Explores the development of regulations for “Accounting for Research and Development” in four countries: USA, UK, Federal Republic of Germany and Sweden. Seeks to illuminate the processes of accounting regulation in the specific institutional contexts of each advanced capitalist country, with reference to the particular mix of organizing principles of dispersed competition, hierarchical control and spontaneous solidarity.

It is argued that Thomas's paper is deficient in three respects. Firstly, it accepts unquestioningly the myopic view that scientific knowledge is the only valid form of knowledge. Secondly, its demarcation between science and technology is of doubtful validity and usefulness. Thirdly, the “science of accounting” which resulted from its prescriptions can only be trivial by virtue of the very tenets of science which it relies upon.

It may be well argued that in modern industrial society bureaucratic organisations are the predominant means of marshalling society's resources in order to produce desired goods and services. Because bureaucracies influence the creation and distribution of scarce wealth and resources, one must necessarily be interested in the assessment of their organisational utility. The commonly used evaluative concept of effectiveness is complex and requires careful definition. It is often couched in terms of financial measures like profit, profitability, return on investment, but we shall argue that these criteria are insufficient and moreover cannot be applied to all organisations. Clearly financial measures are necessary to a definition of organisational effectiveness but they are not sufficient in themselves. For example, a firm may enjoy a high rate of return on investment because of a monopoly power conferred upon it by society. Some adjustment must, however, be made for that matter in concluding about its effectiveness. Explicit research into the concept began to emerge about 20 years ago but the term remains controversial and still somewhat ill‐defined. As Steers (1977) pointed out, there is no generally recognised theory on the concept, no agreement on its criteria of measurement, determinants and influences.

An account is presented of part of an extensive empirical research project concerned with the role of the internal auditing function within enterprises. The main focus of this paper is upon the propensity for bias in the information flows of the budgetary control process. A model of the “traditional” budget process is modified successively to take account firstly of the presence of information bias and secondly of the function of internal auditing as a process of feedback and “counterbias”. Further discussions of the implications for the role of the internal auditor within this context together with some prognostic conclusions are then presented.