Description
This paper explores the role of accountants as part of the necessary infrastructure in rural
community development providing specialised knowledge and skills to business owners who may
lack the expertise required to ensure successful business operations.
Accounting Research Journal
The dual roles for accountants in sustaining rural communities
Amanda J . Carter Roger L. Burritt J ohn D. Pisaniello
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Amanda J . Carter Roger L. Burritt J ohn D. Pisaniello , (2013),"The dual roles for accountants in sustaining
rural communities", Accounting Research J ournal, Vol. 26 Iss 2 pp. 130 - 153
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The dual roles for accountants
in sustaining rural communities
Amanda J. Carter, Roger L. Burritt and John D. Pisaniello
Centre for Accounting, Governance and Sustainability,
University of South Australia, Adelaide, Australia
Abstract
Purpose – This paper explores the role of accountants as part of the necessary infrastructure in rural
community development providing specialised knowledge and skills to business owners who may
lack the expertise required to ensure successful business operations.
Design/methodology/approach – Perceptions of seven rural development of?cers from separate
Rural Development Boards and two local governments in South Australia are canvassed through a set
of interviews.
Findings – Findings challenge the notion that use of modern communication technology, which
allows for accountants and their accountancy practices to be located anywhere in the world, is
suf?cient to ful?l their role in rural communities. Instead, a critical dual role for accountants is
identi?ed which includes a community development function.
Research limitations/implications – The research is limited by the geographic area from which
the participants were selected. While this controlled for any possible jurisdictional differences between
states in Australia, the participants targeted comprise only a relatively small group.
Originality/value – The paper identi?es an important role for accountants in rural communities
hitherto unidenti?ed. Accountant contributions to rural development and the sustainability of rural
communities is highlighted.
Keywords Sustainable rural communities, Accountants, Accountancy practice, Regional development,
Professional services, Accountancy
Paper type Research paper
1. Introduction
Previous research reveals that throughout the world rural areas struggle to remain
economically and socially sustainable for a number of reasons including a lack of
employment, isolation, shortage of leisure opportunities, poor transport, and a
romanticised cultural construction of the rural ideal which masks actual conditions
(Cloke et al., 1997; Little, 1999; Baines, 2012). Maintenance and development of rural
communities[1] seems a hard task in the face of the constant drift of people to
metropolitan areas in search of work and a higher standard of living (Doherty, 1941;
Knapp and Schmitt, 2008). However, maintaining rural communities and associated
services including those provided by accountants, is of strategic importance to regional
development because of, for example, small population numbers, large geographic space
and the resulting low population density, which makes pro?table economic activity
dif?cult (Gray and Lawrence, 2001; Tonts and Haslam-McKenzie, 2005). While rural
communities are in general based on an agrarian or mining economy, they also struggle
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1030-9616.htm
The authors would like to thank the Desert Knowledge Cooperative Research Centre (Ninti One)
for their support. The authors also thank the participants from the Rural Development Boards
and local governments.
Accounting Research Journal
Vol. 26 No. 2, 2013
pp. 130-153
qEmerald Group Publishing Limited
1030-9616
DOI 10.1108/ARJ-12-2012-0093
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fromclimatic extremes of aridity or cold (Cocklin and Dibden, 2005). Rural communities
have a history of being subsidised by government to encourage their continued
existence (Bennett et al., 2004), in Australia through Regional Development Australia, a
federal government agency. In this context sustainability of rural communities depends
on the:
[. . .] need to ensure a better quality of life for all, now and into the future, in a just and
equitable manner, whilst living within the limits of the supporting ecosystems (Agyeman and
Evans, 2004, p. 157).
As rural development of?cers are the gatekeepers of successful rural communities this
paper asks the research question:
RQ1. How do rural development of?cers perceive the potential contribution from
establishing and maintaining resident accountants in rural communities?
There are two motivations for this study. The ?rst reason is to explore the perceived
need for professional services to be located in rural communities for them to remain
vibrant and sustainable; hence, the interest in gaining the perceptions of rural
development of?cers on this issue. Second, with accountants having advanced
communication technologies available this means they do not need to be located in rural
areas to deliver their services. Again, the views of rural development of?cers will help
our understanding of necessary incentives for locating accountants in rural
communities.
Efforts to develop rural communities economically and socially, the responsibility
of development of?cers in the Regional Development Boards, have traditionally
focussed on the improvement of existing, or attraction of new, industries or businesses
(Stephens and Laughton, 2003; Maude, 2004; Sternberg, 2007). However, with
globalisation and its emphasis on international trade the ability to create resilient and
sustainable communities has also seen growth in calls for development efforts to give
serious consideration to the importance of occupations (Markusen, 2004). This
approach to community development stresses the need for:
.
communities to encompass technical skills and contributions of professional
service providers such as accountancy; and
.
the potential for the broader community to encompass cross fertilisation from
knowledge spillovers (Markusen, 2004).
The development role is still being discussed in mainstream and emerging economies
today (Burns and Baldvinsdottir, 2005; Baba, 2011). In this paper the importance of
accountants is explored in the context of their contribution to the sustainability of rural
communities.
The accountancy profession over a lengthy period has been developed to support
the foundation and maintenance of the operations of accountants (Parker, 1994). In
recent times, the advent of advanced electronic and transport communications has
been associated with growth in the transitory nature of accountants in rural areas, such
as through ?y-in-?y-out or drive-in-drive-out activities associated with mining
communities (Beach et al., 2003; Haslam McKenzie, 2010) and the ef?cient provision of
accountancy transactions services beyond country boundaries. Accountancy services
can be provided at arm’s length and at a distance.
Dual roles
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However, the nature of rural practice amongst professional services providers is
arguably different from that in urban centres with Sharplin (2002) noting that rural
educators often work beyond their areas of expertise and within health sciences and
medicine, a broad skills base is recognised as important (Lannin and Longland, 2003).
The indication is that general practice is more common than specialised practice
amongst rural professional services providers (Hegney et al., 2002a, b) and as a result
rural professionals are often required to manage several roles (Mellow, 2005).
These broad skills bases and the expanded professional roles are explored by
Wagner (1993) in her article on legal practice in small town USA. She notes that in
small towns lawyers are often sought as guidance counsellors and that the issues
brought by clients may not have legal solutions at all, rather clients seek a person in
whom to con?de their troubles, or seek companionship (Landon, 1992; Wagner, 1993).
With accessibility a hallmark of small town legal practice in the USA, a high level of
education can result in the lawyer becoming a fountain of wisdom as people seek
reassurance on a range of personal non-legal issues (Landon, 1992, p. 86). The majority
of professionals are trusted with personal information and can assume dual roles as
con?dant and professional advisor (Felton et al., 2008; Farmer and Kilpatrick, 2009;
Werth Jr and Hastings, 2010). Hence, given the fractionation of accounting services
across the globe, people responsible for regional development, professional
accountancy bodies and government policy makers need to be mindful of the
potential con?ict between removal of accounting services from rural communities
because of market ef?ciencies or natural attrition and the potential advantages of
having accountants resident in communities to ful?l dual roles.
The paper proceeds as follows: ?rst, Section 2 outlines the institutional setting
including the rural context, the importance of agrarian values and government
approaches to rural development. In Section 3 role theory and the arguments for
delivery of professional accounting services locally are examined based on evidence
from previous research. Section 4 provides details about the research design. Section 5
outlines the ?ndings of this research and is organised around three main themes:
competitive advantage, morale of rural residents, and the social contribution of
accountants. Section 6 discusses these ?ndings in relation to the literature on
rural-based professions and sustainable rural communities, draws conclusions and
considers future research opportunities in relation to the importance of having
professional accountants in residence.
2. Rural communities and their sustainability: the institutional setting
To consider the roles of accountants in rural communities and economies, the
institutional setting needs to be understood. Australia is a developed country which
has a heavily urbanised population concentrated along the coast. This means that rural
areas are sparsely populated by comparison to urban centres but remain a vital
component of the Australian national economy. The Department of Foreign Affairs
and Trade (2009) notes that 67 per cent of Australian export revenue is sourced from
rural areas – equating to AU$65 billion per annum. Rural areas are sites for major
sectors of the Australian economy including mining resources, energy production, and
various primary industries including forestry and agriculture. In 2005-2006
agricultural production was worth AU$67.5 billion, forestry AU$18 billion to the
national economy and mining accounted for 37 per cent of all exports (Department of
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Foreign Affairs and Trade, 2009). With such multi-functionality of rural areas, the need
for suf?cient permanent and seasonal labour, maintenance of service centres for local
and transient residents and sustainable rural communities, assumes increasing
importance.
Rural communities provide a focal point for the provision of goods and services to
residents via hubs of commercial activities including professional services such as
legal, banking, health, accounting, trades, entertainment, education and general
provisions. Whilst many services support agricultural enterprises a number also
support mining communities (Freestone et al., 2003). Service towns re?ect government
efforts to ensure people have access to basic services (Gray and Lawrence, 2001;
Collitts, 2004; Tonts and Haslam-McKenzie, 2005). Despite the importance of
maintaining rural communities as service hubs, many are in decline as people drift to
urban areas or are encouraged into urban clusters to help government reduce costs and
gain from economies of scale in delivery of social and other services. In South Australia
for example, the rural cities of Mount Gambier, Port Augusta, Whyalla, and
Port Lincoln, have now become such urban clusters and serve residents in the cities
themselves, the immediate surrounding areas and the extended rural communities
(Beer et al., 1994; Beer, 1999; Beer and Clower, 2009). As a consequence, the smaller
rural communities lose their services, necessitating local residents to travel. The loss of
such services can result in permanent loss of population.
Government policy in Australia has a major in?uence on rural development. Rural
policies are based on a strong historical framework. Federal and state governments
made efforts to compensate rural residents under an informal arrangement termed
state paternalism (Tonts and Jones, 1997). Policy addressing differences between city
and country reached an:
[. . .] understanding of their distinctive contributions to the nation and the terms of their
interdependence, and in particular an agreement that country people should be compensated
for the costs of living outside the metropolitan centres (Brett, 2007, p. 3).
The combination of manufacturing efforts in cities and the agricultural activity in the
country combined to create a sense of synergistic nation-building. Brett (2007) points
out that the notion of being Australian incorporated the idea that all people were
entitled to certain social entitlements, access to basic services, and minimum standards
of living, which were universal. Looking after services for rural areas was essentially
Australian. In terms of population, in the nineteenth century Australia was more
urbanised than much of the world (Davison, 2008). It was established quickly in
government policy that people in cities would support those in the country by
subsidising heavily the costs of services (Brett, 2007). Country claims for “special
treatment were supported by powerful economic, strategic and cultural arguments”
(Brett, 2007). In Australia, these claims manifested themselves in countrymindedness
(Aitkin, 1988; Botterill, 2006), a form of political agrarianism with three central beliefs:
(1) rural life has a natural virtue not shared by city life;
(2) everyone relied on farming for their food; and
(3) farmers were independent and hard working.
This countrymindedness in Australia resulted from the centrality of agriculture to
Australia’s economy (Aitkin, 1988).
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A major change in the political mindset took place during the 1980s when neoliberal
reforms restricted both subsidisation of service provision to rural areas and public
support for rural communities (Gray and Lawrence, 2001; Pritchard, 2005). Occupations
declined and a policy of reliance on self-help came to dominate. Deregulation involving,
amongst other things, the abolition of subsidies to rural areas, as well as a restructuring
of the agricultural industry, resulted in consolidation of farming properties, a reduction
in the agricultural workforce and, inevitably, a decline in rural populations (Alston,
2002), as well as increasing social and economic hardship for those remaining in the rural
areas (Lloyd et al., 2001; Postlethwaite and Silverman, 2005).
Major demographic and social change in rural areas includes the out-migration of
youth (16-24 years). The initial movement has been from small towns to larger regional
centres. Known as the sponge cities effect (Salt, 2003), these larger centres soak-up the
surrounding populations with improved employment and educational opportunities
(Garnaut et al., 2001). The effect is skewed towards younger women, hence remaining
populations are older and gender imbalanced, and communities experience decreased
services (such as education and health) and reductions in social capital as families leave
(Alston, 2002; Gabriel, 2002; Vanclay, 2003; Alston, 2004; Brett, 2007). At the same time,
there has been a reversal particularly in coastal areas through movement out of the
major cities as a seachange for people distraught with city life (O’Connor, 2001; Murphy,
2002, 2006). Hence, seachange is a countervailing force, part of counter-urbanisation as
people, especially retirees and the relatively wealthy, move away fromthe congestion of
large urban centres (Maude, 2004; Mitchell, 2004). Seachange is one form of movement
towards people striving towards sustainability in communities. Rural policy literature
has of late turned its attention towards incorporating principles of sustainability with
the view of moving away from traditional economically-focussed policy to the building
of resilient regions and sustainable communities (Bristow, 2010).
Sustainable development has gained momentum as a concept since the late 1980s.
The most common de?nition of sustainable development is provided by the
World Commission on Environment and Development, more commonly known as the
Brundtland Report (UNWCED, 1987). UNWCED (1987, p. 43) de?nes sustainable
development as “development that meets the needs of the present without compromising
the ability of future generations to meet their own needs”. Sustainability conceptualises
development around the concepts of needs and limitations, with development viewed as
a transformative process which incorporates intergenerational equity (Agyeman and
Evans, 2004) and favouring ecological and social decision making over economic when
threats are suspected but evidence is not available. Sustainability in a rural community
context focuses on living within the limits of ecosystems and, importantly, emphasises
the importance of quality of life.
Sustainability is seen as being affected by and affecting three core spheres –
economic, sociocultural and environmental (Sneddon et al., 2006) – although O’Connor
(2006) extends this notion by including a fourth governance pillar incorporating legal
and political spheres of in?uence. In addition, a technological sphere of in?uence is
interwoven throughout. Interests represented by each pillar are seen both as dependent
on one another and integrated (Norman and MacDonald, 2004; Lowe, 2005; McDonald,
2005; Gibson, 2006; Carter and Pisaniello, 2012). Hence, in the current sustainability
perspective on rural communities principles of sustainability have been incorporated
into rural development policy and the necessary interventions in order to encourage
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sustainable outcomes. Stephens and Laughton (2003) in noting the common objectives
of rural interventions used three sustainability pillars to demonstrate the multiple
objectives required of integrated (whole of) government policy (Table I) and which
captures the many aspects discussed to this point, coming full circle again to the
identi?cation of a new form of countrymindedness dressed in sustainable development
clothing.
Sustainable development in rural communities provides a current backdrop for how
accounting services are expected to be perceived and provided in rural areas. The
paper next turns to a theoretical perspective.
From the description above regarding the effects of federal government policy in
rural areas and the adoption of a sustainability agenda, there is a need to consider
the range of key actors involved in rural policy. At the time of this research, Regional
Development Australia (a federal government agency), local governments as a proxy of
the state government, rural development of?cers (from federal or local government
levels), professional service providers (i.e. accountants), and local residents, were all
key actors. This research focussed on rural development of?cers whose role is
explained in Section 4.
3. Role theory and local delivery of accounting services
A role represents a bundle of characteristics associated with a person’s rights, duties,
expectations, and norms in a particular function (e.g. accountant): the social context
in which the person is located assists in creating expectations regarding behaviours
of people in the roles (Biddle, 1986; Echabe, 2010; Senatra, 1980; Zurcher, 1983).
“Role theory” explores patterns in people’s behaviour (Biddle, 1986). An incumbent of a
role accepts or rejects these rights, duties, expectations, and norms. Rural professionals
Economic Social Environmental
Employment growth
Income/output growth
(wealth creation)
Distributional equity: reduce
regional disparities between
lagging regions and the rest
of the economy
Address market failures to
regional development and
non-market bene?ts
(improve ef?ciency)
Structural adjustment
assistance: facilitate transition
from declining to productive
industries and/or mobility
between regions
Equality of opportunity: access
to services and bene?ts across
regions
Social cohesion: enhance quality
of life and community vitality in
regions
Diversity: maintain cultural and
social diversity
Population decentralisation:
reduce urban congestion
Political/administrative
decentralisation: improve
governance and democratic
structures
Defence: strategic development
Biodiversity: enhance life
support and ecological services
from ecosystems
Quality of life: address pollution
and landscape impacts
(externalities)
Resource stewardship:
ecologically sustainable use of
renewable and non-renewable
resources (sustainability)
Structural adjustment
assistance: in the base of
environmental pressures such as
global warming and increasing
salinity
Economic diversi?cation:
improve resilience of regions to
external shocks
Source: Stephens and Laughton (2003, p. 6)
Table I.
Rural interventions –
common sustainability
objectives
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are often required to assume and manage several roles (Felton et al., 2008; Mellow,
2005) and as the majority of professionals are trusted with personal information
(Baldvinsdottir et al., 2011), the dual relationship between con?dante and professional
advisor may in?uence the behaviour associated with their professional role (Farmer
and Kilpatrick, 2009; Mellow, 2005; Werth Jr and Hastings, 2010; Carter et al., 2011).
Tesoriero (2010) identi?es four roles within the broader community development
role: facilitator, educator, representative, and technician. These sub-roles all represent
clusters of activities (see Table II for role clusters performed by community developers)
and will provide a framework to analyse the data collected.
These role clusters can be “mapped” to the spheres of in?uence associated with
working towards sustainability. Schaltegger et al. (2003) identify ?ve spheres of
in?uence. The technological sphere refers to the technical aspects of accounting, and
assisting local residents to engage with technology in the management of their
businesses and personal ?nances or in the management of location organisations. The
technological sphere of in?uence is connected to the community development role
clusters of technician and educator (Table III). Economic refers to accountant
involvement in the local economy and their support of other local businesses. Owing
to the broadness of this sphere of in?uence, all of the community development role
clusters can be seen as related to the economic sphere. Legal is a predominantly
compliance-based notion in which the accountant assists business owners and
individuals in their preparation of various returns or applications and could extend to
in?uencing the creation, retracting or modi?cation of local ordinances. Thus, the legal
sphere is most closely associated with the facilitator and educator community
development roles. Sociocultural is broad and would include all aspects of the
accountant’s business and personal life in their interaction with communities
and residents. Despite the breadth of the sociocultural sphere of in?uence, only
Facilitator Educator Representative Technician
Social animation
Mediation and negotiation
Support
Consciousness raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge
and experience
Data collection and
analysis
Verbal and written
presentations
Management
Financial control
Building consensus
Group facilitation
Utilisation of skills and
resources
Organising
Source: Tesoriero (2010, p. 260)
Table II.
Role clusters in
community
development work
Facilitator Educator Representative Technician
Technological U U
Economic U U U U
Legal U U U
Sociocultural U U
Political U U U U
Table III.
Community development
role clusters and spheres
of in?uence
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facilitators and educators are connected to this sphere. Finally[2], political refers to the
involvement of accountants in local government and the governance of local
organisations both large and small. Like the economic sphere, the political sphere related
to power is pervasive and for this reason is connected to all four of the community
development role clusters.
Professional services can be delivered in a number of ways. For purposes of
exposition it can be assumed that the accountancy practice and the accountant are
coterminous, that is a sole trader with a single partner represents the typical situation.
The accounting practice can be:
(i) located in the rural community and clients can access the practice easily and
regularly speak face to face – often referred to as commercial presence (World
Trade Organization, 2009);
(ii) located in a town, city, or country outside the rural area and face-to-face contact
is not possible with other communications media such as telephone, email, text,
mail, or internet being used; and
(iii) a hybrid situation where the accountant can travel to the client from a place
outside the rural community (e.g. a ?y-in, ?y-out accountant visiting a mining
site), or the client can travel to the accountant who is located outside the rural
community (e.g. for privacy reasons).
In relation to domestic and international trade research shows that method
(i) commercial presence is the dominant mode, with around 56 per cent of all
services delivered in this way (Findlay, 2005). The rationale behind this dominance is
explained by cluster theory (Porter, 1998a) and identi?es the bene?ts from geographic
closeness and face-to-face communication, regarded as the richest communications
medium, as well as the bene?ts from locally generated and applied, or tacit, knowledge
(Ganesan et al., 2005).
Stroper and Venables (2004) suggest the advantages of geographical closeness and
face-to-face contact relative to other methods of communication as being:
(i) higher frequency of transfer of information, rapid feedback, and maximisation
of the use of non-verbal communication;
(ii) building trust in relationships by providing opportunities for the parties
involved to detect falsehoods and misinformation, as well as a demonstration
of commitment; and
(iii) facilitating screening and socialising between parties, particularly useful for
recruitment of staff and clients, for judging and being judged, and for
development of shared norms and values.
This method is clearly favoured as it has face-to-face contact and allows high
frequency of transfer through this method.
Second, in spite of the availability of electronic communication technologies,
Breen and Burgess (2007), in their study of accountants and their use of the web to
communicate with clients, ?nd that accountants are convinced that face-to-face
communication remains the preferred method of interaction between their clients and
themselves.
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Third, face-to-face communication is seen as the most effective method for acquiring
tacit knowledge (Porter, 1998b; Andres, 2002; Sternberg, 2007). Tacit knowledge is
knowledge which is dif?cult to transfer to another person by writing it down or
codifying through symbols such as numbers or images but is seen as the most valuable
and useful type of knowledge and is gained from regular social interaction and the
building of trust (Gertler, 1995; Rosenfeld, 1997; Porter, 1998b; Malmberg and Maskell,
2002; Gertler, 2003; Malmberg and Maskell, 2006; Asheim et al., 2007). It is best
represented by the seminal phrase of Polanyi (1966, p. 4): “we know more than we can
tell”. Part of the dif?culty of establishing and transferring tacit knowledge is the
inadequacy of languages (Gertler, 2003), but there is also a lack of consciousness about
the full extent of personal knowledge (Polanyi, 1966; Nelson and Winter, 1982). The
inability to codify tacit knowledge means it can only be acquired and shared through
experience in a social context with the actors, in this case provider and client, sharing
values, customs, conventions, and language (Gertler, 2003). Tacit knowledge is thus
embedded into local environments (Bathelt and Gluckler, 2003; Bathelt et al., 2004) and
includes casual observations, gossip, regular (organised) and ad hoc meetings, mutual
understandings, and understanding of local customs and expectations. This brings
knowledge to the professional service provider merely by physically “being there”
(Gertler, 1995). Hence, tacit knowledge is referred to colloquially as local buzz
(Bathelt et al., 2004). Method (i) is clearly favoured in terms of gaining access to tacit
knowledge.
These observations support the notion of delivery of accounting services through a
physical presence allowing regular, face-to-face contact. However, little research exists
within rural development literature on the function of the need for accounting services to
be located physically in rural areas rather than acquired remotely. Although rural
development in Australia has been dominated by industry cluster creation and
maintenance (Ffowcs-Williams, 2004; Garrett-Jones, 2004; Roberts and Enright, 2004),
Markusen (2004) considers the targeting of occupations as well as industries as
important for rural development. It is with Markusen’s (2004) argument in mind, that
rural development of?cers were asked howthey perceive the potential contribution from
establishing and maintaining resident accountants in rural communities as explained in
the methods section.
4. Research methods
The paper represents an interpretive qualitative study (Ahrens, 2008; Parker, 2008).
The research design was iterative and ?exible, drawing many elements from grounded
theory such as use of purposive sampling and constant comparative method of data
analysis, and hermeneutic phenomenology as it relied on the lived experience of others
and re?exive methods (Bowen, 2008; Dey, 2004; Fernandez, 2004; Jeon, 2004; Jones and
Noble, 2007).
Semi-structured interviews were the main data collection method. Interview data
were analysed using thematic analysis (Boyatzis, 1998; Braun and Clarke, 2006) in line
with best practice for qualitative data analysis. Triangulation was achieved by using
multiple participants (Modell, 2005; Moran-Ellis et al., 2006).
Participants chosen were rural development of?cers including members of Regional
Development Boards and local governments. The reason they were chosen was that they
are key actors in the decision to build and maintain rural community infrastructure.
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The advantage of interviewing this group is that it is does not have to rely on the
potentially biased views of rural accountants themselves but uses the views of others
who work closely with rural accountants and/or see the results of the work of rural
accountants with their client.
Rural development of?cers were drawn from two types of organisations with
overlapping jurisdictions. The Regional Development Board network is the principal
government mechanism for delivering development funds and activities and is the
result of a cooperative arrangement between the Australian Government and state
governments. The main responsibility of the Boards is the economic development
of their regions including the provision of basic business advice to individuals, training
and education to promote employment, assist communities in infrastructure
development, and lobbying, although the range of activities varies between Boards.
It should be noted that the advice provided to clients is not considered a substitute for
that of an accountant, and all participants stressed that they were not quali?ed
accountants and their advice should not be considered as such. This avoids any
potential con?ict between the roles of rural developer and accountant in this position.
At the time of this research (2008-2009), 13 individual Boards exist in rural
South Australia, the state chosen as the focus of attention for exploring accountancy
practices and accountants in rural communities.
One participant was selected from each of ?ve Regional Development Boards which
had rural jurisdictions. For reasons of con?dentiality the speci?c Boards cannot be
identi?ed. Each participant was selected as they possessed direct experience in
providing advice to local individuals currently or considering operating a business.
These participants are identi?ed using the pseudonyms Developers 1-5.
Two additional participants were sourced from local government in the most remote
areas of South Australia. Local governments play a critical role in economic
development and governance throughout the state. Most local governments have staff
that are responsible for business and/or economic development and, like those
participants from the Regional Development Boards, possessed direct experience of
advising local residents in terms of business and/or had previously conducted their
own business in rural or remote areas. Two participants were sourced from local
government and are referred to by the pseudonyms Developers 6 and 7. The number of
citations for each participant is: D1 ¼ 8, D2 ¼ 9, D3 ¼ 3, D4 ¼ 6, D5 ¼ 4, D6 ¼ 7,
D7 ¼ 7 and re?ect the saturation of ideas embodied in the constant comparative
approach adopted.
Semi-structured interviews were the primary data collection method for securing
depth and detail, vividness and nuance, rich with thematic material (Rubin and Rubin,
2005). The interviews contained main questions that acted as topic guides, but the
participant responses provided opportunities for follow-up questions and probes to
explore their perspectives in greater detail. The use of exact wording was not crucial in
this form of qualitative interviewing and pre-testing could not ensure the right
questions were asked because of the importance of contextual variations based on
remoteness and cultural in?uences (Rubin and Rubin, 2005, p. 156).
Six main questions were asked during the interviews with rural developers,
supplemented by follow-up questions or probes as needed. Questions 1 and 2 focussed
on the perceived importance of having accountants permanently located in their
jurisdictions. Question 3 called for a re?ection on the role of professional accounting
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associations in supporting rural areas. Question 4 was concerned with attracting and
retaining accounting ?rms in their jurisdictions. Questions 5 and 6 considered the
increase or reduction of accounting ?rms in speci?c locations. Question 5 examined
the effect of reductions in, or absence of, accounting ?rms. Question 6 was contingent on
the circumstances and used where no accounting ?rms were currently located in an area
or for part-time of?ces for ?y-in-?y-out accountants. Interviewquestions are as follows:
(1) Why, if at all, are accounting businesses important for the area?
(2) What do accountants add to the area interms of economic and social development?
(3) What role do the professional associations such as the chartered accountants or
CPAs play in attracting and supporting accountants in rural areas.
(4) What programs, if any, does the (organisation name) have to attract new and/or
support existing accounting businesses in the area?
(5) How would (does) the absence of accounting businesses in the region affect
other businesses and economic development?
(6) How might locating (additional) accounting businesses in the area affect the local
economy.
The research designemployed inductive reasoning and was exploratory as the experience
of each rural development of?cer was contextually unique (Morgan and Drury, 2003;
Ahrens, 2008). Stories revealed were interpreted by the researcher, although maintaining
care to preserve the original voice of the participants ( James and Busher, 2006;
Krumer-Nevo, 2009).
5. Findings
The question addressed in this paper addresses whether the presence of accounting
practices in sustainable rural communities is perceived to be important by regional
redevelopment and local government of?cers who have an interest in promoting the
sustainability of rural communities. It asks: “How do regional development of?cers
perceive the potential contribution from establishing and maintaining resident
accountants in rural communities?”
Three broad themes emerged from the analysis of transcripts from the interviews
with rural development of?cers:
.
having resident accountants provides a competitive advantage to the rural
communities through the provision of essential information and advice to
business owners in the region face to face;
.
resident accountants are important contributors to the morale of local residents
through their regular presence and face-to-face availability; and
.
individual accountants make contributions to direct and indirect communities in
both a personal and professional capacity.
Each of these themes will be considered in turn.
5.1 Resident accountants as a competitive rural community advantage
The contribution of accounting ?rms is characterised by rural development of?cers
in rural areas as essential, contributing to the economic vibrancy of businesses
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and regions. Whilst the terminology varied between the participants, a common
message emerged: accounting ?rms are a “must have service” (Developer 1), “critical”
(Developer 7), and “extremely important” (Developer 6), without which business cannot
be successful. This essentialness attributed to accountants and accounting ?rms by
those participants employed by rural development boards means Boards actively
“push” their clients towards accountants (Developers 1, 2, 3, 5, 6, 7).
Accountancy is seen by those interviewed as critical to all stages of a business, from
entry to exit (Developers 6, 7). The general recommendation amongst the participants
is to involve an accountant from “day one” (Developer 1). This is particularly the case
when making the transition from wage-earner to business owner as often happens in
remote communities, where mining companies use independent contractors rather than
employees: “they’re so important for that [transition]” (Developer 1).
A “good” accountant is generally seen as one willing to enter into a long-term
relationship, one in which the strength of the relationship builds to a point where the
accountant understands how business operators work “almost get inside their heads
[and] become an extremely useful tool [. . .] in running the business” (Developer 1). As
rural people are conservative, they will look for an accountant they perceive as
“trustworthy and proven” (Developer 1). Once found, they will “generally stick with
them, it’s not unheard of for businesses to have the same accountant for twenty years”
(Developer 1). This is a key issue for the participants (Developers 3, 5, 6, 7): ?nding an
accountant with whom a comfortable relationship could be formed.
Accountants along with bank managers traditionally held a “god-like status [and]
whatever they said you bow to and said that’s ?ne, yes sir, no sir” (Developer 2).
However, this has changed, and whilst long-term relationships are preferred, the
participants generally felt that accountants should be treated “like any other supplier”
(Developer 2). The key point is to “be able to sit down and feel comfortable relating
with that accountant” (emphasis added) (Developer 2). Hence, trust is a critical issue in
the development of relationships; for business owners this is about entrusting their
“life’s work” (Developer 4, echoed by Developers 3 and 7) in the care of an accountant,
and potentially eliciting a distinct advantage from their involvement. The perception is
that there is a clear competitive advantage to be gained from accounting ?rms having a
commercial presence in rural towns by business owners; this competitive advantage
extends to entire regions.
The absence of local accountants in any region is considered a disadvantage, a
potential disincentive to other businesses looking to expand or start-up. A reduction in
the number of accounting ?rms in an area, whether a down-sizing or closure of existing
?rms, would have a profound effect on local communities, businesses, and any
remaining accounting ?rms. Business owners suddenly bereft of their accountant
would be increasing the stresses associated with compliance activities. Limitations of
business owners were cited by participants as one of the primary reasons why local
accounting ?rms are essential. Increased stress and a lack of professional advice would
see business owners “come unstuck” (Developer 2). For remaining accounting ?rms,
workloads would increase as locals try to access their services, and ultimately
participants expect that in an effort to manage their workloads locals would be
“turned away” (Developer 2). This would leave local business owners with no choice
but to look outside the region to meet their accountancy needs.
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To summarise the main messages emerging from this theme, the rural development
of?cers interviewed, identi?ed several key reasons why resident accountants were
preferred to ?y-in-?y-out providers. Withinthe communitydevelopment role clusters, this
theme identi?es activities associatedwithall four role clusters. Table IVhighlights initalic
the speci?c activities which the rural development of?cers have associated with resident
accountants and the majority of these activities are located under the facilitator role.
5.2 Resident accountants as contributors to the morale of local residents
The consequences of absent or reduced local accounting ?rms for individuals and
business owners can be signi?cant. Consumption of services abroad, which is outside a
community and region, causes “leakage [from the local economy] in terms of dollars
and cents [. . .] in terms of valuable time” (Developer 5). This leakage extends to
the content of the advice provided especially in terms of investment advice (also
Developer 7), where accountants located outside a region are unlikely to have any
knowledge of local investment opportunities.
Two main consequences were identi?ed by the participants: the creation of informal
networks of support and lost government assistance in special circumstances. In the
?rst, there may be an increasing reliance on “normal people” (Developer 4) for business
advice. Such people do not have specialist accounting knowledge but may have
completed a certi?cate level TAFE course or have business experience. This form of
support is particularly important to voluntary organisations where they may offer to
“do the books” (Developers 4 and 6). The extent of this informal system of support is
unknown but its existence is established. The second consequence is that people in
some rural areas go without professional advice often to their detriment. This was
especially evident in relation to government drought assistance packages. More than
one participant highlighted the negative effect on drought assistance applications
resulting from the absence of professional assistance. Preparation of, and application
for, drought assistance includes providing information on the range of assistance
available and ensuring the receipt of supporting documentation by the relevant
government agencies. The absence of such assistance can be signi?cant with a higher
incidence of failed application for those prepared without direct assistance:
A lot of people [. . .] are really needing to rely on their accountants in terms of their advice.
If things aren’t going so well on the farm, [?nding out from the accountant] what welfare
services can be accessed, how can those records be passed onto those services like the
drought taskforce [. . .] and also things like GST (Developer 6).
Facilitator Educator Representative Technician
Social animation
Mediation and
negotiation
Support
Building consensus
Group facilitation
Utilisation of skills and
resources
Organising
Consciousness raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge and
experience
Data collection and
analysis
Verbal and written
presentations
ManagementFinancial
control
Table IV.
Community development
role clusters and resident
accountants: competitive
advantage
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Drought has a pervasive effect on rural communities; it is not restricted to the farms
which are directly affected. Unsuccessful drought assistance applications, for whatever
reason, have a detrimental effect on the entire local economy, as retailers and service
providers in local communities have reduced incomes and people suffer from poor
mental health and start withdrawing from their communities.
There is a general consensus amongst the participants that having accounting ?rms
located within their jurisdictions serves an important morale boosting function. From a
development perspective, having accounting services locally is a “tick the box”
(Developer 1) advantage, providing an incentive for other businesses or prospective
businesses. Developer 2 notes that the withdrawal of any type of service often results
in a “cry of shame and doom” with the community feeling “left behind”. The presence
of accounting ?rms in smaller communities, even where there may only be a part-time
of?ce, represents a “signi?cant boost to morale” (Developer 2), with a feeling of comfort
coming from a strengthening of the local economy.
In summary, the main message emerging from this theme is that resident
accountants by their presence provide increased morale for local residents through their
interaction with business owners and the indirect contribution to the local economy. By
being resident, leakage in the local community, in terms of both time and money, is
limited. However, more importantly, presence, even on a part-time basis, holds a deep
meaning to other residents. Table V highlights in italic the speci?c activities which the
rural development workers have associated with resident accountants with the
majority of these activities located with the representative and facilitator role clusters,
with none of the activities discussed associated with the technician role.
5.3 Social contribution of resident accountants through community involvement
Community involvement by resident accountants and their families is seen universally
by the participants, as a signi?cant contributor to the sustainability of rural
communities. On the one hand, accountants provide their professional skills and
experience to community organisations for governance and ?nancial management. On
the other, there are the purely personal contributions stemming from social activity of
accountants including club memberships and active involvement in leisure activities.
From a professional perspective, the accountants’ contribution of skills and
knowledge to the operation of local community organisations has positive outcomes in
terms of improved management and accountability. The skills brought to a community
by an accountant are seen as highly specialised; in the absence of local accountants,
services are likely to be forgone depending on the ?nancial status of the group.
Facilitator Educator Representative Technician
Social animation
Mediation and negotiation
Support
Building consensus
Group facilitation
Utilisation of skills and
resources
Organising
Consciousness
raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge and
experience
Data collection and
analysis
Verbal and written
presentations
Management
Financial control
Table V.
Community development
role clusters and resident
accountants: morale
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The connection of communities to the “accounting world” (Developer 4) is seen as part
of the overall value of a resident accountant and ?rm. Fly-in-?y-out providers are not
seen as having a “connection” (Developer 4) to the community which brings the same
value. Accountants become involved in local sporting and recreational associations,
imparting their knowledge on both a formal and informal level (Developers 5-7). This is
“incredibly valuable to the community” (Developer 4): they volunteer their time as
members and as accountants. It could be something as simple as helping such
organisations with their accounts at no or low cost. When an accountant resides in
town “they’re part of the community” (Developer 2): they provide their services to local
residents and business owners, their children attend the local schools and sports, and
their spouses may be a part of a community group and/or employed locally. Other local
residents “like to see community involvement” (Developer 2). The anonymity provided
by major cities does not exist for smaller towns and credibility is not afforded merely
by their status as a professional. However, “there is a reasonable amount of credibility
attached to someone participating in a community environment” (Developer 2). There
is also an element of reciprocity involved in being a business owner in rural or remote
town:
If you’ve got a business in a rural centre and you’re also seen to be supporting the community
through [. . .] [all] sorts of activities, they love it, and to the point where they’ll actually deal
with you on a commercial basis more than someone who doesn’t get involved, doesn’t
participate. [. . .] Businesses have disappeared because of a lack of community involvement
(Developer 2).
From a personal perspective, accountants and their families increase the social capital
of communities by their involvement in local sporting clubs, social clubs and
emergency services organisations as active members. If an accountant and their family
leaves, all local community organisations lose members, as do the local school and
hospitals. For smaller communities, the loss of even a few people can have signi?cant
impact on the retention of services. However, this of all the contributions identi?ed by
the participants is the one which can be provided by any other person living in the
communities.
The main messages emerging from this theme, shows the social contributions of
resident accountants, especially when compared to ?y-in-?y-out service providers, are
considered especially important. The contribution may be quite small – such as
providing suf?cient numbers to maintain services – or extensive. Within the
community development role clusters this theme identi?es activities associated with
all four role clusters. Table VI highlights in italic the speci?c activities which the rural
Facilitator Educator Representative Technician
Social animation
Mediation and negotiation
Support
Building consensus
Group facilitation
Utilisation of skills and resources
Organising
Consciousness
raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge
and experience
Data collection and analysis
Verbal and written
presentations
Management
Financial control
Table VI.
Community development
role clusters and resident
accountants: social
contribution
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development workers have associated with resident accountants with the social
contributions extending across all four role clusters.
6. Discussion and implications of ?ndings
The research shows the high importance attributed by the seven regional development
of?cers interviewed in South Australia to the role of the physical presence of
accountancy practices and accountants in rural locations for reasons of competition,
morale and direct and indirect engagement with community members. The
identi?ed importance is linked to the various aspects of the notion of sustainable
rural communities, economic, social and environmental. The key is to link the
research results back to the main problem of rural community developers maintaining
and developing, or sustaining, rural communities in the face of urban attraction.
Accountants and their accountancy practices form a part of the holistic rural
communities in which they are located. Hence if they reduce their presence or assume
out of area arms-length provision of services the social importance of their presence is
lost and rural communities become the poorer as a result.
In the context of modern accountancy practices and accountants whose professional
services have a growing focus on metropolitan location and out of area provision of
professional services, the dif?culty for regional development of?cers is in ensuring
establishment and continuation of physical practices with the accountant being
present for regular, urgent as needed discussions. Rural policy makers face this
challenge of combining with policy makers, professional accountancy bodies and
accountants to ensure the presence of accounting ?rms in the future. With an aging
workforce and declining rural populations, succession within existing ?rms, especially
small, one or two person operations, is anything but assured. The sustainability of
rural communities requires, amongst other things, the strengthening of local
economies, and the presence of local accounting ?rms, rather than visitors from major
cities. The evidence presented here suggests that accounting ?rms, by their mere
presence in rural communities, has an impact on the morale of local residents and
business owners, as a demonstration of the strength of their communities and regions.
Accounting ?rms with a local commercial presence may provide a competitive
advantage between regions in effort to attract new residents. The integrated nature of
contributions of accountants and their practices to communities and their
sustainability merits further examination.
The role of accounting ?rms in providing business support is not novel; many
previous studies have considered the role of service providers in small business.
However, although previous studies have revealed that distance in?uences access to
professional services, other issues such as a lack of understanding of the range of
assistance available and the structure of the profession have not been raised. This poor
understanding of the ways in which accountants can assist business owners and how
they might be in the best position to assist is concerning from a rural development
perspective as local economies struggle to survive.
Beyond this role however the rural development of?cers who participated in this
study have highlighted the importance not only of the services provided but the
contributions made by individual accountants as members of communities. In a
professional and private capacity they contribute to the morale of rural residents,
community social capital, improvements in the management of community groups and
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their endeavours, and facilitate access to government welfare programs and special
assistance packages such as drought relief.
Implications for the accounting profession and the individuals who practice and
live in rural communities are complex. Understanding the importance of
accounting services and practitioners to rural development raises the question of the
level of support provided to its rural members by the professional accountancy
associations.
First, the results reported here call into question the content of accounting education
programs either at undergraduate level or in professional quali?cations, and whether
speci?c skills for economically, environmentally and socially sustainable rural and
community development should be a required part of the higher education curriculumas
a rural practice specialisation. The feasibility of a broad change to educational
requirements is questionable. However, an opportunity may exist to develop a
specialisation to support accountancy in rural communities. To underpin such
development an exploration of rural accounting needs to be conducted to discover the
scope and scale of current practice.
Second, there is embedded in the participant responses a call for a business
education campaign regarding the bene?ts of using accountants for more than
transactional functions such as completion of income tax returns. The confusion
amongst business owners identi?ed by rural development of?cers is a barrier to
engaging accountancy for achieving broader business and social outcomes. This
includes the provision of management accounting services such as budgeting or
collection of non-?nancial information and its use in improving operational aspects of
local businesses.
Third, the range of contributions by accountants in rural areas highlighted in
the paper indicates the need for a review by the profession in collaboration with
rural development of?cers of the resources and professional development available
to rural accounting practitioners. That is, the greater understanding of the complex
roles of accountants and the impact of location of physical practices provided
through this research as well as any potential review, would allow professional
associations to better support their rural members. This may include additional
or tailored resources, targeted professional development activities, or
acknowledgement of such activities in meeting continuing professional education
requirements.
7. Conclusion
This research provides a necessary ?rst step towards developing a fuller
understanding of the importance of accountants and accountancy practices to rural
areas. Whilst attributing a dual role to accountants, especially rural development, this
is consistent with the broad neo-liberal approach taken in Australia. This approach,
which emphasises self-reliance and self-help, would capitalise on the existing roles of
accountants as part of the infrastructure of local economies as well as their social roles
as community members. Indeed, accepting the dual role would take advantage of any
synergies that already exist between these roles and use them to improve the
sustainability of rural communities. However, it must be recognised that one of the
main limitations is the lack of generalisability to a broader population or other areas
outside the rural areas examined in South Australia – something to be considered by
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further research. In addition, an expectations gap between the regional and rural
developers and the practitioners may exist.
Recommendations for future research include that suggested above to explore the
scope and scale of current accountancy practice in rural areas to underpin the
educational changes. Additionally, future research could also focus on national
and international approaches which would allow for a greater understanding of
rural differences across national jurisdictions. It would incorporate local governments,
rural development boards, business organisations, academics with concern for rural
development and other professions.
What is highlighted here is a ?rst glimpse of the important and interrelated roles of
accountants and their contributions to rural development and community
sustainability, thus rural developers should consider establishing a means for
ensuring the location of accounting services in rural areas.
Notes
1. Rural development is de?ned in this research as a process relating to the maintenance,
growth or expansion of economic performance, social welfare and healthy ecosystems in a
de?ned geographical area which is located outside of major cities and associated
metropolitan areas (Tesoriero, 2010).
2. The environmental sphere is part of sustainability but is not directly considered in this
research.
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About the authors
Amanda J. Carter is a Research Associate with the Centre for Accounting, Governance and
Sustainability at the University of South Australia, Amanda J. Carter is the corresponding author
and can be contacted at: [email protected]
Roger L. Burritt is Professor of Accounting in the School of Commerce and
Director of the Centre for Accounting, Governance and Sustainability at the University of
South Australia.
John D. Pisaniello is a Senior Research Fellow in the Centre for Accounting, Governance and
Sustainability at the University of South Australia.
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doc_537210385.pdf
This paper explores the role of accountants as part of the necessary infrastructure in rural
community development providing specialised knowledge and skills to business owners who may
lack the expertise required to ensure successful business operations.
Accounting Research Journal
The dual roles for accountants in sustaining rural communities
Amanda J . Carter Roger L. Burritt J ohn D. Pisaniello
Article information:
To cite this document:
Amanda J . Carter Roger L. Burritt J ohn D. Pisaniello , (2013),"The dual roles for accountants in sustaining
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The dual roles for accountants
in sustaining rural communities
Amanda J. Carter, Roger L. Burritt and John D. Pisaniello
Centre for Accounting, Governance and Sustainability,
University of South Australia, Adelaide, Australia
Abstract
Purpose – This paper explores the role of accountants as part of the necessary infrastructure in rural
community development providing specialised knowledge and skills to business owners who may
lack the expertise required to ensure successful business operations.
Design/methodology/approach – Perceptions of seven rural development of?cers from separate
Rural Development Boards and two local governments in South Australia are canvassed through a set
of interviews.
Findings – Findings challenge the notion that use of modern communication technology, which
allows for accountants and their accountancy practices to be located anywhere in the world, is
suf?cient to ful?l their role in rural communities. Instead, a critical dual role for accountants is
identi?ed which includes a community development function.
Research limitations/implications – The research is limited by the geographic area from which
the participants were selected. While this controlled for any possible jurisdictional differences between
states in Australia, the participants targeted comprise only a relatively small group.
Originality/value – The paper identi?es an important role for accountants in rural communities
hitherto unidenti?ed. Accountant contributions to rural development and the sustainability of rural
communities is highlighted.
Keywords Sustainable rural communities, Accountants, Accountancy practice, Regional development,
Professional services, Accountancy
Paper type Research paper
1. Introduction
Previous research reveals that throughout the world rural areas struggle to remain
economically and socially sustainable for a number of reasons including a lack of
employment, isolation, shortage of leisure opportunities, poor transport, and a
romanticised cultural construction of the rural ideal which masks actual conditions
(Cloke et al., 1997; Little, 1999; Baines, 2012). Maintenance and development of rural
communities[1] seems a hard task in the face of the constant drift of people to
metropolitan areas in search of work and a higher standard of living (Doherty, 1941;
Knapp and Schmitt, 2008). However, maintaining rural communities and associated
services including those provided by accountants, is of strategic importance to regional
development because of, for example, small population numbers, large geographic space
and the resulting low population density, which makes pro?table economic activity
dif?cult (Gray and Lawrence, 2001; Tonts and Haslam-McKenzie, 2005). While rural
communities are in general based on an agrarian or mining economy, they also struggle
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1030-9616.htm
The authors would like to thank the Desert Knowledge Cooperative Research Centre (Ninti One)
for their support. The authors also thank the participants from the Rural Development Boards
and local governments.
Accounting Research Journal
Vol. 26 No. 2, 2013
pp. 130-153
qEmerald Group Publishing Limited
1030-9616
DOI 10.1108/ARJ-12-2012-0093
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fromclimatic extremes of aridity or cold (Cocklin and Dibden, 2005). Rural communities
have a history of being subsidised by government to encourage their continued
existence (Bennett et al., 2004), in Australia through Regional Development Australia, a
federal government agency. In this context sustainability of rural communities depends
on the:
[. . .] need to ensure a better quality of life for all, now and into the future, in a just and
equitable manner, whilst living within the limits of the supporting ecosystems (Agyeman and
Evans, 2004, p. 157).
As rural development of?cers are the gatekeepers of successful rural communities this
paper asks the research question:
RQ1. How do rural development of?cers perceive the potential contribution from
establishing and maintaining resident accountants in rural communities?
There are two motivations for this study. The ?rst reason is to explore the perceived
need for professional services to be located in rural communities for them to remain
vibrant and sustainable; hence, the interest in gaining the perceptions of rural
development of?cers on this issue. Second, with accountants having advanced
communication technologies available this means they do not need to be located in rural
areas to deliver their services. Again, the views of rural development of?cers will help
our understanding of necessary incentives for locating accountants in rural
communities.
Efforts to develop rural communities economically and socially, the responsibility
of development of?cers in the Regional Development Boards, have traditionally
focussed on the improvement of existing, or attraction of new, industries or businesses
(Stephens and Laughton, 2003; Maude, 2004; Sternberg, 2007). However, with
globalisation and its emphasis on international trade the ability to create resilient and
sustainable communities has also seen growth in calls for development efforts to give
serious consideration to the importance of occupations (Markusen, 2004). This
approach to community development stresses the need for:
.
communities to encompass technical skills and contributions of professional
service providers such as accountancy; and
.
the potential for the broader community to encompass cross fertilisation from
knowledge spillovers (Markusen, 2004).
The development role is still being discussed in mainstream and emerging economies
today (Burns and Baldvinsdottir, 2005; Baba, 2011). In this paper the importance of
accountants is explored in the context of their contribution to the sustainability of rural
communities.
The accountancy profession over a lengthy period has been developed to support
the foundation and maintenance of the operations of accountants (Parker, 1994). In
recent times, the advent of advanced electronic and transport communications has
been associated with growth in the transitory nature of accountants in rural areas, such
as through ?y-in-?y-out or drive-in-drive-out activities associated with mining
communities (Beach et al., 2003; Haslam McKenzie, 2010) and the ef?cient provision of
accountancy transactions services beyond country boundaries. Accountancy services
can be provided at arm’s length and at a distance.
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However, the nature of rural practice amongst professional services providers is
arguably different from that in urban centres with Sharplin (2002) noting that rural
educators often work beyond their areas of expertise and within health sciences and
medicine, a broad skills base is recognised as important (Lannin and Longland, 2003).
The indication is that general practice is more common than specialised practice
amongst rural professional services providers (Hegney et al., 2002a, b) and as a result
rural professionals are often required to manage several roles (Mellow, 2005).
These broad skills bases and the expanded professional roles are explored by
Wagner (1993) in her article on legal practice in small town USA. She notes that in
small towns lawyers are often sought as guidance counsellors and that the issues
brought by clients may not have legal solutions at all, rather clients seek a person in
whom to con?de their troubles, or seek companionship (Landon, 1992; Wagner, 1993).
With accessibility a hallmark of small town legal practice in the USA, a high level of
education can result in the lawyer becoming a fountain of wisdom as people seek
reassurance on a range of personal non-legal issues (Landon, 1992, p. 86). The majority
of professionals are trusted with personal information and can assume dual roles as
con?dant and professional advisor (Felton et al., 2008; Farmer and Kilpatrick, 2009;
Werth Jr and Hastings, 2010). Hence, given the fractionation of accounting services
across the globe, people responsible for regional development, professional
accountancy bodies and government policy makers need to be mindful of the
potential con?ict between removal of accounting services from rural communities
because of market ef?ciencies or natural attrition and the potential advantages of
having accountants resident in communities to ful?l dual roles.
The paper proceeds as follows: ?rst, Section 2 outlines the institutional setting
including the rural context, the importance of agrarian values and government
approaches to rural development. In Section 3 role theory and the arguments for
delivery of professional accounting services locally are examined based on evidence
from previous research. Section 4 provides details about the research design. Section 5
outlines the ?ndings of this research and is organised around three main themes:
competitive advantage, morale of rural residents, and the social contribution of
accountants. Section 6 discusses these ?ndings in relation to the literature on
rural-based professions and sustainable rural communities, draws conclusions and
considers future research opportunities in relation to the importance of having
professional accountants in residence.
2. Rural communities and their sustainability: the institutional setting
To consider the roles of accountants in rural communities and economies, the
institutional setting needs to be understood. Australia is a developed country which
has a heavily urbanised population concentrated along the coast. This means that rural
areas are sparsely populated by comparison to urban centres but remain a vital
component of the Australian national economy. The Department of Foreign Affairs
and Trade (2009) notes that 67 per cent of Australian export revenue is sourced from
rural areas – equating to AU$65 billion per annum. Rural areas are sites for major
sectors of the Australian economy including mining resources, energy production, and
various primary industries including forestry and agriculture. In 2005-2006
agricultural production was worth AU$67.5 billion, forestry AU$18 billion to the
national economy and mining accounted for 37 per cent of all exports (Department of
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Foreign Affairs and Trade, 2009). With such multi-functionality of rural areas, the need
for suf?cient permanent and seasonal labour, maintenance of service centres for local
and transient residents and sustainable rural communities, assumes increasing
importance.
Rural communities provide a focal point for the provision of goods and services to
residents via hubs of commercial activities including professional services such as
legal, banking, health, accounting, trades, entertainment, education and general
provisions. Whilst many services support agricultural enterprises a number also
support mining communities (Freestone et al., 2003). Service towns re?ect government
efforts to ensure people have access to basic services (Gray and Lawrence, 2001;
Collitts, 2004; Tonts and Haslam-McKenzie, 2005). Despite the importance of
maintaining rural communities as service hubs, many are in decline as people drift to
urban areas or are encouraged into urban clusters to help government reduce costs and
gain from economies of scale in delivery of social and other services. In South Australia
for example, the rural cities of Mount Gambier, Port Augusta, Whyalla, and
Port Lincoln, have now become such urban clusters and serve residents in the cities
themselves, the immediate surrounding areas and the extended rural communities
(Beer et al., 1994; Beer, 1999; Beer and Clower, 2009). As a consequence, the smaller
rural communities lose their services, necessitating local residents to travel. The loss of
such services can result in permanent loss of population.
Government policy in Australia has a major in?uence on rural development. Rural
policies are based on a strong historical framework. Federal and state governments
made efforts to compensate rural residents under an informal arrangement termed
state paternalism (Tonts and Jones, 1997). Policy addressing differences between city
and country reached an:
[. . .] understanding of their distinctive contributions to the nation and the terms of their
interdependence, and in particular an agreement that country people should be compensated
for the costs of living outside the metropolitan centres (Brett, 2007, p. 3).
The combination of manufacturing efforts in cities and the agricultural activity in the
country combined to create a sense of synergistic nation-building. Brett (2007) points
out that the notion of being Australian incorporated the idea that all people were
entitled to certain social entitlements, access to basic services, and minimum standards
of living, which were universal. Looking after services for rural areas was essentially
Australian. In terms of population, in the nineteenth century Australia was more
urbanised than much of the world (Davison, 2008). It was established quickly in
government policy that people in cities would support those in the country by
subsidising heavily the costs of services (Brett, 2007). Country claims for “special
treatment were supported by powerful economic, strategic and cultural arguments”
(Brett, 2007). In Australia, these claims manifested themselves in countrymindedness
(Aitkin, 1988; Botterill, 2006), a form of political agrarianism with three central beliefs:
(1) rural life has a natural virtue not shared by city life;
(2) everyone relied on farming for their food; and
(3) farmers were independent and hard working.
This countrymindedness in Australia resulted from the centrality of agriculture to
Australia’s economy (Aitkin, 1988).
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A major change in the political mindset took place during the 1980s when neoliberal
reforms restricted both subsidisation of service provision to rural areas and public
support for rural communities (Gray and Lawrence, 2001; Pritchard, 2005). Occupations
declined and a policy of reliance on self-help came to dominate. Deregulation involving,
amongst other things, the abolition of subsidies to rural areas, as well as a restructuring
of the agricultural industry, resulted in consolidation of farming properties, a reduction
in the agricultural workforce and, inevitably, a decline in rural populations (Alston,
2002), as well as increasing social and economic hardship for those remaining in the rural
areas (Lloyd et al., 2001; Postlethwaite and Silverman, 2005).
Major demographic and social change in rural areas includes the out-migration of
youth (16-24 years). The initial movement has been from small towns to larger regional
centres. Known as the sponge cities effect (Salt, 2003), these larger centres soak-up the
surrounding populations with improved employment and educational opportunities
(Garnaut et al., 2001). The effect is skewed towards younger women, hence remaining
populations are older and gender imbalanced, and communities experience decreased
services (such as education and health) and reductions in social capital as families leave
(Alston, 2002; Gabriel, 2002; Vanclay, 2003; Alston, 2004; Brett, 2007). At the same time,
there has been a reversal particularly in coastal areas through movement out of the
major cities as a seachange for people distraught with city life (O’Connor, 2001; Murphy,
2002, 2006). Hence, seachange is a countervailing force, part of counter-urbanisation as
people, especially retirees and the relatively wealthy, move away fromthe congestion of
large urban centres (Maude, 2004; Mitchell, 2004). Seachange is one form of movement
towards people striving towards sustainability in communities. Rural policy literature
has of late turned its attention towards incorporating principles of sustainability with
the view of moving away from traditional economically-focussed policy to the building
of resilient regions and sustainable communities (Bristow, 2010).
Sustainable development has gained momentum as a concept since the late 1980s.
The most common de?nition of sustainable development is provided by the
World Commission on Environment and Development, more commonly known as the
Brundtland Report (UNWCED, 1987). UNWCED (1987, p. 43) de?nes sustainable
development as “development that meets the needs of the present without compromising
the ability of future generations to meet their own needs”. Sustainability conceptualises
development around the concepts of needs and limitations, with development viewed as
a transformative process which incorporates intergenerational equity (Agyeman and
Evans, 2004) and favouring ecological and social decision making over economic when
threats are suspected but evidence is not available. Sustainability in a rural community
context focuses on living within the limits of ecosystems and, importantly, emphasises
the importance of quality of life.
Sustainability is seen as being affected by and affecting three core spheres –
economic, sociocultural and environmental (Sneddon et al., 2006) – although O’Connor
(2006) extends this notion by including a fourth governance pillar incorporating legal
and political spheres of in?uence. In addition, a technological sphere of in?uence is
interwoven throughout. Interests represented by each pillar are seen both as dependent
on one another and integrated (Norman and MacDonald, 2004; Lowe, 2005; McDonald,
2005; Gibson, 2006; Carter and Pisaniello, 2012). Hence, in the current sustainability
perspective on rural communities principles of sustainability have been incorporated
into rural development policy and the necessary interventions in order to encourage
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sustainable outcomes. Stephens and Laughton (2003) in noting the common objectives
of rural interventions used three sustainability pillars to demonstrate the multiple
objectives required of integrated (whole of) government policy (Table I) and which
captures the many aspects discussed to this point, coming full circle again to the
identi?cation of a new form of countrymindedness dressed in sustainable development
clothing.
Sustainable development in rural communities provides a current backdrop for how
accounting services are expected to be perceived and provided in rural areas. The
paper next turns to a theoretical perspective.
From the description above regarding the effects of federal government policy in
rural areas and the adoption of a sustainability agenda, there is a need to consider
the range of key actors involved in rural policy. At the time of this research, Regional
Development Australia (a federal government agency), local governments as a proxy of
the state government, rural development of?cers (from federal or local government
levels), professional service providers (i.e. accountants), and local residents, were all
key actors. This research focussed on rural development of?cers whose role is
explained in Section 4.
3. Role theory and local delivery of accounting services
A role represents a bundle of characteristics associated with a person’s rights, duties,
expectations, and norms in a particular function (e.g. accountant): the social context
in which the person is located assists in creating expectations regarding behaviours
of people in the roles (Biddle, 1986; Echabe, 2010; Senatra, 1980; Zurcher, 1983).
“Role theory” explores patterns in people’s behaviour (Biddle, 1986). An incumbent of a
role accepts or rejects these rights, duties, expectations, and norms. Rural professionals
Economic Social Environmental
Employment growth
Income/output growth
(wealth creation)
Distributional equity: reduce
regional disparities between
lagging regions and the rest
of the economy
Address market failures to
regional development and
non-market bene?ts
(improve ef?ciency)
Structural adjustment
assistance: facilitate transition
from declining to productive
industries and/or mobility
between regions
Equality of opportunity: access
to services and bene?ts across
regions
Social cohesion: enhance quality
of life and community vitality in
regions
Diversity: maintain cultural and
social diversity
Population decentralisation:
reduce urban congestion
Political/administrative
decentralisation: improve
governance and democratic
structures
Defence: strategic development
Biodiversity: enhance life
support and ecological services
from ecosystems
Quality of life: address pollution
and landscape impacts
(externalities)
Resource stewardship:
ecologically sustainable use of
renewable and non-renewable
resources (sustainability)
Structural adjustment
assistance: in the base of
environmental pressures such as
global warming and increasing
salinity
Economic diversi?cation:
improve resilience of regions to
external shocks
Source: Stephens and Laughton (2003, p. 6)
Table I.
Rural interventions –
common sustainability
objectives
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are often required to assume and manage several roles (Felton et al., 2008; Mellow,
2005) and as the majority of professionals are trusted with personal information
(Baldvinsdottir et al., 2011), the dual relationship between con?dante and professional
advisor may in?uence the behaviour associated with their professional role (Farmer
and Kilpatrick, 2009; Mellow, 2005; Werth Jr and Hastings, 2010; Carter et al., 2011).
Tesoriero (2010) identi?es four roles within the broader community development
role: facilitator, educator, representative, and technician. These sub-roles all represent
clusters of activities (see Table II for role clusters performed by community developers)
and will provide a framework to analyse the data collected.
These role clusters can be “mapped” to the spheres of in?uence associated with
working towards sustainability. Schaltegger et al. (2003) identify ?ve spheres of
in?uence. The technological sphere refers to the technical aspects of accounting, and
assisting local residents to engage with technology in the management of their
businesses and personal ?nances or in the management of location organisations. The
technological sphere of in?uence is connected to the community development role
clusters of technician and educator (Table III). Economic refers to accountant
involvement in the local economy and their support of other local businesses. Owing
to the broadness of this sphere of in?uence, all of the community development role
clusters can be seen as related to the economic sphere. Legal is a predominantly
compliance-based notion in which the accountant assists business owners and
individuals in their preparation of various returns or applications and could extend to
in?uencing the creation, retracting or modi?cation of local ordinances. Thus, the legal
sphere is most closely associated with the facilitator and educator community
development roles. Sociocultural is broad and would include all aspects of the
accountant’s business and personal life in their interaction with communities
and residents. Despite the breadth of the sociocultural sphere of in?uence, only
Facilitator Educator Representative Technician
Social animation
Mediation and negotiation
Support
Consciousness raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge
and experience
Data collection and
analysis
Verbal and written
presentations
Management
Financial control
Building consensus
Group facilitation
Utilisation of skills and
resources
Organising
Source: Tesoriero (2010, p. 260)
Table II.
Role clusters in
community
development work
Facilitator Educator Representative Technician
Technological U U
Economic U U U U
Legal U U U
Sociocultural U U
Political U U U U
Table III.
Community development
role clusters and spheres
of in?uence
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facilitators and educators are connected to this sphere. Finally[2], political refers to the
involvement of accountants in local government and the governance of local
organisations both large and small. Like the economic sphere, the political sphere related
to power is pervasive and for this reason is connected to all four of the community
development role clusters.
Professional services can be delivered in a number of ways. For purposes of
exposition it can be assumed that the accountancy practice and the accountant are
coterminous, that is a sole trader with a single partner represents the typical situation.
The accounting practice can be:
(i) located in the rural community and clients can access the practice easily and
regularly speak face to face – often referred to as commercial presence (World
Trade Organization, 2009);
(ii) located in a town, city, or country outside the rural area and face-to-face contact
is not possible with other communications media such as telephone, email, text,
mail, or internet being used; and
(iii) a hybrid situation where the accountant can travel to the client from a place
outside the rural community (e.g. a ?y-in, ?y-out accountant visiting a mining
site), or the client can travel to the accountant who is located outside the rural
community (e.g. for privacy reasons).
In relation to domestic and international trade research shows that method
(i) commercial presence is the dominant mode, with around 56 per cent of all
services delivered in this way (Findlay, 2005). The rationale behind this dominance is
explained by cluster theory (Porter, 1998a) and identi?es the bene?ts from geographic
closeness and face-to-face communication, regarded as the richest communications
medium, as well as the bene?ts from locally generated and applied, or tacit, knowledge
(Ganesan et al., 2005).
Stroper and Venables (2004) suggest the advantages of geographical closeness and
face-to-face contact relative to other methods of communication as being:
(i) higher frequency of transfer of information, rapid feedback, and maximisation
of the use of non-verbal communication;
(ii) building trust in relationships by providing opportunities for the parties
involved to detect falsehoods and misinformation, as well as a demonstration
of commitment; and
(iii) facilitating screening and socialising between parties, particularly useful for
recruitment of staff and clients, for judging and being judged, and for
development of shared norms and values.
This method is clearly favoured as it has face-to-face contact and allows high
frequency of transfer through this method.
Second, in spite of the availability of electronic communication technologies,
Breen and Burgess (2007), in their study of accountants and their use of the web to
communicate with clients, ?nd that accountants are convinced that face-to-face
communication remains the preferred method of interaction between their clients and
themselves.
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Third, face-to-face communication is seen as the most effective method for acquiring
tacit knowledge (Porter, 1998b; Andres, 2002; Sternberg, 2007). Tacit knowledge is
knowledge which is dif?cult to transfer to another person by writing it down or
codifying through symbols such as numbers or images but is seen as the most valuable
and useful type of knowledge and is gained from regular social interaction and the
building of trust (Gertler, 1995; Rosenfeld, 1997; Porter, 1998b; Malmberg and Maskell,
2002; Gertler, 2003; Malmberg and Maskell, 2006; Asheim et al., 2007). It is best
represented by the seminal phrase of Polanyi (1966, p. 4): “we know more than we can
tell”. Part of the dif?culty of establishing and transferring tacit knowledge is the
inadequacy of languages (Gertler, 2003), but there is also a lack of consciousness about
the full extent of personal knowledge (Polanyi, 1966; Nelson and Winter, 1982). The
inability to codify tacit knowledge means it can only be acquired and shared through
experience in a social context with the actors, in this case provider and client, sharing
values, customs, conventions, and language (Gertler, 2003). Tacit knowledge is thus
embedded into local environments (Bathelt and Gluckler, 2003; Bathelt et al., 2004) and
includes casual observations, gossip, regular (organised) and ad hoc meetings, mutual
understandings, and understanding of local customs and expectations. This brings
knowledge to the professional service provider merely by physically “being there”
(Gertler, 1995). Hence, tacit knowledge is referred to colloquially as local buzz
(Bathelt et al., 2004). Method (i) is clearly favoured in terms of gaining access to tacit
knowledge.
These observations support the notion of delivery of accounting services through a
physical presence allowing regular, face-to-face contact. However, little research exists
within rural development literature on the function of the need for accounting services to
be located physically in rural areas rather than acquired remotely. Although rural
development in Australia has been dominated by industry cluster creation and
maintenance (Ffowcs-Williams, 2004; Garrett-Jones, 2004; Roberts and Enright, 2004),
Markusen (2004) considers the targeting of occupations as well as industries as
important for rural development. It is with Markusen’s (2004) argument in mind, that
rural development of?cers were asked howthey perceive the potential contribution from
establishing and maintaining resident accountants in rural communities as explained in
the methods section.
4. Research methods
The paper represents an interpretive qualitative study (Ahrens, 2008; Parker, 2008).
The research design was iterative and ?exible, drawing many elements from grounded
theory such as use of purposive sampling and constant comparative method of data
analysis, and hermeneutic phenomenology as it relied on the lived experience of others
and re?exive methods (Bowen, 2008; Dey, 2004; Fernandez, 2004; Jeon, 2004; Jones and
Noble, 2007).
Semi-structured interviews were the main data collection method. Interview data
were analysed using thematic analysis (Boyatzis, 1998; Braun and Clarke, 2006) in line
with best practice for qualitative data analysis. Triangulation was achieved by using
multiple participants (Modell, 2005; Moran-Ellis et al., 2006).
Participants chosen were rural development of?cers including members of Regional
Development Boards and local governments. The reason they were chosen was that they
are key actors in the decision to build and maintain rural community infrastructure.
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The advantage of interviewing this group is that it is does not have to rely on the
potentially biased views of rural accountants themselves but uses the views of others
who work closely with rural accountants and/or see the results of the work of rural
accountants with their client.
Rural development of?cers were drawn from two types of organisations with
overlapping jurisdictions. The Regional Development Board network is the principal
government mechanism for delivering development funds and activities and is the
result of a cooperative arrangement between the Australian Government and state
governments. The main responsibility of the Boards is the economic development
of their regions including the provision of basic business advice to individuals, training
and education to promote employment, assist communities in infrastructure
development, and lobbying, although the range of activities varies between Boards.
It should be noted that the advice provided to clients is not considered a substitute for
that of an accountant, and all participants stressed that they were not quali?ed
accountants and their advice should not be considered as such. This avoids any
potential con?ict between the roles of rural developer and accountant in this position.
At the time of this research (2008-2009), 13 individual Boards exist in rural
South Australia, the state chosen as the focus of attention for exploring accountancy
practices and accountants in rural communities.
One participant was selected from each of ?ve Regional Development Boards which
had rural jurisdictions. For reasons of con?dentiality the speci?c Boards cannot be
identi?ed. Each participant was selected as they possessed direct experience in
providing advice to local individuals currently or considering operating a business.
These participants are identi?ed using the pseudonyms Developers 1-5.
Two additional participants were sourced from local government in the most remote
areas of South Australia. Local governments play a critical role in economic
development and governance throughout the state. Most local governments have staff
that are responsible for business and/or economic development and, like those
participants from the Regional Development Boards, possessed direct experience of
advising local residents in terms of business and/or had previously conducted their
own business in rural or remote areas. Two participants were sourced from local
government and are referred to by the pseudonyms Developers 6 and 7. The number of
citations for each participant is: D1 ¼ 8, D2 ¼ 9, D3 ¼ 3, D4 ¼ 6, D5 ¼ 4, D6 ¼ 7,
D7 ¼ 7 and re?ect the saturation of ideas embodied in the constant comparative
approach adopted.
Semi-structured interviews were the primary data collection method for securing
depth and detail, vividness and nuance, rich with thematic material (Rubin and Rubin,
2005). The interviews contained main questions that acted as topic guides, but the
participant responses provided opportunities for follow-up questions and probes to
explore their perspectives in greater detail. The use of exact wording was not crucial in
this form of qualitative interviewing and pre-testing could not ensure the right
questions were asked because of the importance of contextual variations based on
remoteness and cultural in?uences (Rubin and Rubin, 2005, p. 156).
Six main questions were asked during the interviews with rural developers,
supplemented by follow-up questions or probes as needed. Questions 1 and 2 focussed
on the perceived importance of having accountants permanently located in their
jurisdictions. Question 3 called for a re?ection on the role of professional accounting
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associations in supporting rural areas. Question 4 was concerned with attracting and
retaining accounting ?rms in their jurisdictions. Questions 5 and 6 considered the
increase or reduction of accounting ?rms in speci?c locations. Question 5 examined
the effect of reductions in, or absence of, accounting ?rms. Question 6 was contingent on
the circumstances and used where no accounting ?rms were currently located in an area
or for part-time of?ces for ?y-in-?y-out accountants. Interviewquestions are as follows:
(1) Why, if at all, are accounting businesses important for the area?
(2) What do accountants add to the area interms of economic and social development?
(3) What role do the professional associations such as the chartered accountants or
CPAs play in attracting and supporting accountants in rural areas.
(4) What programs, if any, does the (organisation name) have to attract new and/or
support existing accounting businesses in the area?
(5) How would (does) the absence of accounting businesses in the region affect
other businesses and economic development?
(6) How might locating (additional) accounting businesses in the area affect the local
economy.
The research designemployed inductive reasoning and was exploratory as the experience
of each rural development of?cer was contextually unique (Morgan and Drury, 2003;
Ahrens, 2008). Stories revealed were interpreted by the researcher, although maintaining
care to preserve the original voice of the participants ( James and Busher, 2006;
Krumer-Nevo, 2009).
5. Findings
The question addressed in this paper addresses whether the presence of accounting
practices in sustainable rural communities is perceived to be important by regional
redevelopment and local government of?cers who have an interest in promoting the
sustainability of rural communities. It asks: “How do regional development of?cers
perceive the potential contribution from establishing and maintaining resident
accountants in rural communities?”
Three broad themes emerged from the analysis of transcripts from the interviews
with rural development of?cers:
.
having resident accountants provides a competitive advantage to the rural
communities through the provision of essential information and advice to
business owners in the region face to face;
.
resident accountants are important contributors to the morale of local residents
through their regular presence and face-to-face availability; and
.
individual accountants make contributions to direct and indirect communities in
both a personal and professional capacity.
Each of these themes will be considered in turn.
5.1 Resident accountants as a competitive rural community advantage
The contribution of accounting ?rms is characterised by rural development of?cers
in rural areas as essential, contributing to the economic vibrancy of businesses
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and regions. Whilst the terminology varied between the participants, a common
message emerged: accounting ?rms are a “must have service” (Developer 1), “critical”
(Developer 7), and “extremely important” (Developer 6), without which business cannot
be successful. This essentialness attributed to accountants and accounting ?rms by
those participants employed by rural development boards means Boards actively
“push” their clients towards accountants (Developers 1, 2, 3, 5, 6, 7).
Accountancy is seen by those interviewed as critical to all stages of a business, from
entry to exit (Developers 6, 7). The general recommendation amongst the participants
is to involve an accountant from “day one” (Developer 1). This is particularly the case
when making the transition from wage-earner to business owner as often happens in
remote communities, where mining companies use independent contractors rather than
employees: “they’re so important for that [transition]” (Developer 1).
A “good” accountant is generally seen as one willing to enter into a long-term
relationship, one in which the strength of the relationship builds to a point where the
accountant understands how business operators work “almost get inside their heads
[and] become an extremely useful tool [. . .] in running the business” (Developer 1). As
rural people are conservative, they will look for an accountant they perceive as
“trustworthy and proven” (Developer 1). Once found, they will “generally stick with
them, it’s not unheard of for businesses to have the same accountant for twenty years”
(Developer 1). This is a key issue for the participants (Developers 3, 5, 6, 7): ?nding an
accountant with whom a comfortable relationship could be formed.
Accountants along with bank managers traditionally held a “god-like status [and]
whatever they said you bow to and said that’s ?ne, yes sir, no sir” (Developer 2).
However, this has changed, and whilst long-term relationships are preferred, the
participants generally felt that accountants should be treated “like any other supplier”
(Developer 2). The key point is to “be able to sit down and feel comfortable relating
with that accountant” (emphasis added) (Developer 2). Hence, trust is a critical issue in
the development of relationships; for business owners this is about entrusting their
“life’s work” (Developer 4, echoed by Developers 3 and 7) in the care of an accountant,
and potentially eliciting a distinct advantage from their involvement. The perception is
that there is a clear competitive advantage to be gained from accounting ?rms having a
commercial presence in rural towns by business owners; this competitive advantage
extends to entire regions.
The absence of local accountants in any region is considered a disadvantage, a
potential disincentive to other businesses looking to expand or start-up. A reduction in
the number of accounting ?rms in an area, whether a down-sizing or closure of existing
?rms, would have a profound effect on local communities, businesses, and any
remaining accounting ?rms. Business owners suddenly bereft of their accountant
would be increasing the stresses associated with compliance activities. Limitations of
business owners were cited by participants as one of the primary reasons why local
accounting ?rms are essential. Increased stress and a lack of professional advice would
see business owners “come unstuck” (Developer 2). For remaining accounting ?rms,
workloads would increase as locals try to access their services, and ultimately
participants expect that in an effort to manage their workloads locals would be
“turned away” (Developer 2). This would leave local business owners with no choice
but to look outside the region to meet their accountancy needs.
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To summarise the main messages emerging from this theme, the rural development
of?cers interviewed, identi?ed several key reasons why resident accountants were
preferred to ?y-in-?y-out providers. Withinthe communitydevelopment role clusters, this
theme identi?es activities associatedwithall four role clusters. Table IVhighlights initalic
the speci?c activities which the rural development of?cers have associated with resident
accountants and the majority of these activities are located under the facilitator role.
5.2 Resident accountants as contributors to the morale of local residents
The consequences of absent or reduced local accounting ?rms for individuals and
business owners can be signi?cant. Consumption of services abroad, which is outside a
community and region, causes “leakage [from the local economy] in terms of dollars
and cents [. . .] in terms of valuable time” (Developer 5). This leakage extends to
the content of the advice provided especially in terms of investment advice (also
Developer 7), where accountants located outside a region are unlikely to have any
knowledge of local investment opportunities.
Two main consequences were identi?ed by the participants: the creation of informal
networks of support and lost government assistance in special circumstances. In the
?rst, there may be an increasing reliance on “normal people” (Developer 4) for business
advice. Such people do not have specialist accounting knowledge but may have
completed a certi?cate level TAFE course or have business experience. This form of
support is particularly important to voluntary organisations where they may offer to
“do the books” (Developers 4 and 6). The extent of this informal system of support is
unknown but its existence is established. The second consequence is that people in
some rural areas go without professional advice often to their detriment. This was
especially evident in relation to government drought assistance packages. More than
one participant highlighted the negative effect on drought assistance applications
resulting from the absence of professional assistance. Preparation of, and application
for, drought assistance includes providing information on the range of assistance
available and ensuring the receipt of supporting documentation by the relevant
government agencies. The absence of such assistance can be signi?cant with a higher
incidence of failed application for those prepared without direct assistance:
A lot of people [. . .] are really needing to rely on their accountants in terms of their advice.
If things aren’t going so well on the farm, [?nding out from the accountant] what welfare
services can be accessed, how can those records be passed onto those services like the
drought taskforce [. . .] and also things like GST (Developer 6).
Facilitator Educator Representative Technician
Social animation
Mediation and
negotiation
Support
Building consensus
Group facilitation
Utilisation of skills and
resources
Organising
Consciousness raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge and
experience
Data collection and
analysis
Verbal and written
presentations
ManagementFinancial
control
Table IV.
Community development
role clusters and resident
accountants: competitive
advantage
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Drought has a pervasive effect on rural communities; it is not restricted to the farms
which are directly affected. Unsuccessful drought assistance applications, for whatever
reason, have a detrimental effect on the entire local economy, as retailers and service
providers in local communities have reduced incomes and people suffer from poor
mental health and start withdrawing from their communities.
There is a general consensus amongst the participants that having accounting ?rms
located within their jurisdictions serves an important morale boosting function. From a
development perspective, having accounting services locally is a “tick the box”
(Developer 1) advantage, providing an incentive for other businesses or prospective
businesses. Developer 2 notes that the withdrawal of any type of service often results
in a “cry of shame and doom” with the community feeling “left behind”. The presence
of accounting ?rms in smaller communities, even where there may only be a part-time
of?ce, represents a “signi?cant boost to morale” (Developer 2), with a feeling of comfort
coming from a strengthening of the local economy.
In summary, the main message emerging from this theme is that resident
accountants by their presence provide increased morale for local residents through their
interaction with business owners and the indirect contribution to the local economy. By
being resident, leakage in the local community, in terms of both time and money, is
limited. However, more importantly, presence, even on a part-time basis, holds a deep
meaning to other residents. Table V highlights in italic the speci?c activities which the
rural development workers have associated with resident accountants with the
majority of these activities located with the representative and facilitator role clusters,
with none of the activities discussed associated with the technician role.
5.3 Social contribution of resident accountants through community involvement
Community involvement by resident accountants and their families is seen universally
by the participants, as a signi?cant contributor to the sustainability of rural
communities. On the one hand, accountants provide their professional skills and
experience to community organisations for governance and ?nancial management. On
the other, there are the purely personal contributions stemming from social activity of
accountants including club memberships and active involvement in leisure activities.
From a professional perspective, the accountants’ contribution of skills and
knowledge to the operation of local community organisations has positive outcomes in
terms of improved management and accountability. The skills brought to a community
by an accountant are seen as highly specialised; in the absence of local accountants,
services are likely to be forgone depending on the ?nancial status of the group.
Facilitator Educator Representative Technician
Social animation
Mediation and negotiation
Support
Building consensus
Group facilitation
Utilisation of skills and
resources
Organising
Consciousness
raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge and
experience
Data collection and
analysis
Verbal and written
presentations
Management
Financial control
Table V.
Community development
role clusters and resident
accountants: morale
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The connection of communities to the “accounting world” (Developer 4) is seen as part
of the overall value of a resident accountant and ?rm. Fly-in-?y-out providers are not
seen as having a “connection” (Developer 4) to the community which brings the same
value. Accountants become involved in local sporting and recreational associations,
imparting their knowledge on both a formal and informal level (Developers 5-7). This is
“incredibly valuable to the community” (Developer 4): they volunteer their time as
members and as accountants. It could be something as simple as helping such
organisations with their accounts at no or low cost. When an accountant resides in
town “they’re part of the community” (Developer 2): they provide their services to local
residents and business owners, their children attend the local schools and sports, and
their spouses may be a part of a community group and/or employed locally. Other local
residents “like to see community involvement” (Developer 2). The anonymity provided
by major cities does not exist for smaller towns and credibility is not afforded merely
by their status as a professional. However, “there is a reasonable amount of credibility
attached to someone participating in a community environment” (Developer 2). There
is also an element of reciprocity involved in being a business owner in rural or remote
town:
If you’ve got a business in a rural centre and you’re also seen to be supporting the community
through [. . .] [all] sorts of activities, they love it, and to the point where they’ll actually deal
with you on a commercial basis more than someone who doesn’t get involved, doesn’t
participate. [. . .] Businesses have disappeared because of a lack of community involvement
(Developer 2).
From a personal perspective, accountants and their families increase the social capital
of communities by their involvement in local sporting clubs, social clubs and
emergency services organisations as active members. If an accountant and their family
leaves, all local community organisations lose members, as do the local school and
hospitals. For smaller communities, the loss of even a few people can have signi?cant
impact on the retention of services. However, this of all the contributions identi?ed by
the participants is the one which can be provided by any other person living in the
communities.
The main messages emerging from this theme, shows the social contributions of
resident accountants, especially when compared to ?y-in-?y-out service providers, are
considered especially important. The contribution may be quite small – such as
providing suf?cient numbers to maintain services – or extensive. Within the
community development role clusters this theme identi?es activities associated with
all four role clusters. Table VI highlights in italic the speci?c activities which the rural
Facilitator Educator Representative Technician
Social animation
Mediation and negotiation
Support
Building consensus
Group facilitation
Utilisation of skills and resources
Organising
Consciousness
raising
Informing
Confronting
Training
Obtaining resources
Advocacy
Using the media
Networking
Sharing knowledge
and experience
Data collection and analysis
Verbal and written
presentations
Management
Financial control
Table VI.
Community development
role clusters and resident
accountants: social
contribution
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development workers have associated with resident accountants with the social
contributions extending across all four role clusters.
6. Discussion and implications of ?ndings
The research shows the high importance attributed by the seven regional development
of?cers interviewed in South Australia to the role of the physical presence of
accountancy practices and accountants in rural locations for reasons of competition,
morale and direct and indirect engagement with community members. The
identi?ed importance is linked to the various aspects of the notion of sustainable
rural communities, economic, social and environmental. The key is to link the
research results back to the main problem of rural community developers maintaining
and developing, or sustaining, rural communities in the face of urban attraction.
Accountants and their accountancy practices form a part of the holistic rural
communities in which they are located. Hence if they reduce their presence or assume
out of area arms-length provision of services the social importance of their presence is
lost and rural communities become the poorer as a result.
In the context of modern accountancy practices and accountants whose professional
services have a growing focus on metropolitan location and out of area provision of
professional services, the dif?culty for regional development of?cers is in ensuring
establishment and continuation of physical practices with the accountant being
present for regular, urgent as needed discussions. Rural policy makers face this
challenge of combining with policy makers, professional accountancy bodies and
accountants to ensure the presence of accounting ?rms in the future. With an aging
workforce and declining rural populations, succession within existing ?rms, especially
small, one or two person operations, is anything but assured. The sustainability of
rural communities requires, amongst other things, the strengthening of local
economies, and the presence of local accounting ?rms, rather than visitors from major
cities. The evidence presented here suggests that accounting ?rms, by their mere
presence in rural communities, has an impact on the morale of local residents and
business owners, as a demonstration of the strength of their communities and regions.
Accounting ?rms with a local commercial presence may provide a competitive
advantage between regions in effort to attract new residents. The integrated nature of
contributions of accountants and their practices to communities and their
sustainability merits further examination.
The role of accounting ?rms in providing business support is not novel; many
previous studies have considered the role of service providers in small business.
However, although previous studies have revealed that distance in?uences access to
professional services, other issues such as a lack of understanding of the range of
assistance available and the structure of the profession have not been raised. This poor
understanding of the ways in which accountants can assist business owners and how
they might be in the best position to assist is concerning from a rural development
perspective as local economies struggle to survive.
Beyond this role however the rural development of?cers who participated in this
study have highlighted the importance not only of the services provided but the
contributions made by individual accountants as members of communities. In a
professional and private capacity they contribute to the morale of rural residents,
community social capital, improvements in the management of community groups and
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their endeavours, and facilitate access to government welfare programs and special
assistance packages such as drought relief.
Implications for the accounting profession and the individuals who practice and
live in rural communities are complex. Understanding the importance of
accounting services and practitioners to rural development raises the question of the
level of support provided to its rural members by the professional accountancy
associations.
First, the results reported here call into question the content of accounting education
programs either at undergraduate level or in professional quali?cations, and whether
speci?c skills for economically, environmentally and socially sustainable rural and
community development should be a required part of the higher education curriculumas
a rural practice specialisation. The feasibility of a broad change to educational
requirements is questionable. However, an opportunity may exist to develop a
specialisation to support accountancy in rural communities. To underpin such
development an exploration of rural accounting needs to be conducted to discover the
scope and scale of current practice.
Second, there is embedded in the participant responses a call for a business
education campaign regarding the bene?ts of using accountants for more than
transactional functions such as completion of income tax returns. The confusion
amongst business owners identi?ed by rural development of?cers is a barrier to
engaging accountancy for achieving broader business and social outcomes. This
includes the provision of management accounting services such as budgeting or
collection of non-?nancial information and its use in improving operational aspects of
local businesses.
Third, the range of contributions by accountants in rural areas highlighted in
the paper indicates the need for a review by the profession in collaboration with
rural development of?cers of the resources and professional development available
to rural accounting practitioners. That is, the greater understanding of the complex
roles of accountants and the impact of location of physical practices provided
through this research as well as any potential review, would allow professional
associations to better support their rural members. This may include additional
or tailored resources, targeted professional development activities, or
acknowledgement of such activities in meeting continuing professional education
requirements.
7. Conclusion
This research provides a necessary ?rst step towards developing a fuller
understanding of the importance of accountants and accountancy practices to rural
areas. Whilst attributing a dual role to accountants, especially rural development, this
is consistent with the broad neo-liberal approach taken in Australia. This approach,
which emphasises self-reliance and self-help, would capitalise on the existing roles of
accountants as part of the infrastructure of local economies as well as their social roles
as community members. Indeed, accepting the dual role would take advantage of any
synergies that already exist between these roles and use them to improve the
sustainability of rural communities. However, it must be recognised that one of the
main limitations is the lack of generalisability to a broader population or other areas
outside the rural areas examined in South Australia – something to be considered by
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further research. In addition, an expectations gap between the regional and rural
developers and the practitioners may exist.
Recommendations for future research include that suggested above to explore the
scope and scale of current accountancy practice in rural areas to underpin the
educational changes. Additionally, future research could also focus on national
and international approaches which would allow for a greater understanding of
rural differences across national jurisdictions. It would incorporate local governments,
rural development boards, business organisations, academics with concern for rural
development and other professions.
What is highlighted here is a ?rst glimpse of the important and interrelated roles of
accountants and their contributions to rural development and community
sustainability, thus rural developers should consider establishing a means for
ensuring the location of accounting services in rural areas.
Notes
1. Rural development is de?ned in this research as a process relating to the maintenance,
growth or expansion of economic performance, social welfare and healthy ecosystems in a
de?ned geographical area which is located outside of major cities and associated
metropolitan areas (Tesoriero, 2010).
2. The environmental sphere is part of sustainability but is not directly considered in this
research.
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About the authors
Amanda J. Carter is a Research Associate with the Centre for Accounting, Governance and
Sustainability at the University of South Australia, Amanda J. Carter is the corresponding author
and can be contacted at: [email protected]
Roger L. Burritt is Professor of Accounting in the School of Commerce and
Director of the Centre for Accounting, Governance and Sustainability at the University of
South Australia.
John D. Pisaniello is a Senior Research Fellow in the Centre for Accounting, Governance and
Sustainability at the University of South Australia.
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