-
Epistemology of Accounting Practices: AnotherFrames of
Objectivity Claims
Lucy Sri Musmini Gede Adi Yuniarta
Department of Economis and Accounting Department of Economis and
Accounting
Universitas Pendidikan Ganesha Universitas Pendidikan
[email protected] [email protected]
Singaraja, Indonesia Singaraja, Indonesia
Ni Luh Gede Erni Sulindawati I Gede Agus Pertama Yudantara
Department of Economis and Accounting Department of Economis and
Accounting
Universitas Pendidikan Ganesha Universitas Pendidikan
[email protected] [email protected],
Indonesia Singaraja, Indonesia
Abstract—The purpose of this article is mainly to examine
theepistemology of accounting practice through a frame of viewother
than objectivity frame. Epistemology is how to get the
rightknowledge and the knowledge obtained is greatly influenced
bywhat epistemology is used. At present, accounting is
generallygained knowledge through modern epistemology. This
articleseeks to examine epistemology in accounting practices in
additionto modern epistemology.
The results of this study confirm that modern epistemology isthe
development of scientific logic that combines rationalism
andempiricism approaches. In addition, this also works by
usingobjectivity and relying on understanding through the five
senses.The epistemology of accounting practices needs to
adoptinterpretative art and be based on perspective.
Accountingpractices that emphasize accounting reports should be
balancedwith elements of conversation or dialogue, not just claims
ofobjectivity. Accounting practices are becoming more completeand
rich when viewed from various epistemological frames.
Keywords—epistemology; accounting practices; objectivity
I. INTRODUCTIONKnowledge can be obtained in two ways that is
through
active human efforts through thinking activities consisting
ofreasoning and intuition, and non-active human efforts obtainedfor
example through revelation [1]. Knowledge is all what weknow about
a particular object, both concrete and abstractobjects [2],
including science, language, and art. Knowledge ismental wealth
that directly or indirectly enriches our lives.Knowledge is
basically there to answer certain questions. In
this case, we expect the right answer, then the problem
ariseshow we arrange the right knowledge.
Thinkers say that science was developed by humans tounderstand
the reality of the universe. Science is a humaneffort to
investigate, discover, and improve humanunderstanding of various
realities that exist. Science is formedbecause humans think to
increase the knowledge they have.What about knowledge of accounting
or what is believed to betrue?
Knowledge of accounting is one part of the social sciencefield.
Burell and Morgan stated that knowledge on the conceptof social
science is very appropriate when using assumptionswith ontology,
epistemology, human nature and methodologyapproaches [3]. In
another study, according to Creswell,philosophical assumptions in
qualitative research consist offour beliefs that are: ontology
(character of reality);epistemology (what counts as knowledge and
how the claim ofknowledge is affirmed); axiology (the role of
values inresearch); and methodology (research process) [4]. Each
typeof knowledge has specific characteristics regarding
itsontology, epistemology, axiology and methodology.
One approach to gaining knowledge is done usingepistemology.
Epistemology is how to get the rightknowledge. Every epistemology
of knowledge has a problemabout how to get the right knowledge by
taking into accountthe aspects of ontology and axiology
respectively. Theknowledge gained will be greatly influenced by
whatepistemology is used, one of which is modern epistemology.
International Conference on Tourism, Economics, Accounting,
Management, and Social Science (TEAMS 19)
Copyright © 2019, the Authors. Published by Atlantis Press. This
is an open access article under the CC BY-NC license
(http://creativecommons.org/licenses/by-nc/4.0/).
Advances in Economics, Business and Management Research, volume
103
414
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]
-
This article aims to examine the epistemology,
modernepistemology, and epistemology of accounting practices.
II.EPISTEMOLOGY AS AN ASSUMPTIONEpistemology comes from the
Greek episteme and logos.
Episteme means knowledge and logos means knowledge orrefers to
systemic knowledge, so at the same timeepistemology can be
interpreted as systemic knowledge aboutknowledge or science that
investigates the understanding andsubtleties of knowledge [2].
Epistemology is a discussion ofhow to gain knowledge or focus on a
process of seekingknowledge: what are the sources of knowledge?
What is thenature, scope, scope of knowledge? To what extent
mighthuman knowledge be obtained? [1]. Epistemology candetermine a
person's view of a truth in terms of the nature,source, and
validity of that truth. Epistemology is said to be alogical
consequence of how truth can be known to be guidedby the
fundamental beliefs that researchers have [5].
In qualitative research, epistemological assumptions meanthat
researchers try to be as close as possible to theparticipants
studied; subjective facts are arranged based onindividual
observation [4]. To answer how knowledge isknown, knowledge is
finally known through subjectiveexperiences of participants or the
community. Researchersneed to conduct field studies where
participants live and work,which is the context for understanding
what is said byparticipants. The more researchers know the
participants, thebetter the understanding obtained from the
participants'information. Therefore, in this view, the researcher
tries tominimize the objective distance or separation between
theresearcher and the participants being studied.
Another view of epistemology is the question of how toobtain
knowledge, with what knowledge is obtained, and howthe nature of
knowledge is studied by the scientific method,which is a way to
arrange true knowledge [1]. The rightknowledge is obtained through
the right method and can bejustified academically. Scientific
science is science that is ableto explain its existence
scientifically, which has a clearmethodology. Therefore,
epistemology is the way and thedirection of human thinking to
acquire and discoverknowledge through the ability of reason,
senses, and intuition.The scientific method consists of a rare
step-formulation of aproblem, the preparation of a framework of
thought, theformulation of a hypothesis, testing a hypothesis, and
drawingconclusions, which are believed to be the procedures
inobtaining knowledge correctly.
Morrow and Brown stated that epistemology is closelyrelated to
ontology because it is very important to know thenature of social
reality before determining its analysis.Realism is related to
positivist epistemology, whereasnominalism is consistent with
anti-positivist epistemology [6].Positivist is closely related to
objectivism which aims toidentify knowledge by finding various laws
that determine therelationship between observed empirical facts.
Positivisttheories include empiricism, functionalism, and
materialism.In contrast, anti-positivist epistemology is consistent
withsubjectivism in identifying knowledge by interpreting
themeanings and beliefs of social actors. Subjectivism is
closelyrelated to interpretative in sociology such as
symbolicinteractions and phenomenology.
III. MODERN EPISTEMOLOGY IN THE OBJECTIVITYFRAME
The development of modern epistemology is relatedto the main
idea of Aristotle which introduces capturing withthe senses and
understanding intellectually, at the next stage tomake general,
complete, and complex concepts about theteachings of moderate
realism that teaches the truth of theuniverse allows for philosophy
and science. In the next periodpeople tend to be materialism which
is the opposite ofintellectualism.
Descrates (1596 - 1650) was called the father of
modernepistemology in the era of positivism. According to him
mindand matter are primary, so it is called dualism. That is,
themind is the material (brain) that thinks, and the material is
theconcept of thought [2]. Influence on positivism refers
torationalism, as Descrates found. Rationalism believes
thatknowledge is based on real reasons, not based on beliefs
ordrawn from factual evidence [6].
Immanuel Kant (1974 - 1804) stated that thought plays anactive
role in making things understandable; the mind givesunderstandable
properties to things; while the truth / reality isitself (without
the touch of a human mind) it cannot beunderstood. For Kant,
knowledge is a product of the mindthrough direct experience and
transcendental means [2]. Kanttried to avoid rationalism and
empiric by looking at the subjectof human reason, not objective
facts (objects) to justify thevalidity and uniqueness of scientific
knowledge. Kant arguesthat the human subject has a certain a priori
reason, butempirically, the truth is also obtained from the
effectiveness ofthe capacity of pure reason [6].
According to Burrell and Morgan of social science, thedebate
that arises is between positivist epistemology and anti-positivist
epistemology [3]. Positivist epistemology is basedon the
traditional approach that dominates natural science,whereas
anti-positivist epistemology says that the social worldcan only be
understood from the perspective of an individualwho is directly
involved in the activity being studied.Epistemology with an
objective approach believes the truth ofreality apart from the
consciousness and existence of theindividual (distance from the
individual) [5]. The truth isobtained by the process of
falsification to explain and predictthe causality of various
variables that form phenomena. On theother hand, epistemology with
a subjective approach believesthat truth is obtained by
understanding individuals who are inthe phenomenon under study.
That is, the truth can beobtained by being as close as possible to
the individual underinvestigation.
An understanding of modern epistemology refers topositivism
logic. Modern epistemology is the development ofscientific logic
that combines approaches of rationalism andempiricism [7]. A
rational approach to compiling knowledgeis a consistent and
cumulative manner. The cumulativeprocess to build knowledge is done
by strengthening orweakening a research result with other research
results [5]. Anempirical approach separates knowledge from facts
and facts.Therefore, the view emerges that science is a collection
ofknowledge that is arranged consistently and its truth can
betested empirically.
Modern epistemology works by using objectivity and relyingon
understanding through the five senses. Knowledge is built
Advances in Economics, Business and Management Research, volume
103
415
-
on anything that is material, physical, and real or
concrete.Then they use the scientific method to guide them
inanswering questions that can later be compiled into
science.Modern epistemology also believes that reduction is
necessaryto formalize problems logically so that it is easier
tounderstand phenomena [7].
Positivism is the earliest scientific paradigm toemerge in the
world of science. The basic belief of this flow isrooted in the
ontology of realism which states that realityexists in reality
which is in accordance with natural law [3].The research effort, in
this case is to reveal the truth ofexisting reality, and how the
reality actually works. Positivismis a philosophy that states
natural science as the only truesource of knowledge and rejects
activities related tometaphysics or knows no speculation, all based
on empiricaldata. Positivism emerged in the 19th century driven
bysociologist Auguste Comte, with the fruit of his workconsisting
of six volumes entitled The Course of PositivePhilosophy
(1830-1842). According to Comte, humandevelopment takes place in
three stages which are theologicalstage, metaphysical stage,
positive stage [8]. At thistheological stage, humans believe that
behind naturalphenomena there are supernatural powers that regulate
thefunction and movement of these phenomena. at this level
ofthought there are three more stages, namely the stage wherepeople
assume that all things have a soul (animism); the stagewhen people
believe in supernatural powers so that eachphenomenon has its own
god (polytheism); the stage wherepeople change gods to monotheism,
that is, humans believe insomething absolute.
According to Emile Durkheim the object of the studyof sociology
is social fact (social-fact) [9]. The social fact inquestion is not
just a social contract. However, society isformed by group
awareness that affects the lives ofindividuals. Even though social
facts come from outside theindividual's consciousness, in
positivism research, the truthinformation is asked by research to
individuals who are madeas research respondents. In order to
achieve this truth, a truthseeker (research) must ask directly to
the object under study,and the object can provide answers directly
to the relevantresearch. This epistemological relationship, must
place theresearcher behind the scenes to observe the reality of
reality asit is to maintain the objectivity of the findings.
Somethodologically, a study uses an
empirical-experimentalmethodology to ensure that the findings
obtained are trulyobjective in describing the actual situation.
They look for highaccuracy, accurate measurements and objective
research, andthey also test hypotheses by analyzing numbers that
comefrom measurements.
Positivism recognizes existence and rejects theessence of
rejecting any definition that cannot be reached byhuman knowledge,
even free of value [10]. This view causessocial science to be
predictive and explanatory as well asnatural and exact sciences.
These generalizations summarizeall the facts that exist, humans,
society, and culture areexplained mathematically and physically.
Accounting isdeveloped based on the positivism thinking, built on
objectivefacts in society and business. Material (objective
conditions) isthe basis for the development of accounting science
usinginductive to deductive patterns [2].
Based on the description of modern epistemologythat develops
knowledge based on objectivity and makesvarious reductions, so as
to produce a partial science, the fieldof accounting starts to move
from modern epistemology(positivism) by opening up to understand
the reality ofaccounting with other epistemologies.
IV. THE EPISTEMOLOGY OF ACCOUNTINGPRACTICES AS A CONSTRUCTION OF
REALITY
In the subsequent development of modernepistemology in the field
of accounting much criticized byscientists. Gareth Morgan put
forward an opinion thatcriticizes modern epistemology in the field
of accounting [11].The implication is that accountants might be
objective(ideally) in presenting reality in the right way.
However,accountants are only able to understand aspects of
accountingreality in a limited way, with a relationship
scheme.Objectivity is only on the part of the object being
observed,then connected with the principles and practices of
accountingpartially and one-sided display of the entire world
view.
An objective perspective is widely used today to
understandreality in accounting. The accounting process aims to
createfinancial statements that are used for information
aboutbusiness performance. In this case accounting only
paysattention to the numbers in the financial statements only.
Thenumbers are said to reflect the company's operations.
Thisperspective only prioritizes objectivity. Aside from
thecompany's operations, as an element in business reality,
thereare still many things in reality that are not disclosed in
thebusiness performance report. For example, the environmentthat
supports business, the work ethic of the employee, theculture of
the business organization, the business relationshipwith the
community, with government, and other things,which are also part of
the reality of the business itself.
In relation to accounting practices Morgan has the sameopinion,
namely that the reality in accounting practices ishandled in a
numerical way, which is then used to build anaccounting framework
(for example: cost and income flows)[11]. Views numerically direct
accounting to see realitythrough objective and value-free numbers.
But if observedfurther, accountants also have a subjective side
that canconstruct reality in addition to the objective side.
Current accounting research has evolved from modernepistemology
that emphasizes objectivity towardsepistemology that uses
subjectivity in accounting practices toestablish truth in
accounting. Richardson, in a discussion onqualitative management
accounting, suggested thatmanagement accounting practices can be
understood in detailthrough a multi-theoretical perspective [12].
Furthermore, it issaid that ontological management accounting
research has themost extreme position, namely the standpoint of
idealism orrealism. Both ontological viewpoints have implications
forepistemology which also have extreme positions that ispositivism
and interpretive. Positivism recognizes thatknowledge must be based
on testing propositions from generaltheories and knowledge that
persists in empirical testing isvalid. The alternative is
interpretive, which recognizesknowledge based on understanding the
meaning of events andprioritizes interpretations to justify claims
of knowledge. The
Advances in Economics, Business and Management Research, volume
103
416
-
idealist perspective is paired with the epistemology
ofinterpretive, while realism is coupled with the epistemology
ofpositivism and interpretive. Thus, different
epistemologicalassumptions can be used to construct social
realities based onmanagement accounting practices.
In reality in the field of management accounting
variousaccounting practices are analyzed based on various
theoriesdeveloped with various epistemological assumptions.
Theoriesused in management accounting include: psychological
theory,economic theory, contingency theory, critical theory,
agencytheory, historical theory, and sociology [13]. This shows
thataccounting practices, as a basis for knowledge construction,are
getting richer because they are seen from variousepistemological
frames.
This critical theory is used to understand accountingpractices,
especially in the field of management accounting.Discussion about
the critical theory in management accountingwas raised by Cooper
and Hopper reviewing the basicapproaches of labor theory, critical
theory, and post-structuralism theory coupled with critical
accounting literaturenamely strategic management accounting and new
publicmanagement [14]. Management accounting can be fullyunderstood
by looking at the social, economic and politicalcontext so that it
can reveal the role of power and conflict inaccounting practices.
Management accounting is not merely atechnical activity, but is a
set of practices that produce andreproduce reality. The constructed
reality does not only coverorganizational life, but also social and
economic life at themacro level. The reality of accounting
practices is closelyrelated to how we view or ontology towards
reality.
Whatever its form, ontology is closely related to
theepistemology used in understanding reality. In
criticalaccounting learning, Modell offers critical realist
accountingresearch that discusses ontology and its implications
forepistemology and methodology [15]. The interaction
betweenexogenous structures (human objective living conditions)
andendogenous structures (conditions of human subjectivecapacity as
a reflexivity) leads to ontological synthesis.Critical realists are
views of causality that revolve betweencomplex interactions between
human agents and causal forcesin social structures. It can be said
that between exogenous andendogenous structures, complex
interactions occur which latergive rise to a view of causality.
This view of subjectivity in accounting is consistent
withMorgan's opinion that reveals the need for a way to
recognizeand accept subjectivity on the basis of accounting
andaccounting practices [11]. Accountants face complexsituations
such as economic vitality, investment decisions, theeffectiveness
of the operational production system, in a limitedand one-sided
manner. For example, in terms of accountingpractices and corporate
culture, it can be seen that anaccounting system designed at the
company will direct thebehavior of everyone in the company to form
a corporateculture. The existence of a reward system or daily money
canchange the behavior of employees to pursue rewards that
theymight be able to get.
Furthermore, how accountants can play an active role in
theconstruction of reality, one of which was stated by
Kamayanti,who redefined behavioral accounting through a
multi-paradigm perspective. According to Kamayanti, behavioral
accounting science is identical to positivism, but
actuallybehavioral aspects can be more enriching and make
behavioralaccounting more complete [16]. Behavioral accounting
isdiscussed through four perspectives that greatly affect how
weobtain knowledge about behavioral accounting. The
fourperspectives are positivistic, interpretive, critical,
andpostmodern. In addition to the four perspectives that are seenas
a paradigm of secularism, Kamayanti suggests a non-secular
perspective called a spiritual-religious perspective thatrecognizes
the truth of science by confirming the truth ofreligious teachings
(God's truth). Based on the spiritual-religious perspective, the
epistemology used is different fromepistemology based on a secular
perspective. One way to gainknowledge can be done by connecting
with God as the ruler ofthe universe, so that we can confirm
empirical evidence as ascience. In addition, this perspective also
believes that realitycan be changed and constructed in accordance
with thedemands of religion and everything that is approved by
God.
V.CONCLUSIONEpistemology is a discussion of how to gain
knowledge or focus on a process of seeking knowledge: whatare
the sources of knowledge, what is the nature and scope,scope of
knowledge. Modern epistemology is the developmentof scientific
logic that combines approaches of rationalism andempiricism. A
rational approach is to compiling knowledge ina consistent and
cumulative manner. An empirical approachseparates knowledge from
facts and fiction. Therefore, theview emerges that science is a
collection of knowledge that isarranged consistently and its truth
can be tested empirically.Modern science has developed rapidly, and
is said to haveushered in a better human civilization.
Accountants often see themselves as an objective,
value-free,technical from the company, and represent reality as it
is.However, in reality, accountants are very subjective as
realityconstructors. They do not only practice technically, but
alsopart of a broader process of reconstructing reality.
Theepistemology of accounting practices needs to
adoptinterpretative art and be based on certain
perspectives.Accounting practices that emphasize accounting reports
needto be balanced with elements of conversation or dialogue,
notjust as claims of objectivity.
According to Morgan, the accounting profession can answerthe
challenge of the concept of objectivity by facingsubjectivity in
the field of accounting. Accounting needs toadopt an interpretive
style that can build accounting principlesis an interpretive art
and based on perspective. In accountingpractices that emphasize
accounting reports should bebalanced with elements of conversation
or dialogue, not just asclaims of objectivity. On the other hand,
many researchersalso suggest that accounting practices can be
understoodthrough the concept of subjectivity using a variety
ofepistemologies, including those of a tolerant or
non-secularperspective. The contribution of this article is that it
canprovide an understanding of how to obtain knowledge
aboutaccounting practices from a different frame of mind other
thanbased on the perspective of objectivity that has been
believedin the field of accounting. The implication is that it
enrichesaccounting knowledge because it is obtained from a variety
ofepistemologies.
Advances in Economics, Business and Management Research, volume
103
417
-
VI. ACKNOWLEDGMENTWe are grateful to Universitas Pendidikan
Ganesha
especially the faculty of economics for your support so thatthis
article can be realized.
References[1] J. S. Suriasumantri, Filsafat Ilmu Sebuah
PengantarPopuler, Cetakan Ke. Jakarta: Pustaka Sinar Harapan,
2009.[2] I. Triyuwono, A. Djamhuri, A. D. Mulawarman, and
D.Prawironegoro, Filsafat Ilmu Akuntansi: Berpikir
Kontemplatif,Holistik, Intuitif, Imajinatif, Kreatif, rasional dan
Radikal dalamAKuntansi, Pertama. Jakarta: Penerbit Mitra Wacana
Media, 2016.[3] G. Burrell and G. Morgan, Sociological Paradigms
andOrganisational Analysis. Burlington, 1979.[4] J. W. Creswell,
Qualitative Inquiry and Research DesignChoosing Among Five
Approaches, Third Edit. California: SagePublications, 2013.[5] A.
Kamayanti, Metodologi Penelitian Kualitatif Akuntansi.Jakarta:
Yayasan Rumah Paneleh, 2016.[6] R. A. Morrow and D. D. Brown,
Critical Theory andMetodology. 1994.[7] D. A. Redman, Economics and
Philosophy of Science,First. Nederlands: Oxford University Press,
1993.[8] G. Ritzer, Teori Sosiologi: Dari Sosiologi Klasik
SampaiPerkembangan Terakhir Postmodern. 2012.
[9] I. B. Wirawan, Teori-Teori Sosial dalam Tiga
Paradigma,Pertama. Jakarta: Kencana, 2012.[10] I. Triyuwono,
“[Makrifat] Metode Penelitian Kualitatif[Dan Kuantitatif] Untuk
Pengembangan Disiplin Akuntansi.,” 2013,no. September, pp.
1–15.[11] G. Morgan, “Accounting As Reality Construction: TowardA
New Epistemology For Accounting Practice,” Accounting,
Audit.Account. J., vol. 13, no. 5, pp. 477–485, 1988.[12] A. J.
Richardson, “Paradigms, theory and managementaccounting practice: A
comment on Parker (forthcoming)‘Qualitative management accounting
research: Assessing deliverablesand relevance,’” Crit. Perspect.
Account., vol. 23, no. 1, pp. 83–88,2012.[13] P. Miller,
“Management Accounting and Sociology,” inHandbook of Management
Accounting Research, 1st ed., C. S.Chapman, A. G. Hopwood, and M.
D. Shields, Eds. Amsterdam:Elsevier, 2007, pp. 285–295.[14] O. D.
J. Cooper and T. Hopper, “Critical Theorizing inManagament
Accounting Research,” in Handbook of ManagementAccounting Research,
1st ed., C. S. Chapman, A. G. Hopwood, andM. D. Shields, Eds.
Amsterdam: Elsevier Ltd, 2007, pp. 207–245.[15] S. Modell,
“Critical realist accounting research: In searchof its emancipatory
potential,” Crit. Perspect. Account., vol. 42, pp.20–35, 2017.[16]
A. Kamayanti, “Meredefinisi Akuntansi KeperilakuanMelalui
Perspektif Multiparadigma,” in Prosiding Seminar NasionalAkuntansi,
Manajemen, dan Keuangan Ke III, 2018, pp. 29–40.
Advances in Economics, Business and Management Research, volume
103
418
