The Critique of Accounting Theory

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Faculty of Commerce

Faculty of Commerce - Accounting & Finance Working Papers
University of Wollongong Year 

The Critique of Accounting Theory
M. Gaffikin
University of Wollongong,

This working paper was originally published as Gaffikin, M, The Critique of Accounting Theory, Accounting & Finance Working Paper 06/25, School of Accounting & Finance, University of Wollongong, 2006. This paper is posted at Research Online.

University of Wollongong
School of Accounting & Finance

The Critique of Accounting Theory

Working Papers Series

Michael Gaffikin

School of Accounting & Finance University of Wollongong Wollongong NSW 2522 Australia Tel +61 (2) 4221 3718 Fax +61 (2) 4221 4297 eMail

The Critique of Accounting Theory
Michael Gaffikin*
School of Accounting and Finance, University of Wollongong, NSW 2522

In previous papers (Gaffikin 2005a, 2005b, 2005c, 2006) the discussion has examined accounting as a science, with attempts to employ a scientific methodology; as a purely technical expression of economic theory, heavily dominated by research in finance; and as part of “law”, albeit law (regulation) heavily influenced by dominant economic and political ideology. That discussion revealed that all these perspectives have suffered from severe shortcomings. Fortunately, there are other perspectives on accounting which may prove more fruitful and some of these will be discussed in this paper. A common element in many of these alternatives approaches is to view accounting as a social science. Social Science A few hundred years ago there were disciplines referred to as natural philosophy and moral philosophy. The former evolved into the natural sciences, the latter into the social sciences. However, like so many of the terms we use regularly, the term social science is difficult to define precisely and has been the subject of much debate. Essentially, social science is the study of aspects of human society. It has, over the last two hundred years, been heavily influenced by positivism with the underlying assumption that the study of societies can be undertaken scientifically. Closely associated with this, then, is the intention that it will apply the methods of the “natural sciences” to study human society. Sometimes the term has been taken to mean the discipline sociology but in a broader sense, the term includes a variety of specific disciplines that have evolved very differently and remain so. Thus, while collectively the term may be used to imply the use of scientific methodology, several other methodologies have been promoted. Accounting can be included with those disciplines concerned with aspects of human society because, clearly, it is a “system of thought” designed by humans to assist human decision making and influence (human) behaviour. Therefore, a social constructionist ontology, rather than a realist ontology, would seem to be a more appropriate basis for conceptualising accounting. Consequently, rather than attempting to recreate the methods of the natural sciences, it is more appropriate that accounting turn to the methods that recognise the human aspects of the discipline rather than claim an intellectual status akin to the natural sciences. Unfortunately accounting theorists and researcher have been very slow to recognise this as is evident in the heavy involvement in the neo-empirical research programs over the last fifty years. There is some truth in the view that accounting is a fairly “young” intellectual discipline and has yet to demonstrate the maturity of self reflection and understanding. To date it has been happy to accept the position of being a sub-discipline of (and consequently inferior to) economics. As a result *


The Critique of Accounting Theory, p2

it has relied heavily on economic theories and methodologies. This is not to...
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