Critical Perspectives on Accounting
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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
Chapter 12: Critical perspectives on accounting
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
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.1
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
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.3
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$! or
"!utral
( accou"ti"g s!!" as a ,!a"s o+ co"structi"gaccou"ti"g s!!" as a
,!a"s o+ co"structi"g
or l!giti,isi"g particular social structur!sor l!giti,isi"g
particular social structur!s
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.5
Criticism of capitalist systemCriticism of capitalist system
( Critical th!orists t!"& to oppos! asp!cts o+ th!Critical
th!orists t!"& to oppos! asp!cts o+ th! capitalist syst!,
a"& accou"ti"gcapitalist syst!, a"& accou"ti"g
( !,phasis! that syst!,s o+ accou"ti"g ar! built!,phasis! that
syst!,s o+ accou"ti"g ar! built arou"& th! pr!$aili"g social
or&!rarou"& th! pr!$aili"g social or&!r
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.6
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!
Chapter 12: Critical perspectives on accounting
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!&
Chapter 12: Critical perspectives on accounting
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!
Chapter 12: Critical perspectives on accounting
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$! probl!,s
( one is using the very process that caused theone is using the
very process that caused the
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.##
Criticism of critical perspectiveCriticism of critical
perspective
( Critical th!orists o+t!" ,argi"alis!& to aCritical th!orists
o+t!" ,argi"alis!& to a
gr!at!r !<t!"t tha" oth!rsgr!at!r !<t!"t tha" oth!rs
( o+t!" &o "ot pro$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
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.#2
!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$!r",!"t will tak!
actio" to !"ha"c! th! l!giti,acy o+ th! social syst!,l!giti,acy o+
th! social syst!,
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.#
!ole of the "tate—continued!ole of the "tate—continued
( '!stricti"g th! +low o+ i"+or,atio" or'!stricti"g th! +low o+
i"+or,atio" or
a$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$!r",!"t &o!s
"ot op!rat! i" th! public
i"t!r!st but i" th! i"t!r!sts o+ 8w!ll o++9i"t!r!st but i" th!
i"t!r!sts o+ 8w!ll o++9
groupsgroups
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.#1
!ole of accounting research!ole of accounting research
( Accou"ti"g r!s!arch!rs ar! s!!" as pro$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 $i!ws at th!
ti,!ti,!
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.#3
!ole of accounting!ole of accounting
research—continuedresearch—continued * ris! o+ 8!co"o,ic
co"s!u!"c!s9 r!s!arch s!!,sris! o+ 8!co"o,ic co"s!u!"c!s9 r!s!arch
s!!,s
to ha$! 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
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.#5
!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
Chapter 12: Critical perspectives on accounting
Copyright © 2000 McGraw-Hill Book Co. Aust . PPT t/a
Financial Accounting Theory by !!ga" #2.#6
!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