Gerard explores critical theory for accounting

1. LO 01 Explain the critical theorists’
arguments that financial accounting
generally supports those individuals
with wealth and social status
1 Created by Dr G. L. Ilott, CQUniversity Australia

2. What is critical accounting theory?
Critical accounting theory refers to a range of perspectives and
paradigms (that are definitely not positivist) that focus on the role of
accounting in sustaining the privileged positions of those in control of
resources (capital) while undermining or restraining the voice of those
without capital.
In other words, to the critical theorist, those that have are privileged,
while those that do not have are suppressed.
2 Created by Dr G. L. Ilott, CQUniversity Australia

3. Critical accounting theory sources
Critical theory comes to us from a surprising range of views and
grievances.
• Marxist economic theory
• feminist theory
• Queer theory
And also a range of theories that classify people as victims of oppression
(physical, economic or emotional) by those who are privileged.
3 Created by Dr G. L. Ilott, CQUniversity Australia

4. Critical accounting theorists
• Critical accounting theorists seek to highlight, through critical
analysis, the key role of accounting in society.
• They challenge the view that accounting can be construed as
objective or neutral.
• Accounting is seen as a means of constructing or legitimising
particular social structures (banks, accounting societies etc.) for the
benefits of those that currently have wealth and need to guard it.
4 Created by Dr G. L. Ilott, CQUniversity Australia

5. Is critical accounting theory useful for accounting?
Personally, I find all forms of critical theory to be very depressing, and it
makes its appeal by turning people into victims. However, I must disclose that
as a white middle-aged straight Anglo male, I might be expected to say that.
That demographic does feature strongly in critical theory's "rogues gallery".
However, critical accounting theory does serve an important purpose. It tells
us that accountants are not objective, dispassionate, detached scribes and
observes of economic events. We are players in the flow of capital and critical
theory reminds us that we should continually reflect (critically) upon the
social effects of our decisions.
5 Created by Dr G. L. Ilott, CQUniversity Australia

6. Some important insights from critical accounting
theory
1. Accountants are not impartial observers or benign decision-makers.
We are influential actors in the practice of capitalism. We are
capable of realising the "better angels" of capitalism, and just as
capable of invoking the dark soul of greed and arrogance.
2. Financial reports are never impartial or value-free. They are political
documents that serve someone's interests.
6 Created by Dr G. L. Ilott, CQUniversity Australia

7. Everything about accounting serves someone's
interests
In truth, critical accounting theory finds a dark side everywhere.
• Accounting regulators (including governments) serve those with the capital,
• Accounting associations and educators are vitally interested in maintaining the
status quo that suits those with capital,
• Global economics is just another form of colonialism, where powerful money
and interests subjugate the interests of emerging economies.
Like I said, critical accounting theory is rather depressing in its world view, but gee,
it makes you think!
7 Created by Dr G. L. Ilott, CQUniversity Australia