Vernacular accountings: Bridging the cognitive and the social in the analysis of employee-generated accounting systems Eksa Kilfoyle a , Alan J. Richardson a,⇑ , Laura D. MacDonald b a Odette School of Business, University of Windsor, Windsor, Canada b Laurier School of Business & Economics, Wilfrid Laurier University, Waterloo, Canada abstract We unpack the concept of ‘‘informal accounting systems’’ and bracket ‘‘vernacular accoun- tings’’ based on the modality and source of legitimacy of such systems. Vernacular accoun- tings are accounting and control systems that are self-generated by organizational actors in the context of their work and not officially sanctioned within the organizational hierarchy. We argue that these systems capture actionable knowledge from the epistemic perspective of their users. We identify three ideal types of vernacular accountings: vernacular accoun- tings as an inventory of knowledge that employees construct to meet their task specific information needs; vernacular accountings as a defensive resource constructed and used by employees who resist or do not trust the formally sanctioned systems; and, vernacular accountings as organizational practice that has both pragmatic and epistemic functions and that facilitates distributed cognition. Drawing on an epistemic perspective that spans cognitive and social levels of analysis we develop theoretical propositions on the emer- gence and use of these three types of vernacular accountings. Ó 2013 Elsevier Ltd. All rights reserved. Introduction The accounting literature has long recognized that man- agers operate in a complex ‘‘information mosaic’’ (McKin- non & Bruns, 1992). Managers use the formal accounting and control systems of the organization but, in addition, ‘‘...every manager creates and uses a personal information system, which is supported by direct observation and interpersonal contacts within and outside the company’’ (McKinnon & Bruns, 1992, p. 7). In some cases these per- sonal information systems are represented by inscriptions and integrated into managers’ routine activity (Nanni, Dix- on, & Vollmann, 1992, p. 18). These employee-generated but not formally sanctioned information systems have be- come a target for elimination by enterprise resource plan- ning (ERP) system implementers (Dechow & Mouritsen, 2005) but are also recognized as an enduring and valuable part of managerial functioning (Frow, Marginson, & Ogden, 2010; Hall, 2010). Hopwood (2009) stresses the impor- tance of understanding the organizational information flows that shape managerial activities and advocates a holistic approach to the study of information flows. More specifically, he calls for management accounting research on the ‘‘alternatives to formal information systems [that] are an important part of overall organizational function- ing’’ (Hopwood, 2009, p. 801). Similarly, Hall (2010, p. 302) argues that researchers should study the strengths and weaknesses of accounting information used by manag- ers in relation to the other sources of information given that the formal accounting system is only ‘‘one part of the wider information set that managers use to perform their work.’’ We focus on accounting and information systems that are self-generated by managers and/or employees and not officially sanctioned within the organizational hierar- chy. Following Hopwood (1994), 1 we will refer to these 0361-3682/$ - see front matter Ó 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.aos.2013.08.001 ⇑ Corresponding author. E-mail address: ajr@uwindsor.ca (A.J. Richardson). 1 Hopwood (1994) was not published and has been lost (Hopwood, 2009, personal communication). Accounting, Organizations and Society 38 (2013) 382–396 Contents lists available at ScienceDirect Accounting, Organizations and Society journal homepage: www.elsevier.com/locate/aos