Accounting, Reality and Sustainability Reporting.
Abstract
Environmental and social accounting has the potential to contribute to a just and
green community. This may be achieved by reforming accounting to consider how
the art of interpretation can put us in touch with the world. The works of Donald
Davidson, Richard Rorty and Charles Taylor are used to extend our understanding
of accounting. The aim is to provide authentic reports about our utilization of the
natural environment. The ideal of authentically is critical in representing our
impacts on the natural world.
This paper examines the philosophical and
theoretical journey that compares traditional accounting with recent developments
in political philosophy.
Keywords: accounting, environmental accounting, facts, hermeneutics,
interpretation, interpretivism, objectivity, subjectivity, value.
Introduction
Research concerning the social and environmental accounting project has been subject
to critical insight and deliberation. This paper explores the objectivist implications for
accounting and its reform agenda.
This task is undertaken by revisting debates
concerning whether accounting can provide objective and real information in its
discursive reports.1
1
This examination involves the assumptions which connect
In part, the argument contributes to Tomkin and Groves’ (1983a; 1983b) work
on the role of the accountant in society. Additionally the paper extends Parker
& Roffey (1997) and McKernan (2007) to consider how accounting
2
accounting with the natural environment. That is, can accounting provide authentic
information about human impacts on the natural environment?
On the traditional epistemological view, it is assumed accounting reports provide
communicative reports that are ‘real’ and represent ‘facts’. McKernan (2007) used
Donald Davidson’s philosophy of language to examine the philosophical assumptions
on which accounting has been based. This theory of language was based on the view
that there is no distinct separation between mind and world. Accordingly, it was
possible for a new accountability framework to be constructed thereby providing real
data. However, Davidson’s work has been the subject of criticism in the philosophy
of language: the idea that our very best sentences put us in touch with the natural
world has been falsified.
Following McKernan, it is clear a new accountability framework is needed
that examines the objectivity of value in the natural world. This examination is one
that aims to revitalize the ethic of the discipline (Gray, 2009; Hopwood, 2009). In
reconsidering the objectivity of accounting, its impact on the natural environment is
examined.2
To do this, ideas from political interpretivists Hubert Dreyfus, John
McDowell and Charles Taylor are used to move beyond instrumental and technical
thinking. In questioning modern epistemology, a different way to understand the
world is introduced from their work. This involves exploring the moral side of our
being which is said to be the avenue through which we engage the natural
environment.
The moral side of our being involves direct perception and
hermeneutics is another social imaginary to understand reporting technologies
and its societal impacts (see Gray, 2009).
2
The argument in part is a development not only of McKernan (2007) but also Gray (2009) who
has offered a critically informed conception of sustainability. This paper differs by focusing
explicitly on the role of our basic sense of engagement in the world to reveal a new
accountability model. Here interpretivism refers to that which is revealed when we consider
how basic engagements with the world.
3
interpretation which connect us with the world. This philosophical approach has been
defined asinterpretivist in directly engaging with objective values.
The aim of interpretivism is not to assimilate with the logic of economic
reason and instrumental rationality that prioritizes profit and calculation (see Shapiro,
1997; McKernan, 2007). They examine people’s basic coping skills to put us closer
to the world than other disengaged philosophies. The idea that we have basic coping
skills making us directly accountable to the world is useful for accounting researchers
attempting to understand sustainability. This way to think about the world involves
not simply reforming the current business system but rethinking our basic
assumptions of that world. These assumptions reflect the means we use to understand
and interpret the natural environment which in turn shape our accounting practices.
The argument proceeds by claiming that environmental and social accounting
reforms are on the wrong track. Current reforms such as carbon trading, business
models, supply chain management for the environment are unlikely to reform the
accounting profession in the public interest. This is partly due to the fact that the craft
of environmental and social accounting has been colonized by the logic of
instrumental rationality.
Instrumental rationality is the type of thinking used by
economists to calculate optimal outcomes at minimal cost. Instrumental rationality,
therefore, limits the full realization of human perceptions of the world and creates a
forgetfulness of our place in the world. By way of contrast, interpretivists search for
value in the world utilizing not simply our powers of rationality but also our total
bodily engagement in the world.
In this paper I suggest a possible solution that involves a radical departure
from the dominant philosophical assumption that the mind and world are separate. It
is well known that naturalism and scientism separate mind and world as the only way
4
people interact with the world. I argue that this assumption creates an anthropocentric
culture that ignores other values in the world. A suggested therapy for accounting
ethics is a radical reworking of our understanding of being in the world and a reenchantment of our ethical appreciation of accounting.
Structure of the argument
Section 1 outlines debates concerning the objectivity of the world in a social and
environmental accounting context. Section 2 examines criticisms of Davidson’s antirepresentational work as applied to accounting in the work of McKernan (2007).
Section 3 introduces a philosophy of direct moral realism. Section 4 utilises Shapiro’s
five philosophical propositions (see Shapiro, 1997). The final section outlines some
directions for the future.
Section 1: Objectivism and the world – the objectivist view of the world
Environmental and social accounting is confronted with a crisis. This crisis has been
from two directions. From one side, it has been argued that accounting is simply a
social construct and cannot provide objective accounts. From another perspective, the
technology of accounting has been submerged by the technical and social vectors it
claimed to supersede.
Following political interpretivists, it is important to understand how people
interact with the world. One way to confront this dilemma is to investigate the
assumption people access the external world through the mind. On that view, we can
never really observe the world as-it-is (the myth of the given). That it is impossible to
directly access the natural environment has introduced a host of dilemmas and
problems for accounting and its relationship with philosophy. For accounting the
5
dilemma takes the form that if we do not know what nature is then it is impossible for
us to provide discursive and real accounts. For philosophy the dilemma takes the
form of a theistic dimension that there are external values existing independently of
us. If there are external values in the cosmos that are independent of us, it becomes
important to find means to access such value.
Charles Taylor (2002a) argued that there is a big mistake operating in our
culture. This mistake involves a (mis)understanding of what it is to know and how we
know and value the world. If we get this thinking wrong there will be dire effects on
both theory and practice in a host of domains, one of which is accounting.
The debates involve how mind and world philosophy influence other bodies of
knowledge such as accounting. Are other ways available that allow people to engage
the world? If so, then, we misunderstand knowledge as mediational. Taylor observes:
In its original form, this emerged in the idea that we grasp external reality through
internal representations. Descartes in one of his letters, declared himself “assure,
que je ne puis avoir aucune connaissance de ce qui est hors de moi, que par
l’entremise des idees que j’ai eu en moi”. 3 When states of minds correctly and
reliably represent what is out there, there is knowledge. (Taylor, 2004, p. 53)
Notice that Taylor argues that the dominant philosophical discourse is based on a
sharp separation between thinking minds and the world. The problem with the
3
From the letter to Gibieuf, 19 January 1642, which comes from the mediational passage:
You inquire about the principle by which I claim to know that the idea I have of
something is not an idea made inadequate by the abstraction of my intellect. I
derive this knowledge purely from my own thought or consciousness. I am
certain that I can have no knowledge of what is outside me except by means of
the ideas I have within me; and so I take great care not to relate my judgements
immediately to things in the world, and not to attribute to such things anything
positive which I do not first perceive in the ideas of them. (Descartes, 1970, p.
123)
6
dominant way to understand the world is that we lose sight of the fact that we are
engaged agents to whom self-interpretation is a feature of our very being.
According to interpretivists, the dominant social science approach is assumed
to be objective and neutral in its descriptions of the world. These assumptions can be
traced back to mind–world dualism, as found in Descartes’ Mediations. The central
message of that book was that our concepts and categories are the only means people
have to access the external world. This naturalistic thinking, in turn, creates a social
imaginary that has led to the supposition that humanity has the ability to control and
transform the external world using procedure and technique. The search for unbridled
profit gives undue emphasis to appetite, where the good life is reflected in continuing
escalations in living standards. According to instrumental and economic reasoning,
moral worth is determined by appeal to the appetite of un-regenerated individuals.
This is a lesson Plato knew all too well.
Section 2: The debate –interpretivists and representationalism
Environmental and social accounting is a contested arena. The contest involves
whether accounting information can create new pathways in the public spheres of a
civil society. Environmental and social accounting has only recently begun to engage
broader debates concerning the philosophy of direct realism (see McKernan, 2007;
Shearer, 2002). For example, accounting and accountability research has been built on
the supposition that reported accounts are objective and reflect reality. Early work in
this area did not question the current order of things and simply assumed that financial
reports were true and fair. These assumptions were criticized as simple conservative
and middle-of-the-road justifications for the status quo. Notably, Hines (1988) and
7
Tinker (1985) challenged the conservative face of accounting and outlined how
accounting is a social construct with distributional and social consequences.
Moreover, accounting has only recently begun to explore the accounting
implications associated with the supposition that humanity is not distinct from the
world. This idea is connected with the philosophy of intentionality that maintains that
the mind is in the world, and not separate from it. For example, Gray attempted to
broaden accounting debates to imagine new ways to report to our communities. He
stated:
Equally the imagining of new (albeit unambitious) accountings within the terms
of conventional accounting is currently experiencing a major upsurge on the back
of ‘environmental accounting’. These imaginings carry the same managerialist
attractions and detriments as the managerialist agenda envisaged by Preston
(1981), only perhaps to a greater degree. Such ‘new accountings’ are largely
driven by questions such as ‘how can society?’ or ‘how can the environment? be
accommodated within GAAP and/or conventional accounting practice?’ Such
accountings, therefore, run into the serious limitation that (in addition to the
aesthetic or ethical repugnance that such questions might engender) they (again)
leave unquestioned the very mechanisms of capitalism, organisation, accounting
and so on, that make the questions so essential. Despite, however, the apparent
absence of much awareness within this GAAP-centered social accounting of the
alternative/critical project and theoretical issues more generally, such accountings
are not entirely without merit. They do raise the issues, change agendas and
provide further grist to alternative/critical and other social accounting projects.
(Gray, 2002, p. 699).
Gray’s call for an imaginative new accounting structure can be addressed by revisiting
philosophical ideas concerning how we perceive the world. McKernan (2007) has
offered a valuable set of arguments that invite accounting theorists to consider further
8
the work of Donald Davidson and Richard Rorty. These thinkers are useful for
accounting research in that they invite us to consider our comportment in the world.
The work of Davidson and Rorty is challenged by interpretivists who offer a different,
anti-representationalist view of the world and realism.
Representationalism has been the dominant philosophical way to understand
how the mind takes in the world. Broadly, the representationalist tradition is
associated
with
thinkers
such
as
René
Descartes
and
Immanuel
Kant.
Representationalists maintain that the way we take in the world is through the mind’s
eye where the processing occurs after having visualized the object or thing. In the
traditional representationalist model the taking-inward happens through the sense
organs and mostly by seeing, where seeing is always “impregnated” by cognition. In
the representationalist view it is important to remember that there is a sharp
distinction between mind and world. Often representationalism is associated with
Locke’s work on primary and secondary qualities: this seems to resonate with the
traditional accounting supposition that we can separate ourselves from the external
world.
Anti-representationalism is the view that objectivity can have no other
foundation than from the inter-subjective interactions between people and the world.
This simply means that people have direct access to the world and the objects that
comprise it. There are two forms of anti-representationalism. First, Davidson’s
coherentism maintains that our best sentences are part of the world in a fundamental
sense. Second, Dreyfus and Taylor argue that coherentism ignores the role perception
plays in putting us in touch with the external world. Like other antirepresentationalists, the interpretivist points out how our thinking is shaped by the
dominant mind–world dualism. Indeed, accounting and economics have been based
9
on this strict separation and in turn perpetuate a culture of accumulation. If, however,
accounting is to act in the public interest it needs to engage these debates such that we
begin to understand the world and our place in it.
(i)
Davidson’s anti-representationalism
It will be recalled that the anti-representationalist does not accept that any statement
can be true “simply in virtue of the way things are, quite apart from how we describe
them” (Rorty, 1994b, p. 86; Mckernan, 2007, 158). McKernan (2007) provided fresh
insight when he argued that Davidson demonstrated that our best sentences and
representations are part of a holistic framework that puts us in causal interaction with
the external world.4 Davidson is therefore anti-representationalist, but not anti-realist.
On this view, an external world exists but is causally independent from people.
McKernan summarizes:
Anti-representationalists will agree that the world may cause us to be justified in
believing a sentence true. But they will not confuse that “platitude” with “the
claim that the world splits itself up, on its own initiative, into sentence shaped
chunks called ‘facts’” (Rorty, 1989, p. 5) that may make our beliefs true by
corresponding to them. The antirepresentationalist will therefore not accept that
any statement can be true “simply in virtue of the way things are, quite apart from
how we describe them” (Rorty, 1994b, p. 86). But she will think any true
statement, whether about the number of chairs in a room, the property rights of a
commercial organisation, or human rights, is true “in virtue of the way things
are”. True, that is, “in virtue of the way our current descriptions of things are used
and the causal interactions we have with those things” (Rorty, 1994b, p. 86).
(McKernan, 2007, p. 158)
4
In technical philosophy this relates to not only the “appearance” but also the “things” that
make up the external world.
10
Accordingly, our interpretations can be true or false in virtue of the meaning of the
account and how the world is arranged. This is provided that we can see the meaning
of the account as causally, rather than representationally, related to things in the
world. Davidson’s contribution concerns how humanity visualizes the world, comes
in contact with that world, and whether it is possible to understand the world in-andof-itself. Therefore, Davidson argues that we cannot have knowledge without
communication and this forms his triadic relationship between speakers and the
external world.
That is, our knowledge and understanding of the world firstly requires
exploring how communication itself is possible. For Davidsonians, the task for the
interlocutor involves assigning a propositional content to each of the speaker’s
utterances. McKernan summarizes the point:
Essentially, she must match a sentence of her own with each of the speaker’s
sentences. If she “gets things right”, her own sentences will “provide the truth
conditions of the speaker’s sentences” (Davidson, 1991, p. 157) and yield the
meaning of the speaker’s utterances. But how can the interpreter construct and
verify such a framework of truth conditions – a theory of truth and meaning – for
the speaker’s utterances? What evidence is available? The interpreter clearly has
no direct access to the detailed propositional intentions or beliefs of the speaker –
and to assume that she did would be to beg the question of interpretation. The
interpreter does, however, have access to the speaker’s utterances, and Davidson
suggests that it is reasonable to assume that she can detect which utterances the
speaker holds to be true in particular circumstances. A speaker will hold an
utterance to be true, or false, in part because of what it means, and in part because
of what he believes to be the case. If the interpreter aims to establish meanings on
the evidence of prompted assent or dissent (holding true or false) to utterances,
11
she must deal with the problem of the entanglement of meaning and belief.
(McKernan, 2007, pp. 156–157)
Davidson’s view involves how the scheme of language and the content it represents
combine and structure our ability to get around in the world. Sets of beliefs are
generally true for him, not because they are proved as propositional attitudes in
confrontation with the physical reality, but because they cohere with the whole set of
beliefs. The sets of beliefs receive their adaptive appropriateness through causality,
which originates from the physical world, and so neither needs the physical world
characterized as true, nor our coherent belief system. Our beliefs are mostly true and
they do not need further justification. Davidson states that a “major reason ... for
accepting a coherence theory is the unintelligibility of the dualism of a conceptual
scheme and a ‘world’ waiting to be coped with” (Davidson, 1986, p 303).
A coherence theory of truth is in conflict with correspondence-seeking
confrontational methodologies. A central claim made by anti-representationalists of
the Davidsonian variety is that it is not possible to come in contact with the world as it
really is. Put differently, to know something about the external world we can never
reduce it to its component parts. We cannot make a precise distinction between what
part of it comes from us and what part comes from the “outside world”. We are part of
the part of the natural world and are not distinct from it.
McKernan claims that Davidson’s argument maintains that an outside reality
exists independently of our accounts and interpretations about the external world.
When dealing with accounts concerning the subjective and independent external
reality, Davidson proposes what he calls a “principle of charity” – this invites
interlocutors to exchange with others on fair terms of cooperation. The principle of
charity has two key components: namely, correspondence and coherence. The former
12
is the view that in order for some statement to be true there must be a
“correspondence” between the things and words that refer to those things. The latter
issue – concerning as it does so the concept of “coherence” – requires agreement
between a belief and the other elements in the agent’s belief system. The axiom can
be put this way:
For a particular belief or statement to be true it has to be in agreement
with or not contradictory to the rest of the belief system within which the
particular belief/statement is found. (adapted from McKernan, 2007).
Clearly, for Davidson, the thinking mind is related to the world through the current
belief systems currently in vogue (i.e. scheme and content) – only another belief can
justify a belief. This invites accountants to rethink their role in society and how they
visualize the world: no longer can we simply assume that the natural world is an
unlimited gift from nature.
However it is entirely problematic whether Davidson’s arguments put us in
touch with the world. I argue that financial accounting has drifted towards total
unintelligibility due to its infatuation with current beliefs and causal relationships with
the natural environment. To borrow a Heideggerian phrase, we are on the wrong track
and our ethical practices have been stretched to breaking by certain accounting
practices. McKernan reminds us that accounts, explicitly or implicitly, carry values
and if those values “were somehow incorrigibly subjective”, the entanglement of
descriptive and normative aspects in accounting might preclude objectivity.
A key to Davidson’s argument is that subjectivity “might” preclude
objectivity. There is, however, no necessary correlation between these two facts.
13
Moreover, on the anti-representationalist view developed in response to Davidson it is
our relationships in the world that are true as a consequence of our engagement in the
world. For traditional accounting theory, there is an “outside” (natural) world that we
can report as a profit or loss. However, the concept of an independently existing
reality presents humanity with the ability to manipulate and transform the natural
world. On the dominant view, what is expressed through language is said to represent
that external reality: accordingly, the objective world is commonly referred to as antirepresentationalist (see Shapiro, 1997; 1998).
(ii)
The anti-representationalism of Dreyfus and Taylor: challenging
environmental and social accounting
In this section I challenge the anti-representationalism associated with the
philosophies of Davidson, McKernan, Quine and Rorty.
This is undertaken by
exploring a more basic and primordial way to understand our place in the world – this
is the philosophy associated with perception and fundamental coping. It involves
engaging with the world so that humanity can come in contact with the way the world
is as-it-is-in-itself. On this view, we are in touch with the world as we act in the
world.
Interpretivists, such as Dreyfus and Taylor, argue that Davidson’s antirepresentationalism nevertheless remains committed to Cartesian mind–world
dichotomies. They maintain Davidson has ignored a more basic way to cope in the
world. To think in this interpretivist way is to suggest another path for environmental
and social accounting. It is a path involving a radical rethinking about how we live in
the world, which in turn requires escaping the current restrictive epistemological
vision of the world.
14
Interpretivists point out that people actually engage in self-interpretation and
this is something that instrumental and procedural thinking ignores. This creates an
economic and social system built on the edifice of economic and procedural
assumptions. This is because procedural thinking limits practical reason and language
theory to designative and instrumental process thinking. Accounting has emerged
from that worldview such that what is reported is assumed to measure and reflect
accurately our external impacts on that world. However it is entirely problematic
whether accounting and audit reports accurately reflect the way humans are using the
planet.
The argument for objectivity and interpretivism presented here is one from the
Counter-Enlightenment, associated as it is with the work of Hegel, Herder and
Hamman. Their work represents an attempt to put people in touch with the world.
This step in the argument engages criticisms of classical empirical epistemology (see
Section 1 above). This involves understanding the limitations associated with
economic and procedural reason: principles shaped by the Enlightenment that gave
rise to a scientific revolution. The Enlightenment, in turn, shaped a social thinking – a
social imaginary (see Taylor, 2004) – that has created a predilection for measurement,
procedure and technique. Nevertheless, there has been a growing body of literature
that challenges the obsession with technicist measurement and KPI fetish in
accounting (see Dillard, 2006).
Furthermore, the dominant instrumental vision of the world is antirepresentationalist and often anti-realist (though Davidson is committed to the
argument that there is an external world existing beyond us). According to Taylor this
is a consequence of our buffered view of the self: the “buffered” self relies on a sharp
dichotomy between the mind and the world. Taylor explains:
15
Modern Westerners have a clear boundary between mind and world, even mind
and body. Moral and other meanings are “in the mind.” They cannot reside
outside, and thus the boundary is firm. But formerly it was not so. Let us take a
well-known example of influence inhering in an inanimate substance, as this was
understood in earlier times. Consider melancholy: black bile was not the cause of
melancholy, it embodied, it was melancholy. The emotional life was porous here;
it didn’t simply exist in an inner, mental space. Our vulnerability to the evil, the
inwardly destructive, extended to more than just spirits that are malevolent. It
went beyond them to things that have no wills, but are nevertheless redolent with
the evil meanings. (Taylor, 2008 accessed Immanent Frame, 2009).
Taylor is simply claiming that modern thinking has lost sight of other ways to engage
with the world. The boundary between self and other is nebulous and porous and this
has to be seen as a fact of experience, not a matter of “theory” or “belief.” As I stated
a few paragraphs ago, this argument means that humanity can never come in contact
with reality as-it-really-is. It is for this reason that Davidson’s anti-representational
view is referred to as a form of coherentism, or coherentist-empiricism. At first sight
it seems to develop a theory of perception and language that challenges designative
approaches to language and the world.
However, as the previous two steps have illustrated, there is no discussion
about whether we are actually in touch with the world as we act and live in the world.
This is important to accounting if it is to remain relevant and develop engagement that
allows us to determine the legitimacy of corporate and consultancy firms’ discussions
of environmental reporting [that] still place far too much attention on changing
strategy and far too little on changing action! (Hopwood, 2009, p. 437).
16
Dreyfus and Taylor offer a different anti-representational frame to explore
how the thinking mind is directly engaged with the world. This suggests a therapy for
modern accounting and its preoccupation with procedure – it involves an art of
interpretation that recognizes everyday coping skills putting us in contact with the
world. This interpretative methodology is directly in conflict with the dominant
empirical view that knowledge of the world simply arises from experience and is then
processed in the mind. In sum, interpretation is associated with an essentially antirepresentationalist view that the thinking mind is in some fundamental sense in the
world (Dreyfus’s and Taylor’s position).
Another way to think about the ethic of interpretivism is to consider it as an
(anti)-epistemology – on this view, people are considered to be purposive beings who
“pursue their goals in a context imbued meaning” (Abbey, 2003, p. 127). Accordingly
our engagements with the world are more fundamental than empiricists and
coherentists have recognised. Rather, people are self-interpreting entities whose
perceptual coping skills need to be explored as well as their conceptual abilities. They
challenge Davidson’s coherentism in the way it ignores the role of the background
and coping. (It will be recalled that Davidson argued that our understanding about the
world occurs only from other beliefs.) Taylor explains that Davidson’s coherentist
claim that reasoning from other beliefs is the only way particular beliefs can be
grounded is so far from obvious as to be plain false. The anti-representationalist view
offered by interpretivists suggests we need to step outside the mediational picture, and
think in terms of the kind of embedded knowing that Heidegger, Merleau-Ponty and
Todes have thematized. Taylor uses an example about how people get about in the
world without necessarily processing images in the mind. He explains:
17
Of course, we check our claims against reality. “Johnny go into the room and tell
me whether the picture is crooked”. Johnny emerges from the room with a view of
the matter, but checking isn’t comparing the problematized belief with his belief
about the matter; checking is forming a belief about the matter, in this case by
going and looking. What is assumed when we give the order is that Johnny
knows, as most of us do, how to form a reliable view of this kind of matter. He
knows how to go and stand at the appropriate distance and in the right orientation,
to get what Merleau-Ponty calls a maximal grip on the object. What justifies
Johnny’s belief is his being able to deal with objects in this way, which is, of
course, inseparable from the other ways he is able to use them, manipulate, get
around among them, etc. When he goes and checks he uses this multiple ability to
cope, and his sense of his ability to cope gives him confidence in his judgement as
he reports it to us. (Taylor, quoted in Dreyfus, 2004, p. 56)
As Dreyfus explains, this simple example shows that representationalism is not the
only way people interact with the world. This anti-representationalist view maintains
that theory does not need to posit the human being primarily as the subject of mental
representations to understand rule-following behavior, or something like checking the
picture on the wall.
Following interpretivists such as Dreyfus, Heidegger, Merleau-Ponty, Michael
Polanyi, Taylor and Wittgenstein, I argue that it is mistaken to presuppose that we are
inherently cut off and detached from the world; that is, our understanding of the
external world is essentially mediated by mental representations. When we act, for
example, we act with our bodies whether linguistically or through grasping with the
hand (to borrow a phrase from Heideggerian phenomenology). According to Dreyfus,
in particular, little of what is involved in our action, whether the goals of action or the
rule-specifying movements, is consciously articulated. In essence, “we are in the
18
world” as “we live and act”. This thinking puts people in touch with the external
world and in this manner offers a new way for accounting to reform itself.
Dreyfus was a chief exponent of this view that the ontological level influences
but does not determine the social, political and cultural goods communities may
choose to follow. Thus, a first step in hermeneutic and interpretive thinking involves
restructuring debates, such as those over the natural environment, as ontological ones.
On this view, ontological features involve “the factors that you invoke to account for
social life” – the way that we explain the world and involve the terms “that you accept
as ultimate in the order of explanation” and provide the structures through which we
define and explore values (Taylor, 1989, p. 160). Advocacy issues, on the other hand,
concern the moral stand or policy that one adopts, and include the connections
between common goods, individual rights and ecological values. Taylor has explained
these differences and the implications that follow:
Taking an ontological position doesn’t amount to advocating something; but at the
same time, the ontological does help to define the options it is meaningful to
support by advocacy. The latter connection explains how ontological theses can
be far from innocent. Your ontological proposition, if true, can show that your
neighbor’s favorite social order is an impossibility or carries a price he or she did
not count [on] But this should not induce us to think that the proposition amounts
to the advocacy of some alternative. (Taylor, 1989, p. 161)
Taylor’s work on authenticity and ontology frames the field of possibilities available
to people in a way that traditional frameworks cannot. This is because our stance
towards the natural environment is related to the way we visualize and come in
contact with it. Interpretivists would require that accounting should begin to consider
not simply extending its functional reach, but also enabling and enriching the public
19
spheres of modern communities. In particular, the accountant’s role would be to
provide accounts that are cognizant and informed by the ontological level in a manner
that does not impose external values on citizens.
Often, though not always, the ontological level involves recognizing how
significant issues are associated with our history and background horizons of value.5
Dreyfus reminds us of the background factors that we need to recognize to understand
that there is more to the human condition than instrumental reason discloses. Dreyfus
explains: “what allows us to make the difference is a rich, largely implicit, and of
course inherently contestable understanding of what the important meanings and
purposes of human life are” (Taylor, 1989b. p. 280).
Dreyfus and Taylor have independently developed a direct realism that
supports the supposition that our perception of reality is, at least in part, a construction
of our own theory. From these observations, interpretivists argue that a naturalistic
and scientific approach engulfs our everyday lives and ignores our self-interpretations
of the world. Interpretivists argue that the dominant forms of empiricism and
naturalism create visions of the natural environment as a simple commodity. The
environment is commodified and seen as manageable through environmental trading
schemes, carbon taxes and other pricing frameworks. An interpretivist perspective,
however, takes a different direction and emphasizes that people are part of the world.
This in turn requires nurturing and developing the spiritual side of our being as
opposed to the instrumental and technical.
Section 3: Accounting implications and engaging with the world
4
This would entail accounting education creating an appreciation of the importance of the
historical dimensions of the craft for understanding identity factors.
20
The argument and critique of Davidsonian reforms provide a lens to examine the
limitations of environmental and social accounting. The interpretivist treatise is about
re-enchanting and putting us back in touch with the external world. Interpretivists
argue that anti-realists and anti-representationalists end up submerging environmental
and social intrinsic values: this results from the fact that they remain trapped by
dualisms like that between mind and world. This bifurcated understanding of the
relationship between mind and world is one reason for the infatuation with procedure.
Accounting emphasizes neutral standards of adjudicating accounting; ethical and
moral disputes are submerged.
Consequently, modern accounting and social science have been preoccupied
with the development of more procedure to adjudicate, through so-called ‘neutral’
procedures, our activities in the world. At the same time, efforts to explore how we
access the world have been underplayed if not sidestepped. On the Dreyfus/Taylor
view, one escape path from the dominant epistemology is to appreciate a more
fundamental and perceptual engagement with the world. Dreyfus summarized this
aspect of the interpretative method: “we can only understand how we are normally in
touch with the cosmos … when we see that we are not disembodied, detached,
contemplators, but rather, embodied, involved coping agents” (Dreyfus, 2004, p. 68).
This means that our perceptual and coping skills put us in touch with the world
at a more basic level than traditional procedural models allow. Accounting as a craft
besotted by instrumental reason can benefit by exploring how other values can be
integrated into accounting standards – how issues of significance such as the use of
the environment can be made explicit and articulate in communicative reports.
Therefore, accounting theory itself can be used to investigate and examine the
implications associated with questioning the supposition that the mind is actually in
21
the world. A first obvious point is that our appreciation of the world is on the wrong
track. A second observation is that accounting and accountability must continually
search to integrate expressive and moral values into the lexicon of the accountant.
This way to think about the world involves tackling the entrenched interests often
associated with the atomism and individualism that shapes modern procedural liberal
democracies.
The art of interpretation, by way of contrast, invites us to think about our
impacts on the planet as well as to consider values other than those associated with
economic gain and profit maximization. In this article, interpretivism is itself used to
consider connections between language, perception and realism. Often critics of this
form of realism argue that such a vision of nature makes it an external standard that
we must defer to. That way to think about the world, however, ignores how a direct
realism can put us in touch with the natural world. This involves two steps.
In the first step our practices reveal different ways to consider the world.
Second, if we directly access the world, we escape the notion of a buffered self and
the supposition that economic reason is the only means on which we construct our
accounting and accountability systems. This gives rise to further accounting, ethical
and moral conundrums as they concern how public reports are themselves shaped by
the limitations of instrumental rationality. Until recently, technical accounting reports
have ignored environmental impacts within the current social system and merely
reinforced technical behaviour. Technical accounting methods ignore the pervasive
influence of hierarchical structures of control and procedural reason at the expense of
interpretation and an enriched engagement with the world.6
6
Accordingly, accounting remains merely a technical and procedural ideology that perpetuates a
sharp division between humanity and the external world. Humanity remains at a distance from
the natural world and our spiritual engagements with the world are submerged by a social
science that perpetuates a technical and procedural mindset. Debates concerning the
22
The interpretive and hermeneutic strategy offered in this paper is not about
promoting more triple-bottom-line reporting or constructing more accounting codes
for ethical conduct. Rather, the argument involves considering people as selfinterpreting beings and world-disclosers. The strategy reveals further limitations with
the ontology of traditional financial accounting and reporting practices that perpetuate
an anthropocentric culture. The reform of accounting must consider fully the sources
of the self and the objective values in the world. Following an observation from
Heidegger the problem modernity is to think about the limitations associated with a
technological world view and the logic that suppresses recognition of other values. It
is for that reason the argument in this paper questions whether procedural reason and
associated techniques can give an accurate reflection of the external world. This
develops a social imagining that gives rise to ethical codes, instrumentalism and other
products that have been commodified. The task confronting accounting is to provide
data and information that not only counters and reveals the inadequacies of traditional
practices but to open new avenues to disclose the practices that would enhance
people’s opportunities.
Likewise, environmental and social accounting projects assume that
accounting reports can tame corporate rationality and align business with the
communities it operates in. Central to interpretivism is an optimistic account of
practice reason that provides other means to investigate the world which have not
been given full consideration in accounting and reform accounting theory.
Furthermore, what this argument shows is that total unintelligibility of another
culture’s accounting practices is not an option. For to experience another group as
philosophy of realism have the potential to rethink our place in the world and visualize an
accounting that engages with multiple cultures thereby reaching other shores.
23
unintelligible over some range of their practices, we have to find them quite
understandable over other (very substantial) ranges. Taylor explains:
We have to be able to understand them as framing intentions, carrying out actions
and trying to communicate orders, truths, and so forth. If we imagine even this
away, then we no longer have the basis that allows us to recognize them as agents.
But then there is nothing left to be puzzled about. Concerning nonagents, there is
no question about what they are up to, and hence no possibility of being baffled
on this score. (Taylor, 2002a, p. 137)
A further problem with Davidson’s argument is that it is too strong and too powerful.
As Taylor explains, it slays the ‘beast of total and irremediable incomprehensibility’ –
thus, in the real life situation Davidson’s theory discredits the idea of ‘conceptual
schemes altogether’ – in spite of the fact that the Davidsonian argument ‘rules out our
meeting a totally unintelligible one’ (Taylor, 2002a, p. 137).
In real-life ethical and pragmatic situations we need to be able to identify what
is ‘blocking us’ and this is achieved through a theory of language that works to reveal
and provide better interpretations of reality (intentionality) Therefore, we need some
way of picking out the ‘systematic differences in construal between two different
cultures, without either reifying them or branding them as ineradicable’ (Taylor,
2002a, p. 138). On an interpretivist view, this is achieved through a fusion of horizons
where language plays a key role. Gadamer states:
Our first point is that the language in which something comes to speak is not a
possession at the disposal of one or the other of the interlocutors. Every
conversation presupposes a common language, or better, creates a common
language. Something is placed in the center, as the Greeks say, which the partners
24
in dialogue both share, and concerning which they can exchange ideas with one
another. Hence reaching an understanding on the subject matter of a conversation
necessarily means that a common language must be first worked out in the
conversation. This is not an external matter of simply adjusting our tools; nor is it
even right to say that the partners adapt themselves to one another but, rather, in a
successful conversation they both come under the influence of the truth of the
object and are thus bound to one another in a new community. To reach an
understanding in a dialogue is not merely a matter of putting oneself forward and
successfully asserting one’s own point of view, but being transformed into a
communion in which we do not remain what we were. (Gadamer, 1975, pp. 378–
379)
Language cannot be constrained by procedure, as Habermas argued (1991; 1999), nor
by any principle of charity. The role of language must be developed from an entirely
different point of view and involves putting ourselves in the position of the other
interlocutor. For accounting this means a total transformation in how we
communicate, inter-relate and teach the craft of accounting. Moreover, this thinking
involves understanding that numbers and values cannot be simply harmonized and
transferred between cultures. Attempts to arbitrate discourse and evaluate the claims
made in the discursive arena are unlikely to achieve their objectives without being
transformed in the communicative process (Shapiro, 1997).
Modern accounting frameworks reinforce the processes of economic
reification as they do not theorise how different cultural systems and values involve
complex patterns and relationships. For example, international accounting standards
assume that comparability and harmonization are the means to create stable capital
markets. Moreover, even if capital markets could be stabilized it remains problematic
whether local cultures can be tamed according to the processes of accounting and
25
economic instrumentalization. Here it is useful to refer to the interpretivism of
Gadamer and his fusion of horizons: in a successful fusion we are transformed and
our life world broadened to understand and come in contact with others and the
external world.
Section 4: Accounting implications and directions for the future
I have argued that the dominant instrumental and procedural discourse has not fully
considered how moral and spiritual values may work to put us in touch with the
natural world. These ideas can be given expression through the development and
adaptation of Shapiro’s (1997) argument that theoretical debates can inform how
accountants arrive at decisions and the rationale that shaped them. Shapiro observed:
Accounting academics can contribute to a constructive debate over accounting
policy, in several respects. First, accounting researchers and educators can use the
five philosophical presuppositions and the related principles of rationality and
objectivity to examine critically the evidence or justification people give for their
assertions. Second, researchers who disagree with any of the five presuppositions
should be encouraged to develop and defend an alternative set of logically and
empirically consistent presuppositions. Third, researchers who disagree with the
principles of rationality espoused in this article should be encouraged to develop
an alternative set of non-self-refuting principles on which to base a productive
critical discussion. Fourth, researchers could apply a conditional-normative
methodology to issues of cultural relativity and the problems it can create for
general acceptance of international standards. Tinker et al. (1982) persuasively
argued that all ideologies and research methods involve normative commitments,
whether or not those commitments are explicitly stated. (Shapiro, 1997, p. 183)
26
Shapiro advocates reasoned arguments and provides five maxims relevant for external
financial reporting. These maxims are designed to provide means to consider valid
arguments as they involve critical accounting arguments. Shapiro (1997) offered five
presuppositions for financial reporting to debate. The debate involved the objectivity
of what accountants and financial reports refer (ontological theses). Second, how
accountants may come to know or believe those things (epistemological theses). The
following subsections contribute briefly to Shapiro’s presuppositions and their
implications for critical accounting. The five propositions for accountants, as
identified by Shapiro, involve:
P1. External realism: External reality exists independently of the financial
statements that represent it.
P2. Correspondence theory of truth: A financial representation is true if it
corresponds (at least approximately) to the underlying economic reality that it
purports to represent.
P3. Conceptual relativism: All systems of representations such as conceptual
frameworks are human creations and thus socially constructed.
P4. Subjective judgement (epistemological subjectivity): Accountants’ judgments
about what constitutes valid descriptions of economic reality are influenced by many
factors: cultural, economic, political, psychological and so on.
P5. Commitment to rationalism (epistemological objectivity): Knowing is
epistemologically objective to the extent that a community can agree on the criteria
for evaluating the justification of evidence for assertions. Furthermore, an
instrumentalist understanding of corporate objectives promotes individualism, wealthaccumulating practices that generate excessive waste and destruction, and fails to
promote practices that enable individuals to develop themselves as complete and
27
authentic persons (see Hopwood, 2009). The instrumentalism that currently prevails
in the corporate world prioritizes profits over people.
Following Shapiro (1997) it is important to shape this debate further utilizing
hermeneutic and interpretivist resources. I will do this by addressing each maxim in
turn.
P1. External realism: External reality exists independently of the financial
statements that represent it
McKernan (2007) offered a detailed critique of Shapiro’s representational perspective
concerning how to reform modern accountability structures. He argued that
“accounting practice does not directly rely on any philosophical presuppositions [and]
accounting might become more responsive to human need if it were to free itself of
the dubious comforts of representationalist philosophy” (McKernan, 2007, p. 156).
McKernan does not explain how accounting might become more responsive to
human need. This is a problem that echoes issues in the work of Richard Rorty, who
has been influenced by Davidson’s coherentism. Rorty suggested that we have no
duties to anything non-human as one implication of his postmodern form of
liberalism. This thinking, however, leaves us within the present social system, with
limited philosophical tools to escape the current ways to perceive the world.
For example, Rorty offers a significant postmodern and anti-realist statement
when he explains: “there is no authority outside of convenience for human purposes
that can be appealed to in order to legitimize the use of a vocabulary. We have no
duties to anything nonhuman” (Rorty, 1998, p. 127). Rather, it is not that we have one
less reason to change our practices but an overwhelming reason to explain how
28
practices such as accounting shape the way we relate to others and our world. These
are increasingly important observations given how sustainable and postmodern
methods focus on one very important issue as it concerns the long-term viability of
the planet. Humanity’s ability to perceive intrinsic values reflects an embedded set of
relationships with nature (see Sections 2 and 3 above). The essential connections
between people and the world become submerged when our methodologies rely solely
on current concepts and categories.
Nevertheless, if we follow Rorty’s reading of Davidson we are co-opted by a
pragmatism that invites us to simply enjoy the possibilities that the world provides to
us. Interpretivist debates are therefore rendered meaningless and the reforms to our
ethical thinking as advanced in this paper become superfluous. However, an
interpretivist response to Davidson and Rorty involves exploring the role feeling and
perception play in putting us in touch with the world (Section 2 above). That thinking,
it will be recalled, involved how accounting remains committed to the provision of
(allegedly) true and fair views themselves shaped by that particular discursive
tradition.
In sum, it is somewhat paradoxical that in our reasoning about the world we
have utilized the technical dimensions of our practical reason but excluded the very
capacities that allow us to fully appreciate the value of nature in the first place. The
instrumental process that dominates modern social imaginaries cannot help but lead to
a bifurcated understanding of the relationships between the mind and the external
world, the factors that make up our identity, and the role that language plays in
shaping “being”.
P2. Correspondence theory of truth
29
McKernan (2007) explains that the pragmatism of Davidson and Rorty is used to
reflect the fact that philosophers have been unable to convincingly specify any sense
in which a statement of a true sentence can take us beyond language to how things are
in the world prior to our descriptions. This argument, however, only creates a causal
connection between mind and world thereby perpetuating the anthropocentricism that
dominates the modern world (see Gray 2009). The rebuttal to McKernan (2007) was
contained in the point about the picture and Johnny getting it right (see Section 2).
The point was about our perceptual coping skills putting us in touch with the world
as-it-is: that we have basic coping skills that allow us to engage with the world.
In recent accounting literature the question becomes whether it is possible for
participants in an accounting conversation to be divorced from background values,
such as culture, community and locality. From one direction Shapiro (1997; 1998)
explored this from a Habermasian perspective to adjudicate between accounting
disputes (such as pension plans, retirement income, and derivate formations). Parker
and Roffey (2001) analysed this issue from a grounded theory point of view, but my
arguments attempt to extend hermeneutics, interpretivism and truth to reconsider our
comportment in the world at the most basic level of engagement (Johnny’s aligning
himself with the mirror).
However, Shapiro’s early work pointed to Habermas’s rule-based approach to
language, which is based around a set of procedures that test whether particular
accounting maxims are right or wrong (Shapiro, 1997). While this approach tests
accounting maxims from “the point of view from which action norms can be
impartially grounded” it remains an open question whether principles of rationality
lead to impartial outcomes (Habermas, 1996, p. 140, original emphasis). Again it is
Rorty who continues his critique of interpretivism by arguing there is no truth or
30
objectivity independent of the rules of discourse. He concurs that only beliefs can
justify other beliefs in a Davidsonian sense: the task of philosophy is to continue the
conversation of humanity. There are no other means to glimpse and come in contact
with nature’s intrinsic value.
On that view, knowledge is constructed only through our current beliefs
expressed by language beings. Once such distinctions are established, any subsequent
dichotomies become futile, and knowledge and foundations that we believe to be
concrete truth are no more than the result of an accepted, or generally agreed upon,
form of discourse. In sum, Davidson (1992), Rorty (1979) and McKernan (2007)
challenge the direct realism of Dreyfus (1980) and Taylor (2002a, 2002b). For
example, Rorty claims that the art of interpretation and world disclosure offer
unhelpful philosophical constructs and this means that there are no means to glimpse
nature’s intrinsic value.
Essentially, Rorty is a pragmatist who relies on solidarity and common sense
to question our current belief structures. I argue that this is unlikely to create an
accountability vision that puts people in touch with the natural world. Interestingly,
McKernan (2007) reminds us that Rorty questioned the role of philosophy when he
claimed radical hermeneutics offers only interesting but limited possibilities, or
reminders. Thus Rorty suggests that “philosophical reflection does not attempt a
radical criticism of contemporary culture, does not attempt to refound or remotivate it,
but simply assembles reminders and suggests some interesting possibilities” (Rorty,
1991b, p. 6).
Interpretivists attempt to reformulate our engagements with the world by
focusing on commonalities between people. They do this in a manner that point
toward possible connections that are not yet evident and available. Davidson,
31
McKernan and Rorty cut off this opportunity in their causal approach to the universe.
Rorty continues and challenges interpretivists to explain how their argument can zero
in on reality; that is, if all interpretations are actually shaped by background practices
how can they escape their own terms of reference? However, Rorty’s argument
simply copies the neutrality embodied in the natural sciences. Rorty ignores how the
background in turn shapes context as it relates to how perception puts us in touch with
the world. One response to Rorty’s charge of essentialism is to remind ourselves of
the double hermeneutic insight outlined in Section 2, which posits connections
between ontology and advocacy. In this context, this involves the role that nature
plays in shaping our being and the significant features of identity.
Dreyfus (2004) continues and criticizes Rorty’s flirtation with postmodernism
by emphasizing how it takes us toward an anti-realism that encourages irony and
difference. It downplays the most fundamental levels of coping and how matters of
significance are revealed in context. The self is not simply a contingent set of values
but involves taking critically rather than just pragmatically the conditions that make
possible our very being and identity. Dreyfus draws on an example from the work of
Samuel Todes:
[Todes] points out that our experience of having to balance in a gravitational field
gives us the sense of a force independent of us that we have to conform to, a force
which sustains our coping only if, by balancing, we relate to it on its own terms.
But again one can ask whether our relation to this force as something that pulls us
down but also enables us to stand up, isn’t our way of making sense of nature in
our world, rather than an experience of how the universe is in itself. (Dreyfus,
2004, p. 67)
32
The fact that the self is embedded in the world creates a raft of different necessities. I
have argued that a response to Rorty’s anti-realism takes our thinking in a different
direction and overcomes the tendency toward postmodern nihilism. In recent work,
Dreyfus noted that Taylor’s approach goes even further than Rorty’s postmodern
understanding of what it is to be a person in the universe. Dreyfus argues that in
‘skilful coping, as in balancing in the vertical field, or climbing over boulders’
(Dreyfus, 2004, p. 68), we have abilities that allow us to harmonise our activities with
the structure of the universe. Dreyfus continues that as embodied beings we have
abilities to move to the appropriate distance and specify by making sense of things
that are independent of our everyday significance attributions.7 For accounting these
arguments imply two key factors (i) the limitations associated with our traditional
understanding of the objective world and (ii) a need exists to continually provide
accounts about the world so that we may better cope in that world. At the very least,
the argument shows how it is through the provision of better interpretations that allow
us to understand how the environment is something more important than an
instrumental economic, or quantifiable good. This then lends support to Gray’s (2009)
argument that we need critical and sustainable accounts that report on our impacts in
the world.
P3. Conceptual relativism of financial reporting schemes
This section responds to McKernan’s argument that “different systems of
representations can be used to represent that reality” (Shapiro, 1997, p. 167). Again,
7
Dreyfus (2004) adds to his argument the example of people’s ability to drink from a glass
without error as an example of realism’s inescapable hold on us. He explains that we must first
perceive the glass and then we have abilities to align ourselves with the causal structures of the
universe. That is, in getting in synchronicity with all the forces and vectors that allow us to
take a sip from the glass it is clear that the self is not simply contingently related to the world .
33
McKernan uses Davidson and Rorty to critique a view propounded by Searle that
there are no conceptual schemes that allow alternative accounting schemes to
construct alternative realities. But Searle’s work is not the only one that attempts to
explain that “we do not make worlds; we make descriptions that the actual world may
fit or fail to fit” (Searle, 1995, p. 166, in McKernan, 2007, p. 163).
Therefore, we are provided with opportunities to “better cope with” reality and
are provided with means to “see” important values for a good society. Davidson,
Rorty, and Searle overlook the role our coping plays in getting about in the world. The
examples provided by Dreyfus are designed to show how humans are embodied
beings with innate coping skills. On this view, we are skilled interpreters who get
things right as we act in the world. This links with the art of interpretation that moves
beyond simple conceptual frameworks to guide our action. Interpretation and
disclosure reflect a disclosing potential in language that can be used to reshape the
social role of accounting. The reformulated communicative strategy is not only
concerned with the reformation of accounting but also with its transformation.
Usefully, Shapiro (1998) referred us to Habermas’s ethic to put different claims on
trial through a process that determines whether claims legitimately bind participants.
Again Habermas demonstrated his predilection for procedure. He stated:
Discourse theory attempts to reconstruct this self-understanding [that of a
universalistic moral consciousness and the liberal institutions of the democratic
state] in a way that empowers its intrinsic normative meaning and logic to resist
both scientific reductions and aesthetic assimilations … After a century that more
than any other has taught us the horror of existing unreason, the last remains of an
essentialist trust in reason are destroyed. Yet modernity, now aware of its
contingencies, depends all the more on a procedural reason, that is, a reason that
puts itself on trial. The critique of reason is its own work: this Kantian double
34
meaning is due to the radically anti-Platonic insight that there is neither a higher
nor a deeper reality to which we could appeal – we who find ourselves already
situated in our linguistically structured forms of life. (Habermas, 1996, p. 11)
For Habermas rational thought can under certain circumstances lead to just outcomes.
This form of reasoning is also evident in Laughlin and Broadbent who stated “there is
a need to debate whether this really is ‘good’ from the perspective of these key
institutions and society more generally” (1993, p. 364). The question remains whether
such an approach to regulation can arrive at fair outcomes when the decision model is
based on a series of rational validity claims and procedural structures from that point
of view. It is, therefore, arguable whether a process of rational deliberation without a
full discussion of the processes of impartiality can respond fully to the urgencies of
cultural and social values in a spirit of openness and democratic accountability.
Another pathway is a “phenomenology” that postulates how we may not arrive
at truth, but better interpretations of that reality. Taylor and Dreyfus go further than
other interpretivists to explore how interpretation reveals values as we cope in the
world. Dreyfus makes the fascinating point that in fact we come to terms with the
structure of the universe and the layout of the world as-it-is-in-itself. Here, Dreyfus
and also Taylor explore Heidegger’s work on the clearing provided by language to
articulate the links between our perception of the world and our shared values in
communities. In turn, the non-conformist stance advanced in this paper reflects an
expressive dimension between people and nature. These dimensions connect with the
social audit work of Humphrey and Owen (2000). Interestingly, their paper developed
Power’s The audit society (1997) to consider the connections between social audit and
society. They claim a therapy for the failures of accounting involves “regarding the
type of values that society wishes to prevail” (p. 37). Their analysis supports a
35
normative stance that shapes an accountability structure that nurtures the nexus
between social practice and the language mechanisms that shape a good society.
P4. Subjective judgement (epistemological subjectivity)
I have argued that accounting can benefit by exploring what constitutes valid
descriptions of economic reality and how they are influenced by cultural, economic,
political, psychological factors. The work of Humphrey and Owen has provided a
valuable review of Michael Power’s The audit society, advocating “keep[ing] the
debate going with respect to the audit society” (2000, p. 37). From such a perspective,
social and environmental auditing does not simply focus on reforming democratic
structures; it becomes part of an endeavour to enrich that process by understanding the
“factors, causes and motives underlying or driving the rise of the audit society” (p.
37).
An escape path from the iron cage of bureaucratic reason and the restrictions
of the conceptual framework can be conceived through a social audit that reveals
meaning and the reality of corporate logic. Or, put differently, this involves how
accounting can act to reveal differences as this involves a way of thinking about the
public sphere such that citizens, shareholders and stakeholders can understand others
and what corporations are in fact doing. This, of course, is an optimistic account of
the way in which practical reason can assist us to redefine the role of accounting and
offer a positive role for it to play. Again, it is Taylor who develops Gadamer’s earlier
work on the commonalities that actually shape society. He states:
[I]t is related rather to the kind of understanding we invoke in personal relations
when we say, for instance: “I find him hard to understand”; or “at last I
understand her”. To switch for a minute to another language, it is the kind of
36
understanding one invokes in French when one says “maintenant on s’entend”.
We are talking here in these cases of what you could call human understanding,
understanding what makes someone tick, or how he feels or acts as a human
being. (Taylor, 1980, p. 30)
Taylor claims that when an interlocutor finally understands what another
conversationalist is talking about they recognise their identity and values. This poses a
further challenge for technical accounting as it involves how to accommodate
different values such as culture and different accounting systems. For accounting
theory, this involves the art of interpretation to reveal social audit and considers “the
possibilities for auditing to serve a more positive role in society” (Humphrey &
Owen, 2000, p. 29). Here, language theory invites reconciliation between accounting
and society; namely, one where the limitations of corporate rationality are made
explicit and can open up new ways to think.8 In sum, the social audit movement
provides a path to open up new vistas thereby offering a realistic account of corporate
affairs (see Arnold & Hammond, 1994; Arnold & Sikka, 2002).
P5. Commitment to rationalism (epistemological objectivity)
Knowing is epistemologically objective to the extent that a community can agree on
the criteria for evaluating the justification of evidence for assertions. Accordingly, the
nexus between accountability and society involves challenging accounting researchers
to consider questions of virtue in the cultivation of a sense of forgiveness,
magnanimity, and reasonableness. Francis (1994) considered the function of practices
whereby accounting and auditing professionals exercise a sense of moral judgement
8
A strategy to re-align corporate rationality with the common values that are revealed through
language involves a regulative structure (such as a social audit) that is backed not simply by
the rule of law but a social system that nurtures these values.
37
(phronesis). It is not that the practices mirror reality, but they allow us to understand
the structures and values in which we live; the very values that require articulation in
accounting theory debates.
Francis (1994) posits a role for accountability research to extend the “due
process” and consider the common goods that shape people’s significant claims. The
focus is to create and maintain the highest standards of accounting, governance and
political morality. As Shearer (2002) explained this is unlikely to be achieved when
econom ic goods are the primary focus and this paper takes this point further by
exploring the focal practices that accounting is supposed to interpret.
This argument to reform accounting attempts a broader understanding of the
role of language than that offered by other accounting reform theorists (McKernan,
2007; Shearer, 2002). On the view in this comment, the role of perception and
language aims to provide better interpretations about how humans have emerged from
nature without being cut off from it. Language is a conduit to articulate the expressive
values emerging from our interactions with the world. Heidegger’s difficult notion of
the clearing provided by language is relevant to this discussion. For Heidegger, it is
language that acts as a means by which humanity utilizes to glimpse not only nature’s
extrinsic values but also its intrinsic values. These intrinsic values can be “explained
by [humanity] as something they cause, or one of their properties, or as grounded in
them” (Taylor, 1992c, p. 247). The clearing, which is related to humanity but not
ultimately controlled by it, therefore involves all people coming together in a
community. Taylor explains: “The clearing is the fact of representation; and this only
takes place in minds, or in the striving of subjects, or in their uses of various forms of
depiction, including language” (Taylor, 1992c, p. 257).
38
Following Heidegger, Taylor argues the clearing is the space through which
expressive language opens up the full dimensions of the human person as a “Shepherd
of Being”. The notion of shepherd connects with Heidegger’s exploration of the
parameters of what it is to be a person (Dasein). Moreover, it shapes Taylor’s
interpretation
of
Heidegger’s
supposition
that
modern
philosophy
offers
predominantly an instrumental stance towards being a human person.9 Language,
therefore, is the conduit through which what is “significant” for an identity is revealed
as a dimension made manifest in the clearing itself, opened to us by our ability to
speak. The difficult Heideggerian notion of the clearing is where language acts to
disclose humanity’s relationships with other entities and the world. Moreover, the
clearing provides a means to connect with the external world in a manner not
available using other environmental and procedural positions. It is not that language
allows us to visualise nature, but language is the expressive medium through which
we explore the values received by our capacities of receptivity and spontaneity.
Heidegger argues that the clearing is where the “mortal10 and divine beings11,
earth12 and sky”13 are seen to come together. The clearing is both Dasein-related, but
9
10
11
12
In this sense, Taylor’s interpretation extends Gadamer’s argument that it is through language
that people’s moral sources can also be given expression to satisfy people’s need for
recognition. For the purposes of ecological politics, as an example, it explores that ground
where nature’s value can be revealed as it shapes the development of freedom.
By mortals Heidegger is describing humans as disclosers and he thinks ‘that death primarily
reveals our disclosive way of being to us. When he speaks of death, he does not mean demise
or a medically defined death but how ‘human practices work that causes mortals to understand
that they have no fixed identity and ready to relinquish their current identity in order to assume
the identity that their practices next call them into attunement with’ (Dreyfus and Spinosa,
1997). Gray (2009) alludes to this aspect of language in his analysis of unsustainable
accounting – we are at a bifurcation point and must begin to explore new ways to engage with
the world.
By divinities Heidegger is thinking about the moment when all parts of the social are working
– when one feels extraordinarily in tune with all that is happening, ‘a special graceful ease
takes over, and events seem to unfold of their own momentum--all combining to make the
moment all the more centered and more a gift (Dreyfus and Spinosa, 1997). Lehman (1999)
explored aspects of this idea in discussing how accounting can assist the public sphere in
moving from a profit-centred focus to a new way of reporting to relevant publics).
When Heidegger and Taylor speak of earth they are referring to the taken-for-granted practices
that ground situations and make them matter to us (Dreyfus and Spinosa, 1997).
39
yet not Dasein controlled where language is not arbitrary and the properties of entities
show up without distortion. That is, people’s authenticity is revealed in context which
involves a deeper social accounting that interprets and contributes to the good society.
It is through the capacity to use language, Taylor argues in utilizing Heidegger’s
insights, that it is possible that we can rebuild our world so that values of significance
are revealed in an open and transparent civil society.
These ideas can be used to construct an accounting strategy designed to
transcend the modernist assumption that language does not count in the development
of, and articulation of, the intrinsic values that shape a “full life”. Dreyfus and Taylor
reconstruct how we consider language and develop political space not only to respect
different values but to combine them democratically (Taylor, 2001, p. 79). It offers
accounting, environmental theorists, and social theory with a new means to glimpse
the otherness of the natural world, rethink our relationships with the world, and
develop commonalities to support these observations.
Conclusion
Environmental and social accounting have rarely considered connections between
mind and world. I argue that this creates a limited vision of the natural world such that
sustainability, in its current guise, will offer a means to come in contact with the
natural world. In Heideggerian fashion I offer a counter argument to the dominant
analytical perspective in philosophy and social science. Those approaches were found
to offer a neutral and scientific means to access the world.
I have argued that this thinking ignores important background values that
involve recognition and exploration. I then argued that this involved thinking about
13
By sky, Heidegger means the disclosed or manifest stable possibilities for action that arise in
focal situations (Dreyfus and Spinosa, 1997). McKernan (2007) alludes to this form of
disclosure in his work on Davidson’s triadic structure.
40
the language of accounting and how it can be constructed to provide better
interpretations of the world. This involved two main hermeneutic and interpretive
insights. The first insight involves recognising that culture, language, and tradition
shape people’s being-in-the-world. The second insight involves the commitment to
“get things right”; the portrait involves improved interpretations and political
structures committed to these goals of articulation and expression, being in tune with
the way things are in, and of, themselves.
In this paper I have considered the connections between environmental and
social accounting and the logic of economic and market forces. The argument has
shown that accounting is on a wrong track and mistakenly maintains it provides an
accurate representation of humanity’s use of the planet. Humanity is in the world
thereby requiring a fundamental reformulation of the type of information needed to
appreciate the value of the natural world. Utilising ideas from interpretivist thinkers
such as Davidson, Dreyfus, McDowell and Taylor, I maintained that our being-in-theworld involves a fundamental reformulation of the mind–world dualism.
This involves engaging with not only the natural world but also significant
others with whom we come in contact. I have offered a different means for accounting
theorists and practitioners to think about how they relate to the world. The external
world is not a mysterious given that grounds our accounts and visions about the
world: rather it is an experiential force with whom we interact all of the time. It was
for this reason that I have moved beyond the current base on which the environmental
and social accounting project has been constructed to reformulate how we interact,
measure and mediate our interactions with those with whom we come in contact.
A key policy implication of the paper is that accounting needs to rethink its
ethical base and in Heideggerian fashion counter the dominant analytical perspective
41
in accounting, philosophy and social science. Accounting needs to think about how it
informs and mediates between different cultures and their visions of the world. No
longer can we assume that the external world can be modelled with neutral and
scientific techniques. We are part of the world and our innate coping abilities allow us
to access the world. I argued that this thinking ignores important background values
that involve recognition and exploration. I argued that this involved thinking about the
language of accounting and how it can be constructed to provide better interpretations
of the world.
Consequently, empathy and perception are underplayed as a means to engage
the external world. The values experienced in this process can be given expression in
our communications, reports and other transmissions. Clearly, there is more to the
human condition than the construction of procedure and technique. Accounting must
engage debates about the ideal of “authentic” accounts to re-connect our perceptions
about the world and to re-enchant our beliefs about the natural world. Despite many
notable accountability and sustainability models it is unlikely that they will enchant
our thinking and re-invigorate our visions of nature unless they engage moral realist
debates.
42
References
Abbey, R. (2003). Recognising Taylor rightly. Ethnicities 3, 1, 127.
Arnold, P., & Hammond, T. (1994). The role of accounting in ideological conflict: lessons
from the South African disinvestment movement. Accounting Organizations and Society 19,
111–126.
Arnold, P.J. & Sikka, P. (2001). Globalization and the state–profession relationship:
the case the Bank of Credit and Commerce International, Accounting, Organizations
and Society 26, 6, 475–501.
Davidson, D. (1986). A nice derangement of epitaphs. In E. Lepore (Ed.), Truth and
interpretation: Perspectives on the philosophy of Donald Davidson (pp. 433–446).
Oxford: Blackwell.
Davidson, D. (1988). The myth of the subjective. In M. Benedikt & R. Burger (Eds.),
Bewusstsein, Sprache und die Kunst (pp. 45–54). Wien: Verlag der Österreichischen
Staatsdruckerei Reprinted in M. Krausz, Relativism: interpretation and confrontation
(1989, pp. 159–172). Notre Dame, IN: University of Notre Dame Press.
Davidson, D. (1990). The structure and content of truth. The Journal of Philosophy,
LXXXVII(6), 279–328.
43
Davidson, D. (1991). Three varieties of knowledge. In A. Phillips GriYths (Ed.),
Royal Institute of Philosophy Supplement (vol. 30). A.J. Ayer: Memorial essays (pp.
153–166). Cambridge: Cambridge University Press.
Davidson, D. (1993). A coherence theory of truth and knowledge. In E. LePore, Truth and
interpretation. Oxford: Blackwell.
Descartes, R. (1970). Descartes Philosophical Letters, trans. A. Kenny. Oxford: Clarendon
Press.
Dillard, J. E. & Ruchala, L. (2005). The rules are no game: From instrumental
rationality to administrative evil, Accounting, Auditing and Accountability, 18, 5, 608630.
Dreyfus, H. (1980). Holism and hermeneutics. Review of Metaphysics 34, 1, 3–23.
Dreyfus, H. L. & Spinosa, C. (1997).Highway bridges and feasts: Heidegger and
Borgmann on how to affirm technology, Man and World, 30, 2, 159–177.
Dreyfus, H. (2004). Taylor’s (anti-)epistemology. In R. Abbey, Charles Taylor. Cambridge:
Cambridge University Press.
Francis, J. (1990). After virtue? Accounting as a moral and discursive practice. Accounting,
Auditing and Accountability 3, 3, 5–17.
44
Francis, J. (1994). Auditing, Hermeneutics, and Subjectivity,
Accounting,
Organizations and Society 19, 3, 235-269.
Gadamer, H.C. (1975). Truth and method. New York: Sheed and Ward.
Gray, R. (2002). The social accounting project and Accounting, Organizations and Society:
Privileging
engagement,
imaginings
and
pragmatism
over
critique?,
Accounting,
Organizations and Society 27, 7, 687-709.
Gray, R. (2009). Is accounting for sustainability actually accounting for sustainability
and how would we know? An exploration of narratives of organisations and the
planet, Accounting, Organizations and Society,
(http://www.sciencedirect.com.ezlibproxy.unisa.edu.au/science).
Habermas, J. (1999). From Kant to Hegel and Back Again – The Moves Toward
Detranscendentalization’, The European Journal of Philosophy 7, 2, 129–157.
Hines, R.D. (1988). Financial Accounting: In Communicating Reality, we Construct
Reality, Accounting, Organizations and Society 13, 3, 251-262.
Hopwood, A. (2009). Accounting and the environment. Accounting, Organizations and
Society 34, 3–4, 433–439.
Humphrey, C., & Owen, D. (2000). Debating the Power of Audit. International Journal of
Auditing 4, 29–50.
45
Laughlin, R.C. (1987). Accounting systems in organizational contexts: a case for critical
theory. Accounting, Organizations and Society 12, 5, 479–502.
Laughlin, R. and Broadbent, J. (1993). Accounting and Law: Partners in the
Juridification of the Public Sector in the UK, Critical Perspectives on Accounting,4,
4, 337-369.
McKernan, J.F. (2007). Objectivity in Accounting. Accounting, Organizations and Society 32,
1–2, 155–180.
Parker, L. D. & B. Roffey. (1997). Back to the drawing board: revisiting grounded
theory and the everyday accountant’s and manager’s reality, Accounting, Auditing and
Accountability Journal, 10, 2, 212-246.
Power, M. (1997). The audit society: rituals of verification. Oxford: Oxford University Press.
Rorty, R. (1979). Philosophy and the mirror of nature. Princeton, NJ: Princeton University
Press.
Rorty, R. (1988). The priority of democracy to philosophy. In M.D. Peterson, & R.C.
Vaughan, The Virginia statute of religious freedom: its evolution and consequences in
American history. Cambridge: Cambridge University Press.
Rorty, R. (1991a). Objectivity, relativism and truth: philosophical papers, Vol. 1. Cambridge:
Cambridge University Press.
46
Rorty, R. (1991b). Essays on Heidegger and Others: Philosophical Papers, Vol. 2.
Cambridge: Cambridge University Press.
Rorty, R. (1991c). Postmodernist bourgeois liberalism. In R. Rorty, Objectivity, Relativism
and Truth: Philosophical Papers, Vol. 1. Cambridge: Cambridge University Press.
Rorty, R. (1991d). Priority of democracy to philosophy. In R. Rorty, Objectivity, Relativism
and Truth: Philosophical Papers, Vol. 1. Cambridge: Cambridge University Press.
Rorty, R. (1994a). Does academic freedom have philosophical presuppositions.
Academe, 80, 52–63 Reproduced under the title: John Searle on realism and
relativism. In R. Rorty (Ed.), Truth and progress: Philosophical papers (1998, pp.
63–83). Cambridge University Press: Cambridge.
Rorty, R. (1994b). Charles Taylor on truth. In J. Tully (Ed.), Philosophy in an age of
pluralism: The philosophy of Charles Taylor in question. Cambridge: Cambridge
University Press Reproduced in R. Rorty, Truth and progress: Philosophical papers
(1998, pp. 84–97). Cambridge: Cambridge University Press.
Rorty, R. (1998). Truth and Progress: Philosophical Papers, Vol.3. Cambridge: Cambridge
University Press.
Shearer, T. (2002). Ethics and Accountability: from the for-itself to the for-the-other,
Accounting, Organizations and Society, 27, 6, 541-575.
47
Shapiro, B. (1997). Objectivity, relativism, and truth in external financial reporting: what’s
really at stake in the disputes? Accounting, Organizations and Society 22, 2, 165–185.
Shapiro, B. (1998). Toward a Normative Model of Rational Argumentation For
Critical Accounting Discussions, Accounting, Organizations and Society, 23, 7, 641663.
Taylor, C. (1980). Understanding in Human Sciences, Review of Metaphysics, 34, 1,
25-38.
Taylor, C. (1980b). Rorty, Taylor and Dreyfus: A Discussion, Review of Metaphysics,
34, 1, 47-57.
Taylor, C. (1989). Cross-purposes: the liberal-communitarian debate. In N. Rosenblum,
Liberalism and the moral life. Cambridge, MA: Harvard University Press.
Taylor, C. (1989b). Taylor and Foucault on Power and Freedom: A Reply, Political
Studies 37, 2, 280.
Taylor, C. (1992a). The ethics of authenticity. Oxford: Oxford University Press.
Taylor, C. (1992b). Multiculturalism and the politics of recognition, ed. A. Gutmann.
Princeton, NJ: Princeton University Press.
Taylor, C. (1992c). ‘Heidegger, Language, and Ecology’, in Dreyfus, H. L. and Hall,
H. (eds.), Heidegger: A Critical Reader, Blackwells, Oxford, 1992, pp. 247-269
(reprinted in Taylor, C. (1995). ‘Heidegger, Language and Ecology’, in Taylor, C.,
Philosophical Arguments, Cambridge, Massachusetts, Harvard University Press, 100126.
48
Williams, P.F., ‘The Legitimate Concern with Fairness’, Accounting, Organizations
and Society, Volume 12, Number 2, pp.169-189, 1987.
Taylor, C. (2000). What’s Wrong with Foundationalism?: Knowledge, Agency and World. In
M.A. Wrathall, & J. Malpas, Heidegger, Coping and Cognitive Science. Massachusetts:
University of Massachusetts Press.
Taylor, C. (2001). A Tension in Modern Democracy. In A. Botwinick, & W. Conolly,
Democracy and vision. Princeton, NJ: Princeton University Press.
Taylor, C. (2002a). Understanding the Other: a Gadamerian View on Conceptual Schemes. In
J. Malpas, U. Arnswald, & J. Kertshcer, Gadamer’s century: essays in honor of Hans-Georg
Gadamer. Massachusetts: MIT Press.
Taylor, C. (2002b). Varieties of Religion Today. Harvard: Harvard University Press.
Taylor, C. Modern Social Imaginaries. London: Duke University Press; 2004.
Taylor, C. (2008). A Secular Age: Buffered and Porous Selves.
http://www.ssrc.org/blogs/immanent_frame/2008/09/02/buffered-and-porous-selves/ accessed
5th of June, 2009.
Tinker, T., Paper Prophets: A Social Critique of Accounting, Holt Reinhart and
Winston, 1985.
49
Tomkins, C., & Groves, R. (1983a). The everyday accountant and researching his reality.
Accounting, Organizations and Society 8, 4, 361–374.
Tomkins, C., & Groves, R. (1983b). The everyday accountant and researching his reality:
further thoughts. Accounting, Organizations and Society 8, 4, 407–415.