TEESSIDE UNIVERSITY

TEESSIDE UNIVERSITY BUSINESS SCHOOL

Contemporary Issues in Accounting Thought
Here are some background notes for the first session of this module. Please
use them as a guide to the course.

Accounting Knowledge
Accounting Knowledge is built up in a variety of ways. Much of this is codified
in accounting standards, ethical guidance and legislation. However, as these
rules are intended to satisfy a range of competing purposes, and may vary
dramatically internationally, it is important to recognise that knowledge is
contested.

What is knowledge?
True belief
It is not enough to believe
It is necessary to have justifiable grounds that the belief is true
Science takes this further and insists that all knowledge is potentially capable
of refutation

How can knowledge be gained?

Empiricism using evidence this might be reflected in both methodological
approaches.
Reason or rationalism

Rationalism
Some aspects on knowledge are derived from pure reason eg mathematical
knowledge (2 + 2 = 4)
We also rationalise or create ideal models of complex events eg in finance
research where we have ideal models of financial markets

Positivism
Experience is external to the observer
It is possible to measure the impact of a change in a variable by isolating that
impact in some way
Results can be measured objectively (not necessarily using numbers)
Results can be verified by other impartial observers

Constructivism
Construction of knowledge is dependent on the observer
Important to understand how the world is interpreted

Normative thought
Tinker et. al. (1982) suggest that all positive theories are dependent upon
earlier normative statements. They are implying that much of what we
describe is dependent upon what we already believe should happen. You
might want to consider recent reports about the credit crisis and in particular
the reasons given for particular forms of action.

Impact on knowledge creation

Our approach to developing knowledge therefore depends on
Our beliefs about the world
The questions we want to ask

Can accounting be studied?

Pragmatism v Theory
Some examples
Pacioli Pacioli was the first accounting writer!
Accounting Standards
Ethical rules

Exercise
You may want to think about this exercise before you come along to the
session.
I am interested in the social aspects of accounting and company behaviour.
One particular area of interest is the extent to which the reporting of costs
and benefits of company social activities (measured or unmeasured) affects
company and employee performance.
Tasks
1. Identify the problems you might encounter in trying to research this
topic.
2. Identify some research questions that you might have in this topic
area.
3. Identify some objectives for your questions and identify which
questions might be more likely to give rise to:
a. Quantitative research
b. Qualitative research

References

Ryan, B. Scapens, R. W. & Theobald, M. (2002) Research Method &

Methodology in Finance & Accounting Thomson
Tinker, T. Merino, B. & Neimark, M. (1982), "The normative origins of positive
theories: ideology and accounting thought", Accounting Organizations and
Society, , Vol. 7 No.2, pp.167-200
Baxter, W. T. (1947) Accounting as an Academic Study in Lapsley, I. (ed.)
(1996) Essays in Accounting Thought: A Tribute to W T Baxter ICAS