Critical Accounting

CRITICAL ACCOUNTING. Critical accounting is a field of academic study that originated in Britain in the 1970s as an alternative to the mainstream accounting research that draws primarily from neoclassical economic theory, employs quantitative methodologies, and aims to improve the efficiency of business enterprises and capital markets. Critical accounting, in contrast, is unorthodox, normative, and interdisciplinary; it draws from diverse theoretical perspectives, uses qualitative methods, and is often radical in its critique of the economic status quo and those who benefit from it. It aims to illuminate the social and political aspects of accounting and financial reporting as a basis for praxis. Critical studies span a broad range of topics including the labor process, union-management disputes, debates over privatization of public services, the politics of accounting standard setting, critiques of transnational accounting firms and the auditing industry, gender and racial inequity within accounting firms, tax abuse, financial fraud, money laundering, and corporate reporting of social and environmental impacts.

In the United States in the 1980s, radical scholars such as Tony Tinker and his colleagues at Baruch College (City University of New York) advanced a stream of critical accounting research that draws from political economy and Marxist thought. The political economy approach challenges the notion that accounting is a neutral, objective, technology and emphasizes instead the ways in which accounting is a partisan practice that is implicated in transfers of wealth between social classes both on the factory floor and in the economy at large. The field of accounting is thus seen as essentially political; accounting policies are influenced by ruling elites and dominant ideologies, and accounting practices, in turn, affect the distribution of income, wealth and power within society.

In the 1990s, postmodern and poststructuralist theories took hold in critical accounting. Cultural studies, influenced by the work of Michel Foucault among others, developed an analysis that focused on the power of seemingly mundane technologies such as accounting and budgeting regimes to construct economic reality and shape subjectivities. Institutional theory emphasizing the ways economic activity is socially embedded also gained prominence in the 1990s.

In the 2000s, critical accounting continued to incorporate interdisciplinary perspectives emerging in the social sciences and humanities including critical geography, economic sociology, and actor network theory. At the same time, the political economy approach continued to inform critical accounting’s understanding of neoliberalism, financialization, government austerity programs, corporate bankruptcies and auditing failures such as the Enron/Andersen scandal, the 2008 financial crisis, rising income and wealth inequality, and other contemporary financial and economic issues.

Like other business and economic research, critical accounting scholarship is disseminated primarily though research journals. Accounting, Organizations and Society, founded in 1975 by Anthony Hopwood at the London School of Economics, was the first major accounting journal to promote interdisciplinary research on the social and behavioral aspects of accounting and to welcome critical studies. In North America, Tony Tinker and David Cooper (University of Alberta) established Critical Perspectives on Accounting in 1990 to provide a forum dedicated to critical scholarship. Both journals remain in publication under new editorship.

Radical scholarship, particularly variants that engaged in a critique of capitalism, was not welcomed by US business schools. After gaining some recognition in the 1980s and 1990s, critical accounting research has been marginalized in the United States. Nonetheless, the field continues to flourish internationally with centers now in major universities in Canada, Europe and the Asia Pacific.

Annisette, Marcia, Cooper, Christine & Gendron, Yves (Eds.). 25th Anniversary Issue [Special issue]. Critical Perspectives on Accounting. 43(March, 2017), pp. 1-166.

Chapman, Christopher, S., Cooper, David, J. & Miller, Peter B. (Eds.). Accounting, Organizations, & Institutions: Essays in Honour of Anthony Hopwood. New York: Oxford University Press, 2009.

Hopwood, Anthony, G. (Ed.).). Accounting, Accounting Research and the Economic and Financial Crisis [Special section]. Accounting, Organizations and Society, 34, Issues 6-7, (August–October, 2009), pp. 797 to 873.