Chapter 13 - Theory Flashcards
Critical Perspective
The critical perspective, explicitly considers how the practice of accounting tends to support particular economic and social structures (which are typically considered by critical theorists as being unfair) and reinforces unequal distributions of power and wealth across society.
*rejects the view that accounting typically provides an objective and unbiased account of particular transactions and events.
Critical Accounting Theory
The term is used to refer to an approach to accounting research that goes beyound questioning whether particular methods of accounting should be employed, and instead focuses on the role of accounting, and therefore accountants (and many accounting researchers), in sustaining the privileged positions of those in control of particular resources while undermining or restraining the voice of those without capital.
Emancipatory process is central, which relates to efforts aimed at removing oppresion of some groups or procuring political rights or equality for particular disenfranchised groups.
Epistemological diversity
Can be considered to represent an acceptance of a diversity of beliefs in how knowledge is developed; what methods and methodologies are appropriate for developing knowledge; and an acceptance of different world views. It represents an acceptance that there are different views.
Promoted by Critical Accounting Theory.
Ontological Beliefs
CAT believe that social reality is socially constructed, yet once constructed, it produces real, tangible effects, particularly marginalising ones (Gendron, 2018).
Partisan approach
A partisan approach is on taken ´by an adherent or supporter of a person, party, or cause´. Therefore, if critical theorists and other theorisits had a particular view (or theory) about how society should function to achieve certain ends or causes, then, in accord with a partisan approach this will impact on the practices they support or oppose.
Why is a critical perspective on
accounting important?
The insights provided by the critical theorists are important as
they provide a different, and potentially confronting way, of
thinking about the role of accounting, the accounting
profession and accountants within society – one that is often
overlooked or ignored by researchers from other paradigms.
The insights will potentially cause us to re-examine some of
our taken-for-granted assumptions about the role of accounting
research and the role of accounting practice within society.
Critical perspectives on
accounting some characteristics
*Purpose = Developing a better understanding of marginalisation processes in society as a basis to engage in social praxis
* The researchers do not try or pretend to be
neutral (Degan, p. 672). I.e. Partisan. Openness to any kind of research method (qualitative or quantitative) that allows the researcher to develop a
better understanding of marginalisation processes (as a basis to engage in social praxis)
* Argues based on social praxis, i.e. that there is
dual relationship between theory and practice, whereby theory influences social practices while social practices also influence theory.
(Degan, p. 673)
* Ontological belief that social reality is socially constructed, yet once constructed, it produces real, tangible effects, particularly marginalising ones.
* Argues that accounting is not objective and / or
neutral (Degan, p. 677)
* Consider accounting to support a privileged
position of some stakeholders (Degan, p. 677). Vested interests in maintaining the status quo.
Counter accounts
Counter accounts are alternative representations or alternative ‘accounts’ of organisations’ performance, produced often by NGOs with the intent to address alleged imbalances in power and various social inequities – something that critical theorists tend to focus upon (see our earlier
discussion).
Monologic and dialogic accounts
Monologic accounts provide one world view, while such accounts are likely biased in representing one world view (that of managers whose interests are assumed to be aligned with investors), managers, accountants and the accounting profession typically promote these corporate reports as objective
(and, therefore, unbiased) representations of an underlying reality (just as the IASB Conceptual Framework promotes the representational faithfulness of general purpose financial reports).
Dialogic accounts can be considered to be the antithesis to monologic accounting. Brown and Dillard (2015, p. 250) note that the aim of dialogic accounting is to enable a diverse range of societal actors to account for things that traditional accounting ignores, and to develop systems of accounting that acknowledge divergent ideological positions. The aim is ‘to widen the number and kinds of stories that get told and the actors who tell them.
Both prescriptive and descriptive, varies among practioners?
Marxist critique of accounting
Probably the founding branch of the CAT perspective, critiques capitalism.
The application of the double entry accounting system, with the associated definitions of ‘assets’ and ‘expenses’ is consistent with this perspective, wherein the interests of owners of capital appear to be prioritised over the interests of other stakeholders. We treat payments to workers as expenses, but do not consider payments to owners as expenses, is consistent with the concerns raised by Marx.
Capitalism is fundamentally flawed. Aim to increase profits => Mechanisation of factory => reduced labours => reduce wages => less demand (buying capacity decrease) => threathens the prosperity of capital.
This inherent instability in turn leads to unemployement, inflation and economic depression. Marxist argues that the actions taken by governments and businesses to adress negative outcomes (policies against unemployement, anti-inflation) are treating symptoms and not addressing the underlying cause, i.e. the capitalism system in of itselfs. The instability threathens to undermine the power and wealth of capital => owners will take action to protect their privileges, power and wealth. Reinforcing the status quo.
Critical perspective on CSR
While calls for greater disclosure of social responsibility
information would seem to be a move in the right direction,
some critical theorists argue that such efforts are wasted
unless they are accompanied by fundamental changes in how
society is structured. They would argue that the disclosure of
corporate social responsibility information, which is
predominantly under the control of the organisations
themselves, acts to legitimate, and not challenge, those
providing the information.
