CHAPTER 12

p) LEARNTNG oBJECTIvES
12.1 Gain an insight into particular perspectives that challenge conventional
opinions about the role of accounting within society.

12.2 Have a broad understanding of what 'critical theory' and 'critical analysis'
means.

12.3 Understand the basis of arguments that suggest that financial accounting
and social and environmental accounting tend to support ihe positions of
individuals who hold power, wealth and social status, while undermining the
positions of others.

12.4 Understand thatthe disclosure (or non-disclosure) of information can be

construed to be an important strategy to promote and legitimise particular
social orders, and maintain the power and wealth of certain 'elites'.

12.5 Understand the reasons behind why some researchers embrace a view
that governments frequently act to support powerful stakeholders (such as
shareholders) rather than the interests of less powerful stakeholders (such
as workers).

12.6 Understand arguments that suggest that accounting research will not only
be influenced by current practice and dominant ideologies, but also has the
potential to influence dominant ideologies and practtce.

12.7 Be able to question whether critical accounting researchers are actually

embracing strategies that could realistically encourage social and structural
change, or whether rnany 'critical' researchers are simply partaking in
various intellectual debates with little real attempt to create positive change.
 OPENING ISSUES
-: we saw in Chapter 6, conceptual framework projects promote approaches to frnancial
,:.ounting that are built on qualitative characteristics such as neutrality, objectivity and
':oresentational faithfulness. How do arguments regarding the unequal distribution of power
:,:iween different social groups, as espoused by critical accounting theorists, challenge the
assumptions about the neutrality and ob.lectivity of corporate f inancial reports?

INTRODUCTION

Previrlrs chapters of- this book hnr-c' expkrrecl nunrcrous issues. including hou. accourting ctrn be
in decision making (CJhapters 5 arrd 6), to recluce a,qenc\', contrilctiug anil politicirl costs
,rsecl to:tssist
(ihapter 7). to rnaintain or assist in briuging legitinrirct,to arr organlsrrtion (Chapter 8). iLncl to satisfi-the
illortnation denands of'particulilr stakeholders (Ch.rpter E). \\'e trlso leitrned that rrccountiug procresses
ntight be chosen on thc bi,rsis of a per:ceir-ecl nccessitv to conlbrnr u-ith certrrin institutionalisecl prnctices
Chapterr 8). Hot'the prtrctice of accounting coukl be liocliflecl to take into a.ccorrnt soine social and
ertvilontnentrrl rrspects of an organisatiori.s operations irtrs illsu been erplored (Cliapter 9), rilongu.ith a
consicler:rtion of h<xv accounting clisckrsures nright irnpact the c:rpitrrl rnarket utcl therefore shiLlc pric.es
iChapter 10). The e{T'ects of :rccorrnting clisclosrrrcs on tl're behrrviorrr of inclivicluals u,irs also erplorecl
tCliapter 1l). This chirpter pror-icles an or-en-icu,of an altenrative alcl r.erl clifl-erent perspective
rrborit the role of irccountir)g. This perspective, ri.hicli is ofierr callecl the criticol perspecliLtc. erplicitlv
cortsiders littu'the prtrctite rrf rtcc,rrurting tericls to support particrrlar c.coriomic irncl social stnrctrrres
tu'hich are trpicallr-consiclered bv criticii] theorists as being uuftrir). iincl r:eir{orcc-s urrerpzil clistributiors
of-por,r,er irridu'ealth:rcross societr-. In doing so, this forrn of ilccounting 1s5c111-sl1-11,hich is unclertaken
bv n mirxrritl, rtf accoutrtilg lesearchers-rejects the vicu. th:rt accounting pror-icles iru objecti'ue ancl
unbiasecl rlccour)t of particul:rr trans:rctiols irncl c.r,errts.
The r'ieu, promotccl bv researchers operating fi'on'r a critic'al perspecti\-e is tli:rt accounting, ftrr
from heing a practice that pror-icles n rreutr:rl or unbiilsecl representation of ulderh.ing cconolric fricts,
actuallr. providcs the meirns o1' nraintaining tlie pos.erfirl positions o{'srlrne sectors of tlrc connrmitv
(tlrose currerrttlv in porccr ancl sith uealth') uililc' suppressing the position ancl interests of those u'ithout
rvealth. Tlrese theorists challenge anr.'perspectives that suggest that various rlgftts ancl pri.--ilegcs are
sprearl throughout societ\'1-irlsteiLd thev :rrgue thirt nrist rights, oltporturiitics mrd zissocirrtecl pou-er
resicle in a srnall (but pe'rh:rps ri-ell-rlefinecl) ,qroup (ofterr refcrr-erl to as an 'elite'). Such rc,sealchers seek
to higl.rllght the perccived inequrrlities :uril stnrctural problelis inlrclerit in eristing social sl.sterrs (anrl
hou, acctttrnting acts to srrstain inequitable sr-sterns)-svsten'rs that are tlpicallv taken lbr grirrrtecl 1t1'
other 'non-o'itical' researche.rs. As Broaclbent (2t)02, p. ,134) notes:

1 The assumpton that there is a spread of rights and priviieges across different groups within society is commonly referred to as'p uralism'. We
cons dered the idea of pluralism n Chapter 8.

fut" d
570 FrriAa{*r,ql,qfcnL.rNTit'i* ri{r*ay

The broad role of critical accounting might be seen as one that makes transparent the assumpt o:^s i' ,

taken-for-granted values that lie behind accounting. Integral to this is the idea of social welfare.
Critical theorists erplore horv accounting potentialh, contributes to elements of societl, u4lcl, r..:..
not erluitable for sclme stakeholders, such as eniplol'ees or particular cornmunities, and ideallr. snt
rese:rrchers also ploricle possible solutions to such concerns. This can be contrasted r,i,.ith most accountir r :
researchers u.,ho, u,'hile often testing for particular relationships bchveen choseu irrriirblcs. h'cqrrcrrt'
clo not tluestiori an-v inequities associated with the processes or svstems that they ale investigating. \:
Gaflikin (2010, p. 35) states:
Generally speaking, accountants have avoided meaningful self reflection. By far the majority of accoun: -=
researchers proceed without questioning the very essential features and assumptions of their discipl ne.
For example, in Chapter 10 r'r,e stu<liecl capital m:irkets research and rve learned that riarrr
accounting researchers studiecl the relatior-rship betrveen particular news announcements ald shiri'e
process. Critical theorists r,vould not tend to be interesteil in such obsen,ations. Rather, thel,might 'step
back' and question underlr.ing lnequities inherent in capital rnarkets such consiclerations lvoulcl not
be part of the issues ilcldressecl bv capital markets researchers. Because of the nature of their rese:rlch.
critical accounting researchers place less emphasis on m:rthen'iatical modelling rlnd statistics (u,hich l,
itself ofien attracts criticisms from other accounting researchers lr,ho emplov such n-rethods) and n-role
importance to histolical irccounts of hor,v certain sociill structures, irnd hou. relatecl processes, carne into
place in the lirst instance.
Therefore, this chapter considers r.-arious (critical) ilrguments about the role of the State (governnrent i.
the role of accounting research and the role of accountilg practice in sustaining particular socjal orders
th:it are alre:id1, in place-sctcial orclers that some researchers ulgtre tunctiorr ort the basis of inec*rities.
,0,h".".,irr" ilrlir.ichrals 1u'itli crrpitll. or s'ealth) prosper at the expense of those u.ithout capital ancl
u,here accoulting is there{bre regilrdecl as one of the tools usecl b1, those u.ith (rnore) capital to help
subjugr,Lte (undermine) those without (or u.ith considerably less) capital. It will be seen th:rt researcliers
adopting a critical perspective often clo not provicle direct solutions to particular inequities; rather.
tlie,v seek to highliglit the irretluities that thev perceive exist in societ1,, and the role thrit, thev argue,
accounting plavs in sustaining and legitimising the inequities. Again it is emphasised that becarrse the
theoretical perspectives investigated in this chapter m:rke c:rlls {br changes that rvill have broad in'rpacts
across socieh,, thcv are quite different from the otlier theories adclressed irr this book.

THE CRITICAL PERSPECTIVE DEFINED

Under the heading (or umbreila ) oI criticol accourtting theonl , there are several clifl'erent ,p""ifi" ] I]
perspectives of critical accounting. Therefore, a single critical perspective is not ens1. to define. n ll'l
12'3
broacl terms, 'critic:rl accounting theory' is uqe-d to refe.r to ar, ,ipp.onch to accounting research thnt goes
beyond questioning u,hether particular lnethods of acCountin$ Should be emplo1,ed, and instead fcrcuses
on the role of accounting in sustaining the privilegecl positions of those in control of particular: resources
(capital) r'vhile unclermining or restraining the voice o{'those u,ithout capital. Accorcling to Roslender
(2006, p. 250):
Critical Theory.is intimately wedded to change. More specifically it is concerned with the promotion of a
better society, one in which the prevailing social arrangements serve the interests of the mass of people,
whose 'potentialities' are perceived to be constrained by those arrangements already in place ... Critical
Theory seeks to provide a form of knowledge that is questioning of the prevailing social arrangements, i.e.
an alternative knowledge. More than this, however, the resulting knowledge will serve as an input into a

process of reflection by society's members on the nature of their involvement within the prevailing social
 CHAPTER 12 CRITiCAL PERSPECTIVES OF,ACCOUNTING 571

arrangements and how this might be changed, for their benefit. Critical Theory is not concerned with the
provision of insights for their own sake but for the purpose of informing the transformation of 'what is' into
what those who experience it wish it to be, through a process of interdction and reflection. Or put another
way, Critical Theory aims to promote self-awareness of both 'what is'and 'what might be', and how the
former might be transformed to install the latter.
Roslender (2006, p. 264) furtherstates that from a critical perspective:
Simply interpreting or understanding what we chose to study is not enough. The purpose of the exercise is
to turn this learning to the advantage of society, i.e. the promotion of a better society. The presupposition is
that there are many things about the existing social arrangements that merit changrng. 'Traditional'theory
does not subscribe to this axiom. lt is this quality that distinguishes 'critical' theory from traditional theory.
This is not to imply that all of those scholars who elect to embrace other ways of seeing are committed to
the reproduction of the existing social arrangements, rather that they do not avail themselves of a way of
seeing, Critical Theory, that explicitly links understanding and change to the enactment of the philosophy of
praxis (a philosophy in which 'theory' informs'practice'and vice versa). Viewed in a slightly different way,
Critical Theory makes no pretence of being objective. Those who embrace a Critical Theory perspective do
so because they recognise and value its partiality.
The above perspective of the benefits of 'critical' analysis is also reflected by Gaffikin (2008, p. 151):
Crudelyspeaking, if you do notthinkaboutwhatyou knowand howyou know it, youractions may besimply
reflecting what others want you to do, so you will be reinforcing the dominant and powerful views that exist
in society ...
through self reflection one is freed from past constraints (such as dominant ideology and
traditional disciplinary boundaries) and thus critical theory is emancipatory.
The above quote makes reference to an 'emancipatory' process. The 'emancipatory role' Emancipation
of critical accounting research is something that is often referred to by critical theorists. Relaies to efiorts
aimed at removing
An emancipatory process is a pr:ocess that, somewhat obviously, promotes emancipation. oppression of some
Emancipation relates to efforts aimecl :rt rernoving oppression of sorne groups or procuring groups or procuring

political rights or equality for particular disenfranchised groups. As Roslender (2006, p. 252) political rights or
equality {or partrcular
states: disenfranch ised
A critical social science approach seeks to provide the knowledge required for the democratic groups"

communication and interaction required to promote emancipation and the construction of a new Social praxis
Envisages a broad
set of social arrangements that will serve the interests of the majority of people.
understanding of
Tony Tinker (2005, p. 101), who is one of the founders of the critical accounting movement, boih 'theory'and
'praciice'and is
has also off'ered a useful definition of critical accounting research in which he introduces the
generally unCerstood
idea of social praxis-another term that is tlpically not used by accounting researchers other to refer to the
than critical accounting researchers. He sees critical accounting research as encompassing: assumption that
there is a tyyo-
... all forms of social praxis that are evaluative, and aim to engender progressive change within way (and possibly
the conceptual, institutional, practical, and political territories of accounting. clrcu lar) relationship
between iheories and
A key element of this de{inition is the notion of social praxis, as distinct from the practices, whereby
investigatior-r (for example, in other branches of accounting theory and research) of iheory influences
social (accounting) practice.2 Praxis within critica] accounting research envisages a br:oad social practices while
social practices aiso
understanding of both 'theory' and 'practice' and is generally understood to refer to the
influence theory.
assumption that there is a two-way (and possibly circular) relationship behveen theories and

2 fhe)xfordEnglishDictionary(2ndedton,1989)contansseveraldefintionsofthewordpraxs, ncluding'thepracticeorexerciseofatechnca
sublect or art, as d stinct from the theory of it' and 'habitua act on, accepted practice, custom'. However, as w I become c ear from ihe discuss on
inthenextfewparagraphs,theword'praxs'inmostcritica accountingresearch susedinaveryspecifcmannerwhichaccordswiththefolowng
def nit on from the Oxford Engltsh Dictionar,v: 'a term used . .. to denote the wi led act on by which a theory or phi osophy (espec a ly a Marxist one)
be om.s (o, d aclual l/
" .
 572 f i ti ii i'"i t i e L E {; * * ri i'i T i':'i {;'l i-l ['* ft 'l

(that is, tllc theoretical viervs ant.[ ilssultrptiotrs

practices. *,herelx.tlreon,inf]rrernces suci:rl prnctices
itrfluence' theolr' Tliat
*,e h.r.e rlbout practice actuallr. irnpacts prtictice) u,hile social pr:actices trlso
also existing practitre itililrrlls
is. t6e.n, irifbr,rs (or provicles a founclation lbr) existing practice ancl
is thtrt $'hen stlcial crortclitiorls
theon..r one irnplicatirir of tliis reiatiorship betu,een theon' iud prircticrt:
(a.cl practices) chauge, theories bns"cl ,,n1hese conclitiors neecl also to change
Tliis shou]d ntlt be a
to sr-rit
.e*. co,cept t, rrxr, lnan\.prrrts of this book have cliscussecl accounting theories th:rt e'-olverl
i:rs

(or rr:flect) brtsiness Practices.

and practice erlillochecl
TIre .ther kev implicltior-r o{ the trxr-u.av r:elatiolship betu'eetl theon'
o1 critlc'el
i* tlie terr] alcl possiblr. the nrore irnportarrt irnplicatioll from the pelspectlve
,rrrrl.s,
can bring irbout (rreeclecl
trccounting. is that cl"..e1',rp,rer.t crf clifl'erent lheoretic:rI perspectivc-s
1

of *'etrlth irilcl po$'er). For ertrrnllle'

ch..gc.s i* social practices ancl stnrcturcs (srrch as tlic- clistribrrtion
i{' $,e cler.ekrp tlieories that ciuestion the {,etrlth tlistributiort
irrpacts of uDlegulatc'cl llrirrkets' or'
<ltttctlrnes' :i[cl if our
t*resti.n tle uperrrtions of cirpital rnarl<ets in ternrs ol pror-icliilg susttlinilble
(u'hicli e'ngagerlent \-ith
[.in accepttrrice u,ith varl<tus parties s'ithil societv rec|rires
^rg*ments trre requl:rtecl' OuI. theories $'i11
societr,), t6er-r this,,riglit htrve iurplicrrtiotrs lor htxv suclt rnarkets
q,c'stiort the otljecti'it' tlf
iriprLct ,., prirctice. Sinrilarh, if ri-c lrrr'e *,e.11-c1cr.e1operl theories that
1or the therrtn'. tlrcn ultirl'ratc'1r-
financial trcc.u.ti*q. ard if *.e trre able to gerrerirte sufllcie,t support
irccountitrg is practisecl F'or'
this co,lcl create t6e nec€rssan' iuipctus 1or chiLngers in the u-u' flnancial
tnight :rct to recluce societv's
craniple, perlurps thc conrpelli,,g ,rr,,trre of our ncu'lv tlevelopecl tlic'ories
the
{ircus ou fiur,rlci,,l p"r{b.u,or"" (u,hich critical theorists belic'r"e particularlr'pr.rnotes
",,.1ru.ot" encorirage :1 n(l\\'business
interests of irir,estors irucl senitlr milnagers)r ilrsterarl, otlr ne\\r thetln'lrlight
towards bene{iting a
p6i6s.pl^. in *tich rneilsrlres ol corporate perlirrnancc retlect ellbrts
tnircle
ulti,tatelr' letrc] t. re{brrl'rs
.lir.".r" ,g.,r.,p ol'st:rkelrolclers a.d t]ie er^,iro,,rent; that is, the thcor' co.lcl
notiou of 'social praris', i[ n'hich tlteon'
in h.*.b*siness ancl societv uPerrlte qu,hich again links t<t the
in{bmrs practice, arrcl r'ice vcrsa).
in the terli
\\jltirt is dillerc.rit trbout the relatiorrship ltehr.ee[ theon ancl practice trs errlbodietl
il ts'o-u'al relatitlnship Nlclst of
(trs usecl in criticirl accorrnting reseirrch) is tlie erplicit notiort of
Trrarls
orle-\\rit\-rerlations]rip *'hetrellr'
t6e t;eor.etictrl perspectlr-es strrrliecl eilrlierr in this book terrcl ttl reh.'rln a
either thcon. cleterrtrines practice or pr.ctice cleterutirles theoni
term pi-arls' \\ihile
\\rhirt is also cliff'erert is the focal point o{'changes iri prtrctice inipliecl in tlle
the eraurilecl eilrlierr souglrt to <ier'elop anrl then irriplene[t specific irccotrtitirtg
...ratir-e tSc.ries
(irl sorrte rvar') superior to eristi[g
practices *,hicli particular normrltive. researcherrs arguecl u'ere
'pr,rctices, rtsuirllr' at the broadcr
the lircls ef the charrges in practice elrbocliecl in the terrll 1'.riz-tls are
societr'. \'Iore specificalll,
I lerel of societr-rirther than ,p""ifi" teclinica] trccorrntlng practices ri'itlrin that
a critical accouritinq .nclerstmcli,g a.c1 usc of the te., prz.r..l.s
is .su:rllr' i*fcrrmed br- ii Nlii^ist-inspire'c1
creatir''e activitr'lil changirig
approach,.*,h,se ce,tral concerli iis] to strrclr anclinllueuce the- role ctllrc'e
li{e alolg hurlanistic sociirlist lines' (De Georgc:'
u,,,,1 ,hoplne etliical. social, political, alcl ecoriomic
social prilctices is prtlballlv
fSS;, p. ;lit. aritl this is .r.hr.\\,e rlrgrle tliat the ro]er of theon' in chziriqing
social Practices in altering
nrore i,rportirnt to mrlr\. critical accourrting scliolars than the role of changecl
both'prornises a ricll
theories. Tir-rker (200i. p. l0 l) argucs that this.rpproiich to criticrrl accounting
sclirtli'rrs 's'ho participate ii[
svrithcsis of ,e*, forms of praris' ard requires tliat critical accoulting
rnust clo so {rorn colnnittecl, pi'Lrtisan. p:rssiotinte, ancl solnerti,les rlrilittr[t
critic.l rr.co*nti.q ."a"uralr]
positi<tns'.

efficiertly when left unregulated tnis will

that says that markets operate most
3 For example, if we lle ieve in, and promote, a theory of econom cs
rnay use the research to further support efforts to reduce market regulatlon conversely' if we observe
inf uence market-based pract ces. Regulators
Hence'theorlesrnlghtimpact
marketsandfndthatthosemarketsthatoperateefficientyareunregulated,thiswlllnfluencethetheorleswedevelop
practice, or existing pract ce might lmpact theories'
 ,IT {:HIT;S,f,,1 FEHSPf;CTi\'fig
{:I"IAPT[R *T ACC*UNTiNG 573

INSIGHTS INTO THE PARTISAN NATURE OF ACCOUNTING

It has been argued earlier that all research is likelv to be influenced to some extent by the (possibly
subconscious) biases of the researchers involved. but this explicit promotion of partisan research in
12.3
o
critical accounting studies might upset and u,orry researchers who adopt other approaches.a
Socialism
However, it could be considered sinrply more honest in that it is making erplicit that all
A,ny of varicus
research in social sciences relies on the subjective (and therefore biased) interpretations ofthe econcmic and
researchers involved. Within critical accounting research, these explicit biases usually range political theories
advocating collective
from moderate socialism to more extreme anti-capitalist positions. rvhich could be regarded
or governmental
as threatening by accounting researchers (and students and practitioners) rvho liave prospered ownership ancl
under the capitalist system. This point u,ill be returned to later in the chapter. ad min istration
of the means of
Researchers within the critical accounting area, critical accounting theorlsts, therefore seek produciion and
to highlight, through critical analysis, the key role of accountir-ig in society. The perspective they distribution of
goocls.
provide challenges the r.iew that accounting can be construed as being objective or neutral,
and these researchers often seek to provide evidence to support this view. Accounting is seen Anti-capital ists
Those who wish io
as a means of constructing or legitimising particular social structures. As Hopper et al. (1995, ,completely replace
p. 528) state: rcapitalism with
'another system.
... in communicating reality accountants simultaneously construct it (Hines, 1988) and
accounting is a social practice within political struggles and not merely a market practice guided
by equilibrium in an eff icient market.
This view is supported by Baker and Bettner (1997, p. 305), who state:
Critical researchers have convincingly and repeatedly argued that accounting does not produce an objective
representation of economic'reality', but rather provides a highly contested and partisan representation
of the economic and social world. As such, the underlying substance of accounting cannot be obtained
through an ever more sophisticated elaboration of quantitative methods. Accounting's essence can be best
captured through an understanding of its impacts on individuals, organisations and societies. Hence it is
important for accounting research to adopt a critical perspective.
As noted at the beginning of this section, the term 'critical accounting' is a very broad term that
captures a varieSz of different perspectives about accounting. Hou,ever, what these perspectives have in
common is that they seek to highlight, oppose and change the perceived role of accounting in supporting
the privileged position of some people in soclety. As Hopper et al. (1995, p. 535) state:
Critical theory is an umbrella term for a wide variety of theoretical approaches perhaps more united in what
they oppose than what they agree upon.
Consistent with the above perspective of critical theory Reiter (1995, p. 53) states:
ln the critical world, there is no single established theory or approach, and little consensus on how to
proceed, aside from an absolute horror of modernity and neo-classical economics.

A MARXIST CRITIQUE OF ACCOUNTING

One of the main branches, and probably the founding branch, of critical accounting theory is grounded
(as indicated above in discussing the term 'social pra-xis') in a Marxist-informed critique of capitalism.
Within this Marxist critique, owners of capital are regarded as having (unfairiy) accumulated their
wealth by the historical exploitation'and expropriation (over several centuries) of the value created by
workers (or labour); workers are seen as feeling alienated both from society and from the products they

4 AccordngtotheOxfordEnglishDictionary,apartsanapproach sonetaken'byanadherentorsupporterofaperson,party,orcause'.Therefore,
ifcritcaltheorstshadaparticularview(ortheory)abouthowsocietyshoudfunctiontoachevecertainendsorcauses,ihen, naccordwithapartsan
approach, this w I mpact on the practices they support or oppose.
514 f iit,{iqe iAL,{e **Ui'iT!t'!S TI-iISRY

plorluce. as their lir.es irre largelv controlled bv externill :rncl iriipersonal markets rather th:lr lrr r:
ou,n free choices.;
Cirpitalisrn is also regarclercl as bc'ing firnclariientallr' stnrcturallr'Ilrvecl. To gir.e an erample oi
such structnral flau,, a ker-\'Iarxist trrgur.nent is tliirt rlrie efT'ectir-e \\,a), fbr iriclividual l)usiless..
increrrse prolits (or economic returns to capitai) over a long periocl o{'histon'hils been to incle.Lsr :
lei'el of rnechanis:rtion in a Iircto4'or olIice process, :rnd therebv replace the proclucti\ie capii(it\
sorne u,orkers (lallour)-u,ho have to be paid irricl cilunot l,ork 24 liours il cln1, udth the prochrr'ti
capacitv of :rdditional rnachinen- (capitai-ri4iich ultirriateh' has been pairl frx' br, :rccurrulatir -
tlre r':rluc created bv laborrr and erpropriatecl or,-er the vears br.cirpitrrl). The costs of usage oi tl .
machinen- (such as clepreciation, repairs ancl the opportunitv cost of cirpittrl inr-estecl ln the nachirrer'.
u,ere historicitllv ofterr consiclerablv lou,er than the cost of the liLbour displacecl bv tlie machiner'
ancl the machinerl' coulcl illso bc-- 'u.orkecl' {br long periods rl'ith mininal stoppagc (rest) periorl.
While such nrechilnisation night have beel in the ccolrornic interests of the otr-rers of ore brrsilr's.
\'Iarrists arguecl thiit there ri'irs il fundilmental coltracliction in the drive of all uu,riers o{'aI] busiress..
to inclease the returns to capital through ever greater rnech:rnis:rtion. This {rinclan,ent:rl fl:uv il t1r.
structure o[ tlie crrpittrlist svster-n is thnt, for capital to earn retulls, not onlr. ckr costs need to l]r
nririin'risecl but also revenrles neecl to be nirrirnised. \\'hile the actions olone or tu'o lactorv ou-ners ir
replacing sonre labour u,ith ctrpital rniglit not alTect the marl<ct fbr their goocls, ilncl there{bre maliet
economic sense frrr these busiriess o\\,ners inclir.icluir]1r,, \Iar:rists tristoricallv iirguecl that if all busint s:
o\\'ncrs actecl in this u,av then the total trrnount ptrid to labour or-erai1 u,oulcl decline ancl the totai
buving crrpacitv in the consuner marl<ets over-all u<nlcl also dercline. At soure poiut. tTre rcduction in
resoLrces ar.aililble- to consurners to purcliase the enrl prorhrcts of the prothrction process s,oulcl, it u-iLs
ar:guecl. be greater than thc incrcasc in procluctir.e capncitl'from mechanisation :rld u,orrkl therelirre
leacl to a recluction (or collapsc) in clcrrii,Lricl. rrncl thcrebv threatcn thc or-e-'rall prosperitv of capit:rl.
Nlarrist theorists arguc that as ther capittrlist sr-stc'rn opcratcs in a rlanne-'r tliat alic-'n:rtcs u,orkcrs (trncl
tlie u,orking clirss). :rnd is riclcllecl u.ith inlierent stnrctrrral contradictions (such as the one cliscrrssed), it is
fuuclarrentallr- unstable. This inherent instabilitv u.ill, it is i,u:guecl. rnanif'est itself in difT'erent s]'rnptours
in clillerent er:rs. such as unemplor.l'rent, inllation ancl econornic clepression. \\i'hile :rction rnight be
talren br.gor-enrments irncl businesses to aclclrcss the negtrtir-r'sr-rnptoms (or outcornes) of'the instabilitl
of ctrpit:rlisrn tl.rat rrriiri{'est thcrnsclves irr a particul:rr erir, \{arxists regarcl this as treating a svmptom
(such as policies ilgirinst uneruplor.ment in one era, irnti-inllatitxr policies in another era) rather than
aclclressing the cornmon cause of all tliese srmptoms-the stnrctrrral instabilitr- of the capitalist sl'stcni
itsell. Furtliermore. 'successlirllv' treatirig the currcnt ncgi,Ltive srrrrptorrr of tlre inherent instabilitr- of
cripitalism ri.ill not, it is argrrerl, prevent the inevitabilitv of neu, svrnpton'rs (ri,liose precise nrrture ls
unfbreseen trrid I;rrgelr'unlbreseeable) arising in {uturc periocls. Policies to aclclress tliese svrnptolns irre
tlrerefbre re{arclecl as ilcting at ir relativelr.superficial level ancl, rtither like pharnaceutical proclucts that
treat the srrnptoms ratirer thiin the unclerlving causes of a disease. riill clo little in the long ter-lr to cure
whtrt N{trrxist-. regard zis the deeper malaise of capitalism.
Nlanv of these s1'mptoms. ancVor the social rurrest crusecl br- these sl,rnptorns, irre rcgtrrclccl br.
\Iilrrist scholars ils tlire'trtc-ning to unclennine t'lie porl,er ancl u,eiilth of capital (to rpote \{ax: 'Cl:rpitalism
procluces its oun gravecli{gers' (\Iarr & trngels, 1967, p. 9,1. as citccl iri Tinker, 2005, p. 122)). Therefbre,
tlie privileges. po\ver ancl u,ealth o{r c.rpittil arc rc'garclecl }rv N{arrlsts as being unstable, ancl or,rrrers of
capitirl will takc' irction to de{encl t}ieir prii'i1eges, po\\rer ancl u,ealth.

5 ln thls lvlarxist perspective on workers' feelings of alienat on, 'the market p ace ... purports to be a sphere of ind vidual freedom, but s ln fact
a sphere of co lect ve slavery to inhuman and destructive forces' (Wood, 1995, p. 525).
 CHAPTER 1? [EITICAL FEESFICTIVES SF,&CCfiUI{TiNG 575

Critical accounting theorists (not all of rvhich are ir-ifornred by Marrist philosophies) regarcl
accounting as a powerlul tool in both enhancing tiie power and rvealth of capital and helping to protect
this power and u'ealth from threats arising fr:om the structural instabiriq, of'capitalism. as, fbllorving
Tinkert (2005) argurnents outlined earlier, manlr critlcal accounting researchers tend to be opponents
of many aspects of'the capitalist system and of accounting, they seek to expose the role of accounting in
supporting unequal distributions olpor,ver and u,ealth across societr,'. and sorne seek to subvert this role
ofaccounting. This aim also tends to be shared b1, several ofthe critical accounting researchers who dcr
not adopt a pure Marxist perspective.
As Gral', Ou'en and Adams (1996, p. 63) state, a major concern of the qritical (or'radical'theorists)
is that:
... the very way in which society is ordered, the distribution of wealth, the power of corporations, the
language of economics and business and so on, are so fundamentally flawed that nothing less than radical
structural change has any hope of emancipating human and non-human life. The social, economic and
political systems are seen as being fundamentally inimical.
Given that the practice of accounting is in the hands of reporting entities, such as large corporations,
and accounting regulation is in the hands of government and associated regulatory bodies (rvhlch
are vieu'ed as being linkecl to, or uncler substantial influence {rom, large corporations and therefore
as liaring a vested interest iri rnaintaining the status quo), accounting infor:mation ri4ll, it
* quo
t Status
is argued, never act to do anl,thing but support our current social system, cornplete r,vith
A Latin term
all its perceived probleris and inequities. N{oore (1991) also suggests that the lou, leyel of meaning the existing
consideration or trse of critical accounting theory bv US accounting academics couid be clue to state of affairs.

the universities' reliance on business funding-{irnding that does not tend to support research
trf rr 'r'ril it'al' nature.

CRITICAL ACCOUNTING RESEARCH VERSUS SOCIAL

AND ENVIRONMENTAL ACCOUNTING RESEARCH

One of the ke1' aleas in lvhich our current social sl,stern is perceivecl by large numbers of people (ancl 12.3
not just critic:rl tlieorists) to produce rnany problems and inequities is in the area of the social :rncl 12.4
enr''ironrnental irnpact of business. Nlany of the issues in this area, ancl their relati.nship to accounting
theorv :ind practice, are cliscussed in Chapters E and 9. Here, rve consicler hou, critical accounting
research differs frtlm ancVor complements social and environment:rl accounting research, as it miglit
be
considered thnt both are seeking substantial changes in social practices.
The critical perspective adopted b1' man1, critictil accounting researchers is groundecl in p6litical
Ec<lnom1' Tlieorli u,hicir lr.as trlso consider-ed in Chapter 8. More speci{icall1l critical accounting
research tends to be groundecl in classical Political Econornl' Theo4,. As Chapter 8 inclicates, the
political econonv has been defined bv Grar,, Or.r,en and Aclarns (1gg6, p. 47) as the 'social, political
ancl ecrlnomic irarneu,ork u'ithin u,hich hurnan life takes.piace'. The r-ierv is that societ1., politics ancl
ecouomics are inseparable, and econornic issues cannot meaningllllv be inr.estigated i, the absence of
consicleratioDs about the political, social ancl institutional fran'reu,or* in u,hich economic activitv takes
place. Relating these arguments specilically to accounting, Guthrie and parker (1gg0, p. 166) state:
The poiiticat economy perspective perceives accounting reports as social, political, and economrc
documents. They serve as a tool for constructing, sustaining and legitimising economic and political
arrangements, institutjons and ideological themes which contribute to the organisation's private interests.
As Ch:ipter 8 also indicates, Political Econornl,Theon has been dividecl into tr,vo broad streams that
Cral', Orven atrd Adan'is (1996, p. 47) arid others have classified as'classical'and'bourgeois'political

L-. --
576 rI NA}{CIAI- ACCSUNTINC Ti-i EOEY

economv The bourgeois political economy-perspective does not explore structural inequities, sectional
interests, class struggles and the like.6 It accepts the way society is currently structured as 'a given'.
Nlany critical theorists consider that research tvhich simpli, accepts the existing nature and stmcture of
society without challenge effectively supports that (undesirable) society (Hopper & Porvell, 1985). By
accepting a pluralist conception of society it thereby tends to ignore the struggles and inequities within
society (PuxS.1 1991). Prominent critic:rl researchers such as Tinkeq Purty, Lehman, Hopper and Cooper
have therefore often considered it necessary to challenge the work of researchers whom they regard as
researching within the bourgeois stream o{'political economy, such as Gray, Ou,en, Maunders, Matheu,s
and Parker (these researchers, plus a number of others, have researched numerous issues associated
with corporate sociiil responsibility reporting)-individuals who have for many years been promoting
the need for organisations to be more accountable {br their social and environmental performance
(that is, to provide more jnformation in relation to whether the corporations are meeting communitlz
expectations in relation to their social and environmental performiince). As Gray, Owen and Adams
(1996, p. 63) state, critical theorists believe that:
Because corporate social reporting (CSR) will be controlled by the reporting corporations and a State which
has a vested interest in keeping things more or less as they are, CSR has little radical content. Furthermore,
CSR may do more harm than good because it gives the impression of concern and change but, in fact,
will do no more than allow the system to'capture'the radical elements of, for example, socialism,
environmentalism or feminism and thus emasculate them"
Critical theorists argue that any such emasculation (undermining or rveakening) of these movements,
rvhich seek to protect and advance the interests of groups or entities often regarded as negatively
affected bv capitalism, rvill have the effect of protecting the capitalist systenr {rom 'threats' these
movements pose to the power and r,vealth of capital.T
Thus, r,vhile calls for greater disclosure of social responsibiiity information would seem to be a
move in the right direction, some critical theorists argue that such efforts are wasted unless thev are
accompanied by fundamental changes in how societv ls structured. They rvould argue that the disckrsure
of corporate social responsibility information acts to legitiririse, and not challenge, those providing the
information. Cert:iinly, much evidence was provided in Chapter 8 about how companies use social and
environmental disclosures to legitimise their exlstence particularly around the time of major adverse
social and environmental events. Cooper and Sherer (i984), for erample, argue that attempts to resolve
technical issues (such as how to account for enr,.ironmental externalities) ivithout consideration of
inequities in the existing social and political environment may result in an imperfect and incomplete
resolution, oudng to the acceptance of current institutions and practices-u,hich are seen to be paft of
tlre ploblern itselI
Reflecting on some of the viervs of critical theorists about the deficiencies of sociai and environmental
accounting research, Orven, Gray and Bebbington (1997, p. 181) note:
Early radical critique of the social accounting movement emanated from a socialist, largely Marxist,
perspective. For writers such as Tinker et al. (1991) and Puxty (1986, 1991) society is characterised
by social conflict. In Tinker et al.'s (1991) analysis, the social accounting movement, particularly as
represented in the work of Gray et al. (1988, 1987), fails to examrne the basic contradictions and
antinomies of the social system under investigation and is therefore, at best, irrelevant, and, at Worst,
malign, in implicitly adopting a stance of 'political quietism'that simply benefits the already powerful
(i.e. the capitalist class). Thus, for example, Puxty writing in 1986 suggested the irrelevance of social

6 LegtimacyTheoryandStakehoderTheory,whicharebothexamned nChapter8,aregeneralyembeddedwthinabourgeospoltica economy

perspective.
7 lncluded in lhe )xford English Dictionarl s (2nd edn, 1989) definit on of emasculation s: 'the depriving of force, vigour ... mak ng weak'.
 C!.i.APTFR'i ? CRI?; CAL F gASPECTIVSS S F,&CCOU NTI I.J S 577

accounting, in noting that'more radical critics of capitalist society have been more concerned with the
broader issues of accountancy and accountants within that society than particular (almost parochial) issues
such as social accounting which appears to be ... rearranging the deck chairs on the Titanic' (p. 107).
However, by 1991, Puxty had taken his critique a stage further in arguing that by leaving basic social
structures intact, social accounting can even lead to legitimation'since the powerful can point to their
existence as evidence of their operiness in listening to criticism, it paves the way for... the extension of
power' (p. 37).
As, according to critical theorists, accounting is deemed to sustain particular social structures, the
introduction of neu, forms of accounting (for example, experimental methods relating to accounting
for social costs) will only help sustain tliat social system. Reflecting on the critical theorists' perception
of the ongoing research being undertaken to explore how to account for the social and environmental
implications of business, Gra1, Orven and Adams (1996, p. 63) state that some critical theorists cor-isider
that by undertaking such research:
... one is using the very process (current economics and accounting) that caused the problem (environmental
crisis) to try to solve the problem. This is known as the process of 'juridification' and it is well established
that one is unlikely to solve a problem by applying more of the thing which caused the problem.s
Although the above discussion indicates substantial disagreen'ients (or even antagonisms) from some
critical accounting researchers towar:ds social and enrrironmental accounting research, in recent vears
several social and environmental accounting researchers have made attempts to address the concerns
expressed by these critical accounting researchers.
However, there does not seem to have been much of a recipr-ocal morrement by some critical
accounting researchers tor,vards recognising the potential impact that some social and environmental
accounting research may have had in reducing a varietv of negative social and enr.ironmental externalities
of some businesses. This lack of movement by some critical accounting researchers is implied, for
example, in a statement by Tinker (2005, p. 124, footnote 18) that in selecting areas of accounting
research for one of his critiques based on a Marxist approach to critical accounting 'Environmental
research is another candidate, hor,vever as far as "the canon" is concerned I have llttle to add to the 19g1
critique (Tinker et al., 1991)'.
Therefore, while many critical accounting scholars believe that social and environmental accounting
scholars are wrong to seek to alter existing practices, as this simply perpetuates and perhaps strengthens
the existing inequitable social and political system, rather than seeking to overturn it, many social and
environmental accorrnting scholars who recognise the inequities in the existing system take what they
regard as a more pragmatic approach. They do not think that the demise of the capitalism system is
hkely in the short to medium term. Rather, they recognise that seeking to reform some of the 'lvorst'
inequities in capitalism by engaging with, and winning the support of, key players in the business and
political worlds is more likely to be successful in reducing some of the most damaging outcomes of
business practices in the short and medium term.
Unlike some critical accounting scholars who appear to approach social change in dichotomous
terms-either the existing system has to be overthror.n or else no change is worthwhile-many sociai
and environmental accounting scholars therefore see the possibiliq, for reform in terms of a spectrum
ranging from no reform through to the critical scholars' desire for fundamental change (Unerman &
Bennett, 2004). Although some social and environmental accounting scholars do not appear to call

8 Simi arly, we cou d make reference to em ssion trading schemes (ETSs), such as the European Emiss on Trading Scheme-wh ch is an examp e
of a cap and-trade system. As Deegan (2013) notes, the development of an ETS appears to be a case of us ng the very instrument that created the
problem (the market wh ch encourages production and therefore pol ution as a byprodLCt) to then try to sove the problem (through market traded
po lution rjghts). Deegan (2013) a so h ghlighted the somewhat strange s tuat on assoc ated with having a 'right to pollute' (the em ssion right) being
presented as an intangible asset that appears wrthin a balance sheet.
578 f tliriNC!,lil ACCilUhiTlNC THf SRY

to as manogerioli'
for much, if ary re{brm to the existing role of business (these :rre often referred
accounting practices that will he\:
appro.ches as they simply seek to .l",r"lop social and environmental
many insights provided b)'critic,.r'
,,-rurng"., further the eisting zrims of their businesses), others clrarv on
sorne of the inequitles
,""o.ril,irrg researchers to help develop practices that reduce, as far as possible'
These researchers r'vou1d ar-gue
and dysf,r-ictionaliti.es o{ tl're existing ro"iul, political ancl capital system.
deYelopment of nerv accountiug
that it is better to engage r,vith businesses to seek to improve-through
c:ipitalist s,vstem ['hile
practices-th"i. ,o"i"l and e,'rr.iror.nlental per{brmance than simplV critique the
the svstem' For erample' Bailer'
putting fbnvard few (if any) practical proposals for horv to improve
(2005) Unerman and Bennett (2004) are
uu.t"-"r-rd sugclen (2000), Lehmar.I (1999, 2001), o'D\wer and
h:u'e touched uptrn issrres
just some of'Ihe social and environrnental trccounting research studies that
and in-rplications of cliflerential power behveen organisations arrd
different groups of stakeholders irr
accountabilitv reJ ationshiPs.
At a 4ifferent (and i"., ""pli"it) level, in the intro4uctory chapter: of a book of social *nc1
environmental accounting ,t.rdi"r, airled primarily at :i re:rdership of managers and practitioners'
"or" (2010,
I{opu,oocl, Unerman and.-Fries pp. 17-iE) included the {bllowing argument that is in{brrnecl br
sorne ideas drar.ln from critical accounting perspectives:
financial and wider economic,
... without explicit connection within an organization's reporting between
of these impacts, it is easy for
social and environmental impacts, including an indication of the materiality
Without this explicit connection,
a company to convey a false sense of meaningful action on sustainability.
environmentally immaterial
its sustainability reporting may focus on incremental changes in socially or
genuinely striving to become sustainable and
impacts ... There is a real difference between an organization
reports without much substance
a company merely employing the rhetoric of sustainability in its external
information that would enable it
underlying this rhetoric ... The latter type of company is unlikely to have
be using its external reporting
to meaningfully report on its sustainability in a connected manner and may
as a form of greenwash.
Nluch more clearly cLrawing on core notions underlying critical accounting
theory the prominent and
has in recent vears published
highly respected social and en lronmental accounting scholar Rob Gray
at Ieast in part, from a
pnp"., thal theorise and/or analvse social and environmental r:eporting pr:rctices,
is inappropriate and inaccurate
perspective (Tinker & Gra1,, 2003). For example, he argues that it
".iti""t 'sustainabilitv' or 'sustainable
for business organisations to describe their practices using the terms
and environmentailv
cleveloprnent' as these businesses and theii practices are inherently socially
'sustainability' and'sustainable development'have
unsustainable (Gra1,, 2010). FIe argues that the terms
unsustainable practices appear
been captured ancl used by the pou,erful buslness sector to make their
safe, thereby protecting and enhancing the lvealth of the olvners of these
corporations' Cray (2010, PP'
57-8) states:
then significantly contributing
ln the line-up of potential villains who might be charged with, if not causing,
modernity's greatest
to (un)sustainability, we have already seen modernity and to this we need to add
spawn-capitalism. lnternational financial capitalism has been identified as a
principal component in
(see, for
(particularly) ecological destruction for much of the modern environmental movement's history
critique of capitalism as the
example, Zimmerman, 19g4, p. 153). Kovel (2OO2) offers a more strident
principal source of ecological destruction placing the nature of capitalism as ensuring that
social iustice
are manifest through its
and ecological destruction are inevitable. Capitalism and its destructive tendencies
placed at the heart
greatest creation-the corporation (see, for example, Bakan, 2004). The corporation is
is such that its room
of concern for three broad reasons. First, the nature of the publicly held corporation
financial return at virtually
for discretion is slight compared to the pressures upon it to deliver short-term
a waste generating machine that
any price. Second, the corporation achieves this return through becoming
but increasingly fatuous consumption of wastefulness. Finally, the lobbying
thrives upon the ever expanding
 I

fif"{,*,PTFilX 1I *HiTi[,*t pf ftgrilfTivf$ *F ACC*,iFiT,ft* 579

' I = ': .':"s of the corporation are turned towards civil socrety and the siate to ensure that
' : :: - ': '' n or hold corporations to account is, at best muted (Bakan,2OO4;
Beder, 2006).
: :' 1::: ihe organisation at the heart of our concerns about how sustainability is threateneci,
:'i : - -arifested. As we see above, the increasingly seductive claims of the corporation
''' ' '-::a rability are the natural deployment of simple discourse mechanisms to permrt the
.' ' : . _,s,.le lts psychopathic drives within capitalism.
- r-lt h e'rplored the relationship betu'een critical accounting research ancl sgcial ancl
"' :'tc'otrtlting reseat'ch, we Do\v turn to an er:rmination of tlie irnpact of critical accounting
' ''icounting ancl business practices and on so-called'mainstrearn'accountilg research,
- '' '-'.-
'-jlscrtssion ol sorne possible reasoDs for the marginalisation that many crltic.l accounting
I lr-r e\lerient.e.

POSSIBLE IMPACT OF CRITICAL ACCOUNTING RESEARCH

ON SOCIAL PRACTICE

-{. preriously explained, the critical perspective tends to be grounded in a classical

political ]f.3
Erspectire, and as such erpllcitly considers stmctural conflict, inequi{z and the ""o.ro*, 12.4
,.ol" if th" State ;;:
heart of the analysis.
Br adopting a research (and, arguably, ideological) perspective that is
often grounded in classical
Pohtical Economy Theory critical accounting ."s""r"h"^
highhght particuhrlssues that might not
""n
othen.ise be addressed. According to Cooper and Sherer (1gg4,;.
20g):
Social welfare is likely to be improved if accounting practices
are recognised as being consrstenly partial;
that the strategic outcomes of accounting practices consistenily (if
not invariably) favour specific interests
in society and disadvantage others. Therefore, we are arguing
that there already exists an established, if
implicit, conceptual framework for accounting practice. A political
economy of accounting emphasises
the infrastructure, the fundamental relations between classes in
society. lt recognises the institutional
environment which supports the existing system of corporate
reporting and subjects to critical scrutiny
those issues (such as assumed importance of shareholders
and securities markets) that are frequenily
taken for granted in current accounting research.
while a substantial amount of critical research is informed by the work
of philosophers such
as Karl Man, not all critical accounting research is trased on a
pure Marxist critique of capitalism.
For example, reference is made by owen, Gray and Bebbington (1gg7)
to criticai researchers who
are identified as 'deep ecologists' and'radical feminists'.
The"deep ecologists question the trade-off
between economic performance and ecological damage-they
question the morality of systems that
justify the extinction of species on the basis of associated 'ecoiromic
benefits'. Acco.ding to Gray,
Owen and Adams (1g96, p. 61):
The essence of these views is that the very foundation-even
the existence-of our economic (and social)
system is an anathema. Put at its simplest, our economic system
can, and does, contemplate trade-offs
between, for example, the habitat of threatened species
and economic imperatives. To a deep ecologist it is
inconceivable that a trade-off could have any form of moral
iustification. Such a view therefore challenges
virtually every aspect of taken for granted ways of human
existence, especially in the developed western
nations.
The radical feminists, on the other hand, believe that accounting
maintains and reinforces masculine
traits such as the need for success and competition, and that
accounting acts to reduce the relevance
of issues such as cooperation, respect, compassion, and so forth.
The masculine versus {'eminine
dichotomy was also discussed in Chapter 4 when various societal
values were considered in the context
5BS FINANCi,&L ACCOUNTI$IG THEORY

of international accounting and how a countryrs ranking in terms of 'masculinity' or 'femininity' in furn
influenced the national accounting practices being adopted. According to Hofstede (1984):
Masculinity stands for a preference in society for achievement, heroism, assertiveness, and mate'a
success. lts opposite, Femininity, stands for a preference for relationships, modesty, caring for the wea;
and the quality of life.
Researchers working with the feminist literature argue for the need for accounting to be less
'masculine' and more 'feminine' in orientation. According to Reiter (1995, p. 35):

Feminist theory has many voices, and the considerable volume of feminist criticism published to da::
represents many different viewpoints. ln the late 1980s, accounting scholars began exploring the idea tha:
feminist theory could be used to critique accounting.
In relation to economic theory on which much accounting theory is developed, Reiter (p. 40) states:
Economic theories tend to value the characteristics associated with masculine stereotypes such as
abstraction, mind, efficiency, equilibrium, rationality, pursuit of self-interest, and autonomy. The opposite
characteristics of concretism, body, randomness, humanity, mutuality and connectedness, which are
associated with feminine stereotypes, are missing from economic theory,
In explaining how the incorporation of feminist values in economic theory could potentially lead to
a more promising theory Reiter (p. 47) states:
Folbre and Hartmann (1988) explain that'a growing body of interdisciplinary feminist research
complements the efforts many economists are making to develop a more complete theory of economic
interests, one that can encompass concepts like cooperation, loyalty and reciprocity'(p. 197). Nelson
(1992) suggests that incorporation of positive feminine qualities such as flexibility, intuition, humanism
and connectedness of individuals and the concept that individual choice is influenced by societal and
cultural factors would lead to increased richness and applicability of economic theory. She also argues that
the exclusive focus of neo-classical economics on problems of exchange is also a denial of the feminine
quality of need ... The view of economic behaviour incorporated in financial economic theories such as
agency theory concentrated on conflict and discipline rather than on productive activity and mutuality of
interests. A single goal (profit maximisation) benefiting a single group (shareholders) is promoted rather
than a multiplicity of goals benefiting all parties. Suppose in contrast that we concerned ourselves with
modes of co-operation between shareholders and managers to promote development of quality products
and services and the skills to thrive in the complex international markets of the twenty-first century? A
different set of concepts and metaphors would be appropriate, and a different view of the roles of capital
markets and accounting information would be needed.
Some researchers, such as Molisa (20I1), have also suggested that issues of 'spirituality'should be
used to inform the practice of accounting, and accounting research. Spirituality would incorporate
notions oflove, care and respect and it is argued that colporate accountability should incorporate such
notions.
In adopting positions, and/or pursuing outcomes, that are at variance with the dominant capitalist
ideology (whether motivated by a pure Marxist position or, as is the case with many critical accounting
researchers, motivated by other philosophical positions such as the deep ecologists, the radical
feminists or those u,ho embrace a more 'spiritual' perspective), critical theorists provide arguments
that are often driven by a desire to create a climate for change in social structures. By arguing for
a change in the status quo it has been argued that 'critical researchers' are often marginalised to
a greater ertent than researchers adopting other theoretical or ideological perspectives (Baker &
Bettner, 1997). Another possible basis of some of this'marginalisation'is that critical theorists often
do not provide solutions to r,vhat they see as perceived problems (Sikka & Willmott, 2005). That is,
they are often 'critical' without providing direct guidance on how the perceived probiems can be
 CHAPTER 12 CRiTICAL PERSPECTIYES SF ACCSUNTiNG 581

solved.s For example, Owen, Gray and Bebbington (1997) argue that critical analysis alone is perhaps
not enough. As they state (p: 183):
Restricting one's activities to critique, rather than actively seeking to reform practice, we would suggest,
poses a minimal threat to current orthodoxy. Thus Neu and Cooper (1997) are led to observe that: 'while
critical accounting scholars have illuminated the partisan functioning of accounting, we have been less
successful in transforming accounting (and social) practices' (p. 1).
Further, Sikka and Willmott (2005, p. 142) state that:
Marxist traditions must continuously be renewed through lived experiences and opposition to institutions of
oppression and exploitation in an effort to enable human beings to live less brutalised and destructive lives.
But how are the agents of such change to be galvanized? While there is a role for scholarship and related
forms of rarefied intellectual engagement with radica,l ideas, this activity should not displace principled
involvement in the mundane world of practrcal affairs.
Accountants are often trained to provide information to solve particular (predominantly economic)
problems; hence, 'culturally many accountants might be con&tioned against criticism that does not
provide a solution. Reflecting on the 'attitudes and orientations' of accountants, Cooper and Sherer
(1984, p. 222) state:
A critical approach to accounting, however, starts from the premise that problems in accounting are
potentially reflections of problems in and of society and accordingly that the latter should be critically
analysed. Thus if a major problem in accounting is identified, say as its overwhelming orientation to
investors, then a critical perspective would suggest that this problem is a reflection of society's orientation
and to change accounting practice requires both social awareness (e.g. identification of alternative
'accounts' and the roles of accounting in society) and ultimately social change.
Whether critical theory can in practice be applied to accounting research depends on whether researchers
can free themselves from the attitudes and orientations which result from their social and educational
training and which are reinforced by the beliefs of the accounting profession and the business community.
For this socialisation process has produced accounting researchers who may exhibit subconscious bias
in the definition of the problem set of accounting and the choice of theories to analyse and solve these
problems. The criterion of critical awareness involves recognising the contested nature of the problem set
and theories and demystifying the ideological character of those theories.
Critical theorists are often strong in their condemnation of accountants, and this in itself could
provide a basis for some of the marginalisation that many believe they experience. Consider the
statement of Tinker, Lehman and Neimark (1991, p. 37):
The enduring nature of this'Radical Critique'is attributable to the persistence of the underlying social
antagonisms, to which it attempts to speak, and the complicity of accountants, which it seeks to elucidate.
More specifically, Sikka and Willmott (2005, p. 138) explain that some of the critical accounting
studies in which they have been involved have:
... shown that [some accountancy professional associations] have a long history of opposing reforms
which arguably would have advanced the accountability of major corporatrons (Puxty, et al., 1994); that
accounting technologies play a major part in the exploitation of workers (Sikka, et al., 1999); and that the
accountancy industry is engaged in a ruthless exploitation of citizens (Cousins, et al., 2000). We have also

9 From a research perspective, and as a ready noted elsewhere w thln th s chapter, it has also been argued that crit ca theor sts have been
marg naltsed because they do not tend to use mathematical model ing and statist ca ana ysis both of which have become (to many researchers, as
wellastoanumberofeditorsofaccountng.lournas)partofacceptedaccountingresearch.AsHopperetal.(1995,p.532)state:'Critca researchers
emphasrse the socia embeddedness of account ng practice, consequent y, they tend to neglect mathematlcal mode I ng, preferring deta led histor ca
and ethnologica studies of structures and processes which he p ident fy societa I nkages to show that accounting is not mere y a techn ca ly rationa
servceactvltybutpaysavta roleineffectngweathtransfersatmicroorgansatona andmacrosocietallevels(Chua,1986).'

r-- --E-
582 Fi NfxN i:iF.L Afl *0t'J i'iTl t{S T# f SRY

and argue that lhe r

mirror to the accountancy trade associations
sought to mobiiise opinion by holding a
Claimsofethics,integrityetcarelittlemorethanrhetoricalgarnishes,andthatneithertheirpoliciesn:.
their self-representations (cousins' et al
2000' Mitchell' et al ' 199i'
their actions come anywhere near '
PuxtY, et al., L994, Willmott, 1990)'
wilmott (2005), reference can be made to a
2005/2006
In reflecting on the quote from sikka ancl
and
of Australia joint Committee on Corporations
Australian Government incluiry by the Parliament
ancl *,hether specific social responsibilities
Financial Services into corporate social responsibiritv,
Within tl're terms of reference of the inquiry
the
should be included within the Cotyorations Act' reporting
col?orate social responsibilities and associated
government solicited vier,vs about u'hether associations 'have
claimecl that some accounting professional
should be regulated. Sikka and Willmott of maior
arguably rvould have advanced the accountability
a long histor",, of opposing reforms r'vhich
that all three maior accounti'ng prof'essional
bodies r'vithin I
corporations', so it is intfiesting to note Accorrntants and
in Australia' the Institute of Public
Australia (the Institute of Chartered Accountants social
that they were opposed to mandating corporate
cpA Australia) macle submissions rvhich stated corporate self-regulation
such factors as the effectiveness of
responsibili$, disclosures. They relerred to that cornpanies
mar:ket as providing the basis for ensuring
and the disciplining mechanlsms of the capital (2005' p' 6) stated:
or'vn t"'"ot"h' CPA Australia
\\-move tor.vards doing'the right thing'. Ref'erring to its
(86%) support for Government to mandate the
while there is strong public (88%) and shareholder
and environmental reporting this is not
reflected in the views of business
reporting of companies'social
Ieaders(53%).CPAAustraliabelievesthisreflectsavalidbusinessConcernthatmandatoryreportingwould
notenhancethevalueoftheinformationprovidedandintroduceanUnnecessarylayerofregulation.
coincicle with their Vier'vs that accounting
practices-and
To a critical theorist such comments r,vould
theaccountingprolessionitself-operatestosupportthevielvs-of'business''CPAAustraliafurther
the risk of attracting
stated (p. 9) that 'A proactive npprou"h torvards
uolt'Ijto'l'' {rom business negates
indicate that the
excessive and inflexible r:egulations'.
Again, liom a'critical perspective' such comments
a position that f*o"t business entities
rather than promoting
accounting prof'ession primarily promotes
than corpor:rte shareholders'
broacler accountabilit/to stakehtlders other by the
and willmott, accountants are being informed
In further considering the cluote liom sikka
to'social antagonisms"'expJoitation of u'orkers'or'a
critical theorists triat they are complicit in relation
in a favourable light by
ruthless exploitation of This is not something that is likely to be seen
"itir"r-tr'.
man/v accountants ancl accounting researchers'
It is confrontlng' Hou'eveA although accountants might
of pro{bund
elect not to agree rvith what u ,r.r.*b", of
tlie critical theorists are saying (perhaps because
to put themselves under
icleological diff'erences), lt is nevertheless
useful, perhaps, for accountants
The critical theorists encollrage such scrutin\''
scrutiny from a broader societal perspective vocal critics
that a number of critical theorists have been
A revieu, of the academic literature shou,s rvell as being critical
Theory as its theoretical basis' as
of research that has adoptecl Positive Accounting Positive
(this issue is lookecl at more closely later in the cirapter)'
of relatecl capital *u.k"t, research
AccountingTlreoryfocusesonconflictsbehl.eenr,vhatmightbeconstruedas.porverful'groupings
withinsocietv(fbrerample,owners'managers'debtholdersianddoesnotconsiderconflictsbetween
of such powerful parties'
havJess ability to impact on the wealth
these pou,erful groups and parties that
Manycriticaltheoristsha,realsobeenparticularlycriticaloftheanti-regulationstanceoftenadvocated
byPositiveAccountingtheoristsbecause,.."hnstancefuftheradvancestheinterestsofthosewith the por'ver
corpor:rtions, because. lack of regulation enables
power or u,ealth (fur J"ample, owners of market forces-rvhich
and wealth of capital to be }ercised
largely t-hind"'"d by anlthing other than
of those who
busil,esses) to'hile ttncler*lni"g the interests
operate to the benefit of many po*"rfrrl
Criti'cal theorists rvould also argue that in assessing
might r-reed some form of regulatoly protection' (share price)
reaily need to look beyond capital market
the usefulness of accounting informatior. *le
 Ci.lAill E{t l il t*!Tit},1. f f *5 *.e e *UilT:i'i* 583
===IITiY=!

r'i.ictions. The capital rnilrl<ct response is clrir.en (obrirtuslr') ltv those r,r-ith c:ipital. CJapital nrarket stuclics
r1r rorc
'otltel voices'.
\\'e ltxr, tuln li'on'r rtn eran'tin:ttion of the role trnd possible inrpirct of criticral accourting tlieorists
to ir consicleration, infbrme-'cl bv critical accounting tlieon-, o{'perspectives about the rolc of t}rc. Stirte,
.rccounting resealch ancl. ultim:rte1r,. accountirg practice in supporting currclit sociirl stmctures (and
ineclualities). Again. as litrs becn errrphasised throughout this book. the r-ieu,s that:ire presentecl are
tlrose of a strbset of the research comrnunitr'. There riill be other subsets ol the r:esearch colirllrlnrit\r
thtrt challernge such vieu's.

THE ROLE OF THE STATE IN SUPPORTING EXISTING

SOCIAL STRUCTURES

Researchers working within the critical perspective typically see the State (government) as being a
iehicle of support for the holders of capital (for example, shareholders), as well as for the capitalist
svstem as a whole. Under this perspective the government will undertake various actions from time to
time to enhance the legitimacy of the social system, and thereby protect and advance the por,ver and
s.ealth of those r,vho or'vn capital, even though it might appear (to less critical eyes) that the government
u'as acting in the interests of particular disadvantaged groups. These critical theorists would therefore
reject theories of regulation, such as public interest theory which r,vas discussed in Chapter 2. For
instance, a government might impose mandatory disclosure requirements for corporations in terms
of the disclosure of information about how the corporations attend to the needs of certain minorities
or the disabled. Arnold (1990) would argue, hou,ever, that such disclosures (which, on average, really
do not cause excessive inr:onvenience for conrpanies) are really implemented to pacify the challenges,
for example, by or on behalf of particular minorities, that may be made against the capitalist system
in rvhich corporations are given many rights and powers. Relating this perspective to the development
of various securities Acts throughout the lvorld, Merino and Neimark (1982, p. 49) contend that
'the securities acts were designed to maintain the ideologlcal, social, and economic st:rtus quo while
r-estoring confidence in the existing system and its institutions'. Within the Australian context, it is
interesting to note that a chief executive officer of one of Australia's largest companies conceded that
corporate regulations overwhelmingly support the interests of the owners of capital (shareholders)
rather than stakeholders generally. Frank Cicutto (2002), then chief executive officer of National
Australia Bank, stated:ro
ln recent decades the efficient use of shareholder funds has been carefully protected by the creation of
the Australian Securities and lnvestments Commission (ASIC) and the continuing development of the
Australian Stock Exchange (ASX) listing rules. In a regulatory sense the focus of legislative change has
been around accountability to investors rather than to the community.
It
is generally accepted that to make informed decisions an individual or groups of indlvlduals must
have access to information. Restricting the flow of information, or the availability of specific tlpes
of information, can restrict the abiliq, of other parties to make informed choices. Hence, restricting
available information is one strategy that can be employed to assist in the maintenance of particular
organisations and social structures. Puxty (1986, p. E7) promotes this view by arguing that:
... financial information is legislated by the governing body of society (the state) which is closely linked
to the interests of the dominant power group in society (Miliband, 1969, 1983, Offe and Ronge, 1978)
and regulated either by agencies of that state or by institutions such as exist within societies like the

! As quoted n the Journal of Banking and Financial Serylces, December 20a2, p. 11

r
584 F!NANe l&L Aee*UNTit\iS TflE*l?Y

Uniied Kingdom, United States, and Australia that are linked to the needs of the dominant power group in
partnership with the state apparatus (albeit a partnership that is potentially fraught wiih conflict).
Hence we are left with a view that government does not operate in the public interest brrt in the
interests of those groups that are already rvell off and polverful'lr
Apart from the State ancl the accounting profession, researchers and research institutions have also
been implicated as assisting in the promotion of particular (inequitable) social structures. Some of the
urg.,*"r1. that have been aclvanced to support this view are now considered.

THE ROLE OF ACCOUNTING RESEARCH IN SUPPORTING

EXISTING SOCIAL STRUCTURES
12'3
Rather than thinking of accounting researchers as being relatively inert r,r.ith respect to th< 12'6
on parties outside their discipline, numerous critical theorists see many accounting."r"tol-p*t
pro,ri,lirrg research results and perspectlves that help to legitimise and maintain partlcular political
ia"ologi"r. Again, this is a different perspective from what most accountants, accounting researchers
and accounting students would be used to.

ACCOUNTING RESEARCH AND SUPPORT FOR DEREGULATION

OF ACCOUNTING
As an example, in the late 1970s and in the 1980s there were moves by particular governments around
the rvorld towarcls deregulation. This was particularly the case in the United States and the llnited
Kingdom. Around this time, researchers working r,vithin the Positive Accounting Theory framework, and
researchers who embraced the Efficient Markets Hlpothesis, came to prominence.12 These researchers
tlpically took an anti-regulation stance, a stance that matched the views of the government of the
time. Coincidentally, p",h"pr, such research, which supported calls for deregulation, tended to attract
considerable government-sourced research funding.13 As Hopper et al. (1995, p' 518) state:
Academic debates do not exist in a vacuum. lt is not enough for a paradigm to be intellectually convincing
for its acceptance, it must also be congruent with prevailing powerful beliefs within society more generally.
The history of ideas is littered with research that was mocked but which subsequently became the
dominant paradigm when other social concerns, ideologies and beliefs became prevalent. The story of PAT
can be told in such terms. lts rise was not just due to its addressal of academic threats and concerns at
the time of its inception but it was also in tandem with and connected to the right wing political ideologies
dominant in the 1980s.
Mouck (1992) also aclopts a position that argues that the rise of Positive Accounting Theory (PAI)
u,as made possible because it was consistent with the political viervs of those in power
(that is, the State):

... the credibility of Watts and Zimmerman's rhetoric of revolt against goveinment regulation of corporate
accountability was conditioned, to a large extent, by the widespread, ultra-conservative movement toward
deregulation that was taking place in society at large ... I would argue that accountants have been willing to
accept the pAT story, which is built on Chicago's version of laissez faire economics, because the rhetoric of
the story was very much attuned to the Reagan era revolt against government interference in economic affairs.

11 Contrast this with the view provided by public interest theory-a theory of regulation described in Chapter 3 and in which it is argued that

government puts in place rules and regulations for the benefit of society generaljy'
paradigms adopted 'a
12 According to Tinker, Merino and Neimark (1982), researchers within the Positive Accounting and Efficient l\4arkets
to take the "free" market and implicit institutional apparatus as given'. PAT and the Efficient
neoconservative ideological bias that encourages us
lvlarkets Hypothesis were discussed in Chapters 7 and 10 respectively'
13 Consistent with this perspective, in 1979 I\4ilton Friedman, a leading advocate of deregulation, became a senior adviser to US President Reagan'
 CHAPTER 12 CRITICAL PERSPECTIVES OF ACCOUNTiNG catr

(}rn-sistent rvith the de,reiopment of PAT. in the late 1970s

a great deal of accounting research sought
," i-:hlight the economic consequences of new accounting regulation. This perspective (which was
:r:L"qdered in Chapters 2 and 3) argues that the implementation of new accounting regulations can have
rri:i unl-anted economic implications, and hence before a new requirement such as an accounting
r.:rlard is mandated careful consideration is warranted. Economic consequences analysis has often
:r:n.id€d a rationale for not implementing accounting regulation. Critical researchers have argued that
r -e-6 $s economic implications for shareholders (for example, through changes in share prices) and
-,;-i;rg€rS (for example, through reductions in salary o, lor. of employment) that were the focus of
icrntion b.v those who researched the economic consequences of accounting regulation. As Cooper and
Si-,erer r1984, pp. 215,217) argue:
: seems unfortunate, however, that the'rise of economic consequences' (Zett,1978) seems to have been
-:tivated, at Ieast in the United States, by a desire of large corporations to counter attempts to change the
:x;sting reporting systems and levels of disclosure. To date, it would seem that accounting researchers have
;enerally reiterated the complaints of investors and businessmen about the consequences of changes in
'equired accounting practice. Studies using ECA (economic consequences analysis) have almost invariably
evaluated the consequences of accounting reports solely in terms of the behaviors and interest of the
shareholder and/or corporate manager class (Selto and Neumann, 1991).
More fundamentally, studies adopting the ECA approach have focused their attention on a very limited
subset of the total economy, namely, the impact on the shareholder or manager class. The effects of
accounting reports directly on other users, e.g. governments and unions, and indirectly on'non-users', e.g.
consumers, employees, and taxpayers, have been ignored. The basis of such a decision can, at best, be that
any such effects are either secondary andlor lacking in economic significance. Thus, these studies have made
an lmplicit value statement that the needs of the shareholder and manager class are of primary importance
and the concentration on those needs is sufficient for an understanding of the role of accounting reports in
society. Unless the insignificance of the effects on other users and 'non-users' is demonstrated rather than
merely assumed, the conclusion from this research cannot be generalised for the economy as a whole and
these studies are insufficjent for making accounting prescriptions intended to improve overall social welfare.
Apart from indicating that economic consequences research focused predominantly on the economic
implications for managers and sha'reholders, Cooper and Sherer (1984) also note that major studies
that adopted this paradigm were funded by the US Securities and Exchange Commission and the US
Financial Accounting Standards Board. It was considered that the interests of these bodies were aligned
with the 'shareholder and manager class', rather than society as a whole.
In a similar vein, Thompson (1978) and Burchell et al. (1980) suggest that the research efforts into
inflation accounting in the 1960s and 1970s were not actually motivated by the rate of inflation per se,
Instead, they argue that the research had been motivated by a desire to alleviate the shifts in real wealth
away from owners (in the form of lower real profits and dividends) and towards higher wages.la
If research gains prominence because it supports the particular political beliefs of those in power,
we might assume that as the views of those in 'power' change so will the focus of research. During the
1990s many governments around the world tended to move away from deregulation. Reflecting on this,
Hopper et al. (1995, p. 5a0) noted:
The environment is continually being reconstituted within changing economic and political conditions.
Accordingly, the ability of PAT to resonate with the prevailing discursive climate may be subject to

14 Attributing such a motivation to a// people.that researched a particular topjc, however, is somewhat simplistic. Again, we must remember that
critical researchers openly adopt a very subjective (partisan) approach to their analysis and this is retlected at times in the generalised nature ot some
comments and clitiques. ln Chapter 6 we discussed the works of Ray Chambers and his prescriptions for accounting that were particularly pertinent
in times of rising prices, lt is very questionable whether Ray Chambers had any interest in undermining the interests of workers.

-
 FiHAi,iet&i- ACC*u liTl r'&s Tl{E0RY
586

Challenge.".FollowingtheremovaloftheRepublicangovernmentintheUSA,thisparticularperiod
andformofconservativereformmayhaveended.lntheUSAPresidentClintonis[was]adopting
amoreinterventioniststrategyandintheUK,theMajorregimeclaims[claimed]toespousean
alternaiive.caringsociety,,albeitwithmarketforces,incontrasttotheharsherfaceofThatcherism'ln
thelggosaneWsetofvaluesmaybeemergingwhichdonoiemphasisesogreatlytheefficiencyand gender issues' The
ecology, health care in the USA'
effectivenessof unregulated markeis, tor.rJrptu,
abilityofPATtoresonatewiththischangedenvironmentmaybebroughtintoquestion;forexample,
theconsecutivefailureofsomebusinessenterprisesandthestockmarketcrashoflgSTaugmented
the call for more regulation'

oF TNCREASED
t.t$l'fi+,t*ttf.oJ,|rliS'l-J5#?t-HJlttN cn (rormer)
U'i'"d States at the beginning of
Despitetheelectionofwhatmanyconsidertobeahighlypro-businessandanti_regulatir
I
W. Brr.h) ur.j gorr.r'r#r., a rh"
12'6
Republican pr"ria"rrt (C"org" at the end of 2004' few
century and the."-"t""tion,rf ?hi, pr"rid"rrt 1ncl-qovernment
the twenty-iirst trend against the deregulation
governments (includlng the US
go,r"r,.*"tttj hu""'t"u"t'"d the 1990s deregulation
initially made moves towards greater
of accounting. Although the Bush go.,".,.,*",,t the large.scale
policy direction rvas folo.ving public revelations about
of accounting, this 1i"",,"a other large US corporations in
2001
at Enron, worldCom n'rd ,"""'n1
accounting failures (o. irrer) failed and
auditor (Andersen) ii 'ome of these
2002, and the apparent complicity ;;.;"a
and "f
unerman and o'Dwyer
damagingaccountingpractices.Despiteanyexistinggovernmentaldesiretheremayhavebeento
by cleregulating acco.rnting practices,
empower tn.g" "orp'oiutions further
(2004) argue that these highly publict"a.""""r?,irg
filrr", I"d to " "o"'iderable reduction in the trust
and, more importantly' the reliability
placed by many investo* Ir-ri
*ork"rs in both """o.rr.tirg practices
ofcapitalmarketsasamecliumforinvestment.one."^.tro.ofmanygo,r"."*""t'throughoutthelvorld
and cor?orate
increase the regulation of accounting
and accounting failures was to
to these coryolate
governance,inanattempttorebuildtrustinthereliabiliq/ofaccountinginformationandinthecapital information.
markets' which are supposeclly d"p",,d",'t
* the claimed relability of this accounting
serwing the needs of large
perspective, this increase in regulation would b" '"gn'd"d as
From a critical investor trust in the capital
investors)las it was aimed nt "tst"i"i"g
corporations (ratheithan protecting
*n.k"a, on which large colporations rely'
ThedamagirrgimpactofaccountingfailuresatEnron,followedbyhighlypublicisedaccounting
large corporations-in North America'
of time at several other
failures over a relatively short period in
(for exampl", p"rlna^, in Italy, Ahoid i" ihe Netherlands' Addeco
Australia and Europe
SwitzerlandandoneTelanclHlHinAustralia)-couldberegardedbycriticalaccountingscholars
system (as discussed earlier)'
just another symptom of the inherent instabilitv of the capitalist
as a reoccurrence ofthis latest
would tend to argue that u"y u"tio"t t-aken fo prevent
These researchers misses the point
symptom of the structural conflic*
i"rr*"ri i, capitalism (ac-counting failures) other (different)
to pre"e"t
which is flawed, and the only way
that it is the capitalist system itself wlth a &fferent system in which
is to replace the capitalist system
failures emerging in the future the powerful
the weak (employees, the environm",,t,
*,,,y sectio.ns of.society) are not exploited by examined
have indeed
they srpport). severi researchers
(Iarge corporations and the governments and/or
the early twenty-first century ,"""rr,i;
i;ii"'"' Enron (and other large corporations)'
"
from a variety of critical perspectives
(see' fbr example'
the regulatory reaction to these fnilrr"r]
Arnold&DeLange,ZOO4;Baker,2003;Briloff,2004;Craig&Amerrric,2004;Froudeta1..2004;
andWilliams' 2004)'
Fuerman, 2004; OlConnell' 2004;
 CHAPTER 12 EftiTICAL FERSFECT}VES OF ACCSUNTII{G 587

A CRITICAL ACCOUNTING VIEW ON THE ACTIVE ROLE OF ACADEMIC

AND NON-ACADEMIC DISCOURSE IN PROTECTING CAPITALISM
In another area, some critical theorists have implicated the editors of accounting journals in ensuring that
accounting research does not challenge the interests of dominant groups in society, arguing that these
@
12.5

editors will reject research that does not have 'complementarif, with themes prevailing in the social 12.6

milieu' (Mouck, 1992). In relation to the role of accounting jourlals, Tinker, Lehman and Neimark (1gg1,
p. 44) state:
Accounting literature represents the world in a manner conducive to the changing needs of capital
accumulation' Journals such as Accounting Review adjudicate in secondary conflicts by filtering research,
scholarship (and untenured scholars) in a manner conducive to this primary purpose. The hostility of this
journal to even the tamest 'deviants' is well known.rB

Other research in critical accounting demonstrates that it is not just academic discourse which
is biased in a manner designed to support the interests of capitalism. For example, Collison (2003)
characterises as propaganda many of the justifications that are given by organisations operating in
the corporate sector in support of existing business and accounting practices, where subjective values
(biased in the direction of furthering the power and r,vealth of capital) are
portrayed as otjective facts.
He argues (p. 853):
The effect of this use of propaganda ... is to buttress the hegemony of discourse ... in which the contestable
values that are often implicit in the practices and terminology of accounting and finance are treated as
though they are uncontentious ... [and that propaganda is] a tool that can be used by powerful interests,
often covertly, to support and proselytise a prevailing ideology.
Developing this theme of accounting being used as a tool to 'objectify' subjective viervs, our analysis
moves to the critical theorists' perceptions of the role of accounting practice in supporting existing social
structures.

THE ROLE OF ACCOUNTING PRACTICE IN SUPPORTING

EXISTING SOCIAL STRUCTURES

As rve iearrred in CJliapter 6 u'lien u-e irclclressecl the IASB Conc:eptrtll Frantttcctrk.f.r Finorrc:iol
Rcporting (rr'fiich u'e classifiecl i'rs a normi'Ltire theon-of irccountilg), the C.lceptual Frirnrer','ork htrs
il nrttllber. o[ 'furlclattlerltal' ancl 'enliancing' qualiti,rtive cliaracteristicrs tliat rrscfLl firralcil] i11b,,irtio,
shoultl Possess. Olc' <tl the firrrclarnent:rl qualitatir-c characteristics is '{aitlil11 represe,t:Lti.,' (t6e
otller findarnental r|r:rlitativc' chtrracteristic being 'reler-ance'). Faithlirl represeltati.n rer'rires tirilt
irrlilrrutltiort lle con'rplcte, neutrtr] and f]ee lhrrn en'or. This is consistert u,ith the ge,er.llr.acceptecl
lielv thirt accourtting irifbrrnirtion should be 'obic'ctive'-sollrethinq that is prori-rotecl br profi:ssional
accotrnting iloclies iritentatirxrtrllr- as being zin imprtrtant and valuilltle irttribute o1' the rrccorutting

15 ln recent years, however' it does appear that more research of a crtrcal nature s being publ shed within some leading accounting journals.
One
lourna that has been n ex stence for a number of years and that pub ishes var ous 'crit ca ' papers s critical perspectives on Accounting.
Accorcling
to the lournal (as per its 'lnstructlons to Authors'), it 'aims to provide a forum for a growing number of accounting
researchers and practit oners who
realize that conventiona theory and practice is rl -suited to the cha lenges of the modern environment,
and that account ng practrces and corporate
behav our are inextricab y connected with many a locat ve, social and ecological problems of
our era. From such concerns, a new I terature s emerging
that seeks to reformulate corporate' socia and politlcal activity, and the theoretical afd practcal means by which
we apprehend and affect that
activ ty'.
s88 FI N,{ITili,qL ACC*U iIT! i!G TH tr*.qY

profession. Accourrting is projectecl as pror'k1ing an ol'tjective replesentatirln ol the underlrnq

economic facts.l6
role thirt
Hou,e'er. a nur1ber of criticirl theorists see il diflerent role lbr conceptual fian]e$'rlrks: il
stateltients produccd br- reportirrq
inr.olr-ers legitimising tbe accorurting profession, zrs u'ell as the firianciirl
entities. Hines (1991, p. 328) states:
of an objective world and
Conceptual Frameworks (CFs) presume, legitimise and reproduce the assumptions
provide social legitimacy to the accounting
as such they play a part in constituting the social world .,. CFs
profession. Since the objectivity assumption is the central premise of our society ... a fundamental form of
Legitimacy is achieved by
social power accrues to those who are able io trade on the oblectivity assumption.
proposition are perceived as
tapping into this central proposition because accounts generated around this
,normal,. lt is perhaps not surprising or anomalous then that CF prolects continue to be undertaken which

rely on information qualities such as'representational faithfulness', 'neutrality', 'reliability', etc, which
generating Accounting
presume a concrete, objective world, even though past CFs have not succeeded in
. of an objective
Standards which achieve these qualities. The very talk, predicated on the assumption
serves to construct a
world to which accountants have privileged access via their'measurement expertise',
perceived legitimacy for the profession's power and autonomy"

THE ROLE OF ACCOUNTING STATEMENTS IN CREATING

A SELECTIVE.REALITY'
characteristics are
Hines (1g88) argues that accountants impose their olr,n views about which performance 12.3
'profits'). Accountants also decide which attributes
important ar.d thereby require emphasis (fbr example, 12.4
or disclosure'
of organisation performance are not important, ancl therefore are notworthy of measurement 12.6
of accounting, attention will be directed
Through the practice to the particular me.asures the

(apparently objective) accountant has emphasised and in turn these measures will become a means
of
'profits' are promoted as an
differentiating 'good' organisations from 'bad' organisations. For example, if
objective *"u..rr" of orlanisational performance, then people will focus on profits as calculated by t\"
loss-making company
accountant, and a profitable company will be deemed to be a good company and a
that profits, determined by the accountant,
rvill be deemed to be a bad company. This is despite the f'act as
(as discussed in Chapter 9)'
will ignore many social and environmental externalities caused by the business
f"o. if the organisation emits pollution but there are no costs or fines attacl'red to the
"r"*pi", society that is
emissions, no costs ., ,i[ b; recognised clespite the damage to the enr.ironment and
potentially being caused by the emissions. Hines argues that in communicating reality
accountants
the failure to account for the effects of pollution
,i*rltrn"orrrly construct reality. Hence, for example,
emissions means that to many people such emissions are non-existent' They do not appear in the
accounts of the companv's performance. If the accountant put a cost on such emissions, they would
a selective visibility
become 'real', and the organisation would. become accountable. Accounting provides
are'significant'
for particular issues within an or:ganisation and accounting dictates which financial
issues

(Carpenter & Feroz, 1992). Coopeq Hayes andWolf (1981, p. 182) also adopt this perspecilve in stating:
(by choosing which
Accounting systems encourage imitation and coercion by defining the problematic
(by choosing which variables
variables are measured and reported) and they help to fashion solutions
are to be treated as controllable). Of course, the way accounting systems are used is highly significant,

but nevertheless the structure and elements of accounting systems help to create the appropriate and
systems are
acceptable ways of acting, organising and talking about issues in organisations. Accounting
a

significant component of the power system in an organisation'

s consistent with the argurnent prov ded by soomons

(1978) that to increase the usefulness of accounting reports they should be as
16 Th s
so can the financial posltion and performance of an organ sation
objective as cartography. That s, iust as an area can be objectively'mapped',
 I

CHAPTER 12 CRITICAL PERSPECTIVES OF ACCOUNTING

589

reflecting the view that accounting makes certain things visible,

and can act to obscure other
tirqqs qrhat nevertheless might be important in terms
of related i"mpacts upon sociefz), Broadbent (2002,
p. *36-states:
Hence the visibilities that accounting creates are important
as they are implicated in the political and
ideological processes of society-they create visibilities (Hopwood,
19g4) and those visibilities are
partial (Broadbent, 1995). The visibilities are linked
to various sets of interests. current constructions of
accounting are arguably linked to the interests of capital and
can also be seen as patriarchal, although this
-
rs not inevitable as the'realities'that are created are
mutable (Guthrie & parker, 1999).
In exploring the role of accounting reports in 'constructing' particular 'realities'.
Macintosh ancl ] . lllL.Lrl l L\,ola olllr

'I _. .ll]i.::i
dra"i' on de'elopnrents in literrn theon', ancl arg*e tli:rt acco,*tirg
ll:':l',,:o:n,(r,ru1)

Expressive realism
:ealih (that novel, for example, 'acts like a mirror to refleci reality' (Macintosh
a ln Iiterary theory, it
& Bakea 2002,
p' 159)) has long been regarded as highly problematic, and they i.u* on is the notion that a
these criticisms from
literan- theory to demonstrate how similar assumptions of texi is an objective
accouriting reports objectively refiection of an
reflecting an external economic reality are equally problematic (p. underlying reaiity.
1g2):
'" the common sense view of accounting assumes that the financial reality of an enterprise is ,out-
:here' prior to its capture in accounting reports. The proper way
of ascertaining this reality is thought to be
ivith obiective and verifiable measurement processes. This realist
correspondence view of the accounting
assumes the financial reality of a corporation exists independently
i3 of accountants, auditors, and accounting
reports Yet accounting runs up against the same problem that
)i undermined expressive realism Iin literary
theoryl' Different equally qualified professional accountants come
i6 up with different financial statements
for identical transactions and events.
Macintosh (2001) and Macintosh and Bal<er (2002) then use
different paradigms in literary theory
to analyse and explain the subjectivity of accounting reports,
and the partiafvier,vs of realig, constructed
b'these reports They argue that any accounting report rvill tend to
present selective and biased
information in a manner designed to lead to the construction
of a single view of the unclerling reality,
u'ith this view being the one that most favours management
urrd pro..i.l"rs of capital. These academics
then-argue, based on poststructuralist literary_theory, fo.
u""orrri'rg reports to change so they contain
a suificient variety of information to enable clifferent,sers
of o""o".rrrt. to see a
contradictory views of the realig, underling the business, rather ""J"r, "ir.metimes
than accounting information being
selectively presented in an objectified manner to 'force' :r
single partisan vierv of the business.

THE POWER OF ACCOUNTANTS THROUGH A FALSE IMAGE

:i ,)"t-',::,1:::'-:.; .,".,0 """,

,::;-"".:-: ;" :-:*n, ^
do ihe cr, , a, O
theorists, there may be some form of bewilclerment. Hou, can accountants have ,o i.,"h p"*";;;;;;;
some arguments {br this issue have been provided in the discussion :::
1z'4
above. The accountlrg proi".riir. ,,
portrayed (through such vehicles as conceptual framer'vorks)
as being objective and neutral-that is, free
from any{brm ofbias. Such characteristics (iftrue) are apparentlyblyond
reproach. In fact, accountants
are perceived as so objective and neutral that they hav"
u r"prtniron fo. b"ir.g very dull. But if lve are to
believe the critical theorists, this 'dullness'is a faqade that
ierhaps hides a great deal ofsocial porver.rT
As Carpenter and Feroz (1gg2, p. 618) state:
'" accounttng may be viewed as a means of legitimising the
current social and political structure of the
orcanlsaton' Hopwood (i983) further suggests that the legitimising
force of accounting derives in part

lf we are agaln back to the position that was introdLrced in chapter

2 accountants are indeed very powerful ind v cluals.
I 590 FI NAI\ICIAL ACTOUNTIhi6 THEORY

from the apparenfly dull, unobtrusive, and routine nature of accounting

aura of objectivity and legitimacy in the eyes of financial statement
accounting and accountants can and do take sides in social conflicts.
Tinker, Merino and Niemark (1982, p. 184). argue:
This image of the accountant-often as a disinterested, innocuous
users.
procedures, which generate an
Far from being dull and routine,

'historian'-stems from a desire to deny

which, in turn, affect decisions
the responsibilrty that accountants bear for shaping subjective expectations
social classes. The attachment
about resource allocation and the distribution of income between and within
accountants to claim that they merely
to historical facts provides a veneer of pseudo-objectivity that allows
record-not partake in-social conflicts'
ofthe
Becauseofthe appareni objectivi$r and neutraliq' ofaccounting' and accountants' the output
accounting system (r.,"h ar profits or losses) can be used as justification
for undertaking certain actions
which might cause particular hardship for some less powerful groups. For example, declining profits
might
(which we know are calculated following various professional judgements made by accountants)
company. As Rroadhent
be used as a justification for reducing the size of the workforce in a particular
(2002, p. 439) states:
much
The existence of accounting, at the same time, provides the opportunity for disembedding-how
than it is to think
easier it is to legitimize the reduction of iobs through the existence of financial
losses
disembedding of systems
about the effects on the individuals affected, Giddens goes on to argue that the
legitimating trust by being
relies on the existence of trust. Accounting paradoxically provides a means of
able to provide'accounts'and accountants are the'experts'who mediate
that system' Seal and Vincent-
lones (1997) provide a view of the role of accounting in the development of
trust in the development of
produces systematic information that
new relationships when contracts are developed. Finally, accounting
is seen as integral to the ref lexive development of knowledge about society.
was discussed
Research that investigated the economic consequences of accounting requirements
the economic
earlier in the chapter (as well as in Chapter 3). Once a profession starts considering
that the accounting standards,
consequences of particular accounting standards, it is difficult to perceive
and therefore accounting, could really be considered as truly objective and
neutral'

A CRITICAL ACCOUNTING PERSPECTIVE OF ACCOUNTING

AND LEGITIMATION
Moving on to another aspect of how critical accounting researchers believe that
accounting practices
@
12.4
.silent{' and'stealthily' ,"ir.for"" capitalist power, among the other theoretical perspectives considered
documents such as annual
earlier is Legitimacy Theory (discussed in Chapter 8). Organisations often use
While these disclosures can be explained in
reports to legitimise the ongoing existence of the entity.
'social contract' (which may
terms of u dol." by the corporation to appear to be acting in terms of the
be the case), some critical theorists see the legitimation motive as potentially
quite harmful,
or may not
classes within society As
particularly if it legitimises activities that are not in the interests of particular
Puxty (1991, p. 39) states:
I do not accept that I see legitimation as innocuous. lt seems to me that the legitimation can
be very
progress.
harmful indeed, insofar as it acts as a barrier to enlightenment and hence
In considering the use of social and environmental disclosures to legitimise coryorate behaviour,
Deegan, Rankin and Tobin (2002, p.334) state:
that have arisen
Legitimising disclosures mean that the orgSnisation is responding to particular concerns
(and importantly,
in relation to their operations. The implication is that unless concerns are aroused
disclosures could be quite
the managers perceive the existence of such concerns) then unregulated
minimal. Disclosure decisions driven by the desire to be legitimate are not the
same as disclosure
 CH,APTER 12 CEITiC&L PERSPTCT'VES CF,&CCSU},ITING
591
: ' - :s :' "e n Dy a management view that the cclmmunity has a right-to-know
about certain aspects
-' :- :':arisation's operations. one motivation relates to survival,
whereas the other motivation relates
._ '=s::-stbtltty.
DreqaD. Rankin and Tobin (2002,p.335) further
state:
-:u ' -lslng disclosures are Iinked to corporate survival. In jurisdictions where there
-::- 'ernents to provide social and environmental are limited regulatory
information, management appear to provide information
'.'-:'they are coerced into doing so. Conversely, where there is limited concern,
there will be limited
- s: csures The evidence suggests that higher levels of disclosure will
only occur when community
-:-:erns are aroused, or alternatively, until such time that specific regulation is
introduced to eliminate
-3"agements'disclosure discretion. However, if corporate
legitimising activities are successful then
:?rnaps public pressure for government to introduce
disclosure legislation will
:: able to retain contror of their sociar and environmentar reporting practices. be low and managers will
consistent with the above discussion, Guthrie ancl Parker (1gg0,
p. 166) believe that the political
:co,lo.l1\' perspective adopted bv critical tlieorists
emphasises the role of accounting reports in
rrr trintaining (or iegitimising) particular social
The political economy perspective perceives ".r"r.rg"*"rtr,
accounting reports as social, politrcal, and economic
documents They serve as a tool for constructing,
sustaining, and legitimising economic and political
arrangements' institutions, and ideological themes
which contribute to the corporation,s private interests.

THE ROLE OF ACCOUNTING IN LEGITIMISING

THE CAPITALIST SYSTEM
Gaffikin llrovides a fairly critic:rl perspective of the
accounting profession in terms of rvhat he sees
as
the profession's uncritical acceptance of the capitalist 12.4
sl,stem ,i,]ri"t tr" believes acts to undermine
interests of certain people u.ithin societyl As he the
states (2U10.p. 31): 12.5
Over the last four hundred or so years the majority 12.6
of mainstream accountants have seen themselves
as handmaidens of what we refer to as capitalism, providing
information to facilitate optimal economic
decision making' Accounting has been instrumental
in maintaining the capitalist ethos-it has
unashameably served the interests of the providers
of capital" critical theories challenge the assumptions
inherent in capitalism.
civen the role of accounting reports in 'constructing, sustaining,
ancl Jegitimising economic ancl
political arrangements, instit.tions, and ideological themes
u,hich contribute to the corporation s private
interests' (Guthrie & Parker, 1990, p. 166), the
classical political ecoromy perspective r.ieu,s
one of the
key roles of accountlng reports as being to legitimise
the capitalist system as a whoie, and to protect
this systeln {rom threats arising as a result of the
outcorr", uf the structural conilict inherent in the
capitalist system (as cliscussed earlier in the chapter).
This, for erampie, is part of the reason r^,hy rnanv
crltical :rccounting scholars are opposed to ,nr,ch research
lnto corporate social reporting practlces, as
highlighted earlier in the chapter.
A maior critical acco.nting ernpirical stucly, erarnining
the role that disclosures in annual reports
pluy-"d in protecting (and legitimising) the capitalist
q'rt"- as a rvhole from the outcornes of.social
conflict' analysed the annuai reports of the uS-based
car muitin:rtional General Motors over the period
1917 to 1976 This empirical material u'as analysecl
in a series of papers (Neimark, 1gE3; Neimark &
Tinker 1986; Tinker, Lehman & Neir,iark, 1g91; Tinker
er xei,i-,a.k, 1gg7; Tinker & Neimark, lggg)
r'vhich derno,strated that the {bcus o{' voluntary
cliscursive material in the annu*l reports tendecl
to cliange to address the changing challenges.to capitalism
arising from the structural instabilit' of
capitalistn. For eran'iple, in times rvhen th1 (claimed)
sl,mptoms of this structural instability rvere
rveaknesses in or-erall consumer demand, the
annual ,eports focusecl on gi'ing tlie i,.rpression that
increased consumptiorl-such as regularlv buf ing
a ne\\, car-was an ideal social norm. At other
times.

r
f l hl,4Fi CIAL AeC0U l"lT! hi S Ttl [0RY

when the symptoms of the structural instability of capitalism was labour militancy, the focus of the core
messages in the annual report switched to a demonstration that workers were better off if they
acted in

cooperation rather than in conflict with managers.

ih" urgr-"r1t in these studies seems to be that while successful articulation of these management
viewpoints might benefit General Motors economically, through maintaining the support of economicallr-
po.rerful stakeholders, they also benefited the capitalist system as a whole because, for example.
ie,reloping a norm of consumption in times of weakened overall economic demand should result in
greater dernand for the products of many businesses. If other businesses also used their annueil
reports-

In conjunction with messages in other media such as advertising and newspaper articles, at this point
in
history to help reinforce a consistent message about the social desirability of consumption, this would
help protect arrd ad,ran"e the power and wealth of mam, businesses bv increasing overall consumer
demarrd. As Tinker, Lehman and Neimark (1991. p. 39) state:
The General Motors studies.." focus on the various ways the company uses its annual reports as an
ideological weapon, and the social circumstances that govern one use rather than another ... Ithey
uncoverl the conflictual and antagonistic situations that embroiled GM over that period, and the way
the firm's reports were used to modify and ameliorate these conflicts ... This is not to argue that annual
reports have a dramatic impact on business and political decision making. Rather, like other ideological
materials (party political statements, advertising, public relations'fluff', religious dogma) it is the
repetition of the mundane and particularly the censoring of other points of view that make these reports
most effective.

A CRITICAL REFLECTION ON THE ROLE OF CRITICAL

ACCOUNTING RESEARCHERS IN CREATING CHANGE

tlie accepted role of critical analysis is to identify problems

As u,e have already noted in thls chapteq
inherent within existing structures and processes (such as accounting) with the ultimate aim of
providing a fairer society rvhich does not undermine the interests of particular groups, such as
That is, the ultimate goal of critical research is projected as being to create positive social
"*ploy""r.
chzrnge. To create change would seem to require constructirre engagement i,vith a broad cross-sectlon
of people to not only hlghlight problems, but to suggest pathrvays for improvement. As Roslender
(2006, p. 264) states:
Simply interpreting and understanding what we choose to study is not enough. The purpose of the exercise
is to turn this learning to the promotion of society, that is, the promotion of a better society.
However. concerns have been raised from some critical theorists that their colleagues are failing
to engage the broader community. For example, the leading critical theorist, Christine Cooper, has in
the pasi been particularly critical of the language used by many critical theorists, and by the apparent
negLct of efforts to usefully engage with practice. In relation to the difficult nature of the language
frequently used by critical theorists, Cooper (2002, p. 452) refers to the rvork of Callincos (1999), r'vho
she quotes as saying:
ln the self-contained university world, intellectual life is specialized and professionalized: academics, even
those who think of themselves as political radicals, write for each other using an idiom which renders their
work unintelligible to those outside.
perhaps the itinerary of the Frankfurt School is emblematic of this larger process: Marxism becomes
'critical theory', a body of thought elaborated in the academy at long remove from any political practice,
profoundly pessimistic about the possibility of social revolution, and expressed in allusive and arcane
language. In what is, however, alltoo common a feature of cultural life at the end of the twentieth century,
 -!

CH,APTER 12 CRITICAL PERSPECTIVES O.F ACCOUNTiNG 593

an avant-garde activity has now been massif ied, as innumerable academics engage in what Althusser called
theoretical practice, matching Adorno and Horkheimer in obscurity of expression, but not, alas, in novelty
of content. (Callinicos, 1999, p. 309)
Reflecting upon the above quote, Cooper @. a1a) makes the following point:
ln short, academics at the beginning of the twenty-first century write theoretical pieces, which hardly
anyone reads, mainly for each other using impenetrable language.

While such criticism was raised more than a decade ago, similar concerns could be raised today.
Of course, such criticism can be made of much research, not just critical accounting research, but it
does seem somewhat odd that critical theorists who argue passionately against the exclusion of certain
members from society will write in a manner that is very dlfficult to understand and which therefore is
also potentially open to the criticism of being exclusionary in n4f1116-6ther than for those well versed
in reading the specific literature.
In relation to concerns about the lack of engagement of many critical accounting researchers,
Cooper (p. 452) notes:
I can't help but feel that intellectual pessimism about the possibility of social change is alive and well in
much critical accounting work. Many academics who describe themselves as critical do not seem to believe
in the possibility of social change and certainly never strive to change the world, preferring instead to
concentrate on theory alone or upon work which is strangely separate from contemporary social movements.
There are of course notable exceptions. I hesitate to single out any critical accounting academics here for
risk of causing offence to those whom I have negligently missed out.
In terms of the expectation that critical researchers should engage with the community (rather
than perhaps restricting their movements to university offices and specialised academic conferences),
Cooper @. aSQ provides the positive exarnple of a group of critical theorists who wrote material that was
readable by people other than those working within universities and who have knowledge of particular
philosophies:
Wolfreys (2000) carefully traces the work of Bourdieu and his colleagues as follows. They set up a pqblishing
house, Liber/Raisons d'Agir (Reasons to Act), and have used it to produce a series of reasonably priced,
accessible books covering a range of issues, almost all of which have reached a wide audience. The first to
be published, Bourdieu's Sur la l6l6vision (7997), sold over 100 000 copies and his Contre-feux (1998)
over 50 000, while Serge Halimi's attack on the media, Les Nouveaux Chiens de Garde (7997) has sold
over 150 000. Others, such as the collective work Le 'Ddcembre'des lntellectuels Frangais, on the effect
of December 1995 on France's intellectual elite, have all enjoyed similar success. The accessibility of
much of Bourdieu's and Liber/Raisons d'Agir's material is an exemplar which could be followed by critical
accountants. This isn't to argue that academics should eschew theory. On the contrary, it is to argue that
theory and practice should be merged and the complex picture they produce should be disseminated in an
understandable form.
Cooper emphasises the need for critical theorists to leave the confines'of comfortable offices and
to take their concems and insights to the broader community. She uses the work of well-known critical
theorists as outstanding examples (exemplars) of engaging theory with practice @. a1a):
Some of the academics connected with Raisons d'Agir have gone on to create an lnternational of
intellectuals. There are now groups in Germany, Belgium and also in a number of French towns, notably
Grenoble, forming part of a growing network of militant think-tanks, reviews and associations of various
kinds allfighting, in diverse ways, the effects of global capitalism. fhe Fondation Copernic was established
in November 1998 as a rival to the right-wing Fondation Saint-Simon. Other newly formed associations
include the unemployed workers'associations ACI and APEIS, the homeless association Droit au Logement
(DAL), the SUD trade union and the loose Groupe des Dix federation of which it is a part, numerous

/
' 594 FINANf; iAt ACCOLJI{TING THEilRY

anti-fascist and anti-racist groups. This demonstrates how the activities of academics will be
strengthened

by their joining with and perhaps even forming other groups'

theorists Sartre
By contrast, Cooper notes (p. 458) that the highly respected, and highly cited, critical
the rights of workers,
and Foucault were known to be sympathetic to various movements that supported
researchers/philosophers unfortunately 'did not have much empirical knowledge of workers"
but these
Cooper (p. a58) further states:
those critical
I am setting out a case that in order to have less pessimism in academia it is essential for
participate in practice as
accountants who wish to do something about social inequality and injustice to
well as the develoPment of theorY.
(2005, p' \a2)
The views of Cooper are also consistent with the views provided by Sikka and Wllmott
as discussed earlier within this chapter:
with radical
While there is a role for scholarship and related forms of rarefied intellectual engagement
world of practical affairs'
ideas, this activity should not displace principled involvement in the mundane
about
Another notable critical theorist, jane Broaclbent (2002, p, aa\), has also highlighted concerns
the lack of engagement of critical theorists:
It becomes difficult to think of many examples of how critical accounting research has been directly
successful in changing policy or practices.
Ai this point we might why we have questioned the lack of engagement of many critic:rl theorists
ask

and the inaccessible lur.grug" often used when we have not raised similar concerns
in relation to other
accounting research pnradlg*rZ."searchers discussed elsewhere in this book' Are we being unfair in
singling out the critical theorists?
Critical theorists often claim that the puryose of their work is to expose structural and social
problems with existing social systems. This is a praise-worthy endeavour. They rightly
express concern
a 'voice', often
about the u,elfare of different groups and hor,v different groups are excluded from having
such researchers
because the 'system' does not allow them to have a voice. Therefore, to be consistent,
enough to
shoulcl not write in a manner which is unintelligible other than to those who are privileged
have education in, or knowledge of, pafticular philosophies. It would also seem that, to
be consistent
with their discipline, they shoul<l engage with the community-urith practice (perhaps in the way that
the examples from Cooper above show).
it is probably true ihat other researchers, for example, Positive Accounting theorists and capital
do not use
markets ,"."u."h"., (as well as researchers operating within other paradigms), on average,
their research to engage the community to create positive social change. But many of these paradigms
are based around assumptions such as the rational economic person (gulded by self-interest)
""orro*i" efforts that benefit
so, in a sense, such researchers cannot be accused ofhlpocrisy for not undertaking
journals and
others. If their actions were limited to attaining publications in prestigious research
that not inconsistent with the self-
attending various academic conferences throughout the world then is

interest perspective that they have adopted as a guiding assumption of their research'
As can see, reflecting on the role of research, and researchers, can raise rnanv issues and
've
opinions-many of which might not be popular to some individuals or groups. But hopefulY tl"l
can be the catalyst for self-reflection. Indeed, for researchers (who are often publlcly
funded
"riti"ir*
to undertake research) it perhaps is impoftant to reflect on the central role that they are assuming and

whether they are indeed iulfilling the role that might be expected of researchers within that particular
discipline.
 =
-,.?7
=?.
: : * ft i1 I ilAL PA Ri -* [ *? itJ[F * f 4f i'; il tl Ti f{ S 595

] -.]APTER SUMMARY

:rrtr'r llrovidcs an o\-erl-ic\\/ o{'research tlrat }ras been undertrrkcn bv people u.ho have
.'.itlerl as rvorkirg u.ithin the . These researchers
.riticirl o{'current accounting practices. Tlrcv irrgue that exlsting financi:rl accounting
U:ed :r. tc
' -:: :ull|l{)rt the culrent ecoriornic arxl social stnrctures-stmctures t}iat unf:rirl1, benefit
r-eier
al aPP'rl;lri ti:
l,,plcirttlleexpense o1'otlir-rs.Ther,ieu,tl-r:rt{ini,rncialaccountingpracticesirrencutrtrl accor.rllirig fesearah
ihai goes beyon.j
tttir e izrs promoted in various crrnceptuai frarneurork projects) is challengecl.
oi,estr+ning rilir*tl:rr
- . rritrcill perspective of accounting co\iers n'ranr.' di{I'erent spccific perrspecrtives. ancl this pai'tri:L.iilr rrethcds
'r. lras c\plored onl1,a f'eur o{'tlie rnajor ones. IIorvevel ilt a llroad ler'el. much critical li eccrirr.::ing
::hou iti L-re ilm i:layeii,
.:urq research is grounclecl in clrrssical Politicril Ecrinornr. 'Iheon'. in rl'hich coriflict,
elc ii:s,.e;cl
-.' ,urd tlie- role of the State are centrirl to tlie analtsis. \\,'hile tlre rese:rrch positions icil.jses cn ihe
.:,r triticiri accounting schol:rrs ilre inlirrrnecl b1, '1 !'1- s1 critique of capitalism. tlicrc r,::ie of a,:rounling
in susrariil':g the
,nr other critical accounting reserirchers r"".hose critiqucs of the role of accormting in prr'li iegen i:*srtroiis
. :rrrrq inequities in societl are not birsed on \,{arrist pirilosophr'. A con'rmon therne alitolrg ci ihnss rn ccrirol rf
. \l:u'rist (ilnd sornc' rion-Nlarrist) critical accounting theorists is a cirll for funclzir-nental pririicuiar resoLircet

. :t! ir) hou' societv is stmctured, as, u.ithout this restructuririg, thev believe that irn\- {ri:pria ) 'trh11e
i.;nrierrliiring *'
.:,lcs or n'rotlifications to accortnting practices u.ill htne no effect in riaking society il]ore ,(t+!.nrnrgr\p,;oice
. .,:.Lble lbr trll. Critical theolists :rlso argue tliat gor.ernments (the Stnte) tencl to put in place *''n"-'
] :::Tj"
.-lirinisrns and regrriations to support eristirig sociiil str-uctures. N{anv accollrting researchcrs .-::: j:,----
.o belier.ecl to be supporters
-J.o surfDorters of particular uolitical ideologies,
oarticular political ideoloiries. u.ith the resrilts of their resetrrch
reserrrrl'r
' :rl irflnerrtial in supporting those people rvith privileged arccess to scarce capltal.
\lthough this chripter is relatir.'e11,'brief, the aim htrs been to pror-icle an insight into a point o1'r.ieu,that
.
-..,-iitior.rallv has
not received a great deal of attention in rrccounting education or in rrccounting jountals.
-- -r'hzrps. zrs tlie critictrl theorists rvould trrgue, this ]ack of attention is cluc to the llct that this branch of the

. -., rr nrtir-rg literature challenges so miinv of the r,ieus and values held not onlr.- bv accourtrlnts but b1-' rrrar4.
.jLcls uitliin sociehi The liter:rhrre c:.ur inrleerl be rluite conf'ronting. It does, hou,ever', pror.ide a diflerent
:rlsl)ecti\-e on the role of accountallts, ancl one that u,e shoulcl not intmecliatelv clisrniss. I{'the literature
- ,1r15es L1s to be critical of our ,run position as irccoultants within sociehl to stand back und question our role

':thin societv'. then u,ell :rnd good. In concluclirig this cliapter u,e can rellect upon the following hr.,o quotes:
-::ounting's capaciiy io creaie anC control social reality iransiaies rirto emDowermeni i-or ilir:ce wi-ic use ii.
S-.:h power resides in organisations and ii'lsiiiLiiions, where ii is used to insiilivalLieg, sustain legiiinlsing
.'_''tlrs, mask conflici anti prcrnote self-perpeiuating sociai crders.'fhroughoui societ-y, the infiuence r:l
,!.ounting permeates fundamental issi;es concerning wealth distriautron, scclal lustrce, political rCeclcgy
?lld environmental degraciation. Conirary to irublic opinicn, accouniing is not a static ref lection of econunr c
'eality. bLrt rather is a highly parlisan activity (l3aker and Bettner, t99i, p.29s).
The adopiion of a Critrcal Theci'y perspective shouid not be seen as ileing synonyrnous wiih the whoiesale
:electroti of the tnstitution of accouirtancy and its various prac'iices. Whiist these have been ceveloped i0
s-.rve the inierests of the minority, and in nrany instances to the great Cisacvanrage of the maloi'ity, they
ray prnvide a basis on which to consttuct an alternalive set 0f structures and processes consjsient tryiih
social betterment. The Critical Theory perspectrve ofiers a means oJ establishinC yh!: inlght be desirable
li
to retain from wlrat cLirrently exists, whiie always being inlormed by 1.hc belief that tt rs pr;ssible to buiid
someLhing bettei, whrch will serve the inlerests ol a rnuch Drcader sei of stakehoiclers. lt is therefore not
a perspective to be embraced llghtly or dr-ployed beca:se il proir scs to furnisil an(other) inieresling set
cf insights. As the embodiment of ihe philcsophy of pra;<rs, Critical Theory does ilot cuttent rtself with
understanding accounting. By rneans oi intorverrtion, Critical lheorir seeks io promote a belter fit between
accouniing and the interests of all societl,'s various stakeholder groups (Rr"r:lender, 2006, p ?66').
 596 7'i ?i A i.r i: i !;1- b.: * :,
i ?.ii i 7i,.;' T a t..: ie'
"

QUESTIONS
12.1 What is a critical perspective of accounting? L0 1? 2
by critical
12.2 what are some of the fundamental differences between the research undertaken
L0 12 .t, r2.3
theorists, relative to the work undertaken by other accounting researchers?
Framework for Financial
12.3 From a critical perspective, what is the role of the IASB Conceptual

ReportingJ L0123'124
objective or neutral?
12.4 From a critical perspective, can financial statements ever be considered
ExPlain Your answer. L0 12 3
argue that
12.5 lf it is accepted that there are many inequities within society, would critical theorists
or could help' or would
introducing more accounting, or improved methods of accounting, would
problems? Explain your answer' Do you
they argue that such a strategy will only compound existing
agreewiththepositiontakenbythecriticaItheorists?Why?L0l?3'12'4
grounded within Positive
12.6 Critical theorists would challenge the work of authors whose work is
AccountingTheory.Whatisthebasisoftheiropposition?10121,12'2
12.1 Roslender (2006, P. 265) states:
a Critical Theory
Critical Theory makes no pretence of being objective . Those who embrace
perspective do.so because they recognise and value its partiality.
Explain the meaning of the above quote' L0 12'I,1?'2
labour and equity capital'
12.8 organisations need various resources to operate. Two such resources are
Providers of labour and equity capital receive payments in return
for their resources Payments to
are referred to as dividends'
labour are often referred to as wages, and payments to shareholders
which reduce
wages-which.are a payment to one stakeholder group (employees)-are expenses
I
group (owners)-are a
profits, whereas dividends-which are a payment to another stakeholder
encourage organisations
distribution of profits and therefore do not reduce profits. Capital markets
profits, which by implication puts pressures on organisations to reduce wages At
the
to maximise
same time, capital markets encourage higher dividend
payments to owners.
(a) ,critical perspective' how would critical theorists view the fact that payments to one group
From a
(workers) is to be minimrsed but payments to others (owners) is to be maximised?
the interests of
(b) would critical theorists see this as an example of accounting practice advancing
the owners over and above the interests of workers?
relating to payments
(c) How do you, personally, feel about the different accounting treatments
resources to an
that are made to parties that are both considered as providers of necessary
organisation? L0 12 3 12 4
grounded within Legitimacy
12.g critical theorists would challenge the work of authors whose work is
Theory. What is the basis of their opposition? L0 12 I' l2'2
is deemed to be complicit in sustaining social inequities, how would
critical theorists
12.10 lf accounting
argue that accounting can be 'fixed'? L0 12 3
of accounting are
12.11 Tinker, Merino and Neimark Qg82) argue that'the social alleglances and biases
are "masked" pretensions of objectivity and independence' Explain
rarely apparent; usually, they
the basis of this argument. L0 12 1, 12 2
it was noted that
12.12 ln chapter 9 the idea of 'personal social responsibility'was discussed and
some commentators have argued for personal social responsibility-or,
as it has also been called,
social responsibility
corporate stakeholder responsibility-on the grounds that expecting corporate
 becomes a way of 'passing the buck'-evading personal responsibility for doing the ,right
thing,. A
quote from Chandler (2010) was provided in which he states:
Let's get beyond the id-ea that firms are inherently evil. Such a perspective does not absolve
firms of responsibility, but recognises that for-profit organizations add considerable social
value
in producing products and services that are in demand. lt also recognizes that the relationship
between firms and society is syrnbiotic and, as a result, the responsibility to ensure social
responsible outcomes is shared. In the same way that we deserve the politicians we vote
for, we
also deserve the companies we purchase from.
Explain how you think critical accounting theorists might respond to the above quote from Chandler
(2010). L0 12.1
12.13 Cooper and Sherer (1984) argue that 'accounting researchers should be explicit about the
normative elements of any framework adopted by them. All research is normative in the sense
that
it contains the researcher's value judgements about how society should be organised. However, very
few accounting researchers make their value judgements explicit'. Do you agree or disagree with
this claim? Why? L0 12.1,12.2
12.14 What does Scott (2OO7, p. 23) mean when he says:
The point of critique is to make visible those blind spots in order to open a system
of change ...
To open the possi!irity of thinking (and so acting) differenfly. L0 12.2
12'l5 Explain the importance in critical accounting theory of assumptions regarding the distribution
of power in society. How do these assumptions differ from those adopted in other theoretrcal
perspectives? L0 12.2, 12.5
l2'16 CPA Australia (2005) made a submission to the Australian Government inquiry into
corporate social
responsibility in which it stated (p. 6):
While there is strong public (88%) and shareholder (86%) support for Government
to mandate
the reporting of companies'social and environmental reporting this is not reflected in
the views
of business leaders (53%). CPA Australia believes this reflects a valid business concern that
mandatory reporting would not enhance the value of the information provided and
introduce an
unnecessary layer of regulation.
Evaluate this statement from a ,critical, perspectrve. L0 12.1, 12.3,1?.5
12'17 Why might critical theorists be opposed to academic research that attempts to assist corporations
to
put a cost on their social and environmental impacts? L0 12.6
12-18 Cooper (2002, p.452) provides a quote from Callinicos (1999, p. 309), which states:
ln the self contained university world, intellectual life is specialized and professionalized:
academics, even those who think of themselves as political radicals, write for each
other using
an idiom which renders their work uninteiligibre to those outside.
Cooper g. aSZ then states:
ln short, academics at the beginning of the twenty-first century write theoretical pieces, which
hardly anyone reads, mainry for each other using impenetrabre Ianguage.
Explain the ideas that Cooper is trying to project. Further, if we accept the view
being promoted,
does this diminish the 'contribution, of such researchers? L0 12.7
12'19 Evaluate the following quote from the Business Council of Australia (2005) from ,critical,
a perspective:
Given the difficulty defining corporate social responsibility (CSR), as well as the
fact that CSR
activities are already broadly being pursued in Australia by large corporations, mandating
cSR
through legislative intervention runs the risk of stifling the innovative and creative approaches
to
CSR that are being adopted by Australian companies. L0 lZ.4,lZ.5

I
>-,-
-fl

rl
 598 rlflArue i&i- 3te *tii\iTlhiil Ti-if*fiY

12.20 Baker (2OlI, p. 209) states:

By the end of the 1980s, there was a distinct separation in the accounting research disciplines,
not only into sub-disciplines in the United States, but also into paradigmatically separate fields,
such as positivist and critical accounting research. For most part, these two fields have had
little interaction, with scholars in one field barely acknowledging the existence of scholars in the
other field.
Why do you think there would have been such little'interaction'? L0 12.1,12.2

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L.