Accounting, Accountants and Accountability

Norman Macintosh

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781136011269
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

In the business world, recent years have seen a growing acknowledgement of the value of intangible assets rather than physical assets. This has precipitated a crisis in the accounting industry: the accounting representations relied upon for years can no longer be taken for granted.

Here, Norman Macintosh argues that we now need to understand accounting in a different manner. Offering several different ways of looking at accounting and accountants, he draws upon the work of eminent thinkers such as Barthes, Baudrillard, Derrida, Foucault, Lyotard and Bahktin. In doing this, he develops revolutionary insights into the nature of accounting, pioneering the introduction of contemporary poststructuralist ideas into accounting theory and practice.

With a wide range of examples and case studies and now available in paperback for the first time, this revolutionary new work will be essential reading for academic and professional accountants along with all those with an interest in the future of accounting.

1Introduction

That things possess a constitution in themselves quite apart from interpretation and subjectivity, is a quite idle hypothesis: it presupposes that interpretation and subjectivity are not essential, that a thing freed from all relationships would still be a thing … the essence of a thing is only an opinion about the ‘thing.’

(Nietzsche, 1968: 302–3)

The knowledge domain of accounting has a reputation of being long on practice and short on theory. As the adage goes: ‘Accounting is a practice in search of a theory.’ This, however, may be overstating the case. In fact, a great deal of theorizing has ensued over the years, even if it has tended to be ignored by practitioners. Much of this has drawn on economics as the theoretical base.

In fact, the late 1800s witnessed the introduction of economic theory into the accounting realm in the UK. And in the 1930s, scholars at the London School of Economics developed accounting theories drawing on neo-classical economic models, particularly regarding cost allocation issues and information usage for decisions.¹ This ‘London Tradition’ had an important impact on academic accountants in the UK and spread to the USA where it was adopted with a vengeance. Germany also has a long tradition of its own of economics-based accounting theory.² Accounting researchers in many other countries have drawn on economics for accounting theory development.³

Today, this approach is known as the ‘informational perspective.’ It has come to determine ‘what counts as accounting research’ in many institutions. While undoubtedly the informational perspective has added a lot to accounting thought and practice, it may well be, as one prominent academic of this approach has suggested, that it has run its course and that not a lot more can be mined from it.⁴ So this book aims to introduce a quite different perspective, one based on relatively recent developments in poststructuralist philosophy, sociology, history, and especially language, into the scholarly academic accounting world. The hope is that others will follow suit.

This is not the first attempt to introduce poststructuralist ideas into the realm of accounting thought, bits and pieces already have appeared here and there. But, as with nearly all new and radical initiatives, they have in general been met with stiff resistance, even disdain and disbelief, and more often than not dismissed without a real grasp of what it’s all about. Ironically, much of the opposition to a poststructural perspective has come from accounting scholars who have also challenged the informational perspective’s stranglehold and introduced accounting theories that draw on great thinkers of modernity like Karl Marx, Max Weber, and, more recently, Louis Althusser and Jürgen Habermas. As for proponents of the informational perspective, they seem to be unaware of the existence of postructuralism or assert that it has no relevance to accounting. Yet poststructuralism is already an important, if controversial, part of the woodwork and today is almost déja vu for many scholars, especially younger ones, throughout the humanities and the social sciences.

The ideas drawn on in this treatise have had a profound, and many would say salutary, effect on discipline after discipline in the humanities, social sciences, and the arts in general. They include some of the central writings of several French intellects who helped pioneer poststructuralist thinking – Jean Baudrillard, Jacques Derrida, Michel Foucault, and Jean-François Lyotard and the works of Roland Barthes whose work is considered to bridge structuralism and poststructuralism. Each of them was profoundly affected by the ‘Events of May’ which refers directly to the riots and protests which took place in Paris and spread to other parts of France during May, 1968. It also refers more generally to somewhat similar events that took place around the world at about the same time. This book also draws on some of the ideas about language and literature that Mikhail Bakhtin, a Russian literary theorist, developed earlier in the twentieth century.

Events of May

The French riots started out as a demonstration in the Paris suburb of Nantes by university and high school students protesting the conditions under which they were forced to work and live and the autocratic rule of the highly centralized ministry of education and university administrators. The police response was vicious and harsh, but only resulted in an escalation of protest by the students. Then, a remarkable thing happened. The students were joined by a rapidly growing number of factory workers, teachers, trade unionists, and professionals of all kinds who occupied factories, rail depots, hospitals, museums, and even the dance halls and night clubs.

As police brutality escalated, the rioting and protests spread, not only in Paris but throughout France. Agricultural workers joined in and many of the 168,000 government soldiers brought in to suppress the rioting, along with some members of the police union, were openly sympathetic to the strikers. Factory workers by the millions across France voted to strike and they occupied factory after factory. Matters escalated when police stormed the factories to beat up the occupying workers and even killing some. France literally ground to a halt and the end of de Gaulle’s decade of rule was near at hand.

But the protests and rioting in 1968 were by no means limited to France. Widespread demonstrations also took place in Warsaw. Students rebelled and rioted in Yugoslavia. In Italy, 60 per cent of the workers supported a general strike. Demonstrations of half a million strong broke out in Mexico just before the 1968 Olympic Games, while in the USA, race riots erupted in major cities and massive anti-Vietnam war marches were organized in Washington, as well as in Britain. In Spain, Franco was putting down the new workers’ movement and the Basque separatists with large-scale arrests, torture, and executions. The massive protests by students in Tokyo went pretty much unnoticed in the West, although the Russian invasion of Czechoslovakia to put down a democratically elected government shocked even the most ardent Marxists and Leninists. The world was powerfully shaken as the Events of May reverberated globally. As one observer summed it up:

The year 1968 was a watershed. That was the year millions of workers in France struck in protest at police violence, bringing the government to the point of panic. It was also the year the black ghettos of the United States rose in protest at the murder of the leader of nonviolence, Martin Luther King.

1968 was the year of the Prague Spring, when students, workers and intellectuals challenged the Stalinist monolith – and were crushed by Russian tanks; the year of the Chicago Democratic Convention, when the use of teargas and billy-clubs ensured a US presidential candidate who had already been rejected by voters in every primary.⁵

The world, it seemed, had undergone some kind of a radical change in a few short years. Crucially, the social and philosophical theories that had dominated the French intellectual scene since World War II no longer offered much understanding of these events. Any attempt to fit them all into some kind of metanarrative, such as Marx’s dialectical historical materialism, did not work well at all, while more recent theories – such as Louis Althusser’s Marxism, Alexandre Kojeve’s Hegelianism, Husserl’s phenomenology, or Jean-Paul Sartre’s existentialism – had also lost much of their robustness for explaining the Events of May.

For critical social philosophers, such as Barthes, Baudrillard, Derrida, Foucault, and Lyotard, who had been weaned on Marxism and who had joined the Communist Party in their younger days, it seemed that they would need either to substantially revise the now moribund theories of the likes of Hegel, Marx, and Gramsci or look in a different direction. Now highly suspicious of universal truths, they chose the latter and turned for inspiration to the work of Friedrich Nietzsche, particularly his seminal book On the Genealogy of Morals, and his notion of discontinuities and ruptures in the historical trajectory of Truth and Reason. All five have always been quick to acknowledge their debt to Nietzsche and the Events of May proved to be a golden opportunity to break new intellectual ground.

Each has produced a prodigious volume of published works stretching over three or four decades. While each looks at a quite different aspect of communication, language, and discourse, the golden thread running through their collective works is the idea that language itself, how it works, and how it gets used has a deep influence today on the lives of individuals, perhaps more so today than does the material world of producing and consuming material things. Collectively, these works make up an important part of what is known as ‘the linguistic turn’ taken in recent years by most of the social sciences and humanities.

Linguistic turn refers to the use of language for the production and consumption of immaterial objects such as images, signs, models, and simulacra, as exemplified in media of all kinds, including TV, the Internet, and various computerized webs, as well as newspapers and magazines. And since accounting is accepted as the language of business, and more and more also the language of the public sector, it would seem to go without saying that much can be learned about accounting from these highly influential poststructuralist thinkers. What is at stake here, however, is not just a matter of a local set of crafts: it is part of the cultural history of the twentieth century, and it has implications for anyone who is interested in how our society and culture has come to assess and regulate itself.

Thus, this book looks at accounting following Lyotard for its language games nature, Derrida for its duplicity in constructing meaning, Baudrillard for its hyper-textuality, Foucault for its punitive and disciplinary discourses, and Barthes for its semiotic nature. (Of course, none of them would want to be called ‘poststructuralist’ or any ‘post,’ as such labelling goes against the grain of poststructuralism.) The book also suggests a new way of accounting based on the works of Mikhail Bakhtin. Reviews of the methodologies of structuralism, semiotics, and Nietzschean genealogy are presented in Chapter 2 as a backdrop and entré to their radical ways of thinking. And, as their research methods are historical in nature, albeit radically so, the tenets of traditional history serve as helpful background.

Traditional history

Traditional historians tend to follow four basic suppositions.⁶ The first of these is that history investigates only the real. History must be grounded on the fundamental and absolutely central distinction between established facts and fictions.⁷ The Black Hole of Calcutta, the Japanese rape and pillage of Chinese cities, the Gulag, the Holocaust, the US atomic bombing of Nagasaki and Hiroshima, and the ethnic cleansing in Kosovo did really happen in real places, to real people, by real people. These are the objects of historical documentation.

The second supposition holds that the past is a permanent dimension of the human community and consciousness. We carry it around with us as a ‘sense of the past.’ The pull of the past as tradition and continuity is strong. Its patterns tend to get reproduced in what we consider today to be important about community and society. Judiciaries, bureaucrats, politicians, accountants, and members of other professions and trades frequently search for precedent when making judgements and taking decisions, thus bringing the past into the present. In fact, many people today have more in common with their forebears than with their contemporaries. Today’s second-hand car dealers, for example, are more similar to horse traders of medieval times than they are to, say, today’s computer scientists. And even when ideologues ‘invent’ or ‘distort’ the past, instead of improving on it, to suit their present causes, they retain a sense that the past is important.

Societies, of course, do change. But, changes and innovations are made in comparison to the past, often in the hopes of improving on it. So it behoves historians to document, analyse, trace, and report about this sense of the past, including its transformations. History not only throws light on the past of earlier societies, but, more importantly, it illuminates the present. And even, or especially, when people do not seem to learn from what history can teach, historians must go on trying. Large-scale bombing is a case in point.

The German blitz bombing of London early in World War II was designed to break the will of the English populace to fight on. Yet it had just the opposite effect. Their will got stronger. The reciprocal bombing by Allied forces a couple of years later only stiffened the resolve of the German people to carry on with the war in spite of inevitable and crushing defeat. History repeated itself again in Vietnam, where US bombers in one week dropped more tons of bombs, including napalm and fire bombs, than during the entire Allied bombing in World War II. Yet, the will of the North Vietnamese got stronger and stronger. Similarly, the so-called ‘United Forces’ bombing of Baghdad and other cities and towns in Iraq strengthened the will of its citizens to resist as well as exacerbating the already strong hatred for the Western world, especially the USA. And, more recently, history repeated itself once more in Yugoslavia when the United Nations’ bombing failed to break the people’s resolve. Historians should be in the business of trying to remove these blindfolds.

The third supposition, closely related to the second, holds that history has much to say about contemporary society. It is a storehouse and repository of the experience, wisdom, follies, and moral precepts which can and should provide the ‘wiring’ for a better world today. While much of the human situation and temperament stay about the same from era to era, a lot of it gets better, based on lessons from the past. And even when politicians, generals, and others in key positions of power ignore the lessons of history, the historian must keep trying. History has a lot to say about the present. It is a case of, as the adage goes: ‘Fool me once, shame on you; fool me twice, shame on me.’ History repeats. We should pay attention to it.

The fourth basic supposition contends that the past, present, and future constitute a continuum, and so the present and future are systematically chained to the past. The future is not merely a capricious and arbitrary imbroglio of circumstances and events. Thus, historians can, if they try, predict social trends and perhaps influence the future in important ways. As it turns out, prediction may not be all that hard. Today’s social structures and the pattern of reproducing them put a limit on the number of things that can happen tomorrow. Historians, as experts on the past, should be able to provide insights into what possibly might happen. And, if these future possibilities are deemed to be undesirable, historians should speak out. The past has important things to say about the future.

In sum, traditional history rests on four basic suppositions. It concerns the investigation of real events and persons; the past has a strong influence on the shape of the present; it is progressive; humankind learns from the experience, wisdom, and mistakes of the past; and the past, present, and future represent a continuous process. So historians can and should predict important social trends which, when identified, might be acted upon to influence the direction of the future.

Conventional accounting also ascribes to these basic suppositions. It claims to report only real events and transactions that did occur and thus accounting reports are deemed to be factual. It also holds, at least implicitly, that the past traditions of accounting are important for decisions and actions today. Double entry accounting, now centuries old, remains the basic mechanism for collecting, coding, encoding, and reporting accounting data; while the postulates of revenue recognition, historical cost, matching, conservatism, going concern, etc., are time honoured traditions that inform present day accounting practice and subsequently affect capital market decisions. And it is widely believed that historical cost-based accounting has lessons for the present in terms of resource allocations in society. Finally, accounting statements are seen to link the past (previous years’ comparative figures are required to be included) with the present and some accounts are based on estimates of future events and transactions, thus linking the present to the future. Conventional accounting wisdom, then, adheres closely to the basic suppositions of traditional history

This somewhat lengthy exposition of the presuppositions of traditional history provides a necessary backdrop for understanding how the work of poststructuralist researchers differs. Foucault, Derrida, Baudrillard, Barthes, and especially Nietzsche, as we shall see, each adopts a different and radical method of doing history known as ‘genealogy.’

2Structuralism and poststructuralism

You become a card carrying structuralist only when you claim that the meaning of each image (sign) is wholly a matter of its relation to the other (images). The images do not have a ‘substantial’ meaning, only a relational one.

(Eagleton, 1983: 94)

Poststructuralists … are antagonistic to the concept of totality and in its stead emphasize fragmentation … they do not recognize a unity against which the fragments can be measured … poststructuralists also emphasize the local and the contingent and they have a hatred of all overarching theories.

(Sarup, 1993: 186)

Structuralism

Structuralism has been an important ontology in nearly all the natural sciences, the social sciences, and the humanities for some time. It holds that structures, the organizing properties or blue...