Wai Fong Chua

Radical Developments in Accounting Thought
Author(s): Wai Fong Chua

Source: The Accounting Review, Vol. 61, No. 4 (Oct., 1986), pp. 601-632
Published by: American Accounting Association
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THE ACCOUNTING REVIEW
Vol. LXI, No. 4
October 1986
Radical Developments in
Accounting Thought
Wal Fong Chua
ABSTRACT: Mainstream accounting is grounded in a common set of philosophical

assumptions about knowledge, the empirical world, and the relationship between theory and
practice. This particular world-view, with its emphasis on hypothetico-deductivism and
technical control, possesses certain strengths but has restricted the range of problems studied
and the use of research methods. By changing this set of assumptions, fundamentally
different and potentially rich research insights are obtained. Two alternative world-views and
their underlying assumptions are elucidated-the interpretive and the critical. The conse-
quences of conducting research within these philosophical traditions are discussed via a
comparison between accounting research that is conducted on the "same" problem but from
two different perspectives. In addition, some of the difficulties associated with these alterna-
tive perspectives are briefly dealt with.
The history of thought and culture is, as Hegel showed with great brilliance, a changing
pattern of great liberating ideas which inevitably turn into suffocating straightjackets,
and so stimulate their own destruction by new emancipatory, and at the same time,
enslaving conceptions. The first step to understanding of men is the bringing to con-
sciousness of the model or models that dominate and penetrate their thought and action.
Like all attempts to make men aware of the categories in which they think, it is a difficult
and sometimes painful activity, likely to produce deeply disquieting results. The second
task is to analyse the model itself, and this commits the analyst to accepting or modifying
or rejecting it and in the last case, to providing a more adequate one in its stead.
[Berlin, 1962, p. 191
SINCE the late 1970s there have been The author would like to acknowledge the continual
signs of unease among academics support of Tony Lowe and the helpful comments of Ray
Chambers, David Cooper, Anthony Hopwood, Richard
about the state and development of Laughlin, Ken Peasnell, Tony Tinker, Murray Wells,
accounting research. In 1977 the Ameri- David Williams, participants at a Sydney University
can Accounting Association's (AAA) Research Seminar, and the anonymous reviewers of this
journal.
Statement on Accounting Theory and
Theory Acceptance concluded that there
was no generally accepted theory of ex- Wai Fong Chua is a Senior Lecturer
ternal reporting. Instead, there was a at the University of New South Wales,
proliferation of paradigms that offeredAustralia.
only limited guidance to policy makers.
Manuscript received September 1984.
In addition, the Committee was pessi- Revisions received August 1985 and February 1986.
mistic that a dominant consensus could Accepted March 1986.
601
602 The Accounting Review, October 1986
be realized since, through their reading The accounting domain is thus (a)
of Kuhn [1970], paradigm choice was characterized by apparently irreconcilable
ultimately a value-based decision cross-paradigmatic discussions and (b)
between incompatible modes of scien- hampered by some theories about
tific life. This view of accounting as a practice that, in the main, are neither of
''multi-paradigm science" is shared by nor informed by practice. Given the state
writers such as Belkaoui [1981]. of the discipline, this paper has a three-
Wells [1976], on the other hand, argues fold purpose.
that at present accounting lacks a defini- Contrary to the conclusion of the AAA
tive paradigm or disciplinary matrix Statement on Accounting Theory and
[Kuhn, 1970, p. 182]. According to the Wells [19761, this paper argues that
argument, an identifiable disciplinary accounting research has been guided
matrix emerged in the 1940s and provided by a dominant, not divergent, set of
the basis for "normal science" activity. assumptions. There has been one general
However, research in the 1960s and 1970s scientific world-view, one primary disci-
brought about criticisms of this matrix plinary matrix. And accounting research-
and led to the emergence of several ers, as a community of scientists, have
"schools" of accounting that start from shared and continue to share a constella-
different axiomatic positions. As yet, tion of beliefs, values, and techniques.
none of these schools has formed the These beliefs circumscribe definitions of
foundation of a new disciplinary matrix. "worthwhile problems" and "accept-
Accounting, it appears, remains in the able scientific evidence." To the extent
throes of a "scientific revolution." that they are continually affirmed by fel-
While academics debate whether low accounting researchers, they are
accounting is a "multi-paradigm" or often taken for granted and subcon-
"multi-school" discipline, they agree that sciously applied. In this way, a common
world-view may be obscured by appar-
dissension is rife. In addition to this lack
of consensus in the academic arena, there ently conflicting theories.
are problems with the relationship The first aim of this paper is to enable
between accounting theorizing and accounting researchers to self-reflect on
organizational practice. The 1977-78 the dominant assumptions that they
"Schism" Committee of the AAA share and, more importantly, the conse-
indicated that academics neither spoke quences of adopting this position. The
the language nor saw the problems of mainstream world-view has produced
practitioners. Similarly, Hopwood benefits for the conduct of accounting
[1984a] and Burchell et al. [1980] argue research with its insistence on public,
that particular rationales have been im- intersubjective tests and reliable empiri-
puted to accounting procedures, and cal evidence. However, it has limited the
these may be divorced from the actual type of problems studied, the use of
roles that these procedures play in prac- research methods, and the possible
tice. More recently, Kaplan [1984] has research insights that could be obtained.
chided academics for their preoccupation Such limitations only become clear when
with esoteric economics and management they are exposed to the challenge of alter-
science journals and their reluctance to native world-views.
"get involved in actual organizations and The second purpose of this paper is to
to muck around with messy data and rela- introduce such alternative sets of assump-
tionships" [p. 415]. tions, illustrate how they change both
Chua 603
problem definition and solution, and classified using these four paradigms.
offer research which is fundamentally (Hopper and Powell [1985] actually
different from that currently prevailing. combine the two radical paradigms.)
Finally, this paper argues that not only The Burrell and Morgan framework,
are these alternative world-views dif- however, is not without its problems. A
ferent, they can potentially enrich and detailed discussion of these difficulties is
extend our understanding of accounting found in Appendix 1. Briefly, these
in practice, thus answering the recent problems stem from: (a) their use of
calls for studying accounting numbers in mutually exclusive dichotomies (deter-
the contexts in which they operate. minism v. voluntarism); (b) their mis-
reading of Kuhn as advocating irrational
RECENT CLASSIFICATIONS
paradigm choice; (c) the latent relativism
OF ACCOUNTING PERSPECTIVES
of truth and reason which their frame-
To perceive commonality amidst theo- work encourages; and (d) the dubious
retical diversity, one has to examine the nature of the differences between the
philosophical (meta-theoretical) assump- radical structuralist and humanist para-
tions that theories share. In accounting, digms. In addition, transplanting an
there have been several attempts to delin- unmodified framework from sociology
eate these assumptions [Jensen, 1976; implies some equivalence between the
Watts and Zimmerman, 1978, 1979]. two disciplines. In the absence of a
However, these efforts concentrate on detailed exposition of such commonali-
only a few dimensions and have been ties and the problems cited above, it was
ably and powerfully criticized [Christen- decided not to adopt the Burrell and
son, 1983; Lowe, Puxty, and Laughlin, Morgan framework. Instead, accounting
1983]. perspectives are differentiated with ref-
Recently, more comprehensive dimen- erence to underlying assumptions about
sions have been proposed. For instance, knowledge, the empirical phenomena
Cooper [1983] and Hopper and Powell under study, and the relationship
[1985] rely on the sociological work of between theory and the practical world
Burrell and Morgan [1979] and classify of human affairs.
accounting literature according to two
A CLASSIFICATION OF ASSUMPTIONS
main sets of assumptions: those about
social science and about society. Social All human knowledge is a social arti-
science assumptions include assumptions fact-it is a product of the constituting
about the ontology of the social world labor of people as they seek to produce
(realism v. nominalism), epistemology and reproduce their existence and wel-
(positivism v. anti-positivism), human fare [Habermas, 1978]. Knowledge is
nature (determinism v. voluntarism), produced by people, for people, and
and methodology (nomothetic v. ideo- is about people and their social and
graphic). The assumption about society physical environment. Accounting is no
characterizes it as either orderly or sub- different. Like other empirically-based
ject to fundamental conflict. According discourses, it seeks to mediate the rela-
to Burrell and Morgan [1979], these two tionship between people, their needs,
sets of assumptions yield four paradigms and their environment [Tinker, 1975;
-functionalist, interpretive, radical Lowe and Tinker, 1977]. And in a feed-
humanist, and radical structuralist. Par- back relationship, accounting thought is
ticular accounting theories may then be itself changed as human beings, their
environment, and their perception of ied in the same manner. Alternatively,

their needs change. Given this mutually these beliefs could be criticized for reify-
interactive coupling between knowledge ing individuals and obscuring the role of
and the human, physical world, the pro- human agency. People, it may be argued,
duction of knowledge is circumscribed cannot be treated as natural scientific
by man-made rules or beliefs' which objects because they are self-interpretive
define the domains of knowledge, empir- beings who create the structures around
ical phenomena, and the relationship them (see Habermas [1978] and Winch
between the two. Collectively, these [1958] for a discussion). Yet other onto-
three sets of beliefs delineate a way of logical positions which attempt to dialec-
seeing and researching the world. tically relate this reification-volunta-
The first set of beliefs pertains to the rism debate have also been advocated
notion of knowledge. These beliefs may [Bhaskar, 1979]. Whichever position is
be sub-divided into two related sets of adopted, the issue of ontology lies prior
epistemological and methodological to and governs subsequent epistemologi-
assumptions. Epistemological assump- cal and methodological assumptions.
tions decide what is to count as accept- Social science is also based on models
able truth by specifying the criteria and of human intention and rationality. Such
process of assessing truth claims. For models are necessary because all knowl-
instance, an epistemological assumption edge is intended to be purposive and is
might state that a theory is to be consid- constituted by human needs and objec-
ered true if it is repeatedly not falsified tives. Economics and accounting, for
by empirical events. Methodological instance, are based on assumptions
assumptions indicate the research about the information needs of people
methods deemed appropriate for the given limited access to resources. Hence,
gathering of valid evidence. For the use of constructs such as "economic
example, large-scale sample surveys or men," "bounded rationality,' ''prefers
laboratory experiments that are "statis- maximum leisure," or "desires informa-
tically sound" may be considered accept- tion about future dividends and cash
able research methods. Clearly, both sets flow."
of assumptions are closely related. What Further, there are assumptions about
is a "correct" research method will how people relate to one another and to
depend on how truth is defined. society as a whole. As Burrell and
Second, there are assumptions about Morgan [1979] point out, every social
the "object" of study. A variety of these theory makes assumptions about the
exist, but the following concerns about nature of human society-is it, for
ontology, human purpose, and societal example, full of conflict or essentially
relations have dominated much debate in
' The word "beliefs" is used to show the tentative,
the social sciences.2 To begin, all empiri-
open, and historically-bound nature of such assump-
cal theories are rooted in an assumption tions. As social and historical contexts change, so will
about the very essence of the phenomena these meta-theoretical rules. In turn, these "scientific
revolutions" will materially affect people and their envi-
under study. Physical and social reality,
ronment.
for instance, may be presumed to exist in 2 For a discussion see Weeks [19731, Fay [19751, Bern-
an objective plane which is external to an stein [1976, 1983], Driggers [1977], Bhaskar [19791,
Brown and Lyman [1978], Burrell and Morgan [1979],
independent knower or scientist. Within
Habermas [1978], Van de Ven and Astley [1981], Astley
this perspective, people may be viewed as and Van de Ven [1983], Gadamer [1975], Schutz [19671,
identical to physical objects and be stud- and Winch [19581.
Chua 605
TABLE I
A CLASSIFICATION OF ASSUMPTIONS
A. Beliefs About Knowledge
Epistemological
Methodological
B. Beliefs About Physical and Social Reality
Ontological
Human Intention and Rationality
Societal Order/Conflict
C. Relationship Between Theory and Practice
stable and orderly? Are there irreconcil- debated in the social sciences. In addi-
able tensions between different classes, tion, they discriminate well between the
or are such differences always effectively alternative disciplinary matrices now sur-
contained through a pluralistic distribu- facing in accounting research. Using
tion of resources? other dimensions such as different con-
Third, assumptions are made about cepts of income, measurement, or value
the relationship between knowledge and would not have highlighted the funda-
the empirical world. What is the purpose mental philosophical differences
of knowledge in the world of practice? between these accounting perspectives.
How may it be employed to better Also, these assumptions are not posed as
people's welfare? Is it intended to eman- mutually exclusive dichotomies. This is
cipate people from suppression or to to encompass attempts to relate opposite
provide technical answers to pre-given ends of a spectrum of positions.
goals? As Fay [1975] shows, theory may Finally, unlike the work of Burrell and
be related to practice in several ways, Morgan,3 this set of assumptions is used
each representing a particular value posi- to assess the strengths and weaknesses of
tion on the part of the scientist.
Table 1 summarizes these assump- I This is a major difference between the use of the
classification in this paper and the non-evaluative stance
tions. The three general categories of
of Burrell and Morgan. In addition, the present classifi-
beliefs about knowledge, the empirical cation does not use mutually exclusive dichotomies and
world, and the relationship between the does not claim to comprehensively categorize all social
and accounting perspectives in a permanent classifica-
two are argued to comprehensively char-
tion. Because the assumptions about, for instance, soci-
acterize a disciplinary matrix. However, etal order and human rationality are seen as context-
the list of particular expressions of these dependent and changeable through time, the classifica-
tion only attempts to identify current perspectives which
general conditions is not exhaustive.
are emerging. These differences have the following
That is, other important assumptions result: although the individual assumptions used for the
under the category "beliefs about the classification appear similar to those of Burrell and
Morgan (ontological, epistemological, methodological),
physical and social world" may emerge.
the classification as a whole and its use differ in impor-
These assumptions are not immutable, tant respects. The apparent similarity arises because both
but historically specific. The assump- frameworks attempt to summarize and assemble sepa-
rate discussions in the social and philosophical disciplines
tions above were chosen because they
such that the distinctive nature of a disciplinary matrix
reflect dominant themes currently being may be identified.
alternative perspectives in accounting. ical realism-the claim that there is a

This paper is not an attempt to describe world of objective reality that exists
different world-views in a value-free, independently of human beings and that
non-evaluatory language. Recent philo- has a determinate nature or essence that
sophical debate [Kuhn, 1970; Popper, is knowable. Realism is closely allied to
1972a; Feyerabend, 1975] has demon- the distinction often made between the
strated the folly of the search for a per- subject and the object. What is "out
manent, neutral framework within there" (object) is presumed to be inde-
which competing paradigms and theories pendent of the knower (subject), and
may be evaluated. Neither recourse to knowledge is achieved when a subject
deductive proof nor to inductive general- correctly mirrors and "discovers" this
izations provides the foundation for objective reality.
rational paradigm choice, not even in the Because of this object-subject dis-
so-called hard sciences [Hesse, 19801. tinction, individuals, for example
Abandoning this concept of rational accounting researchers or their objects
choice, however, does not lead inevitably of study, are not characterized as
to irrationalism and relativism, which sentient persons who construct the
claim that there can be no rational reality around them. People are not seen
comparison among different paradigms as active makers of their social reality.
and forms of scientific conduct. A The object is not simultaneously the sub-
scientist is always obliged to give a ject. Instead, people are analyzed as enti-
rational account of what is right and ties that may be passively described in
wrong in the theory that is displaced and objective ways (for example as informa-
how an alternative is better. Of course, tion-processing mechanisms [Libby,
these arguments of truth and falsity may 1975] or as possessing certain leadership
prove "wrong" in the course of time. or budgetary styles [Brownell, 1981;
The criteria for paradigm comparison Hopwood, 1974]).
and evaluation are essentially judg- This ontological belief is reflected in
mental, open to change, and grounded in accounting research as diverse as the
social and historical practices [Bernstein, contingency theory of management
1983; Rorty, 19791. The notion of what accounting [Govindarajan, 1984; Hayes,
is scientific is always in the process of 1977; Khandwalla, 1972], multi-cue
being hammered out and being formed. probability learning studies [Hoskins,
Human fallibility, however, is not syn- 1983; Kessler and Ashton, 1981; Harrell,
onymous with irrationalism, and re- 1977; Libby, 1975], efficient capital
searchers are not forced to be locked markets research [Gonedes, 1974;
within the prison of their own frame- Beaver and Dukes, 1973; Fama, 1970;
work. Alternative frameworks may be Ball and Brown, 1968], and principal-
rationally compared [Bernstein, 1983] agent literature [Baiman, 1982; Zimmer-
such that not only do we come to under- man, 1979; Demski and Feltham, 1978].
stand an incommensurable paradigm, All these theories are put forward as
but also our own prejudices. attempts to discover a knowable, objec-
tive reality. This inference is based on
MAINSTREAM ACCOUNTING THOUGHT-
the absence of any expressed doubt that
ASSUMPTIONS
the empirical phenomena that are
Beliefs about Physical and Social Reality observed or "discovered" could be a
Ontologically, mainstream accounting function of the researchers, their a priori
research is dominated by a belief in phys- assumptions, and their location in a spe-
Chua 607
cific socio-historical context. Thus, a falsified," but on p. 34 speaks of scien-

stock market return is discussed as an tific theories which are able to account
objective fact that may be classified as for the occurrence of the phenomena
normal or abnormal. Similarly, "com- under study. These, and many other
petitive" environments, "sophisticated" examples, do not accord with Popper's
management accounting techniques, ideal of theories that specify what ought
"shirking," "adverse selection," and not to happen and scientists who seek to
"response to feedback" are character- find those occurrences that refute their
ized as representations of an objective, theories.
external reality. Finally, as Christenson [1983] shows,
the philosophical position of the propo-
Beliefs about Knowledge
nents of positive accounting is muddled
This prior assumption leads to a dis- at best-conforming neither to Fried-
tinction between observations and the man's instrumentalism nor to Popper's
theoretical constructs used to represent falsification criterion but apparently
this empirical reality. There is a world of appealing to the discredited position of
observation that is separate from that of the early logical positivists. Abdel-khalik
theory, and the former may be used to and Ajinkya [1979, p. 9] appear to fall
attest to the scientific validity of the into the same predicament with their
latter. In philosophy, this belief in one-line statement that "the researcher
empirical testability has been expressed following the scientific method...
in two main ways: (a) in the positivist's verifies his/her hypotheses by empirical
belief that there exists a theory-indepen- testing."
dent set of observation statements that In summary, accounting researchers
could be used to confirm or verify the believe in a (confused) notion of empiri-
truth of a theory [Hempel, 1966], and (b) cal testability. Despite this lack of clarity
in the Popperian argument that because as to whether theories are "verified" or
observation statements are theory- "falsified," there is widespread accep-
dependent and fallible, scientific theoriestance of Hempel's [1965] hypothetico-
cannot be proved but may be falsified deductive account of what constitutes a
[Popper, 1972a, 1972b]. "scientific explanation."
Accounting researchers believe in the Hempel argued that for an explana-
empirical testability of scientific tion to be considered scientific, it must
theories. Unfortunately, they drawhave on three components. First, it must
both notions of confirmation and falsifi- incorporate one or more general princi-
ability with considerable unawareness ples of
or laws. Second, there must be some
the criticisms of both criteria [Popper, prior condition, which is usually an
1972a; Lakatos, 1970; Feyerabend, 1975] observation statement, and third, there
and of the differences between themust two.be a statement describing whatever
Thus, Sterling [1979, pp. 39-41, pp. is being explained. The explanation
213-218] refers to empirical testability shows that the event to be explained fol-
with a quote from Hempel [1966]. But aslows from the general principles, given
Stamp [1981] points out, Sterling is also that the prior condition(s) also hold.
an advocate of Popper's thesis of falsifi- For example: Premise 1 (Universal
ability and invites attempts to falsify hislaw): A competitive environment always
arguments. Similarly, Chambers [1966, leads to the use of more than one type of
p. 33] writes that "the state of management accounting control. Prem-
knowledge consists in what has not ise been
2 (Prior Condition): Company A
faces a competitive environment. between the development of accounting

There-
fore: Conclusion (Explanandum): systems, changing environmental condi-
Company A uses more than one type of tions, and organizational forms. Gen-
management accounting control. eralizable relations are also sought in
This hypothetico-deductive account of multi-cue probability learning studies
scientific explanation has two main con- (between individual responses and
sequences. First, it leads to the search for accounting numbers in the performance
universal laws or principles from which of specific tasks), efficient capital mar-
lower-level hypotheses may be deduced. kets research (between accounting num-
To explain an event is to present it as an bers and aggregate market responses),
instance of a universal law. Second, and principal-agent literature (between
there is a tight linkage between explana- particular principal-agent contracting
tion, prediction, and technical control. arrangements and the use of accounting
If an event is explained only when its techniques such as cost allocation or
occurrence can be deduced from certain budgetary control). Indeed, so extensive
premises, it follows that knowing the is the search for generalizable relations
premises before the event happened that accounting researchers appear to
would enable a prediction that it would believe that the empirical world is not
happen. It would also enable steps to be only objective but is, in the main, char-
taken to control the occurrence of the acterized by knowable, constant rela-
event. Indeed, the possibility of control tionships.
and manipulation is a constitutive ele- These related assumptions about
ment of this image of scientific explana- "scientific" explanation have influenced
tion. the choice of research methods. Invari-
The use of the hypothetico-deductive ably, research reports are begun with a
model of scientific explanation is the statement of hypotheses followed by a
most consistent characteristic of extant discussion of empirical data and con-
accounting research. Abdel-khalik and cluded with an assessment of the extent
Ajinkya [1979] and Mautz and Sharaf to which the data "supported" or "con-
[1961] refer to it as the scientific method. firmed" the hypothesis. In addition,
Peasnell [1981], Hakansson [1973], data collection and analysis are focused
Gonedes and Dopuch [1974], and on the "discovery" of rigorous, general-
Scapens [1982], through their reviews izableof relations. Hence, there is a relative
financial and management accounting, neglect of "soft" methods such as the
illustrate that to do empirical research is case study [Hagg and Hedlund, 1979]
to conduct it within a hypothetico- and instead a widespread use of large
deductive mode. (Peasnell uses the samples, survey methods, experimental
phrase "hypothetico-positive.") laboratory research designs, and statis-
Related to hypothetico-deductivism, tical and mathematical methods of anal-
yet another common assumption is a ysis.
ubiquitous search for universal regulari-
Beliefs about the Social World
ties and causal relationships. The contin-
gency approach in management account- Mainstream accounting research
ing, the positive theory of agency [Fama makes two important assumptions about
and Jensen, 1982], and the transaction the social world. First, it is assumed that
cost theory [Chandler and Daems, 1979;human behavior is purposive. Thus,
Johnson, 1980] seek general connections although people may possess only
Chua 609
bounded rationality [Simon, 1976], they tions, and divisional performance cri-
are always capable of rational goal-set- teria [Hopwood, 1974; Zimmerman,
ting [Chambers, 1966; Fama and Jensen, 1979; Demski and Feltham, 1978]. Orga-
1982], whereby goals are set prior to the nizational conflict is not seen as reflec-
choice and implementation of strategic tive of deeper social conflict between
action. Also, human beings are charac- classes of people with unequal access to
terized as possessing a single superordi- social and economic resources. Con-
nate goal: "utility-maximization." structs such as sustained domination, ex-
Within this abstract notion of utility, ploitation, and structural contradictions
theories differ as to what may provide do not appear in mainstream accounting
utility. Principal-agent theory assumes literature. And conflicting interest
that an agent will always prefer less work groups are classified as possessing
to more [Baiman, 1982], while finance different legal rights within a given
theory assumes that a shareholder/bond- system of property rights-for example,
holder will desire the maximization of creditors versus shareholders. They are
the expected, risk-adjusted return from not categorized using antagonistic
an investment. Moreover, although only dimensions such as class or ownership of
individuals have goals [Cyert and March, wealth.
1963; Jensen and Meckling, 1976], col- Further, conflict is usually perceived
lectivities may exhibit purposive behav- as being "dysfunctional" in relation to
ior that implies consensual goals or the greater corporate goal (whatever it
common means which are accepted by may be). Examples of "dysfunctional"
all members-for example, the maximi- conflict include "budget biasing,"
zation of discounted cash flows or the "opportunistic behavior," "self-interest
minimization of transaction costs. These with guile," and "rigid, bureaucratic
assumptions about purposive behavior behavior." Dysfunctional behavior
are necessary because accounting infor- occurs when individual or group inter-
mation has long been ascribed a techni- ests override what is best for the organi-
cal rationale for its existence and pros- zation in some reified sense [Tiessen and
perity: the provision of "useful" and Waterhouse, 1983; Williamson, Wach-
"relevant" financial information for the ter, and Harris, 1975; Hopwood, 19741.
making of economic decisions [Paton The accounting researcher then seeks to
and Littleton, 1940; AICPA, 1973; specify procedures whereby such dys-
FASB, 1978]. And usefulness presumes functions may be corrected.
some prior need or objective. Finally, some mainstream researchers
Second, given a belief in individual imply that organizations and "free"
and organizational purpose, there is an markets have an inherent tendency to
implicit assumption of a controllable achieve social order. Left to themselves,
social order. While conflicts of objec- organizations appear to "naturally"
tives, for instance, between principals evolve administrative and accounting
and agents and between functional systems that minimize transaction costs
departments are recognized, they are in changing environmental conditions
conceptualized as manageable. Indeed, it [Fama and Jensen, 1982; Chandler and
is the effective manager's duty to remove Daems, 1979]. Also, the desirable
or avoid such conflict through the appro- amount of financial disclosure may be
priate design of accounting controls such determined by the "free" play of market
as budgets, cost standards, cost alloca- forces with a minimum of state interven-
tion [Benston, 1979-80]. Indeed, Jensen regarded as "neutral" information and

and Meckling [1980] attribute certain value-free in that sense. Similarly, Ster-
financial crises, for example the bank- ling [1979, p. 89] argues that accountants
ruptcy of Penn Central Railroad, to the as scientists may make "ought" state-
State abrogation of individual property ments about the means that are appro-
rights [Tinker, 1984]. People and mar- priate for the achievement of a given
kets thus appear to achieve order by goal. And Gonedes and Dupoch [19741
themselves. contend that researchers can only assess
the effects but not the desirability of
Theory and Practice
alternative accounting methods.
In terms of the relation between theory Table 2 summarizes these assumptions
and practice, mainstream accounting which provide a common framework for
researchers insist upon a means-end mainstream accounting research.
dichotomy. That is, accountants should
MAINSTREAM ACCOUNTING-
deal only with observations of the most
CONSEQUENCES AND LIMITATIONS
"efficient and effective" means of
meeting the informational needs of a There are several consequences flow-
decision-maker but should not involve ing from this set of dominant assump-
themselves with moral judgments about tions. First, because of the belief in
the decision-maker's needs or goals. For a means-end dichotomy, accounting
instance, an accountant might be able to researchers take as given and natural
inform the decision-maker that to [Tinker, 19821 a current institutional
operate successfully (usually defined framework of government, markets,
through notions of profitability) in an prices, and organizational forms. Ques-
uncertain environment, a rigid, bud- tions about the goals of a decision-
getary system is unsuitable. However, maker, firm, or society are seen as out-
the accountant cannot instruct a deci- side the province of the accountant.
sion-maker to operate in a certain/un- Similarly, concerns about the system of
certain environment nor to adopt a par- property rights, economic exchange, and
ticular budgeting system. Thus, only the distribution and allocation of wealth
"conditionally prescriptive" statements and wealth-creating opportunities are
of the form "if you want X, then I not raised. Mainstream accounting
recommend Y" are offered. research does not have as one of its
That this supposedly "value-free" expressed purposes an attempt to evalu-
stance itself represents the choice of a ate and possibly change an institutional
moral, value-laden position is not often structure. Societies may be capitalist,
recognized. Instead, its apparent "neu- socialist, or mixed, and markets may be
trality" is widely accepted and advo- monopolistic or firms exploitative. The
cated by members of the academic accountant, however, is said to take a
accounting community. Hence, Cham- neutral value position by not evaluating
bers [1966, pp. 40-58] argues that the these end-states. His/her task is simply
accountant can only provide informa- the provision of relevant financial infor-
tion about the financial means available mation on the means to achieve these
for the satisfaction of given ends. Since states. And as such goals, governing
such information is independent of any structures, or relations of exchange and
particular goal and the value placed production change, so does a flexible
upon that goal, accounting may be accounting system.
Chua 611
TABLE
DOMINANT ASSUMPTIONS OF MAINSTREAM ACCOUNTING
Theory is separate from observations that may be used to verify or falsify a theory. Hypothetico-deductive account of
scientific explanation accepted.
Quantitative methods of data analysis and collection which allow generalization favored.
Empirical reality is objective and external to the subject. Human beings are also characterized as passive objects; not
seen as makers of social reality.
Single goal of utility-maximization assumed for individuals and firms. Means-end rationality assumed.
Societies and organizations are essentially stable; "dysfunctional" conflict may be managed through the design of
appropriate accounting control.
Accounting specifies means, not ends. Acceptance of extant institutional structures.
This supposedly neutral position, how- creasingly accepted until it is a part of

ever, runs into difficulties. This itself is aour ''common-sense" knowledge.
value position which cannot logically be A second limitation relates to the
argued as "superior" to a position that assumption of human purpose, ration-
judges goals in the name of some ideal. ality, and consensus. When these con-
Weber [1949] recognized that the very sensual goals of "utility-maximization"
distinction between fact and value is it- are examined, they invariably are the
self a value judgment. Also, it amounts goals of the providers of capital. Al-
to conservative support, however indi- though accountants and auditors some-
rect, of the status quo. By not question- times suggest that they act in the "public
ing extant goals, there is a tacit acqui- interest," it is generally accepted that
escence with what is. Tinker, Merino, both managerial and external financial
and Neimark [1982] have also argued reports are intended to protect the rights
that such support helps to legitimize of investors and creditors [The Corpo-
extant relations of exchange, produc- rate Report, 1975; AICPA, 1973]. In
tion, and forms of suppression. addition, internal control and contract-
Further, the assumptions about ing procedures have as their expressed
human purpose in mainstream account- aim the prevention of managerial and
ing research have undermined the means- worker "excesses" and the safeguarding
end dichotomy. For once the notion of of the rights of "residual claimants"
"dysfunction" is admitted, it becomes [Fama and Jensen, 19821. Influenced by
difficult to separate a prescription of traditional micro-economics, main-
means from a prescription of ends. Rarelystream accounting thought is based on
do accountants write "technique X is the notion of the prior claims of the
dysfunctional only if the goal of the firm "owners" and further implies that the
is to maximize the discounted value of satisfaction of these claims provides the
its future cash flows. " Indeed, the means to satisfy all other claims. For
described/prescribed end becomes in- example, it is assumed that workers
desire a maximization of cash flows or [Burawoy, 1979; Benson, 1975; Marglin,

long-run profit, for without that they 1974] and interest groups [Larson, 1977;
could not be paid. Heydebrand, 1977]. No longer are orga-
Can one make such a simplistic nizations assumed to be collectivities
assumption of a corporate welfare func- wherein conflicts are successfully medi-
tion? Do all organizational members ated through contracting arrangements
agree on some ambiguous common end and "the market." Instead, they are seen
or means to that end? Or have such as possible repositories of deep conflict
beliefs left us with an overly-rationalwhich and reflect wider, societal contradic-
consensual model of human action and tions and crises [Burrell, 1981; Clegg,
the role of accounting [Cooper, 1983; 1981]. Mainstream accounting research
Burchell et al., 1980]? Recent organiza- has largely neglected these developments
tional theory [Weick, 1979; Meyer and which may offer new insights into the
Rowan, 1977; March and Olsen, 1976; power effects of accounting and accoun-
Georgiou, 1973] has begun to question tants within organizations and societies.
this goal-driven, rational basis of indi- A third limitation of the set of domi-
vidual and organizational action. It has nant beliefs is the lack of awareness of
moved beyond Simon's [1976] notion of controversies within the philosophy of
bounded rationality and argues that per- social science which have questioned
haps people do not strive towards goals realism and the empirical testability of
but retrospectively reconstruct goals to theories. Beginning with Popper [1972a]
give meaning to action. Goal statements and continuing through the arguments
then become the "son" rather than the of Kuhn [1970], Lakatos [1970], and
"father" of the deed, and people with Feyerabend [1975], post-empiricist phi-
solutions look for problems rather than losophy has generally agreed that obser-
vice versa. vations are fallible propositions which
This "loosening" of the rationality are theory-dependent and therefore
assumption has been accompanied by a cannot act as the neutral arbitrator
new set of metaphors that stress not the between competing theories. Indeed, the
structured, causal patterns of organiza- search for a trans-historical, permanent
tional life but the fluidity and equivocal- criterion of acceptability is now seen as
ity of human action and processes. Con- a futile exercise [Bernstein, 19831. This
cepts such as "negotiated orders" consensus has been accompanied by a
[Strauss et al., 1963], "organized anar- revived interest [Geertz, 1979; Winch,
chies," "loose coupling," "enactment 1958] in certain trends in German philos-
and organizing" [Weick, 1979], "orga- ophy [Gadamer, 1975; Wittgenstein,
nizational garbage cans" [Cohen, 1953] that emphasize the historically-
March, and Olsen, 1972], and "messy" bounded nature of all conceptual lan-
organizations [Mintzberg, 19791 all guages.
emphasize organizations as complex sets These arguments have coalesced such
of interactions and rules that are con- that the philosophy of science is in a
stantly being negotiated, produced, and state of flux; without the comfort of a
reproduced. neutral, objective reality, it faces the
In addition to this process orientation, threat of an absolute relativism of truth
there is a renewed interest in power and and irrational theory choice [Barnes and
political struggles [Benson, 1977a, Bloor, 1982; Feyerabend, 1975], and is
1977b] within and between organizations traversed by different attempts to
Chua 613
ground a rational set of criteria for osophical assumptions. It discusses two

theory adjudication [Habermas, 1978; alternative world-views: the interpretive
Popper, 1972a; Kuhn, 1970]. Main- and the critical.
stream accounting thought has devoted
THE INTERPRETIVE ALTERNATIVE
insufficient attention to these philosoph-
-AsSUMPTIONS
ical debates. There is some discussion of
Popper's falsifiability criterion, but little This alternative is derived from Ger-
of Lakatos's extensions or of other con- manic philosophical interests which
cepts of the function of theorizing and emphasize the role of language, interpre-
the standards necessary for theory accep- tation, and understanding in social
tance. Instead, accounting researchers science. As Schutz [1967, 1966, 1964,
work within some vague notion of an 1962] has been one of the most influen-
objective reality and of confronting tial proponents of this alternative, his
theory with data. ideas form the core of the description
Despite these limitations, it is impor- here.
tant to recognize the virtues of the philo-
sophical assumptions which ground Beliefs about Physical and Social Reality
mainstream accounting research. As Schutz begins with the notion that
Bernstein [1976, p. xxii] points out, at what is primordially given to social life is
their best they have insisted upon clarity an unbroken stream of lived experience.
and rigor, been committed to the ideal of This "stream of consciousness" has no
public and intersubjective tests, and have meaning or discrete identity until human
instilled a healthy skepticism toward beings turn their attention (self-reflect)
"unbridled speculation and murky on a segment of this flow and ascribe
obscurantist thought." These intellec- meaning to it. Experience to which
tual virtues have also been linked with a meaning has been retrospectively
genuine belief that neutral, empirical endowed is termed behavior. Social
knowledge can not only help people to science is generally concerned with a
escape from superstition and prejudice, special class of meaningful behavior-
but provide informed judgment which actions-which is future-oriented and
will better people's relations with their directed towards the achievement of a
natural and social environment. determinate goal. Because actions are
Mainstream accounting research has intrinsically endowed with subjective
attempted to develop useful, generaliz- meaning by the actor and always inten-
able knowledge which can be applied in tional, actions cannot be understood
organizations to predict and control without reference to their meaning.
empirical phenomena. It has insisted on However, in everyday life actions do
certain standards of validity, rigor, and not take place in a vacuum of private,
objectivity in the conduct of scientific subjective meanings. While human be-
research. But these once liberating ings are continuously ordering and clas-
assumptions have ignored new questions sifying ongoing experiences according to
being raised in other disciplines, imposed interpretive schemes, these schemes are
ever more severe restrictions on what is essentially social and intersubjective. We
to count as genuine knowledge, and not only interpret our own actions but
obscured different and rich research also those of others with whom we inter-
insights. The rest of this paper examines act, and vice versa. Through this process
the consequences of changing these phil- of continuous social interaction, mean-
ings and norms become objectively actor. Finally, there is the postulate of
(intersubjectively) real. They form a adequacy. As there is no neutral, objec-
comprehensive and given social reality tive world of facts which acts as the final
which confronts the individual in a man- arbitrator, the adequacy of a theory (or
ner analogous to the natural world. In explanation of intention) is assessed via
addition, despite continual refinement the extent to which the actors agree with
and modification of this social stock of the explanation of their intentions.4
knowledge, there are some temporarily How does one carry on this task of
stable constructs which become institu- interpretive understanding? Initially, it
tionalized, taken for granted, and used was mistakenly thought that the observer
to typify (structure) experiences. These had to "jump into the shoes/skins" of
typifications are an essential part of the the observed. Such a notion has been
social frameworks within which actions rightly discarded. However, it remains
are made intelligible. difficult to specify precise procedures for
the conduct of interpretive research,
Beliefs about Knowledge
such methods being similar to those of
Given this view of a subjectively- the anthropologist. They emphasize
created, emergent social reality, the observation, awareness of linguistic
research questions that are pertinent are: cues, and a careful attention to detail.
how is a common sense of social order Each item of information has to be inter-
produced and reproduced in everyday preted in the light of other items drawn
life; what are the deeply-embedded rules from the language and ideology of the
that structure the social world; how do "tribe" under investigation [Feyera-
these typifications arise, and how are bend, 1975, p. 251] rather than through
they sustained and modified; what are
the typical motives that explain action? I Schutz writes, "Each term in a scientific model of
In essence, the interpretive scientist seeks human action must be constructed in such a way that a
human act performed within the life-world by an individ-
to make sense of human actions by fit- ual actor in the way indicated by the typical construct
ting them into a purposeful set of indi- would be understandable for the actor himself as well as
vidual aims and a social structure of for his fellow-men in terms of common sense interpreta-
tions of everyday life. Compliance with this postulate
meanings. warrants the consistency of the constructs of the social
These explanations or models of the scientist with the constructs of common-sense experience
life-world must conform to certain cri- of the social reality" [Schutz, 1962, p. 44].
This postulate is similar to the positivist notion of veri-
teria. The first is logical consistency. fication and reflects Schutz's agreement with Nagel and
Schutz [1962, p. 43] writes that the "sys-Hempel on a number of important issues. These are: (a)
tem of typical constructs designed by the all empirical knowledge involves discovery through pro-
cesses of controlled inference, must be statable in propo-
scientist has to be established with the sitional form, and must be capable of being verified
highest degree of clarity and distinctness through observation; (b) theory means the explicit for-
of the conceptual framework implied mulation of determinate relations between a set of vari-
ables that explains a fairly extensive class of empirical
and must be fully compatible with the regularities; and (c) a social scientist should seek to be
principles of formal logic." This pos- completely disinterested in the construction of objective
tulate is required to ensure the "objec- explanations.
Schutz's position, however, is not necessarily accepted
tive validity of the thought objects con- by other interpretive philosophers. Gadamer [1975], for
structed by the social scientist." The instance, rejects the feasibility of a "disinterested
second is "subjective interpretation" observer" and implies that competing theories can only
be judged by (unspecified) historically-bound criteria
which means that the scientist seeks the that are temporarily agreed upon by a community of
meaning which an action had for the scientists.
Chua 615
TABLE
DOMINANT ASSUMPTIONS OF THE INTERPRETATIVE PERSPECTIVE
Scientific explanations of human intention sought. Their adequacy is assessed via the criteria of logical consistency,
subjective interpretation, and agreement with actors' common-sense interpretation.
Ethnographic work, case studies, and participant observation encouraged. Actors studied in their everyday world.
Social reality is emergent, subjectively created, and objectified through human interaction.
All actions have meaning and intention that are retrospectively endowed and that are grounded in social and historical
practices.
Social order assumed. Conflict mediated through common schemes of social meanings.
Theory seeks only to explain action and to understand how social order is produced and reproduced.
a priori definitions. Meanings are them- for-granted themes which pattern the
selves built on other meanings and social world in distinct ways. Interpretive
practices. As such, "thick" case studies science does not seek to control empir-
conducted in the life-world of actors are ical phenomena; it has no technical ap-
preferred to distant large-scale sampling plication. Instead, the aim of the inter-
or mathematical modeling of human pretive scientist is to enrich people's
intention. understanding of the meanings of their
actions, thus increasing the possibility of
mutual communication and influence.
The main beliefs about people are (a) By showing what people are doing, it
the ascription of purpose to human makes it possible for us to apprehend a
action, and (b) the assumption of an new language and form of life. Table 3
orderly, pre-given world of meanings summarizes these assumptions.
that structures action. However, Schutz
argues that purposes always have an ele- THE INTERPRETIVE ALTERNATIVE
-CONSEQUENCES
ment of pastness, for only the already
experienced may be endowed with mean- Some researchers have attempted to
ing in a backward, reflective glance. study accounting in action and to in-
Further, purposes are grounded in vestigate its role as a symbolic medi-
changing social contexts and are not pre-
ator [Hopwood, 1983, 1985, forthcom-
given. ing; Tomkins and Grove, 1983; Colville,
1981; Gambling, 1977]. The consequences
Theory and Practice
of adopting an interpretive perspective,
As Fay [1975] points out, interpretive with its emphasis on understanding, may
knowledge reveals to people what they be highlighted by comparing two pieces
and others are doing when they act and of work on budgetary control systems:
speak as they do. It does so by highlight- Demski and Feltham [1978] and Boland
ing the symbolic structures and taken- and Pondy [1983]. The first is conducted
within mainstream assumptions and the uals to be "resourceful, evaluative, max-

second reflects interpretive concerns. imizing men (or REMMs)." In addition,
For Demski and Feltham, the "bud- Baiman [1982, p. 170] points out that
getary control system" exists as a facet each individual is assumed to act in his
of reality that is external to the world of or her own interest and expects all other
the researchers, and indeed, of the prin- individuals to act solely to maximize
cipal and the agent. The system exists their own best interests.
and its existence is taken for granted; it is There are also implicit assumptions of
an exogenous variable. The budget is not what is dysfunctional for the "organiza-
seen as an entity which is "socially con- tion," that is, for both the principal and
structed" and constituted through inter- the agent. Demski and Feltham speak of
action. The authors then seek to explore moral hazard and adverse selection
general conditions that may explain the problems. These are essentially informa-
use of such control systems in a particu- tion-based problems which arise because
lar setting. This setting is described in the the principal is unable to accurately
abstract language of economics, in terms report the agent's input choice and verify
of contracts between principal and agent information that is private to the agent.
and a market for information exchange In addition, "shirking" by either princi-
in which "equilibrium" and "Pareto- pal or agent is regarded as unhelpful and
optimal solutions" may be found. A to be controlled, in this instance, through
mathematical model of principal-agent a budget-based contract. However, there
behavior is then constructed with several appears to be greater emphasis placed on
manageable variables: the state of the control of the agent. He or she appears
world, worker effort, skill, and amount more likely to engage in dysfunctional
of capital. Based on an analysis of this behavior. Thus, Demski and Feltham
model, some generalizable conclusions write that the budget-based contract is
are drawn, for instance that "market used to "learn something" [p. 339]
incompleteness" and "risk aversion" about the agent's behavior. Similarly,
are necessary conditions for the choice Zimmerman [1979, p. 506] argues that
of budgetary systems. There is also a lim-"we would expect (as should the princi-
ited attempt to attest to the validity of pal) that the agent will try to improve his
the model by assessing how well it ex- welfare by engaging in activities which
plains observed practice. are not necessarily in the principal's best
Single goals of utility-maximization interest (e.g. shirking, on-the-job leisure,
are attributed to the principal and the consumption of perquisites, theft)."
agent. The principal "contracts for labor Boland and Pondy, by contrast, do
services so that he can obtain a return not take the budget as a permanent,
from his capital without expending any fixed object. Instead it is "symbolic not
effort [He achieves maximum leisure]" literal, vague not precise, value loaded
[p. 3381. The agent's utility depends not
on value free" [p. 229]. At certain
his level of output/income and also the times, the budget plays an active role in
amount of effort expended (He prefers shaping reality [p. 228] and is in turn
less effort to more [p. 342]). Other influenced by political interests (for
researchers working within this theoreti- example, those of the Governor of Illi-
cal framework use similar models of nois) and social definitions of "accept-
human intention. Zimmerman [1979, p. able and legitimate" (categories like
506], for instance, assumes all individ- "repair and maintenance" being more
Chua 617
viable than "research"). There is no a and accounting reality that is constantly

priori assumption that the budget has a being redefined. In addition, these
rational, technical purpose; instead, its meanings will be constituted by changing
symbolic, emergent role is seen to be social, political, and historical contexts.
grounded in the social processes of the They do not necessarily conform to a
organization and its environment. priori rational definitions, such as
Neither is there an attempt to accord "being useful for efficient decision-
priority to particular goals and to speak making." Accounting numbers are in-
of "dysfunctional" behavior. In fact, adequate representations of things and
the authors suggest that organizational events as experienced by human beings.
goals were being discovered through the Because of this, actors will seek to trans-
budget process. cend the formality of the numbers and
Further, the budget and its setting are manipulate their symbolic meaning to
located in the everyday, common-sense suit their particular intentions [Boland
language of the participants. Indeed, one and Pondy, 1983; Cooper, Hayes, and
of the authors' aims was to study Wolf, 1981]. Indeed, Hayes [1983] sug-
accounting through the actors' defini- gests that the ever-expanding demand
tion of the situation [p. 225]. Also, un- for accounting information may be
like Demski and Feltham, Boland and because of this intrinsic ambiguity which
Pondy do not seek to develop generaliz- allows complex trade-offs among inter-
able explanations of behavior which may est groups.
be used to predict and control such be- Second, not only are accounting
havior in similar settings. Their most meanings constituted by complex inter-
generalizable statement is: There are pretive processes and structures, they
constant shifts between the rational, help constitute an objectified social real-
quantitative aspects of organization and ity [Berry et al., 1985; Hayes, 1983;
the natural, qualitative aspects [p. 226]. Boland and Pondy, 1983; Cooper,
Because generalizations are not their Hayes, and Wolf, 1981; Burchell et al.,
aim, the authors advocate the use of case 1980]. For example, the traditional
studies to understand accounting as a responsibility accounting map of the
lived experience [p. 226]. Unfortunately, organization helps to consolidate a par-
Boland and Pondy are unclear as to how ticular view of hierarchy, authority, and
the adequacy of their explanation may power. Accounting numbers give visibil-
be evaluated. On p. 226, they write that ity to particular definitions of "effec-
the researcher should take a "critical tiveness," "efficiency," and that which
view" of the actor's definition of the sit- is "desirable" and "feasible." In this
uation. This departs from Schutz's idea way, accounting numbers may be used to
of the non-evaluative, disinterested actively mobilize bias, to define the pa-
scientist and his postulate of adequacy. rameters permissible in organizational
The differences between these two debates, and to legitimize particular sec-
approaches to the study of the same phe- tional interests.
nomenon illustrate the distinctive contri- Accounting information is particu-
butions of an interpretive emphasis. larly useful for legitimization activities
First, the perspective indicates that, in because they appear to possess a neutral,
practice, accounting information may technical rationality. Numbers are often
be attributed diverse meanings. Such perceived as being more precise and
diversity is intrinsic to an emergent social"scientific" than qualitative evidence.
Even among actors/players who are ably "dysfunctional." The concept of

aware of the imprecision of these num- "dysfunction" does not arise because no
bers, public debates continue to be orga- priority is given to particular human
nized around such numbers because that goals. Goals and their priority are argued
is considered the proper arena for discus- to be constituted through human interac-
sion. Thus, in Boland and Pondy's tion.
[1983] case study, the Governor of Illi- As can be seen, changing the set of
nois continues to use the budget as evi- philosophical assumptions about knowl-
dence of his good faith despite the fact edge and the empirical world gives us a
that he had obviously "fiddled" the new purpose for theorizing, different
numbers. Accounting often becomes a problems to research, and an alternative
"sacred" language [Bailey, 1977] that is standard to evaluate the validity of
publicly acceptable. To talk otherwise, research evidence. There is much to be
for example, by exposing the dubious gained by moving accounting into the
nature of such numbers or by being life-world of actors. Instead of con-
skeptical of high-sounding principles structing rigorous but artificial models
("the public interest"), may be consid- of human action which presume ra-
ered "profane." Bailey argues that pro- tional, consensual goals, the approach
fane talk is usually conducted in private offers an understanding of accounting in
where messy compromises are then re- action. It seeks the actor's definition of
translated into a public, sacred (for the situation and analyzes how this is
example, accounting) language such that woven into a wider social framework.
rationality and the appearance of order This interpretive emphasis is valuable,
are maintained. for as Burchell et al. [1980] point out, we
Third, the interpretive perspective know how accounting numbers ought to
questions the traditional view of account-function but have little knowledge of the
ing information as a means of achieving meanings and roles that they actually
pre-given goals. Information may be undertake. And unless such information
used to accord rationality after the event is obtained, we may only have an abstract
[Weick, 1979; Cohen, March, and image of the accounting discourse that -is
Olsen, 1972]. Similarly, accounting in- fossilized in our journals and textbooks
formation may be used to retrospectively and is unrelated to practice.
rationalize action and to impose a goal
THE CRITICAL ALTERNATIVE
as though it always existed. In addition,
-ASSUMPTIONS
although local objectives may initiate the
desire for particular types of accounts, Interpretive work, however, also pos-
these may merge with other diverse, sesses weaknesses. There have been three
possibly conflicting objectives such that major criticisms of the approach [Haber-
the results cannot be said to be intended mas, 1978; Bernstein, 1976; and Fay,
by any particular party. As Burchell, 1975]. First, it has been argued that using
Clubb, and Hopwood [1985] write, the extent of actor agreement as the stan-
although accounting may be purposive, dard for judging the adequacy of an ex-
whether it is intentionally purposeful is a planation is extremely weak. How does
matter for detailed empirical investiga- one reconcile fundamental differences
tion. between the researcher and the actors?
Finally, the interpretive perspective Also, how does one choose between
does not assume that conflict is inevit- alternative explanations, such as those of
Chua 619
a Marxist and a non-Marxist? As yet tained in every being. It is this quality

these issues have not been settled. which distinguishes human beings as uni-
Second, the perspective lacks an evalua- versal, free beings [Marcuse, 1968,
tive dimension. Habermas [1978], in par- 1941].
ticular, argues that the interpretive However, human potentiality is re-
researcher is unable to evaluate critically stricted by prevailing systems of domina-
the forms of life which he/she observes tion which alienate people from self-
and is therefore unable to analyze forms realization. These material blockages
of "false consciousness" and domi- operate both at the level of conscious-
nation that prevent the actors from ness and through material economic and
knowing their true interests. Third, the political relations. At one level, ideologi-
interpretive researcher begins with an cal constructs may be embedded in our
assumption of social order and of con- modes of conceptualization, in our cate-
flict which is contained through common gories of common-sense and taken for
interpretive schemes. Given this and the granted beliefs about acceptable social
focus on micro-social interaction, there practices [Lehman and Tinker, 1985]. At
is a tendency to neglect major conflicts another, repression may be effected
of interest between classes in society. through rules governing social exchange
These difficulties have given rise to and the ownership and distribution of
various attempts to transcend the prob- wealth.
lems of both mainstream and interpre- Another belief concerns the relation-
tive perspectives. In philosophy and soci- ship between parts (individuals, groups,
ology, such work is exemplified by writers organizations) and the whole (society).
such as Poulantzas [1975], Lukacs Critical researchers argue that because
[1971], Habermas [1979, 1978, 1976, any finite thing is both itself and its
1971], and Foucault [1981, 1980, 1977]. opposite, things taken as isolated par-
Despite major differences between the ticulars are always incomplete. The par-
work of these writers, there are also ticular exists only in and through the
commonalities. totality of relations of which it is a part.
Therefore, what a finite thing is and
Beliefs about Physical and Social Reality
what it is not may only be grasped by
The most distinctive idea that the understanding the set of relations that
majority of researchers in this perspec- surround it. For example, accountants
tive share dates from the work of Plato, are not isolated particulars. They exist
Hegel, and Marx. It is the belief that only in the context of groups, classes,
every state of existence, be it an individ- and institutions. They are what they are
ual or a society, possesses historically by virtue of their relations as sellers of
constituted potentialities that are unful- services, employees, professionals, etc.
filled. Everything is because of what it In this manner, the true form of reality
is and what it is not (its potentiality). lies not with particulars but with the
In particular, human beings are not universal that comes to be in and
restricted to exist in a particular state; through particulars.
their being and their material environ- This emphasis on totality leads to a
ment are not exhausted by their immedi- particular view of the object-subject dis-
ate circumstances [Held, 1980, p. 234]. tinction. Social structures are concep-
Instead, people are able to recognize, tualized as objective practices and con-
grasp, and extend the possibilities con- ventions which individuals reproduce
and transform, but which would not cal practices. There are no theory-inde-
exist unless they did so. As Bhaskar pendent facts that can conclusively prove
[1979, pp. 45-46] puts it, societyey does or disprove a theory. In addition, the
not exist independently of human activ- interpretive standard (degree of consen-
ity (the error of reification). But it is not sus between researcher and actors) is
[solely] the product of it (the error of considered insufficient. Beyond this
voluntarism)." Rather, society provides weak consensus, critical philosophers
the necessary, material conditions for disagree as to the precise criteria that
the creative subject to act. At the same may be used to assess truth claims.
time, intentional action is a necessary Foucault, for example, eschews a
condition for social structures. Society is transcendent criterion for the establish-
only present in human action, and ment of truth. He writes [1977, p. 131],
human action always expresses and uses "truth is a thing of this world: it is pro-
some or other social form. Neither can, duced only by virtue of multiple forms
however, be identified with or reduced to of constraint. And it induces regular
the other. Social reality is, thus, both effects of power. . . ." The scientist
subjectively created and objectively real. cannot emancipate truth from every sys-
Further, because of the belief in human tem of power; he/she can only detatch
potentiality, there is an emphasis on the power of truth from the forms of
studying the historical development of domination within which it operates at a
entities that are conceptualized as com- particular time. By contrast, Habermas
ing to be. Reality as a whole, as well as [1976] seeks to establish a quasi-tran-
each particular part, is understood as scendental process for rational theory
developing out of an earlier stage of its choice, that simultaneously recognizes
existence and evolving into something the historically-grounded nature of all
else. Indeed, every state of existence is norms and yet seeks to transcend it. In
apprehended only through movement the face of such substantive diversity, it
and change, and the identity of a partic- is not feasible to set out a common
ular phenomenon can only be uncovered standard for the evaluation of theories
by reconstructing the process whereby within the critical perspective.
the entity transforms itself. "To know Finally, the methods of research
what a thing really is, we have to go favored by critical researchers tend to
beyond its immediately given state. . . exclude mathematical or statistical
and follow out the process in which it modeling of situations. Research is sited
turns into something other than itself. in organizations and their societal envi-
. . . Its reality is the entire dynamic of its ronments. In addition, quantitative
turning into something else and unifying methods of data collection and analy-
itself with its 'other' " [Marcuse, 1941, sis are used to a lesser extent. There is
p. 49]. greater emphasis on detailed historical
explanations (Foucault emphasizes the
Beliefs about Knowledge "genealogical approach") and "thick,"
Critical philosophers accept that the ethnographic studies of organizational
standards by which a scientific explana- structures and processes which show
tion is judged adequate are temporal, their societal linkages. The emphasis on
context-bound notions. Truth is very long-term historical studies is especially
much in the process of being hammered important given the prior belief that the
out and is grounded in social and histori- identity of an object/event can only be
Chua 621
grasped level is seen to support and be supported

th
-what it has been, what it is becoming, by the other, and conflicts within organi-
and what it is not. Such historical analy- zations create and are created by societal
sis also serves the critical function of divisions.
exposing rigidities and apparently ahis-
Theory and Practice
torical relations that restrict human
potentiality. Theory now has a particular relation-
ship to the world of practice. It is/ought
to be concerned with "the freedom of
Critical researchers view individuals as the human spirit," that is, the bringing
acting within a matrix of intersubjective to consciousness of restrictive condi-
meanings. Thus, like the interpretive tions. This involves demonstrating that
researcher, it is accepted that social so-called objective and universal social
scientists need to learn the language of laws are but products of particular forms
their subject/object. The process of of domination and ideology. Through
coming to an understanding is also such analysis, it is intended that social
agreed to be context-dependent as social change may be initiated' such that injus-
scientists are necessarily immersed in and tice and inequities may be corrected.
engaged with their socio-historical con- Critical researchers reject the value posi-
texts. However, critical researchers argue tion traditionally espoused by orthodox
that interpretation per se is insufficient. social scientists-a scientist cannot eval-
It cannot appreciate that the world is not uate ends-arguing that it bolsters exist-
only symbolically mediated, but is also ing forms of injustice inherent in the cur-
shaped by material conditions of domi- rent system of property rights and in the
nation. Language itself may be a medium capitalist appropriation of economic sur-
for repression and social power. Hence, plus value. Their moral position is that
for Habermas, social action can only be such domination ought to be exposed
understood in a framework that is con- and changed. Social theory is therefore
stituted conjointly by language, labor, seen to possess a critical imperative.
and domination. Through such a frame- Indeed, it is synonymous with social
work, symbolic schemes and traditions critique.
would also be subjected to critique such Table 4 sets out these assumptions.
that their relations to other material
forms of domination were revealed
[Held, 1980, pp. 307-317].
A critique of ideology is considered
5 Critical researchers differ as to the precise role
necessary because fundamental conflicts envisaged for the theorist in initiating social change.
of interest and divisions are seen to exist Habermas [1974], for instance, distinguishes between (a)
in society (indeed, are endemic to con- the formation of critical theories that may be therapeuti-
cally applied to initiate a process of "enlightenment"
temporary society) and to be institution- and self-reflection among actors, and (b) the selection of
alized via cultural and organizational appropriate political strategies. Task (a) is that of the
forms. The organization is viewed as a social scientist while task (b) belongs to the actors
(community). Habermas took pains to emphasize that
middle-range construct, a microcosm of theory does not provide the grounds, conditions, or justi-
society that reflects and consolidates fications for day-to-day political decisions. This position
alienating relations. Because of this, dis- may be contrasted with that of Althusser 11969] and
Poulantzas [19751 who see Marxism as a science that can
tinctions between societal and organiza- be employed in developing a political strategy for bring-
tional levels of analysis are blurred. One ing the working class to power.
TABLE 4
DOMINANT ASSUMPTIONS OF THE CRITICAL PERS
Criteria for judging theories are temporal and context-bound. Historical, ethnographic research and case studies
more commonly used.

Human beings have inner potentialities which are alienated (prevented from full emergence) through restrictive
mechanisms. Objects can only be understood through a study of their historical development and change within the
totality of relations.
Empirical reality is characterized by objective, real relations which are transformed and reproduced through subjec-
tive interpretation.
Human intention, rationality, and agency are accepted, but this is critically analyzed given a belief in false conscious-
ness and ideology.
Fundamental conflict is endemic to society. Conflict arises because of injustice and ideology in the social, economic,
and political domains which obscure the creative dimension in people.

Theory has a critical imperative: the identification and removal of domination and ideological practices.
THE CRITICAL PERSPECTIVE is, performs these functions at a lower

-CONSEQUENCES transaction cost. Hence, if the firm
structure is used to organize economic
Considerable interest has been shown
production, this is because the firm is
in developing accounting research within
more efficient than the market. Also, for
the critical perspective.6 To illustrate the
the firm to continue to maintain this
differences between the mainstream
comparative advantage, it has to contin-
approach and the critical perspective,
ually develop cost-efficient accounting
two historical explanations of the devel-
controls that provide the information
opment of accounting theory and prac-
required to meet the demands of a
tice are compared: Chandler and Daems
changing environment.
[1979] and Tinker, Merino, and Neimark To Chandler and Daems, firms and
[1982]. accounting controls are parts of a con-
Chandler and Daems [1979] focus on
crete reality which evolve in a rational
the development of accounting practices
manner: in response to a need for effi-
from the end of the 19th century to 1920-
cient organization. The firm is pictured
30. They begin by arguing that there are
as a rational, single-minded, organic sys-
three core economic functions that need
tem that seeks to survive and adapts its
to be performed in every economic sys-
accounting system in order to maintain
tem. These are the allocation, monitor- its economic advantage. On p. 4 this
ing, and coordination of activities. These
image is tempered by identifying the firm
functions may be performed by a num-
ber of alternative structures of which the
6 See Armstrong [19851, Cooperet al. [19851, Laughlin
firm and the market are the most impor-
[1985], Lehman and Tinker [19851, Puxty [19851, Tinker
tant. The choice of structure depends on and Neimark [forthcoming], and Willmott [1984, forth-
which mechanism is more efficient, that coming].
Chua 623
with the activities of owners and mana- cation of the concept of value, the
gers. However, people as reality-construc- merchants, it is argued, were able to
tors do not feature in the discussion, and strengthen their bargaining position
there is little mention of intra- and inter- relative to the producers and to legiti-
organizational conflict. In addition, the mize their gains as just.
concepts of allocation, monitoring, hier- Similarly, the neo-marginalist assump-
archy, and efficiency are seen as non- tions that underlie much mainstream
problematic. They are not seen as per- accounting are argued to be interested
petuating an ideological, managerial bias (grounded in the interests of dominant
and as bolstering unequal economic rela- classes) as opposed to being theoretically
tions. neutral. In addition, these assumptions
By comparison, Tinker, Merino, and are ideological because they obscure
Neimark [1982] see accounting discourse other realities such as "market imperfec-
as being actively involved in social con- tions," unequal distributions of income,
trol and in conflicts between different and injustices embedded in extant sys-
classes of people. Accounting theories tems of property rights [p. 191]. Finally,
do not state an unambiguous truth that Tinker, Merino, and Neimark [1982]
is value-free and independent of social attempt to set out a new role for account-
and historical conflict. The authors ing and the accountant that is considered
focus on the development of the concept more just and less mystifying.
of value from the Middle Ages to the This brief comparison indicates that
20th century and argue that this cannot accounting research as social critique has
be explained as a rational evolution several important characteristics. First,
during which more wisdom was gradu- accounting is no longer seen as a tech-
ally accumulated. Instead, concepts of nically rational, service activity which is
value constitute and are constituted by divorced from wider societal relation-
social struggles, particularly in the ships. Instead, accounting as a discourse
economic domain. Specifically, particu- with a particular mode of calculative
lar concepts of value became dominant rationality is argued to constitute and be
because they benefited the interests of constituted by macro conflict between
dominant groups in society during a different classes (for example, capitalist/
particular period. manager v. worker, the State v. multi-
Thus, in the pre-mercantile period, national corporations) [Knights and Col-
value was defined in terms of the socially linson, 1985; Tinker, 1984; Tinker,
necessary labor expended on a product Merino, and Neimark, 1982]. At the
[p. 176]. Such a concept of value was micro-organizational level, the account-
acceptable because trade at that time ing calculus paints a picture of the
took place between small independent "cake" that is available for distribution
producers. However, as trade and com- and reports on how such distributions
merce expanded, the concept of value have been made. At the macro-societal
was modified to include the utility and level, these numbers influence taxation
subjective expectations of owners and policy-making, wage bargaining, and
consumers [p. 177]. This was because the economic restructuring. In all these situ-
merchants' gains came from the consu- ations, wealth transfers are involved and
mer, specifically from the difference in the accounting calculus is seen as playing
price charged and that paid to the pri- (or potentially playing) a vital role in
mary producer. Through such a modifi- effecting such transfers.
Second, critique emphasizes ing policy-makingthe totality

and standard-setting
of relations (social, economic, political, bodies? Are accounting standards noth-
ideological). As a result, the perspective ing more than political compromises in a
engenders a new interest in certain macro- complex arena of organized capital and
structural phenomena that are neglected labor, the government, and the account-
in mainstream accounting research. An ing profession? What kinds of roles do
example is the role of accounting infor- these professional pronouncements play
mation in the regulation of and by the given the separate and different interests
State [Cooper et al., 1985; Cooper, 1984; at work? Their public aim may be the
Hopwood, 1984b; Tinker, 1984]. The control of public sector or managerial/
State holds a pivotal position in the com- corporate excesses. How, if at all, is such
plex of human relations and is expanding control effected?
the use of accounting information. In Third, such questions not only empha-
the United Kingdom and Australia, for size the State as an important constitu-
instance, the State constantly stresses the ency, they focus on accountants as an
need for efficiency or value-for-money organized interest group. Within a criti-
audits and the development of perfor- cal perspective, the accounting profes-
mance indicators for the public sector. sion is no longer theorized as a neutral
This response to calls for greater public group which evolves in response to
accountability, however, may not indi- rational demands for useful information.
cate that those in government believe in Instead, it is an aspiring occupational
the technical superiority of "rational" monopoly that seeks to further its own
methods of financial management. For social and economic self-interests
accounting numbers may be called upon through (a) particular professional
to perform tasks for which they are not ideologies (for example, the universal
equipped: the quantification of welfare service ethic), and (b) the policing of
trade-offs in activities where neither the changeable and ambiguous relations
inputs nor the outputs desired are clearly with other professions, corporations,
specified. Hence, accounting/auditing and the government [Puxty, 1984; Chua,
information may only be used symbolic- 1982]. For instance, to preserve its
ally to rationalize or legitimize power territorial advantage from the challenge
relations. of engineers, investment advisors, and
In addition, the greater use of account- the State, the accounting profession in
ing calculation in the public sector could the U.S., U.K., and Australia has had to
be because the State finds it difficult to institute new membership controls and
manage the demands of organized capi- standard-setting bodies. Such reforms,
tal and labor. Such structural conflict however, often are claimed to be for the
could represent macro-economic prob- "protection of the public" (see Willmott
lems that the State must be seen to man- [1985] for a critique of this notion), not
age: inflation, stagflation, long-term the profession.
unemployment, an ever-increasing State Fourth, the focus on totality also pro-
bureaucracy, and limited opportunities motes organizational studies that inte-
to raise State revenue and to reduce grate micro- and macro-levels of analy-
expenditure. How are accounting pro- sis. This has the effect of avoiding the
cedures implicated in the management oftraditional distinction between manage-
these problems? Further, how do such ment and financial accounting. For
problems relate to the State's attempt to instance, exploitative relations or forms
regulate business firms through account- of domination at the societal level are
Chua 625
seen as reflected and effected through fied (alienated) view of human beings.
organizations [Habermas, 1978; Fou- Labor is seen as a number, a cost to be
cault, 1977]. Foucault writes that social minimized while profit that accrues to
control is insidiously widespread in insti- others is regarded as desirable. As
tutions such as the school, family, prison, Cherns [1978] points out, within account-
and hospital and is vested in so-called ing, instead of an organization being
experts whose possession of knowledge seen as a resource for people, people are
has power effects. encouraged to think of themselves as a
His argument is taken up by Crawford resource for the greater organizational
[1984] and Miller and O'Leary [1984] goal of more profit and cash flows.
who argue that the accounting-expert Finally, as discussed earlier, notions of
exercises power in the factory throughstructural
a conflict and of inequitable
procedure like standard cost accounting. domination do not enter into mainstream
Such an accounting technique forms a accounting models of organizational
powerful, managerial tool for the disci- goals. Through the maintenance of these
plining and control of workers. It sets ideas, extant accounting theory and
norms for "proper" behavior and practice is seen as a form of ideology
"desirable" outcomes, thereby restrict- which isolates people from their "true"
ing (normalizing) individual variety and essence.
creativity. It also socializes workers into Indeed, Lehman and Tinker [1985]
constantly being watched, monitored, argue that the accounting discourse con-
and governed. Through such social constitutes part of the "ideological appara-
trol the worker becomes a more govern- tus" of the State. Using the work of Alt-
able unit within the firm and in society husser, they argue that ideology is more
more generally. than false ideas perpetuated by, for
Finally, critical theorists claim that the example, the mass media. Ideology is a
view of accounting information as social "representation of the imaginary rela-
control and as a mediator of conflict has tionship of individuals with the real
often been obscured (mystified) by conditions of their existence" [Lehman
powerful, ideological ideas embedded and Tinker, 1985, p. 9]. It inheres in the
in mainstream accounting thought. taken-for-granted social practices and
Accounting is claimed to be a service symbols that people use to interpret and
activity which is "neutral as between organize their world. The accounting
ends," when in fact the goals of the literature, by subtly promoting particu-
owners of capital are implicitly given lar views of the State, "free markets,"
priority. Also, accountants are pictured and the importance of business, is said to
as professionals who are independent of institutionalize a biased version of struc-
biases and who offer universal service to tural conflicts.
the community. Such claims are, how- The research that a critical perspec-
ever, seen as highly dubious. Due to the tive initiates clearly differs from that
difficulty of policing compliance to the offered by a mainstream or interpretive
professional ideals of independence and approach. It poses a particular chal-
competence at the level of the individual lenge for the accounting researcher
practitioner, peer supervision is often and accounting as a discipline to adopt a
only rhetorical rather than real [Larson, radically different value position that
1977]. may not be easily accepted by main-
Mainstream accounting research is stream accountants. There is also much
also criticized as perpetuating an objecti- intra-disciplinary criticism and debate.
As pointed out earlier, critical theorists cussed: the interpretive and the critical.
do not share common philosophical It is hoped that the challenges posed by
standards for the evaluation of theories. these alternatives will stimulate consider-
What is an acceptable theory or explana- ation and debate.
tion is still debatable. In addition, pro-
ponents of one form of critical theory APPENDIX 1
may be bitterly criticized by other writers
DIFFICULTIES WITH THE BURRELL
also working in the Marxist tradition (for
AND MORGAN [1979] FRAMEWORK
example, see the discussion of Haber-
mas's work by Anderson [1976] and First, all the assumptions are presented
Slater [1977]). However, this last charac- as strict dichotomies; for example, one
teristic of major disagreements among either assumes that human beings are
academics is also present in mainstream determined by their societal environment
and interpretive perspectives. or they are completely autonomous and
In summary, this perspective offers free-willed. This does not encompass
new insights that are worthy of consider-positions such as those of Bhaskar [1979,
ation. As the State plays an ever-increas- pp. 31-91], which argue that although
ing role in the economic domain, as the societies are prior to and different from
use of accounting information expands individuals, they are continually repro-
in the private and public economic sec- duced and transformed by intentional
tors, and as accountants become more human action. Neither does it lead
involved with policy-making at the to a full appreciation of Habermas's
macro-level, it may no longer be useful [1978] argument that while individuals do
to distinguish the political/social from act and shape meanings, they may still
the economic effects of accounting num- live within structures of domination in
bers. Nor may it be helpful to separate society. The use of mutually exclusive
the organization from its wider struc- dichotomies and the derivation of para-
tural relationships. Critique may then digms that cannot be "synthesized"
offer a way of understanding the role of [Burrell and Morgan, 1979, p. 25] fails to
accounting in these complex contexts. locate philosophical attempts to over-
come such unsatisfactory dichotomies.
CONCLUSION
Second, the framework embraces a
This paper has sought to move ac- strongly relativistic notion of scientific
counting debate beyond the stalematetruth
of and reason. Influenced by Kuhn's
"incommensurable" paradigms which [1970] idea of a conversion experience,
cannot be rationally evaluated. It has Burrell and Morgan [1979, pp. 24-25]
argued that mainstream accounting imply that the choice and evaluation of
thought is grounded in a set of common paradigms cannot be justified on rational
assumptions about knowledge and the scientific grounds. This interpretation of
empirical world which both enlighten Kuhn as encouraging irrationalism (there
and yet enslave. These assumptions offer are no good reasons for preferring one
certain insights but obscure others. By theory to another) as the basis for theory
changing them, new insights may be choice misreads his rational intent [see
gained which can potentially extend our Bernstein, 1983; Gutting, 1980]. On the
knowledge of accounting in action contrary, Kuhn [1970, pp. 199-200]
within organizational and societal con- explicitly writes that accepting a thesis
texts. Two main alternatives were dis- that states that theory-choice is not
Chua 627
simply give each paradigm an opportunity a to

not imply
speak for itself [p. 395]. Where exactly is
for being persuaded a particular way. this privileged, non-evaluative "fifth
Kuhn continues by citing certain evalua- position" located? (Presumably it must
tive criteria that are "usually listed by lie outside the four paradigms proposed
philosophers of science" such as accu- by the authors!) Thus, Burrell and
racy, simplicity, and fruitfulness. These Morgan appear to both accept and reject
criteria, however, are not universal and simultaneously the existence of a neutral
fixed but open in their application and language for cross-paradigmatic discus-
weighting. sion.
To read Kuhn as advocating irration- Moreover, the latent relativism of
alism is to miss his main point: that tra- Burrell and Morgan has been roundly
ditional notions of what constitutes criticized by philosophers of science [see
rational scientific choice are inadequate Hollis and Lukes, 1982; Gutting, 1980;
and need to be modified in order to Lakatos and Musgrave, 1970]. Relativ-
better understand in what sense such ism is self-referential and paradoxical.
choice is a rational activity. In addition,For, implicitly or explicitly, the relativist
there is a fundamental tension in the claims that his or her position is true, yet
arguments of Burrell and Morgan. On the relativist also insists that since truth
the one hand, they appear to accept is relative, what is taken as true may also
Kuhn's argument that there is no trans-be false. Consequently, relativism itself
historical, neutral, permanent language may be true and false.
(set of criteria) for evaluating scientific Finally, as Hopper and Powell [1985]
theories. This presumably is the basis for point out, the separation of the radical
arguing that each paradigm mutually structuralist from the radical humanist
excludes the other, is incommensurable, paradigm is not well supported within
and cannot be validly compared or syn- sociology itself, being based on a conten-
thesized. Yet by adopting a non-evalua- tious reading of Marx's arguments. In
tive stance, Burrell and Morgan attempt addition, such a separation does not ade-
what Kuhn rejects-the use of a com- quately place work that seeks to inte-
pletely neutral language or frameworkgrate the structuralist and idealist facets
within which rival paradigms can be fully
of Marx's writings [Habermas, 1976;
expressed! Burrell and Morgan claim to Poulantzas, 1973].
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Radical Developments in Accounting Thought

Author(s): Wai Fong Chua

American Accounting Association is collaborating with JSTOR to digitize, preserve and

ABSTRACT: Mainstream accounting is grounded in a common set of philosophical

[Berlin, 1962, p. 191

environment, and their perception of ied in the same manner. Alternatively,

A. Beliefs About Knowledge

B. Beliefs About Physical and Social Reality

C. Relationship Between Theory and Practice

alternative perspectives in accounting. ical realism-the claim that there is a

cific socio-historical context. Thus, a falsified," but on p. 34 speaks of scien-

faces a competitive environment. between the development of accounting

tion [Benston, 1979-80]. Indeed, Jensen regarded as "neutral" information and

A. Beliefs About Knowledge

B. Beliefs About Physical and Social Reality

C. Relationship Between Theory and Practice

Accounting specifies means, not ends. Acceptance of extant institutional structures.

This supposedly neutral position, how- creasingly accepted until it is a part of

desire a maximization of cash flows or [Burawoy, 1979; Benson, 1975; Marglin,

ground a rational set of criteria for osophical assumptions. It discusses two

DOMINANT ASSUMPTIONS OF THE INTERPRETATIVE PERSPECTIVE

A. Beliefs About Knowledge

B. Beliefs About Physical and Social Reality

C. Relationship Between Theory and Practice

within mainstream assumptions and the uals to be "resourceful, evaluative, max-

viable than "research"). There is no a and accounting reality that is constantly

Even among actors/players who are ably "dysfunctional." The concept of

a Marxist and a non-Marxist? As yet tained in every being. It is this quality

grasped level is seen to support and be supported

DOMINANT ASSUMPTIONS OF THE CRITICAL PERS

A. Beliefs About Knowledge

B. Beliefs About Physical and Social Reality

C. Relationship Between Theory and Practice

THE CRITICAL PERSPECTIVE is, performs these functions at a lower

Second, critique emphasizes ing policy-makingthe totality

simply give each paradigm an opportunity a to

Hagg, I., and G. Hedlund, " 'Case Studies' in Acc

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