relationships are vested in the
community. Therefore Bourdieu and Putnam's ideas on social capital can be
synthesised by seeing them as representative of two points on a continuum
(Figure 1) contrasting individualised and collectivised forms of social capital.
An important question that remains is how the trust/relationship based
social capital is developed and maintained over time. Weber (1998, p. 23)
explores the creation and maintenance of trust and suggests that this involves
a process of self-disclosure over time, moving from trivial to intimate. Blau
(1964, p. 94) focuses on the development of trust in exchanges and presents the
same progression from minor transactions, where little trust is required, to
more substantial exchanges if reciprocity is evident. However, both Weber
(1998) and Blau (1964) focus on an individualised form of trust, much closer to
Bourdieu's social capital than Putnam's structural and intuitive form. However,
it is Putman (1993) who gives us a basis for understanding the absence of
accounting in this case of the village. If this kind of trust is essential for
survival in the village setting and the sanctions against violation are strong
enough to lead to exclusion or suicide, then the kind of evidential monitoring,
control and reporting associated with accounting practices could simply be
unnecessary. A virtuous absence represents an absence of need. Accounting is
not so important and the issue of maintaining relationships is much more
important to continuing in business in this setting. However, it is interesting to
explore further the idea of social capital by returning to the case studies.

Figure 1.
Models of social capital
When Abul arrived in Dhaka it is evident that he was in a difficult situation. Accounting
Having left his birthplace he was outside the established kinship framework. In presence and
that sense he did not have access to the kinds of collective social capital absence
described by Putnam (1993). However, over time Abul has succeeded in
establishing a powerful network of relationships. This ability to develop
relationships is evident in his willingness to form a relationship with a
foreigner. However, most important for his ability to remain in business is 155
Abul's relationship with the mastans[3], as they wield a great deal of power
over small business people. The most obvious aspect of Abul's relationship
with the mastans is that he gives them cigarettes. Throughout his constant
tasks he will override other services to engage small groups of young men who
shout for a cigarette, perhaps while paused in a passing rickshaw. Their choice
is invariably foreign and therefore both expensive and indicative of high social
status. However, to merely focus on the ``gift'' is to miss the point, as all
shopkeepers are required to give such gifts. However, Abul is friends with the
mastans and over a very long time he has built a personal relationship with key
powerful political individuals. These friendships were the result of Abul's
friendly nature, entrepreneurial flair and his commitment to core Bengali
family values that has won him respect.
What is particularly interesting is that in Abul's case, his social capital is
improvisational rather than institutional: rather than only co-operating with
one of the mastan factions, Abul is able to deal effectively with all of them. This
setting is closer to Bourdieu's model of social capital, characterised by
individual relationships and links with powerful groups and individuals. This
is an individualised and improvisational form of social capital and it is a key
factor in explaining Abul's success. The process of developing this form of
trust would clearly fit the incremental model defined by Weber (1998) and Blau
(1964).
Mintu's case is in contrast to Abul. He operates in a relatively stable context
of Rosulpur. As already indicated, strong kinship bonds and therefore strong
and established relations encompass the village. The social capital that Mintu
has access to is much closer to Putnam's model of norms of reciprocity. This is
not necessarily honesty or trust for its own sake, but in this setting threats of
social exclusion and community sanction are much more powerful. Ideas of
trust are deeply intuitive and normally unquestioned. It is not that anyone
would think about the consequence of sanctions because the idea breaking this
trust would be inconceivable. This is not to suggest that the consequences of
such a breach would not be very real.
One would expect that Mintu would be in a much better economic situation
than Abul with access to this trust. However this traditional or collective social
capital does not seem to have been a significant financial benefit to Mintu.
Perhaps the fact is that such norms do not preference Mintu in any particular
way as all of the local traders have access to the same resources as Mintu does.
The very fact that Mintu could continue in business as long as he did is
testimony to established norms of trust. However, this collective form of social
AAAJ capital has also imposed particular costs. In Mintu's case improvisation was
15,2 unacceptable and deviation from the social norms unthinkable. It was
unthinkable that Mintu would breach social practices such as the provision of
dowry for his daughters or the fulfilment of his vow to have a feast. Putnam's
version of social capital, while making co-operation and trust possible, also
makes change and innovation difficult.
156 Haru illustrates that concepts such as social capital are not strictly unitary.
Bourdieu offers economic, cultural and symbolic capital(s) as alternative
categories. However, it is not immediately clear which category Haru fits as his
ability to heal is deemed to come from closeness to God. Undergirding Haru's
reputation and indirectly his ability to trade is an assumed piety. This piety or
religious capital exists somewhere between Bourdieu's understanding of social
capital (built on relationships), cultural capital (legitimate knowledge) and
symbolic capital (prestige and social honour). Haru relies on this since piety
and proximity to God is deemed to have a tangible reality and blessing can be
acquired by contact with holy people or sites. Perhaps the best example of this
is the practice of wiping dust from a holy grave site on one's face in order to
gain blessing.
Haru's financial standing, as evidenced by his tin roof, is better than one
might expect, although the relationship between his spiritual standing and his
financial standing is not clear. He receives no payment for his healing, which
apparently comes from patronage of unseen powers. But these healings do
build his reputation, in effect his social capital, which in turn helps him to make
a living. But is this a social capital in the sense understood by Bourdieu or by
Putnam? In fact, it is somewhere in the middle. It is similar to Bourdieu's model
since it relates to Haru's personal reputation and has its basis in relationships
he forms (and people he heals). However, this is also similar to Putnam's model
of social capital in that it is firmly based on collective values and ideas,
particularly local understandings of the role and importance of the fakir.
Without these established norms and relationships Haru's reputation would be
meaningless.
Based on these studies it became evident that the most important issues for
these people was managing their relationships ± in effect their social capital.
Accounting was useful and important but for Mintu, in his relatively stable
village setting, and Abul, in the changing environment of Dhaka, managing
these relationships was central and accounting did not play a significant role in
that process. However, there was a link between the importance of social
capital and the issue of literacy. Long-standing relationships (social capital)
and non-accounting based modes of trust and dispute resolution made written
records of limited value in resolving disputes. For Abul his ability to manage
the potentially difficult and dangerous relationship with the mastans gave him
an important business advantage, as when they called a strike his shop
remained open while all others were closed. Therefore the presence or absence
of social capital would seem to be another useful explanation for the absence of
accounting.
Conclusion Accounting
This paper explores the issue of accounting presence and absence, responding presence and
to the challenge to seek accounting where it is not. The context for this research absence
was the daily life of three small traders in Bangladesh. Little work has been
done to explain accounting presence and absence at an individual level. One
exception to this is the work of Boden (1999), who suggested that in the UK
demands of institutions such as Inland Revenue, Customs and Exercise and the 157
Child Support Agency were critical in encouraging the self-employed to
produce financial information. This paper sets out to explore whether the
presence or absence of these institutional demands in Bangladesh results in a
corresponding presence or absence of accounting. From the three cases
presented there would seem to be some support for this argument. There was
little direct interest from state agencies in the accounting practices of small
traders and therefore the lack of such institutional demand can be seen to be an
important contributing factor to a relative absence of accounting.
The second key research question was whether there was a relationship
between literacy and accounting. In this case there was no evidence that any of
the traders practiced ``pre-literate'' forms of accounting. After Abul and Mintu
learnt to read and write they started to keep basic debtor records. Haru could
not read or write, but neither did he keep any identifiable accounting records.
However, as Haru operated a pure cash trading system he had no reason to
keep debtor records. There was the absence of both ability and motive.
Therefore it could be argued that there was a link between literacy and
accounting although it is hard to say if illiteracy caused the absence of
accounting or if they just coincided. Perhaps literacy is necessary but not
sufficient to lead to the development of accounting practices.
Choudhury (1988) suggests that an accounting absence can be seen either as
pathological or as a virtue (functional). While we do not suggest that there is
some kind of planned design in this case, we do argue that there are a number
of reasons why an accounting absence might make sense in this context. First,
with the current taxation structures in Bangladesh it is more difficult for tax
authorities to collect from small traders who do not have detailed accounting
records. Therefore there could be an inverse of Boden's (1999) argument. In this
case the presence of government authorities could lead to the absence of
accounting. A second suggestion was that accounting was not useful for
decision making in this context. While basic debtor records were a beneficial
memory aid for Abul and Mintu, as Haru dealt completely in cash written
records would not have been any benefit. Perhaps in Abul and Mintu's cases
the simplicity of their business activities and predominance of cash
transactions make any more detailed accounting unhelpful. The third
argument is that the presence or absence could be influenced by the social
setting and can be seen as a counterpoint to the presence of social capital as
defined by Bourdieu and Putnam. Essentially in a context of personally or
socially established norms of reciprocity the sanctions against violation are
strong enough to lead to exclusion or suicide. In this kind of context the written
AAAJ records associated with accounting in western society are simply not
15,2 necessary.
The three cases of Abul, Mintu and Haru illustrate that Bourdieu and
Putnam's respective models of social capital represent different ends of a
common continuum. In the stable setting of the village social capital was
strongly linked with bonds of kinship and traditions of behaviour. Because of
158 this Mintu was trusted and could trust others, whereas an outsider or
newcomer would not be trusted. However, as these norms of trust were shared
throughout the village they were not a particular economic advantage to Mintu
and were not sufficient to prevent him losing his business. The costs associated
with this collective social capital were the compliance with local norms and
traditions, and deviation becomes almost unthinkable. Abul was outside of the
village structure and did not have access to these kinship resources. However,
over time Abul developed a personal network relationship, facilitating a
personalised form of social capital. Haru illustrated the link between the
personalised and the collective forms as he developed personal relationships
associated with his status as fakir. However, the role and respect attributed to a
fakir were firmly rooted in local norms and expectations. Clearly the theme of
social capital, trust and accounting is an interesting one and worthy of further
research.
In conclusion, much can be learnt by studying the margins of accounting;
particularly the areas of accounting in daily life and the presence/absence of
accounting. By further exploring absences we challenge the assumption that
accounting is inevitable and therefore a universal good. We also will come to
better understand the fundamental question of ``why do we do accounting''?
In this case there was not a single answer to the presence/absence of
accounting question. However four different factors were identified. First, the
absence of state and institutional demand for individuals to account seems to
contribute to the absence of accounting. However, it was also possible that
the presence of certain institutions could also lead to the absence of
accounting. Second, literacy/illiteracy seemed to provide some explanation
for presence and absence. Third, the decision relevance of accounting in a
cash rather than a credit orientated trading environment seemed to be
limited. The fourth explanation was the social context ± the presence or
absence of social capital. Social capital, defined as norms of reciprocity and
trust, seemed to reduce the need for accounting. Clearly further explanations
could be advanced and each of these could be further developed, and there is a
need for further research, particularly of the relationship between accounting
and trust.

Notes
1. Which is why the field study is expressed in first person whereas the second person form
is used elsewhere in the paper. The use of first person in this way also highlights the
reflexivity of the interaction between the researcher and the researched.
2. Qur'an and hadith are the Islamic religious texts.
 2. Mastan equates to more than the ``neighbourhood tough'' or ``thug'' that they appear to be. Accounting
In a society where both the police and judiciary exist largely to carry out the orders of
those with power, the children of the powerful can tend to experiment with their vicarious presence and
strength. This dovetails with the perceived need major political parties have to maintain absence
loose militias (political leverage comes from the ability to mount rallies and disrupt daily
life through strikes and disturbances more than an electoral process). So it is that some of
Abul's customers are potentially dangerous. Conversely, they are also potentially helpful
as well, since their patronage can give protection. 159
References
Alam, M. (1997), ``Budgetary processes in uncertain contexts: a study of state-owned enterprises
in Bangladesh'', Management Accounting Research, Vol. 8 No. 2, pp. 147-68.
Al Mamun, A. (2001), ``Bangladesh's tax structure: have the reforms made any difference'',
Bangladesh Economic Chronicle, available at: www.bdec.org/sec/dev/issue2/2-1.html
Aziz, A. (1979), Kinship in Bangladesh, Monograph Series No. 1, International Centre for
Diarrhoeal Disease Research, Dacca.
Baxter, W. (1994), ``Early accounting: the tally and the checker-board'', reprinted in Parker, R. and
Yamey, B. (Eds), Accounting History: Some British Contributions, Clarendon Press,
Oxford.
Beard, V. (1994), ``Popular culture and professional identity: accountants in the movies'',
Accounting, Organizations and Society, Vol. 19 No. 3, pp. 303-18.
Blau, P. (1964), Exchange and Power in Social Life, John Wiley & Sons, New York, NY.
Boden, R. (1999), ``Figure it out yourself: financial reporting, accountability and the self-
employed'', Critical Perspectives on Accounting, Vol. 10 No. 1, pp. 37-64.
Bougen, P. (1994), ``Joking apart: the serious side to the accounting stereotype'', Accounting,
Organizations and Society, Vol. 19 No. 3, pp. 319-35.
Choudhury, N. (1988), ``The seeking of accounting where it is not: towards a theory of non-
accounting in organizational settings'', Accounting, Organizations and Society, Vol. 13
No. 6, pp. 549-57.
Civil Practices Network (2001) Social Capital, CPN Tools, available at: www.cpn.org/cpn/
sections/tools/models/social_capital.html, 7 June 2001.
Coleman, J. (1990), Foundations of Social Theory, Harvard University Press, Cambridge, MA.
Encyclopaedia Britannica (1999), Encyclopaedia Britannica '99 CD-ROM, Encyclopaedia
Britannica, Chicago, IL.
Ernst & Young International Ltd (2000), ``The global executive (2001) Bangladesh income tax'',
EY/Passport, December 2000, CD-Rom, Ernst & Young International Ltd.
Fagerberg, D. (1954), ``Spotlight on personal accounting'', The Accounting Review, Vol. 29,
pp. 355-64.
Grameen Bank (1999), ``Grameen Bank'', Web page, 2 July 1999, available at: www.grameen-
info.org/bank#62
Grey, R. (1992), ``Accounting and environmentalism: an exploration of the challenge of
gently accounting for accountability, transparency and sustainability'', Accounting,
Organizations and Society, Vol. 17 No. 5, pp. 399-425.
Hechter, M. (1987), Principles of Group Solidarity, University of California Press, Berkley, CA.
Hopwood, A. (1994), ``Accounting in everyday life: an introduction'', Accounting Organizations
and Society, Vol. 19 No. 3, pp. 299-301.
AAAJ Hoque, Z. and Hopper, T. (1994), ``Rationality, accounting and politics: a case study of
management control in a Bangladeshi jute mill'', Management Accounting Research, Vol. 5
15,2 No. 1, pp. 5-30.
Hoque, Z. and Hopper, T. (1997), ``Political and industrial relations turbulence, competition and
budgeting in the nationalised jute mills of Bangladesh'', Accounting and Business
Research, Vol. 27 No. 2, pp. 125-43.
160 Jenkins, R. (1992), Pierre Bourdieu, Routledge, London.
Jones, G. (1997), ``Accounting for social capital'', ESRC/CIMA New Public Sector Workshop,
Edinburgh, 28/29 April 1997.
Keister, O. (1963), ``Commercial record keeping in ancient Mesopotamia'', The Accounting Review,
April, pp. 371-6.
Littleton, A. (1933), Accounting Evolution to 1900, Russell & Russell, New York, NY.
McKinstry, S. (1997), ``Status building: some reflections on the architectural history of Chartered
Accountant's Hall, London, 1889-1893'', Accounting, Organizations and Society, Vol. 22
No. 8, pp. 779-98.
Malinowski, B. (1922), Argonauts of the Western Pacific, Routledge & Sons, London.
Morgan, G. and Willmott, H. (1993), ``The `new' accounting research: on making accounting more
visible'', Accounting, Auditing & Accountability Journal, Vol. 6 No. 4, pp. 3-36.
National Board of Revenue (2001a), ``Revenue collection position for up to the month of Dec '97,
Dec '98, Dec '99'', available at: www.nbr-bd.org/rev_coll_97-99.htm, 30 May 2001, Dhaka,
Bangladesh.
National Board of Revenue (2001b), ``Fraud and evasion control'', available at: www.nbr-bd.org/
vat/vat_2.pdf, 30 May 2001, Dhaka, Bangladesh.
Neu, D. (1991a), ``New stock issues and the institutional production of trust'', Accounting,
Organizations and Society, Vol. 16 No. 2, pp. 185-200.
Neu, D. (1991b), ``Trust, contracting and the prospectus process'', Accounting, Organizations and
Society, Vol. 16 No. 3, pp. 243-56.
Putnam, R. (1993), Making Democracy Work: Civic Traditions in Modern Italy, Princeton
University Press, Princeton, NJ.
Schmandt-Besserat, D. (1992a), Before Writing, Volume I: From Counting to Cuneiform,
University of Texas Press, Austin, TX.
Schmandt-Besserat, D. (1992b), Before Writing, Volume II: A Catalogue of Near Eastern Tokens,
University of Texas Press, Austin, TX.
Seal, W. and Vincent-Jones, P. (1997), ``Accounting and trust in the enabling of long-term
relations'', Accounting, Organizations and Society, Vol. 10 No. 3, pp. 406-31.
Thompson, G. (1999), ``Cultural capital and accounting'', Accounting, Auditing & Accountability
Journal, Vol. 12 No. 4, pp. 394-412.
Thorp, J. (1978), ``Masters of earth: conceptions of `power' among Muslims of rural Bangladesh'',
unpublished PhD thesis, University of Chicago, Chicago, IL.
Uddin, S. and Hopper, T. (2001), ``A Bangladeshi soap opera: privatisation, accounting, and
regimes of control in a less developed country'', Accounting, Organizations and Society,
Vol. 26 No. 7-8, pp. 643-74.
Wacquant, L. (1989), ``Towards a reflexive sociology: a workshop with Pierre Bourdieu'',
Sociological Theory, Vol. 7 No. 1, Spring, pp. 26-63.
Walker, S. (1998), ``How to secure your husband's esteem. Accounting and private patriarchy in Accounting
the British middle class household in the nineteenth century'', Accounting, Organizations
and Society, Vol. 23 No. 5-6, pp. 485-514. presence and
Weber, L. (1998), ``On constructing trust: temporality, self-disclosure and perspective-taking'', absence
International Journal of Sociology and Social Policy, Vol. 18 No. 1, pp. 7-26.
Whiting, B. and Whiting, J. (1973), ``Methods for observing and recording behaviour'', in Naroll,
R. and Cohen, R. (Eds), A Handbook of Method in Cultural Anthropology, Columbia
University Press, London.
161
(The) World Bank Group (2001), ``What is social capital? Social capital for development'',
available at: www.worldbank.org/poverty/scapital/whatsc.htm, 7 June 2001.