Critical Perspectives on Accounting

Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.#
Financial Accounting TheoryFinancial Accounting Theory Craig DeeganCraig Deegan
Chapt!r #2Chapt!r #2

Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.2
Learning ObjectivesLearning Objectives
( )" this chapt!r you will b! i"tro&uc!& to)" this chapt!r you will b! i"tro&uc!& to
* particular p!rsp!cti$!s that chall!"g! particular p!rsp!cti$!s that chall!"g! co"$!"tio"al opi"io"s about th! rol! o+co"$!"tio"al opi"io"s about th! rol! o+ accou"ti"g withi" soci!tyaccou"ti"g withi" soci!ty

Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.
Learning ObjectivesLearning Objectives
* th! +act that &isclosur! or "o"-&isclosur! o+th! +act that &isclosur! or "o"-&isclosur! o+
i"+or,atio" ca" b! co"stru!& to b! a" i,porta"ti"+or,atio" ca" b! co"stru!& to b! a" i,porta"t
strat!gy to pro,ot! a"& l!giti,is! particular socialstrat!gy to pro,ot! a"& l!giti,is! particular social
or&!rsor&!rs
Critical perspective definedCritical perspective defined
( '!+!rs to accou"ti"g r!s!arch that go!s'!+!rs to accou"ti"g r!s!arch that go!s
b!yo"& u!stio"i"g wh!th!r particular b!yo"& u!stio"i"g wh!th!r particular
,!tho&s o+ accou"ti"g shoul& b! !,ploy!&,!tho&s o+ accou"ti"g shoul& b! !,ploy!&
( +ocus!s o" th! rol! o+ accou"ti"g i"+ocus!s o" th! rol! o+ accou"ti"g i"
sustai"i"g th! pri$il!g!& positio"s o+ thos!sustai"i"g th! pri$il!g!& positio"s o+ thos!
i" co"trol o+ r!sourc!s capital whil!i" co"trol o+ r!sourc!s capital whil!
u"&!r,i"i"g or r!strai"i"g th! $oic! o+u"&!r,i"i"g or r!strai"i"g th! $oic! o+
thos! without capitalthos! without capital

Critical perspectiveCritical perspective
highlight through critical a"alysis th! k!yhighlight through critical a"alysis th! k!y
rol! o+ accou"ti"g i" soci!tyrol! o+ accou"ti"g i" soci!ty
( chall!"g!s th! $i!w that accou"ti"g ca" b!chall!"g!s th! $i!w that accou"ti"g ca" b!
co"stru!& as ob4!cti$! or "!utralco"stru!& as ob4!cti$! or "!utral
( accou"ti"g s!!" as a ,!a"s o+ co"structi"gaccou"ti"g s!!" as a ,!a"s o+ co"structi"g
or l!giti,isi"g particular social structur!sor l!giti,isi"g particular social structur!s

Criticism of capitalist systemCriticism of capitalist system
( Critical th!orists t!"& to oppos! asp!cts o+ th!Critical th!orists t!"& to oppos! asp!cts o+ th! capitalist syst!, a"& accou"ti"gcapitalist syst!, a"& accou"ti"g
( !,phasis! that syst!,s o+ accou"ti"g ar! built!,phasis! that syst!,s o+ accou"ti"g ar! built arou"& th! pr!$aili"g social or&!rarou"& th! pr!$aili"g social or&!r

Origins of critical perspectiveOrigins of critical perspective
( Grou"&!& i" Political 7co"o,y Th!oryGrou"&!& i" Political 7co"o,y Th!ory
( 88 political !co"o,y9 is th! political !co"o,y9 is th! social, political social, political
and economic framework within whichand economic framework within which
human life takes placehuman life takes place Gray !t al #::5Gray !t al #::5
( bas!& o" 8Classical9 bra"ch;chall!"g!s th! bas!& o" 8Classical9 bra"ch;chall!"g!s th!

Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.=
Classical political economyClassical political economy
perspectiveperspective ( '!lat!& to th! works o+ philosoph!rs such as'!lat!& to th! works o+ philosoph!rs such as
Mar<Mar<
( !<plicitly co"si&!rs structural co"+lict!<plicitly co"si&!rs structural co"+lict
i"!uity a"& th! rol! o+ th! %tat! at th! h!arti"!uity a"& th! rol! o+ th! %tat! at th! h!art
o+ th! a"alysiso+ th! a"alysis
( highlights issu!s which ,ay "ot oth!rwis! b!highlights issu!s which ,ay "ot oth!rwis! b!
a&&r!ss!&a&&r!ss!&

Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.:
Disclosure of socialDisclosure of social
responsibility informationresponsibility information ( Critical th!orists argu! that &isclosur! o+Critical th!orists argu! that &isclosur! o+
social r!spo"sibility i"+or,atio" is wast!&social r!spo"sibility i"+or,atio" is wast!&
u"l!ss acco,pa"i!& by +u"&a,!"talu"l!ss acco,pa"i!& by +u"&a,!"tal
cha"g!s i" how soci!ty strucutr!&cha"g!s i" how soci!ty strucutr!&
( acts to l!giti,is! "ot chall!"g! thos!acts to l!giti,is! "ot chall!"g! thos!

Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.#0
Vies on social andVies on social and
environmental accountingenvironmental accounting ( As accou"ti"g &!!,!& to sustai" particularAs accou"ti"g &!!,!& to sustai" particular
social structur!s i"tro&uctio" o+ "!w +or,ssocial structur!s i"tro&uctio" o+ "!w +or,s
o+ accou"ti"g o"ly h!lp to sustai" that socialo+ accou"ti"g o"ly h!lp to sustai" that social
syst!,syst!,
( co"si&!r!& wast!& !++ort to us! accou"ti"g toco"si&!r!& wast!& !++ort to us! accou"ti"g to
sol$! probl!,ssol$! probl!,s
( one is using the very process that caused theone is using the very process that caused the

Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.##
Criticism of critical perspectiveCriticism of critical perspective
( Critical th!orists o+t!" ,argi"alis!& to aCritical th!orists o+t!" ,argi"alis!& to a
gr!at!r !<t!"t tha" oth!rsgr!at!r !<t!"t tha" oth!rs
( o+t!" &o "ot pro$i&! solutio"s to p!rc!i$!&o+t!" &o "ot pro$i&! solutio"s to p!rc!i$!&
probl!,s probl!,s
* i"co"sist!"t with "or,al trai"i"g o+ accou"ta"tsi"co"sist!"t with "or,al trai"i"g o+ accou"ta"ts
to pro$i&! solutio"s i+ probl!,s ar! !$i&!"tto pro$i&! solutio"s i+ probl!,s ar! !$i&!"t
( critical o+ accou"ta"tscritical o+ accou"ta"ts

!ole of the "tate!ole of the "tate
( Th! %tat! is s!!" as a $!hicl! o+ support +orTh! %tat! is s!!" as a $!hicl! o+ support +or hol&!rs o+ capital a"& +or th! capitalist syst!,hol&!rs o+ capital a"& +or th! capitalist syst!, as a whol!as a whol!
( Go$!r",!"t will tak! actio" to !"ha"c! th!Go$!r",!"t will tak! actio" to !"ha"c! th! l!giti,acy o+ th! social syst!,l!giti,acy o+ th! social syst!,

Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a Financial Accounting Theory by !!ga" #2.#
!ole of the "tate—continued!ole of the "tate—continued
( '!stricti"g th! +low o+ i"+or,atio" or'!stricti"g th! +low o+ i"+or,atio" or
a$ailability o+ sp!ci+ic typ!s o+ i"+or,atio"a$ailability o+ sp!ci+ic typ!s o+ i"+or,atio"
s!!" as a ,!a"s o+ ,ai"tai"i"g particulars!!" as a ,!a"s o+ ,ai"tai"i"g particular
orga"isatio"s a"& social structur!sorga"isatio"s a"& social structur!s
( go$!r",!"t &o!s "ot op!rat! i" th! publicgo$!r",!"t &o!s "ot op!rat! i" th! public
i"t!r!st but i" th! i"t!r!sts o+ 8w!ll o++9i"t!r!st but i" th! i"t!r!sts o+ 8w!ll o++9
groupsgroups
!ole of accounting research!ole of accounting research
( Accou"ti"g r!s!arch!rs ar! s!!" as pro$i&i"gAccou"ti"g r!s!arch!rs ar! s!!" as pro$i&i"g
r!s!arch r!sults a"& p!rsp!cti$!s that h!lp tor!s!arch r!sults a"& p!rsp!cti$!s that h!lp to
l!giti,is! a"& ,ai"tai" c!rtai" politicall!giti,is! a"& ,ai"tai" c!rtai" political
i&!ologi!si&!ologi!s
* !g. a"ti r!gulatio" sta"c! a"& 7MH &uri"g th! lat!!g. a"ti r!gulatio" sta"c! a"& 7MH &uri"g th! lat!
#:60s a"& #:=0s ,atch!& th! $i!ws o+ go$!r",!"t#:60s a"& #:=0s ,atch!& th! $i!ws o+ go$!r",!"t
at th! ti,!at th! ti,!
* ris! o+ PAT co"sist!"t with political $i!ws at th!ris! o+ PAT co"sist!"t with political $i!ws at th!
ti,!ti,!
!ole of accounting!ole of accounting
research—continuedresearch—continued * ris! o+ 8!co"o,ic co"s!u!"c!s9 r!s!arch s!!,sris! o+ 8!co"o,ic co"s!u!"c!s9 r!s!arch s!!,s
to ha$! b!!" ,oti$at!& by &!sir! o+ larg!to ha$! b!!" ,oti$at!& by &!sir! o+ larg!
corporatio"s to cou"t!r att!,pts to cha"g!corporatio"s to cou"t!r att!,pts to cha"g!
r!porti"g syst!,s a"& l!$!ls o+ &isclosur!r!porti"g syst!,s a"& l!$!ls o+ &isclosur!
* r!s!arch !++orts i"to i"+latio" accou"ti"g w!r!r!s!arch !++orts i"to i"+latio" accou"ti"g w!r!
s!!" as b!i"g ,oti$at!& by a &!sir! to all!$iat!s!!" as b!i"g ,oti$at!& by a &!sir! to all!$iat!
shi+ts i" r!al w!alth +ro, ow"!rs to high!rshi+ts i" r!al w!alth +ro, ow"!rs to high!r

!ole of accounting practice!ole of accounting practice
( Critical th!orists s!! co"c!ptual +ra,!worksCritical th!orists s!! co"c!ptual +ra,!works
as l!giti,isi"g th! accou"ti"g pro+!ssio"as l!giti,isi"g th! accou"ti"g pro+!ssio"
a"& o+ +i"a"cial r!ports pro&uc!& bya"& o+ +i"a"cial r!ports pro&uc!& by
r!porti"g !"titi!sr!porti"g !"titi!s
( accou"ta"ts s!!" as i,posi"g th!ir ow"accou"ta"ts s!!" as i,posi"g th!ir ow"
$i!ws about what p!r+or,a"c!$i!ws about what p!r+or,a"c!
charact!ristics ar! i,porta"t or "otcharact!ristics ar! i,porta"t or "ot
i,porta"ti,porta"t
!ole of accounting!ole of accounting
practice—continuedpractice—continued ( Att!"tio" is &ir!ct!& to particular ,!asur!s !g.Att!"tio" is &ir!ct!& to particular ,!asur!s !g. pro+its through accou"ti"g pro+its through accou"ti"g
( in communicating reality, accountantsin communicating reality, accountants simultaneously construct reality simultaneously construct reality
( political !co"o,y p!rsp!cti$! !,phasis!s th! political !co"o,y p!rsp!cti$! !,phasis!s th! rol! o+ accou"ti"g r!ports i" ,ai"tai"i"g socialrol! o+ accou"ti"g r!ports i" ,ai"tai"i"g social arra"g!,!"tsarra"g!,!"ts

Critical Perspectives on Accounting

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