Critical theorists would challenge the work of those grounded in legitimacy theory. Critical theory aims to critique and change society, uncover assumptions, and promote a better society serving mass interests through increased self-awareness and knowledge. It promotes emancipation, political equality, and two-way relationships between theory and practice, allowing easier implementation of policies. Critical theory also focuses more on social and environmental developments, accountability, and sustainable development.

1. ACC 4322 : Advanced Accounting Theory
Year IV, Semester 2, 2016
Group No -

2. Chapter 12 – Critical perspective of
Accounting.
Critical theorist would challenge the work of authors
whose work is grounded within legitimacy theory.
What is the basic of their oppositions?

3. What is Critical Theory?
 The Frankfurt School, also known as the Institute
of Social Research, is a social and political
philosophical movement of thought located in
Frankfurt am Main, Germany.
 It is the original source of what is known as Critical
Theory. The Institute was founded, thanks to a
donation by Felix Weil in 1923, with the aim of
developing Marxist studies in Germany.

4.  Critical theory is a social theory oriented toward
critiquing and changing society as a whole, in contrast
to traditional theory oriented only to understanding or
explaining it. Critical theories aim to dig beneath the
surface of social life and uncover the assumptions that
keep us from a full and true understanding of how the
world works.
 So that critical theory is a very broad term that
captures a variety of different perspectives about
accounting.(Hopper, 1995)

5. What is the basic of Critical theorist
oppositions towards legitimacy theory?
1. Critical theory is concerned with the promotion
of a better society than legitimacy theory.
 It is a social arrangement serve the interest of the
mass people.
 It promotes self awareness of both “what is” and
“what might be” and so that it provides more
knowledge base decisions. (Roslender, 2006)

6. 2. Critical theory consists with emancipation
decisions.
 Removing oppression of some groups.
 Ensuring political rights and equality of all
groups in world.
3. Critical theory promotes the idea of social praxis.
 All forms of social praxis are evaluating and aim
to promote progressive change with in the
conceptual, institutional and practical.

7.  social praxis such as education, transport and
health etc are considered under Critical theory.
(Tony Tinker, 2005)
4. Critical theory involves two way relationship
among the theories and practices. But in
legitimacy theory, it has only one way
relationship.
 Due to above mentioned relationship, it is easy to
implement different theoretical perspectives in
to practical social development process.

8.  So that theory can be converted to the practical.
 As an example if particular researcher develop
theories regarding on “distribution of wealth and
power”, based on findings, easily new rules and
regulations can be implemented.
 The reason is that critical theory consider all the
aspects of the society and it evaluate all the effects
of the particular theory. So that particular theory
can be implemented easily and so that it is
considered as two way relationship.

9. 5. Critical theory reduces the limits in capitalistic.
 In legitimacy theory, resources are not distributed
in perfect manner. So that unemployment,
inflation and economic depression can be
occurred.
 But in Critical theory, it consider society as a whole
unit, so that it is easy to implement polices , rules
and regulations to reduce limits in Capitalistic
structure.

10. 6. Critical theory more focus on social and
environmental developments.
 In critical theory, social and environmental
developments are identified and it is seeking a
substantial changers in social practice in order to
make stability in social and environmental factors.
 Promoting the need for organizations to be more
accountable for their social and environmental
performances. (Gray, Own and Adams, 1996)
 Most of critical theorist believes that it is
important to strength the existing inadequate
social and political system rather than seeking to
overcome it. (Tinker, 1991)

11.  Organization should need to report social and
environmental cost in their accounts in order to
identify real effect of the business operations.
Sustainable development is captured in critical theory.
(Unerman and Fries, 2010)