Your Honours, An Appeal: Re-litigating
‘Accounting on Trial’
A Response to Moore’s (1991) “Accounting on
Trial: The Critical Legal Studies Movement and
its Lessons for Radical Accounting”.
David Carter
Assistant Lecturer and PhD Candidate
School of Accounting and Commercial Law
Victoria University of Wellington
PO Box 600
Wellington
NEW ZEALAND
David.Carter@vuw.ac.nz
+64 4 463-5233 extn 7009
1
“Your Honours, An Appeal: Re-litigating ‘Accounting on Trial’”
I
FOREWORD
In 1991, Accounting, Organizations and Society published a paper by David Chioni
Moore entitled “Accounting on Trial: The Critical Legal Studies Movement and its Lessons
for Radical Accounting”.1 This exploratory paper sought to identify various lessons for
critical or radical accounting from the Critical Legal Studies movement [CLS hereafter]. In
particular, Moore identifies some tentative theoretical links between the two disciplines,
which is possible, given the relatively similar historical roots.2 From this, Moore develops the
thesis that in relation to CLS the critical accounting movement,3 at the time of writing, was
undertaking a ‘realist’ examination of accounting.4 One of the prime reasons for writing a
response to the Moore article is that there has been no substantive engagement or response
with the paper. In my mind this is concerning, and in that capacity, I am moved to respond. 5
It is not that the essential thesis is problematic in respect of critical accounting, but rather that
the mode of comparison between law and accounting, and thus, between CLS and critical
accounting is incomplete and concerning.
In terms of the interface of law and accounting from a critical perspective, there is
limited research,6 although there is a body of work that considers the boundaries of the
interface.7 At about the same time as the publication of the Moore article, Bromwich and
Hopwood published an edited collection of essays entitled Accounting and the Law.8 This
essay collection provides some guidance for considering the scope of the interaction between
accounting and law. The book is largely an exploratory work and has more of a pragmatic
focus. Little work is done on identifying any interconnecting or explanatory theory between
the disciplines. Furthermore, although interdisciplinary in nature, with work by both legal
and accounting academics, there is no criticism of the interaction or relationship between the
two disciplines. The chapter by Napier and Noke considers,9 historically, the relationship
between accounting and the law, tracing historical factors in the growth of the professions.
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for Radical
Accounting” (1991) 16 Accounting, Organizations and Society 763-791.
2
Moore, above, 765-766. Moore states: “Lawyers and Accountants are much closer cousins to each other, for
example, than either of them is to engineers, physicians …”. Moore continues drawing similarities for two
pages of the article, noting amongst other things, the ability to bear the name profession, their role in
society, that they are both tools of social and organisational control.
3
Moore, above, 768.
4
Moore, above, 768.
5
There is the risk that Moore’s work will be seen as the authoritative or seminal work on the interface between
critical legal studies and critical accounting. Of course, this is mediated by the fact that there is little or no
response to the article. However, it is often cited in interdisciplinary articles in accounting. What the
citation represents is beyond the scope of the paper, but perhaps it suggests the article is seen as
authoritative.
6
For example, this includes David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement
and its Lessons for Radical Accounting” (1991) 16 Accounting, Organizations and Society 763-791;
Christopher McCrudden (ed) Regulation and Deregulation: Policy and Practice in the Utilities and
Financial Services Industries (Oxford, Oxford University Press, 1999); and Michael Bromwich and
Anthony Hopwood (eds) Accounting and the Law (Prentice Hall International (UK) Ltd, Hertfordshire,
1992).
7
But not necessarily the interface itself of the two disciplines.
8
Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall International (UK)
Ltd, Hertfordshire, 1992).
9
Christopher Napier and Christopher Noke ‘Accounting and the Law: An Historical Overview of an Uneasy
Relationship’ in Bromwich and Hopwood, above.
1
2
Although Napier and Noke comment that the two professions seem to be compatible and
have a history of a close and good ‘working’ relationship,10 the authors note that there is
apparent conflict between the two professions, as “the role of accounting in [the] relationship
has been an essentially subordinate one” and “the respective claims of the accountants and
lawyers to professional expertise have been expanding, bring the professions into increasing
commercial rivalry”.11 The chapter by Bromwich and Hopwood is much more about the
intertwining of the two professions, but takes a strongly pragmatic focus.12 It is largely
concerned with presenting an overview of the contents of the collection of chapters, but it
looks closely at the regulation of accounting by law.13
This paper seeks to add to the debate, and accepting that critical accounting can learn from
CLS, this paper will focus on two questions in particular:
1) What lessons can CLS teach critical accounting? It will be argued that critical
accounting needs to be careful in drawing lessons from CLS, in that, there are
sufficient subtle, but important, differences between the two disciplines of law
and accounting, that it is not merely a case of translating CLS to critical
accounting.
2) What is the interrelationship between law and accounting? The relationship is
two-way: law tends to shape accounting, and increasingly accounting relies on
law to provide the space for the practice of accounting, but equally, accounting
plays a vital societal role, defining expectations, interaction, and power relations,
through the provision of information. For example, law is increasingly reliant on
accounting for the provision of a wealth of information that the law requires in
order to function.
II
THE APPEAL: INTRODUCTION
The predominant issue concerning this re-examination of Moore’s 1991 paper is the
interrelationship between law and accounting, and in particular, the lessons that critical
accounting can draw from Critical Legal Studies. Moore’s conclusion in the paper is that
there are series of lessons that CLS can teach critical accounting. While this paper accepts the
basic premise, the aim of this paper is to consider that subtleties and limits of both disciplines
in drawing out these lessons. In other words, careful attention must be paid to the differences
between law and accounting.
There are a series of primary concerns in relation to the Moore paper. These include,
Moore’s conception of the CLS movement; Moore’s rationale behind how critical accounting
can learn from CLS, and finally, the lessons that critical accounting can learn from CLS. As
stated earlier, I am not disputing Moore’s essential thesis that in relation to CLS the critical
10
Napier and Noke, above, 31.
Napier and Noke, above. At this point in time, the paper is not a paper, necessarily, on professional or
professions literature. There is a vast array of literature concerning professional development and
professions building. This is not the focus of this paper.
12
Michael Bromwich and Anthony Hopwood ‘The Intertwining of Accounting and the Law’ in Bromwich and
Hopwood, above.
13
Michael Bromwich and Anthony Hopwood ‘The Intertwining of Accounting and the Law’ in Michael
Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall International (UK) Ltd,
Hertfordshire, 1992).
11
3
accounting movement14 was undertaking a ‘realist’ examination of accounting. 15 Rather, the
aim of this paper is to draw out some of the lessons that critical accounting should take from
CLS that Moore fails to acknowledge, and that in drawing these lessons, we must be mindful
of the differences between the two disciplines.16 Thus, this paper is organised around two
sections, following the introductory comments:
1) Differences between law and accounting, and consequently between CLA and
critical accounting that Moore does not acknowledge.
2) Further lessons that critical accounting should draw from CLS that Moore fails to
acknowledge.
III
BACKGROUND TO THE APPEAL
A
The Interface between Law and Accounting
Let us begin with a brief outline of the background to the appeal, including an outline
of the 1991 “Accounting on Trial” article. The starting point for this discussion is that
accounting and law are intertwined social institutions. Thus, the critical accounts of law and
accounting should equally be intertwined and should prove illuminating.
Napier and Noke acknowledge that at the interface of law and accounting, “[l]aw
provides a framework for accounting while accounting produces information for the
processes of law”.17 Progressively, accounting relies on the law in at least two distinct
ways:18 first, in terms of the day-to-day practice of accounting; and second, through the law’s
influence over the scope and shape of the discipline.19 In terms of practice, the law often
affects accounting in that legal parameters define the operation of accounting.20 In New
Zealand, for example, Parliament, by law, designated the Accounting Standards Review
Board (ASRB) as the appropriate authority to determine the delegated legislation of Financial
Reporting Standards,21 which provide legal guidance in the preparation of financial reports.22
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for Radical
Accounting” (1991) 16 Accounting, Organizations and Society 763, 768.
15
Moore, above, 768.
16
That is, in drawing out the lessons from CLS to critical accounting it is not a matter of copying one tradition
and applying the results to another. Rather, it is that there are sufficient differences (subtle as some of them
may be) that require the tradition of CLS to be ‘translated’ to the different tradition of critical accounting.
17
Christopher Napier and Christopher Noke ‘Accounting and the Law: An Historical Overview of an Uneasy
Relationship’ in Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall
International (UK) Ltd, Hertfordshire, 1992). It is worth noting that the interface is not unidirectional, in
that it is not simply a process of law exerting its influence over accounting, but it is a multidirectional and
multifunctional process of each discipline interfacing with and influencing the other discipline.
18
Craig Deegan and Grant Samkin New Zealand Financial Accounting (McGraw-Hill Book Company,
Auckland, 2001) 273
19
Napier and Noke, above, 32.
20
Of course, there are a number of examples where law does not define the scope of accounting information
including social and environmental disclosures, as well as other voluntary disclosures.
21
See, in general, the Financial Reporting Act 1993. For the establishment of the Accounting Standards
Review Board (ASRB), see the Financial Reporting Act 1993, s 22. Section 24 of the Act defines that the
prime function of the ASRB is to, if it thinks fit, approve financial reporting standards. However,
Parliament reserves the right under section 33, subject to the Regulations (Disallowance) Act 1989, to
disallow any approved financial reporting standard or to overturn a decision of the ASRB to revoke a
14
4
Not only are the general range of transactions and events that accountants deal in and with
governed by law, but much of the work of accountants is conducted “within particular legal
structures”.23 Financial reporting, tax, audit, trusteeship, and insolvency, to name a few,
require a thorough knowledge of the law surrounding the area. Law also, seemingly, plays a
vital role in shaping accounting as a discipline. These links between law and accounting are
reinforced through education. For example, in order to qualify for chartered accountancy in
New Zealand, it is necessary for the accounting student to undertake a series of commercial
law subjects alongside the mainstream accounting requirements.24
In increasingly more areas of the law, the law “consumes” accounting information,25
and as a consequence the interrelationship between the two disciplines is increasingly
significant. Thus, as the uses of accounting information vary widely, it is difficult to draw the
boundaries of the use of accounting information in the legal process. There are two trends: 1)
Areas of law and accounting draw closer together to the point where they intersect or perhaps
overlap (this category includes areas such as tax, industrial relations, auditor’s liability, and
perhaps intellectual property);26 and 2) An increasingly broader range of legal processes
require an increasingly broad range of accounting processes and information flows (while
there is no direct overlap or intersection between the two disciplines, the interface arises as
these areas require accounting information, such as the law of contract, conveyance, banking
law, company law, insurance law, and torts to name a few). Although the interface between
law and accounting is incredibly vast, and it continues to grow, what is most interesting
about the interface is that the law very rarely passes direct judgment upon accounting, the
accounting process, or the accounting number. Hadden and Boyd comment that irrespective
of the apparent simple marriage of the two disciplines, there is considerable conflict between
them.27
In relation to the use of accounting information in legal processes, accounting
information (both financial and non-financial) plays important and useful roles in the law of
previously approved financial reporting standard. The ASRB, for example, determined that New Zealand
should adopt International Financial Reporting Standards (IFRS).
22
The Regulations Review Committee is the Parliamentary Select Committee responsible for checking that all
delegated legislation (regulations, codes etc) are essentially legal, in that they do not exceed the governing
statute that proscribes the power of delegated legislation. Parliament reserved the right, in the Financial
Reporting Act 1993, to overrule any financial reporting standard promulgated pursuant to the Act. This
power has yet to be exercised, and one expects that this will be the case. New Zealand simply does not have
the commercial lobbying parties as powerful as exist in the United States. It is noted, though, that it is not
necessary for lobbying to be solely from commercial interests, but the point is more that the United States’
commercial lobbyists are very strong, well-organised, and increasingly powerful.
23
Christopher Napier and Christopher Noke ‘Accounting and the Law: An Historical Overview of an Uneasy
Relationship’ in Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall
International (UK) Ltd, Hertfordshire, 1992) 31.
24
In particular, the commercial law requirements in order to qualify for entrance into the professional chartered
accountancy training programme include a compulsory company law paper and at least one compulsory
contract paper. The New Zealand Institute of Chartered Accountants (NZICA) recently undertook a review
of the requirements for education at tertiary institutions. NZICA restated the importance of a grounding in
the knowledge of legal principles during this review.
25
Christopher Napier and Christopher Noke ‘Accounting and the Law: An Historical Overview of an Uneasy
Relationship’ in Bromwich and Hopwood, above, 30.
26
There may even be inter-disciplinary competition, such as within tax, with competition for tax consultancy
between ‘accounting’ firms and ‘legal’ firms.
27
Tom Hadden and Denis Boyd ‘The Legal Control of Accounting Standards: A Critical View’ in Michael
Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall International (UK) Ltd,
Hertfordshire, 1992) 57.
5
trusts, partnerships, company law, criminal prosecutions (especially in fraud), negligence
(and torts in general), insurance law, competition law, consumer law, insolvency law,
banking law, matrimonial property, contracts, property valuation, and even in public law
(such as commercial State Owned Enterprises and the use of the public funds).28
Furthermore, recent legislative changes in New Zealand resulted in the scope for increased
information disclosure (including accounting information) in collective bargaining in
employment law.29 Thus, legal processes, be they judicial, legislative or other, are
increasingly requiring accounting information.
In relation to this information-provision role, McBarnett and Whelan argue that the
greatest challenge, amongst many challenges, facing legal regulation is ‘creative
accounting’.30 Although they define creative accounting broadly, they include specific
examples such as uncommon acts of direct fraud or flagrant breaches of accounting
standards. However, McBarnet and Whelan point to more subtle attempts to ‘subvert’ the
regulatory process, the passive resistance evidenced by regulated entities ‘playing the
system’. Tactics employed in ‘playing the system’ include calling the bluff of the regulator
through challenge, or by being aware of litigation budgets of regulators (which are usually
grossly under funded). In respect of ‘creative accounting’, it is often incredibly difficult to
recognise, and if one is able to uncover that which appears to be ‘creative’, the next difficulty
is pinning it down. The legal process is inherently subjective, and rhetoric is a vital
component – ‘creativity can still be perfectly legal’ – loopholes exist. McBarnet and Whelan
argue that in seven years of investigations by the United Kingdom’s Financial Reporting
Review Panel (from 1989-1996), no case went to court. The ‘might of the law’ is perhaps not
so mighty.31 In this light, certain of the historical literature concerning the interface of law
and accounting may be useful, including, but not limited to work by Napier and Walker.32
28
This list is modified and reconsidered in light of New Zealand legislation. However, the mechanics of the list
derive from Tom Hadden and Denis Boyd ‘The Legal Control of Accounting Standards: A Critical View’
in Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall International
(UK) Ltd, Hertfordshire, 1992) 58.
29
See, in particular, Employment Relations Act 2000, s 31 (entitled “Providing information in bargaining for
collective agreement”).
30
Doreen McBarnet and Christopher Whelan “Challenging the Regulators: Strategies for Resisting Control”, in
Christopher McCrudden (ed) Regulation and Deregulation: Policy and Practice in the Utilities and
Financial Services Industries (Oxford, Oxford University Press, 1999). For further information, see
Doreen McBarnet and Christopher Whelan “The Elusive Spirit of the Law: Formalism and the Struggle for
Legal Control” (1991) 54 Modern Law Review 848-873, Doreen McBarnet and Christopher Whelan
“Creative Compliance and the Defeat of Legal Control: The Magic of the Orphan Subsidiary” in Keith
Hawkins (ed) The Human Face of Law (1994); Doreen McBarnet and Christopher Whelan Creative
Accounting and the Cross-Eyed Javelin Thrower (John Wiley, London, 1999).
31
Doreen McBarnet and Christopher Whelan “Challenging the Regulators: Strategies for Resisting Control”, in
Christopher McCrudden (ed) Regulation and Deregulation: Policy and Practice in the Utilities and
Financial Services Industries (Oxford University Press, Oxford, 1999) 69-76.
32
Christopher J Napier “Intersections of Law and Accountancy: Unlimited Auditor Liability in the United
Kingdom” (1998) 23 Accounting, Organizations and Society 105-128; Stephan P Walker “Laissez-Faire,
Collectivism and Companies Legislation in Nineteenth Century Britain (1996) 28 British Accounting
Review 305-324; Dean Ardern and Maxwell Aiken “An Accounting History of Capital Maintenance”
(2005) 32 Accounting Historians Journal 23-61; Robert Baxt “True and Fair Accounts – A Legal
Anachronism” (1970) 44 Australian Law Journal 541; and Roy A Chandler and John R Edwards British
Audit Practice: 1884-1900 – A Case Law Perspective (Garland Publishing Inc, London, 1994). There are
many more, and these are just a brief selection.
6
This problem facing the legal process perhaps sheds more light on Napier and Noke’s
comment that there is apparent conflict between the two professions.33
Fact plays an important role in law. In considering the representation of accounting
information within law, the day-to-day practice of law (legal positivism) seemingly treats
accounting as a ‘fact’.34 The label ‘facts’ holds considerable power for the processes of law.35
By equally, our conception of ‘fact’ is a complicated concept:36
‘Facts’ are no longer facts when alternative interpretations are possible; nor do they have the
same ‘factual’ quality when what is being measured or described is not susceptible to
precision. ‘Facts’, so regarded, become the pabulum of discussion, of argument, or of
negotiation. Communication of ‘facts’ is no longer merely a process, but the imperfect
representation of a situation, an essay in persuasion or an act of outright propaganda. The
scope for complete objectivity is rare; the name of the game, successfully played … it will
convince some but not others, or depending on circumstances, convince nobody. Much
depends on trust, much on shared knowledge or values …
Undoubtedly, such a charge is not unique to accounting, and the representations of
accounting within law. However, the fundamental question revolves around the descriptive
noun of ‘fact’. To label as ‘fact’ invokes certain notions of truth, of objectivity, of general
acceptance, and of correctness – vital in a realist-based ontology. The consideration of ‘fact’
within accounting raises some fundamental considerations. It is clear that one set of financial
information could lead to a variety of accounting answers due to the ability to manipulate
and vary accounts due to the indeterminacy of language in general,37 and the particular skills
of accountants.38 Accounting, in this sense, “… has been created and developed to
accomplish various desired objectives and, therefore, it is not based on fundamental laws or
absolute precepts”.39
Morgan depicts accounting professionals and the accounting process as active
“constructers of reality”.40 That is, the skills and tools of accounting enable certain ‘pictures’
to be created representing a particular accounting conception. Broadbent puts it in a slightly
different light, in relation to ‘our desire’ for accountability:41
33
Napier and Noke, above. At this point in time, the paper is not a paper, necessarily, on professional or
professions literature. There is a vast array of literature concerning professional development and
professions building. This is not the focus of this paper.
34
Tom Hadden and Denis Boyd ‘The Legal Control of Accounting Standards: A Critical View’ in Michael
Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall International (UK) Ltd,
Hertfordshire, 1992) 57-58 and Christopher Napier and Christopher Noke ‘Accounting and the Law: An
Historical Overview of an Uneasy Relationship’ in Bromwich and Hopwood, above, 36.
35
This extends to the confining the decision that can be made in terms of the application of the law to the case
at hand, to the processes of law including appeals. The notion of a ‘finding of fact’ is highly influential in
the law.
36
Roger Hussey and Arthur I Marsh Disclosure of Information and Employee Reporting (Aldershot, Brookfield
1983) 154.
37
See, Ludwig Wittgenstein Philosophical Investigations (GEM Anscombe Translation, 1974) para 66-276 and
Jeremy Waldron “Vagueness in Law and Language: Some Philosophical Issues” (1994) 82 Cal LR 108.
38
See, Christopher Napier and Christopher Noke ‘Accounting and the Law: An Historical Overview of an
Uneasy Relationship’ in Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law
(Prentice Hall International (UK) Ltd, Hertfordshire, 1992) 34.
39
Catlett, 1960, 44.
40
Gareth Morgan “Accounting as Reality Construction: Towards a New Epistemology for Accounting
Practice” (1988) Accounting, Organizations and Society 477-485.
41
Jane Broadbent “Critical Accounting Research: A View from England” (2002) Critical Perspectives on
Accounting 443, 445.
7
In order to make ourselves accountable and ensure due governance, we seek (or are forced) to
render our actions transparent. The use of accounting in both its programmatic and its
technological sense is associated with this; alongside this is the extensive use of auditing. The
deep irony is that the tools that are used are themselves not necessarily open and transparent.
What is intriguing, given the relatively elevated positions of both the professions of
law and accounting, is that these professions are not in a vacuum.42 That is, these professions
do not exist independent of their surrounding society, but in fact, incorporate, rely upon, use,
adopt, and co-depend as an entity amongst and as an aspect of society. In reading the annals
of jurisprudential theory, there are numerous discussions of the contrasting roles of law
within society. From Plato to Aristotle, Marx to Weber to Durkheim, Foucault to Habermas
to Derrida, many of the great philosophers have debated the extent and shape of the societal
role for law and the legal system.43 While certain philosophers consider law to be an ‘evil’
force to the detriment of society, the vast majority of philosophers consider law “to be one of
the great civilising forces in society”.44 Few such philosophers, though, have considered the
position of accounting. Apart from Althusser’s conception of accounting as the language of
capitalism, there is little philosophical treatment of the societal influences of accounting.
Perhaps, this is due to the more recent, historically speaking, development of an accounting
profession, almost entirely documented in the Twentieth Century.
B
Re-Presenting the Facts – the Case Under Appeal
In “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for
Radical Accounting”,45 Moore argues that the critical accounting movement,46 at the time of
writing, was undertaking a ‘realist’ examination of accounting.47 Hence due to the differing
positions of the respective critical theory movements of law and accounting, critical legal
studies has important insights into the future direction of critical accounting. Moore (1991)
argues that ‘critical accounting’ can learn from Critical Legal Studies (CLS), as the CLS
movement “has become the most powerful and divisive phenomenon since the 1930s in
American academic law”.48
In particular, Moore makes a series of directional comments, observations, and comparisons:
1) Moore observes that critical accounting and critical legal studies share a similar
history in the serious criticism of the realist epistemology that a ‘reality consists
of a world out there’, capable of objective depiction and measurement, and which
exists independently of the social actor.49 Moore acknowledges that critical
accounting provides varied attacks on traditional positivism, but criticises critical
42
Dennis Lloyd The Idea of Law (Penguin Books, Harmondsworth, 1983) Preface, and see Gareth Morgan
“Accounting as Reality Construction: Towards a New Epistemology for Accounting Practice” (1988)
Accounting, Organizations and Society 477, 480-482, as Morgan traces the impact of accounting upon
society, with four specific examples: Accounting and Economic Investment, Accounting and Corporate
Culture, Accounting and Social and Economic Policy, and Accounting and the Shareholder View.
43
Lloyd, above.
44
Lloyd, above.
45
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for Radical
Accounting” (1991) 16 Accounting, Organizations and Society 763-791.
46
Moore, above, 768.
47
Moore, above, 768.
48
Moore, above, 763
49
Moore, above, 774.
8
accounting for, in Moore’s words, “suggest[ing] no serious or consistent
consequences for its critique … the critical attacks have placed nothing major at
stake”;50
2) Moore criticises accounting’s employment of Foucauldian theory as limited and
ill-informed, resulting in “politically conservative” critical accounting. 51 Moore
notes that the integration of Foucauldian theory in critical legal studies has been
both broad and deep, while the integration in accounting, in contrast, has been
“less widespread and more … procedural”.52 By this, Moore accuses critical
accounting theorists of employing Foucauldian theory “without abiding by the
vision of Foucault’s overall project”.53 For Moore, critical accounting is
“politically conservative”;54 and
3) Moore’s warns against deconstruction for the sake of deconstruction, as it has the
potential to fall foul of the nihilistic critique of deconstruction.55 In this light,
Moore argues that deconstruction is not ‘a toy’ or ‘a game’, and quotes Derrida in
that such concepts are used for “strategic convenience”.56
4) Moore examines the parallel work in CLS and critical accounting in relation to
contracts and contract theory:57
Contracts deserve special mention in this paper since they are a major concern of
recent accounting theory as well as an area of focus within CLS.
CLS and critical accounting challenge the ‘naturalist’ or ‘positivist’ assumptions
underpinning much of the contract theory in law and accounting.
5) Moore argues that CLS has been “much more aggressive in pointing to the
consequences of the various theoretical stances” despite CLS and critical
accounting sharing a similar background and theoretical and intellectual
heritage.58 Moore presents examples where CLS has ‘gone further’ than
criticising the ‘objectivist’ epistemological assumptions of the dominant
paradigm.
a) “Daily-life-of-the-law exposé – For Moore, this is not represented within the
critical accounting work of the time. CLS scholars have “go[ne] to the street
to unmask what effects existing jurisprudence has on … everyday, individual
50
Moore, above, 775. In contrast, Moore comments, at 775, about the Critical Legal Studies (CLS) movement,
that:
CLS also sees reality not as objectively available outside of discourse, but as socially constituted in signifying
systems. But unlike critical accounting, CLS makes clear what is at stake in this battle over reality: control over
social ‘facts’, and control over the US Constitution.
51
Moore, above, 773
Moore, above, 772.
53
Moore, above.
54
Moore, above, 773.
55
Moore, above, 775.
56
Moore, above, 778.
57
Moore, above, 779.
58
Moore, above, 780.
52
9
lives”.59 Examples include studies of the perpetuation of racial discrimination,
how defining the ‘family’ detrimentally affects freedom for women, collective
bargaining, and the patriarchal views embedded in definitions of rape and
other sexual crimes.
b) “Maverick posture within the profession” – For Moore, there is a clear
“institutional restraint, characteristic of the profession, present in critical
accounting work”.60 CLS scholars essentially ‘take no prisoners’. For Moore,
the key thing is that CLS scholars “see no difference between the standard
legal theory they oppose and the institution that created it”.61
c) “Radical political program” – Moore argues that the CLS “program is antipure-capitalism and anti-hierarchical, quite experimental and often highly
spiritual”.62 Moore acknowledges that the development of ‘alternative
programs’ is troubling for CLS, “but CLS does attempt to reach out and does
engage many of its members in fighting concrete injustices”. 63 A serious
critique of CLS is that:64
though its critiques are clear enough, with its arcane prose and elusive
proposals CLS has not only failed among intellectuals in developing
respectable alternatives, it has frozen out the working class and daily-grind
leftist lawyers is sought to ally with and empower in the first place.
6) Moore concludes by drawing out the reasons underpinning the differences
between CLS and critical accounting. For Moore, there are several reasons:
a) “[T]he traditionally polite and stewardly attitude of its professionals”.65
b) “The hopelessly indirect social-science prose style of accounting research”.66
c) “The effects of accounting may seem to be far more diffuse and far less
dramatic … [t]here are no media stars in accounting”;67 and
d) “[A] lack of Critical self-declaration of community”.68
Thus, Moore’s overarching thesis is a call to arms of critical theorists, and critical
accountants in particular. However, before accepting this call to arms, it is necessary to
further develop and further consider aspects of the interrelationship between law and
accounting and the lessons that critical accounting can learn from CLS.
59
Moore, above, 781.
Moore, above, 781.
61
Moore, above, 782.
62
Moore, above, 782.
63
Moore, above, 782.
64
Moore, above, 782-783.
65
Moore, above, 783.
66
Moore, above, 783.
67
Moore, above, 783.
68
Moore, above, 783.
60
10
C
Critical Theory and Law and Accounting
One must start by knowing what is going on, by freeing oneself from the
mystified delusions embedded in our consciousness by the liberal legal world
view.69
There are strong critical theory movements in both law and accounting, but given the
variety of constituent elements of a ‘critical theory’ movement, it is not appropriate to
attempt to define critical theory. However, in relation to why critical theory is appropriate for
the study of law and accounting, Chua quotes from Berlin:70
The history of thought and culture is, as Hegel showed with great brilliance, a changing
pattern of great liberating ideas which inevitably turn into suffocating straightjackets, and so
stimulate their own destruction by new emancipatory, and at the same time, enslaving
conceptions. The first step to understanding of men is the bringing to consciousness of the
model or models that dominate and penetrate their thought and action. Like all attempts to
make men aware of the categories in which they think, it is a difficult and sometimes painful
activity, likely to produce disquieting results. 71
Although it is not appropriate to define critical theory, it is possible to deduce some
common themes or strands of thinking.
1
Critical Accounting
Critical accounting challenges the dominant mainstream view that accounting is “an
objective, value-free, technical enterprise, representing reality ‘as is’”, while seeking
progressive social change.72 Critical Accountants, amongst many things, argue:
a) that accounting developed as a tool for the maintenance and continuation of the
power relationships within society;
b) that accounting is a social and technical process in ‘itself’;
c) that it is subject to contextual and cultural variation between accountants and
accountings; and
d) that the discourse of accounting creates and sanctions conceptions of ‘truth’.
Central to this challenge is that “every state of existence, be it an individual or
society, possesses historically constituted potentialities that are unfulfilled”.73 The critical
theorist assesses the inherent power struggle in the social situation and recommends certain
actions in an attempt to ‘empower’ individuals or groups within society. 74 With respect to
accounting, critical theorists target the power of accounting, and in particular, accounting’s
norm-shaping potential. In some ways, accounting has been very clever and in particular, this
Alan D Freeman “Truth and Mystification in Legal Scholarship” (1981) 90 Yale Law Journal 1229.
Wai Fong Chua “Radical Developments in Accounting Thought” (1986) 61 The Accounting Review 601-632.
71
There is an obvious feminist critique of this quote.
72
Gareth Morgan “Accounting as Reality Construction: Towards a New Epistemology for Accounting Practice”
(1988) Accounting, Organizations and Society 477-485.
73
Chua, above, 619.
74
Chua, above, 619.
69
70
11
relates to the use of numbers as a means of expression. Numbers are difficult to argue with,
irrespective of the condensation, representation, and summation inherent in numeration.
Furthermore, critical accountants focus on how accounting processes dehumanise human
beings and society by reducing social relations to measurable, countable entities, or by
excluding them from the measurement process altogether. Hence, strands of critical
accounting have concentrated on broader social and environmental issues. The critical
accountant challenges the ideological assumptions and foundations upon which accounting is
constructed. Accounting is a powerful discourse.
2
Critical Legal Studies
CLS is a collection of theoretical approaches and strategies that challenge accepted
norms and standards in legal theory and practice.75 Unsurprisingly, these are not substantially
different to critical accounting. Critical Legal Theorists, amongst many things, argue:
a) that the logic and structure attributed to law grew out of the power relationships
within society;
b) that law exists to support the interests of the party or class that form the law; and
c) that law is merely a collection of beliefs and prejudices that legitimise the
injustices of society and the interests of a few.
The primary thesis of CLS is that law is the site of politic and it is not neutral or value free.
Most ideas about law disguise its political nature and functions. Much of the reason for this
relates to the nature of law and the weight attached to law in ‘Western democratic society’.
As a consequence, the existing political order is rationalised in the rhetoric of equality, rights,
and the rule of law. The dominant legal positivist paradigm disguises the structures of
political power by making legal discourse appear to be neutral, value-free, and scientific, by
separating legal discourse from other discourses, particularly moral discourses, and by
imposing legal parameters and concepts upon a multitude of societal relations. Legal
discourse attaches great power to ‘property rights’, a legal mechanism that dehumanises
human beings and society, abstracting human beings from their social existence, by
constructing them exclusively as the holders of legal rights and the subjects of legal duties.
CLS challenges the judgment process, arguing that the legal process is flawed in logic and in
practice, highlighting such concerns as the over-representation of particular parts of society
as adjudicators.76 Further, legal discourse celebrates the individual, and reifies social and
political relations between people.77 The role of the critical theorist is to analyse and
deconstruct the material effects of law and the ideological bases upon which law is
75
Roger Cotterrell The Sociology of Law: An Introduction (2 ed, London, Butterworths, 1992) 136. Approaches
and strategies include, but are not limited to, feminist legal theory, critical race theory, postmodernism,
post-structuralism, psychoanalysis, post-analytical philosophy, linguistics. Some accounts of CLS even
include Law and Economics, due to its alternative agenda, Richard Posner Economic Analysis of Law (4 ed,
Boston, Little, Brown, and Company, 1992) 3.
76
The best example of this is the much-used “reasonable person on the Clapham Omni-bus”. CLS scholars
point out that judges are very good at applying the “reasonable white, greying, middle-aged man on the
Clapham Omni-bus” test, and little else. Moore acknowledges this, stating that “the two professions [law
and accounting] have been overwhelmingly white, overwhelmingly male, and middle to upper-middle
class”. See David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its
Lessons for Radical Accounting” (1991) 16 Accounting, Organizations and Society 763, 765.
77
Cotterrell, above, 136.
12
manufactured in order to comprehend the power of modern legal discourse as a dominant
intellectual paradigm. And thus, CLS focuses on the indeterminacy of language and law, on
the indeterminacy of the relationship between law and society, and that ‘law’ is a discourse
of power.78 Thus, the following sections seek to draw out the key elements of the CLS
movement.
As a movement, CLS aims to challenge and overturn accepted norms and standards in
legal theory and practice.79 In essence, CLS radicalises legal realism, focusing on the fact
that legal language and law is indeterminate, as is the relationship between law and society.80
Austin summarises the basic cause as:81
Laws, decisions, and regulations are indeterminate, full of choices and options that are
denied the oppressed. The solution: topple the Establishment, break up the monopoly on
objectivity, and institute communitarianism.
Of prime importance to the movement is challenging the social context of law, and,
in particular, critical legal theorists argue that law is in a political mechanism and therefore is
not neutral nor value free.82 CLS scholars threw down ‘the gauntlet’ by defiantly attacking
core liberal legal values and by identifying “various Liberal atrocities committed against
everyone from law students to minorities”.83 While the movement focuses on the aim of
realising a ‘better’ world, whatever that may mean for the particular critical theory
intervention, there are a plurality of approaches and strategies used to question the ‘power’ in
the law.84 For example, the scope of CLS spans feminist legal studies, critical race theory,
post-structuralism, and Marxist analyses. CLS grounds its critique through the view that the
law:85
reflects ideological struggles among social factions in which competing conceptions of
justice, goodness, and social and political life, get compromised, truncated, vitiated, and
adjusted.
There is considerable inconsistency between the liberal conceptions of legitimacy and radical
indeterminacy – judges make law – judges encounter a range of choices, and in rendering a
determination a Judge not only makes a choice (inherently subjective), but the Judge makes
law.86 Consequently, the different schools of thought within critical legal studies have their
own particular criticisms of the legal process. For example, feminist legal studies focuses its
critique on identifying and demonstrating how patriarchy shapes the content of the law, and
seeks to challenge the ability of judges (usually middle-aged, greying, white male tests) to
make objective and impartial decisions.87 Critical race theory concentrates on how traditional
78
Cotterrell, above, 134-137.
Margaret Davies Asking the Law Question: The Dissolution of Legal Theory (2 ed, The Law Book Company,
Sydney, 2002) 167-169 and Roger Cotterrell The Politics of Jurisprudence: A Critical Introduction to
Legal Philosophy (University of Pennsylvania Press, Philadelphia, 1989) 210-211.
80
Roger Cotterrell The Sociology of Law: An Introduction (2 ed, Butterworths, London, 1992) 134-137.
81
Arthur Austin The Empire Strikes Back: Outsiders and the Struggle over Legal Education (New York
University Press: New York, 1998) 3.
82
Cotterrell, above, 136.
83
Austin, above, 2.
84
Davies, above, 169.
85
Andrew Altman “Legal Realism, Critical Legal Studies, and Dworkin” (1986) 15 Philosophy and Public
Affairs 1, 12.
86
Cotterrell, above, 149.
87
Davies, above, 209.
79
13
theories of jurisprudence include explicit or implicit assumptions about race, as well as
challenging the ability of judges to make objective and impartial decisions.88
As indicated, CLS theories have attacked traditional Western jurisprudence in variety
of ways. There is considerable scope for attack given that the essential view that the law
“reflects ‘ideological struggles among social factions in which competing conceptions of
justice, goodness, and social and political life, get compromised, truncated, vitiated, and
adjusted’”.89 The prime critique underpinning CLS interventions is that there is considerable
inconsistency between the liberal conceptions of legitimacy and radical indeterminacy.90
Essentially, the critique boils down to a similar critique to legal realism: Judges make law.
Critical legal theorists state that inconsistency provides a judge with a range of choices, and
in making a determination a Judge not only makes a choice, but also makes law.91
(a)
Feminist Legal Studies
Feminist jurisprudence is fundamentally based on the political, economic, and social
equality or inequality of gender.92 This is not a united school of thought, though, and there
are three distinct schools of thought: 1) Traditional (Liberal) Feminism; 2) Cultural
Feminists; and 3) Radical Feminism. In brief, each school takes a particular view of the role
of law. Traditional feminism asserts that as females are just as rational as males, females
should have equal opportunities; law is about ensuring those opportunities.93 Cultural
Feminists seek to focus on the differences between women and men, and then celebrate those
differences.94 Finally, Radical Feminists assert, essentially through Marxist theory, that
males, as a class, have dominated the class of women. This has created inequality between
the genders, and as such, this has led to a power imbalance.95
However, irrespective of the differences in the particularities of the strands of
feminist thought, feminist legal theorists tend to focus their critiques on the following strands
of thought:
(a) The prime critique focuses on identifying and demonstrating how patriarchy
shapes the content of law.96 For example, feminist legal theorists will consider the
patriarchal influence on the development of Human Rights discourse.
(b) In accepting that judges do make laws, feminist legal theorists challenge the
ability of judges to make objective and impartial perspective.97 For example, in
88
Davies, above, 265, 287-288.
See III.2 Critical Legal Studies in <http://www.utm.edu/research/iep/l/law-phil.htm>, quoting Andrew
Altman “Legal Realism, Critical Legal Studies, and Dworkin” (1986) 15 Philosophy and Public Affairs 1,
12.
90
III.2 Critical Legal Studies, above.
91
Roger Cotterrell The Sociology of Law: An Introduction (2 ed, London, Butterworths, 1992) 149.
92
Cotterrell, above, 121.
93
Anne Bottomley “Feminism: Paradoxes of the Double Bind” in The Critical Lawyers’ Handbook Volume 1
<http://freespace.virgin.net/suzanne/boyce/files/book/1_5htm>, 3.
94
Bottomley, above.
95
Bottomley, above, 4.
96
See III.4 Outsider Jurisprudence in <http://www.utm.edu/research/iep/l/law-phil.htm>.
97
III.4 Outsider Jurisprudence, above.
89
14
tort law, judges are experts at applying the reasonable middle-aged, greying,
white male test.98
(c) The focus is on erasing gender-based distinctions in the law, and to seek equal
recognition of women’s rights.99
(b)
Critical Race Theory
Critical Race Theory tends to focus, in a similar fashion to Feminist Legal Studies, on
equality. The persistence of racism and segregation is the primary aim of the movement, and
in particular, the law’s role in maintaining such institutions. The critique is centred on the
challenge to ‘white supremacy’ and “how that has shaped the law at the expense of persons
of colour”.100 There are three primary areas of focus: 1) Historical Racism, especially from
slavery and emancipation; 2) Economic Segregation, in terms of economic segregation
through the inequality of opportunities; and 3) Cultural Concerns.101
The central concerns of critical race theory concentrate on:
(a) There is a focus on identifying how most traditional theories of jurisprudence
include explicit or implicit assumptions about race.102 For example, it was
demonstrated that Aquinas’ Classical Naturalism did not regard persons of
different colour as being equal before God and equal before the law.103
(b) In a similar vein to feminist legal studies, critical race theorists challenge the
ability of judges to make objective and impartial decisions.104 Traditionally, our
legal systems have been dominated by greying, middle-aged, white males. This
criticism is also charged at legal practitioners and legislators.105
(c) Critical race theorists seek to evaluate law’s role in perpetuating racial and ethnic
inequality, reinforcing racial and ethnic stereotypes, and the iniquitous treatment
of law and legal systems. For example, certain critical race theorists challenge
discrimination laws as a means of perpetuating and encouraging racial separation
and inequality.
(c)
Post-structuralism
Foucault is most probably the leading theorist in this tradition, although there is work
in Derrida, Laclau and Mouffe, Deleuze, amongst others. Post-structural jurisprudential
98
See the discussion of this above. Also, see Stephen Todd (ed) The Law of Torts in New Zealand (3 ed,
Wellington, Brookers, 2001) 309.
99
Anne Bottomley “Feminism: Paradoxes of the Double Bind” in The Critical Lawyers’ Handbook Volume 1
<http://freespace.virgin.net/suzanne/boyce/files/book/1_5htm>, 6.
100
See III.4 Outsider Jurisprudence in <http://www.utm.edu/research/iep/l/law-phil.htm>.
101
Alan Thomson “Foreword: Critical Approaches to Law, Who Needs Legal Theory” in The Critical Lawyers’
Handbook Volume 1 <http://freespace.virgin.net/suzanne/boyce/files/book/1_3.htm>, 1-2.
102
III.4 Outsider Jurisprudence, above.
103
Roger Cotterrell The Sociology of Law: An Introduction (2 ed, London, Butterworths, 1992) 204.
104
III.4 Outsider Jurisprudence, above.
105
III.4 Outsider Jurisprudence, above.
15
theory is largely inspired by the “perceived failure of Marxist socialism to deliver its promise
of a society that overcomes exploitation”.106 Foucault has argued, simply, that:107
There is nothing which is not the effect of power, and no form of knowledge which is not
also a form of power.
Post-structuralism has broad theoretical aims, including the identification of power, seeking
‘micro-processes of power’ in order to “reveal the possibilities of resistance”. 108 Second,
post-structuralism provides an open invitation to reconsider and study text ‘anew’ “to
discover new and suppressed meanings”.109
(a)
In a direct attack to legal positivism and legal formalism, poststructuralists argue
that there is no one correct way of applying the law, and in fact, there are
multiple, equally valuable interpretations of the text. Legislators, Judges, and
legal practitioners are as biased and fallible as all other citizens.110
106
Thomson, above, 4-6.
Thomson, above, 4.
108
The main theoretical tendencies and innovations of post-structuralism can be summarised as follows:
1) The critique of Renaissance humanist philosophy, the rational, autonomous, self-transparent,
subject of humanist thought, and the privileging of human consciousness by phenomenology and
existentialism.
2) A Saussurean-informed theoretical understanding of language and culture in terms of linguistic
and symbolic systems, where linguistic signs act reflexively rather than referentially.
3) An acceptance of the Freudian notion of the ‘unconscious’ and in hidden structures or sociohistorical forces that, to a large extent, constrain and govern our behaviour.
4) A shared intellectual inheritance and tradition based upon Saussure, Jacobson, the Russian
formalists, Freud, and Marx, among other thinkers. This shared intellectual history is a complex
theoretical mix.
5) Post-structuralism holds an interest in critical history through a re-emphasis on “diachronic
analyses, on the mutation, transformation, and discontinuity of structures”, on repetition, and
genealogy.
6) Post-structuralism challenges the rationalism and realism that structuralism continues from
positivism, with its faith in scientific method, progress, and the capacity of the structuralist
approach to discern and identify universal structures of all cultures and the human mind.
7) The rediscovery of Nietzsche and Heidegger’s interpretation of Nietzsche as the “last
metaphysician”.
8) A critical philosophy of technology, in relation to developing Heidegger’s notion of technology.
9) A deepening of democracy and a political critique of Enlightenment values.
10) There has been substantial development of political thought and political reason in relation to
Foucault’s notion of “governmentality”.
11) Many post-structuralist thinkers focus on the politics and philosophies of difference, and how
difference is developed, used, and applied in different ways.
12) There is a suspicion within post-structuralism of meta-narratives, a suspicion of transcendental
arguments and viewpoints, combined with the rejection of canonical descriptions and final
vocabularies.
13) The diagnosis of “power/knowledge” and the exposure of technologies of domination based upon
Foucault’s analytics of power.
14) Post-structuralism critiques the politics of global knowledge, global information, the global
society, and the global economy. The new production of knowledge and the global knowledge
economy, together with classical assumptions of rationality, individuality and self-interest, are
important construction sites for knowledge deconstruction and critique.
109
Thomson, above, 5.
110
Alan Thomson “Foreword: Critical Approaches to Law, Who Needs Legal Theory” in The Critical Lawyers’
Handbook Volume 1 <http://freespace.virgin.net/suzanne/boyce/files/book/1_3.htm>, 4-5.
107
16
(b)
As society changes and the implications of language change, a claim to truth will
similarly change. “No text can ever sustain the basis on which it makes a claim to
truth”.111 This, potentially, could pose a challenge to precedent based law.
Clearly, due to historical position of CLS, and the similarities between the ‘targets’
and ‘objectives’ of the critical accounts of law and accounting, critical accounting can learn
much from CLS. In that light, let us turn now to consider the aspect of Moore’s article
IV
SUBMISSION ONE – DIFFERENCES BETWEEN ACCOUNTING AND LAW
Moore argues that law and accounting are theoretically similar disciplines as “both
claim as their base highly elaborated, identifiable bodies of written and unwritten rules of
judgment and conduct”.112 It is argued that the rules of both accounting and law operate
under a system of legislation and precedent. Moore suggests that the sources of rules for law,
such as parliamentary legislation, precedent rules based on judgment, and the rules of
professional and ethical conduct are the equivalent of the delegated legislation of
International Financial Reporting Standards (IFRS), Generally Accepted Accounting
Principles (GAAP) and rules of professional conduct.113 For Moore, both sets of rules are
subject to a similar process of judgment. That is, there is equivalence between the role of the
auditor and the role of the judge, involving the objective application of the relevant rules to
the case at hand, arriving at some “impartial disposition”. It is accepted that the language of
judge-making that applies to both law and accounting tends to establish the impression of the
result being some factual condition, pre-existing the act of judging. The results are merely
‘something’ that the judge or auditor ‘finds’ or ‘presents’ – judgment based on ‘careful rulebased investigation and diligence’. This is the language of profession-creation. For the
professions of law and accounting, the experts, namely, the lawyers and the accountants are
the only professionals capable and trained in deciphering this information, seemingly
factually pre-existing the act of discovery. In law, this is the language of legal positivism,
developed from doctrinal formalism.114 For accounting, this is the language of the dominant
positivist paradigm, popularised in the late 1960s.115
A
The Critical Audience: Law v Accounting
111
Roger Cotterrell The Sociology of Law: An Introduction (2 ed, London, Butterworths, 1992) 204.
Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for Radical Accounting”
(1991) 16 Accounting, Organizations and Society 763, 766. Moore acknowledges that this is deliberately
simplistic, but this is the original level of analysis as depicted by Moore. A passing look at the theory and
practice of accounting and law would begin to question many of the assumptions that underpin this
analysis. Of course, law and accounting are broadly similar, and in fact, the practice of law and accounting
is not dissimilar, in that much of the practice is generally language-based, opinion work. But equally, with
this, there are many differences.
113
Moore, above, 766. Of course, this has been updated to reflect current sources of accounting rules.
114
As alluded to earlier, this is the equation representation of law: Legal Rule A + Fact Scenario B = Result C.
See the working of HLA Hart. In particular, see HLA Hart The Concept of Law (Oxford, Oxford University
Press, 1961. For more general discussion, see Roger Cotterrell The Sociology of Law: An Introduction (2
ed, London, Butterworths, 1992) 56.
115
This, for example, holds that that profit is an entity discovered, and that objects exist independent of human
accounts of the objects. See, Wai Fong Chua “Radical Developments in Accounting Thought” (1986) 61
The Accounting Review 601-632, and see Watts and Zimmerman, 1986: 7. For Watts and Zimmerman,
Positive Accounting Theory:
112
…. is concerned with explaining accounting practice. It is designed to explain and predict which firms will and
which firms will not use a particular method … but it says nothing as to which method a firm should use.
17
Law and accounting are different. One of the prime issues for this paper is the
audience for which law and accounting are presented. CLS often has the advantage, in
respect of audience, of having the ability to appeal to the essential democratic function of
members of society. That is, if we are unhappy about civil rights, human rights, or some
other ‘public law’ concern, citizens, where they are allowed, have the ability to exercise a
degree of influence through their vote. But are critical accounting scholars in a similar
position? Who do critical accounting scholars appeal to and what is the aim of the appeal? Is
it mobilisation? Is it democracy in the broadest sense of the term? For me, this is the
difference. Of interest, though, is that the accounting profession has carefully constructed a
picture of the profession as serving a public function. This is loosely acknowledged by
legislative recognition of accounting standard setters and professional accreditation bodies. Is
that the aim of critical accounting? Do critical accountants agitate for change or action at the
margins? In my mind, this is one of the differences between critical accounting and CLS.
There is a difference in audience. Law and accounting are different. Both are powerful. This
is not an attempt to dispute that there is public space within accounting, and the accounting
profession claims to represent the ‘public interest’. For example, financial reports are
publicly presented in line with ‘publicly’ available standards. There is, at least, a pretension
of due process. However, in that light, the public forum is limited, as the information in the
public arena is largely aggregated, technical, numbers-based, and representative. The general
public does not often have access to the decisions that accounting and auditors make in the
pronouncement of the financial reports. Equally so, many critical legal theorists criticise the
legal process and actors for their attempts to ‘privatise’ the law. However, the essential
democratic right for citizens in countries determined by the rule of law, is that if a citizen so
wishes they are entitled to know the law, to find it, and understand the implications of the
law. The citizen is not required to do this, and many do not, but it is a right that they can
chose to avail themselves of, including a broad range of law from Parliament to Courts. Of
course, many aspects of the law are private, and they serve particular interests, namely the
client. However, the level of access and opportunity available within law is generally not
available within accounting. In my mind, if critical accountants are to draw useful lessons
from CLS, then we should be aware of the activities of CLS scholars in the more private
areas of law, in line with the more private activities of accounting. That, in my mind is a
useful comparison. Of course, though, we are not talking about absolutes here.
Thus, in drawing the lessons from CLS to critical accounting, and mindful of the
fundamental difference in audience, we should be aware of certain differences between law
and accounting, including:
a) The general accounting expectation gap; and
b) That the adversarial nature of accounting is private.
Accounting holds an incredibly powerful, albeit largely unrecognised role in day-today life. As Althusser argued, accounting is the language of capitalists, and therefore, is
inherently caught in the bourgeois conscience. Althusser, for example, in the preface to
Volume 1 of Capital stated:116
Those with no direct experience of capitalist exploitation and who are dominated in their
practices and conscience by the ideology of the dominant class, the bourgeois ideology
116
Louis Althusser Avertissement aux Lectures du Livre du Captial: Karl Marx, Le Capital (Flammarion, Paris,
1969) 9.
18
… find it extremely difficult to understand Capital (even if they are “very learned”, in
fact I would say, especially if the are “very learned”), because there is political
incompatibility between the theoretical content of Capital and the ideas they have in their
heads, ideas they see (since they put them there) in their practices.
Thus, there is little public knowledge of what takes place in accounting or what
accounting actually is. At the crude level, most members of the public have some knowledge
of the rules of law, but few have knowledge of the rules of accounting. Yet, much of our
public and private lives are guided, judged, and measured by accounting. While we have a
passing knowledge of the laws of theft, as determined by ethical, moral, and practical
recollection, very few of us have any knowledge of the rules in relation to the recognition of
an asset.
Morgan (1986) carefully argues as “subjective constructors of reality”, there is a
dichotomy between the practice of accounting and the perception of accounting:117
Accountants often see themselves as engaged in an objective, value-free, technical
enterprise, representing reality ‘as is’. But in fact, they are subjective “constructors of
reality”: presenting and representing the situations in limited and one-sided ways. They are
not just technicians practising a technical craft. They are part of a much broader process of
reality construction, producing partial and rather one-sided views of reality, exactly as an
artist is obliged to produce a partial view of the reality he or she wishes to represent.
The clever presentation of accounting and accountants involves the implication of
objectivity, science, technical processes, and a reliance on numbers. Morgan attempts to
dissect the improbability of these goals, holding that the myth of objectivity is important to
the public perception of accounting. In particular, he quotes Berkeley as saying that
“objectivity is always as much as part of the observer as the object observed”. 118 In other
words, the accountant will always be implicated in their account. The technical nature is
reinforced by the reliance on numbers. Gray, Owen and Adams question the underpinning
theoretical framework of accounting implicated in this depiction of accounting:119
If all agents were equal, and if markets were information efficient and if this led to
allocative efficiency and if this led, in turn, to economic growth and if this ensured
maximum social welfare and if maximum social welfare were the aim of society then
accounting is morally, economically and socially justifiable and may lay claim to an
intellectual framework.
Of course, this is not the case.
As indicated above, Moore acknowledges the common misconception by the
layperson that law is about words, and accounting is about numbers.120 Numbers are part of
the power of the accounting discourse. It is very difficult to argue with numbers. First, they
are the highly summative being the result of numerous valuation choices and ‘policy
decisions’. Second, the accounting number is highly representative. These factors render the
Gareth Morgan “Accounting as Reality Construction: Towards a New Epistemology for Accounting
Practice” (1988) Accounting, Organizations and Society 477.
118
Morgan, above, 482.
119
Rob Gray, Dave Owen, and Carol Adams Accounting and Accountability: Changes and Challenges in
Corporate Social and Environmental Reporting (Prentice Hall, London, 1996) 17.
120
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for
Radical Accounting” (1991) 16 Accounting, Organizations and Society 763, 765, 766.
117
19
accounting number deceptively simple, yet are the same, metaphorically, as an iceberg. The
vast majority of the accounting process is hidden from public view.
B
The General Accounting Expectation Gap
As discussed above, many people have a general idea of accounting, but very little
knowledge of the processes of accounting. However, the presentation of accounting is one of
the key elements of the power of accounting. Moore attempts to argue that there is similarity
between law and accounting due to equivalences between the sources and form of rules and
that there is equivalence between the role of the auditor and the role of the judge. For me, this
comparison is fraught with difficulty. The role of the auditor is vital for the accounting
process, lending credibility to the accounting process, through a mix of process, language and
perception. The auditing process is a self-check process, seeking to determine the ‘accuracy’
of the accounts. The role of the auditor in New Zealand is to determine ‘accuracy’, indicating
whether the accounts present a ‘true and fair view’ and whether the company has complied
with GAAP in their accounts.
But, what does an auditor actually do? Enter the auditing expectation gap:
a) The auditor examines a small proportion of the accounts of a business, ranging
between 5-15 per cent in order to form a judgment as to the ‘accuracy’ of the
financial accounts. This is based on an assessment of risk and familiarity with the
business;
b) If an error is discovered, the auditor determines whether the error at hand is a
significant error, and the standard auditing measure is whether the error represents
1-5 per cent of the value of the business, depending on the size of the business;
c) Once satisfied with the accounts, the auditor will sign off on the accounts. They
will sign that: 1) That these accounts present a true and fair view; and 2)
Compliance with GAAP.
The auditing expectation gap is fully represented here: 1) Auditors only check a small
proportion of the accounts, but provides a representation that the accounts are true and fair.
Much of society is wholly unaware of this. 2) Only significant errors matter. One to five per
cent of value can be a significant amount. However, societal perception of the auditing
process is that auditors seek out errors, not just significant errors. 3) Finally, for me, the key
to the misconceptions about the auditing process relates to the sign off. This is ‘a’ true and
fair view. The most important word in that phrase is ‘a’. It is ‘a’ true and fair view. In
structural linguistics, ‘a’ view implicates that there may well be other ‘true and fair’ views. It
is not ‘the’ true and fair view, but ‘a’ true and fair view. And in saying that, what is a ‘true
and fair view’ anyway?
In relation to the overarching theme of this paper, then, in comparing law to
accounting, and drawing subsequent lessons from CLS to critical accounting, critical
accountants should pay careful attention to the general accounting expectation gap. The
construction and maintenance of the general accounting ‘expectation gap’ is key to this
discussion.121 There are two aspects that underpin the general accounting expectation gap:
121
This expectation gap differs from the traditional auditing expectation gap.
20
a) A misunderstanding as to the purpose of accounting. In New Zealand, the
Statement of Concepts provides a depiction of purposes of accounting.
Essentially, the purposes of accounting are accountability and decision
usefulness.122 The Statement of Concepts at paragraph 3.1 states:123
The objectives of general purpose financial reporting are to provide information
to assist users in:
(a) assessing the reporting entity’s financial and service performance, financial
and position and cash flows;
…
(c) making decisions about providing resources to, or doing business with, the
reporting entity.
Although the Statement of Concepts defines accountability as “the requirement
for one party to account to another party for its performance over a given
period”,124 the theoretical framework underpinning accounting has limited the
concepts of accountability and decision usefulness. In that sense, the power of the
assumptions of positivism, including shareholder wealth maximisation, rational
actor theory, and agency theory traditionally has rendered accountability to mean
accountable for the use of the investors’ funds. That is, in agency theory
terminology, as the owners of capital wealth are separated from their capital
which they invest in an enterprise, then they are due an information flow to
explain the past transactions and events that used the shareholder funds (how
have you used my money?). Similarly, the notion of decision usefulness has been
limited to reflect the assumptions of positivism. In this light, traditionally,
decision usefulness reflects the provision of information to prospective
shareholders and creditors (should I invest or should I sell my goods to this
company?). Napier would argue that this is focus is illustrative of the ‘business
company” view of the firm, where the business exists as a matter of right,
independent of its shareholders, as a medium for the promotion of capital
investment.125 As a consequence of this emotional and practical separation from
the company, shareholders no longer view the company as belonging to them, as
their company.
b) A misunderstanding of how the rules of accounting operate. This is largely based
around the public conceiving accounting rules as though it is like any other law.126
The rules of accounting differ to the general type of law that Parliament provides.
Although grossly simplified, in the passage of legislative provisions, the law is
fairly straightforward and clear. That is, parliamentary law is generally black and
122
Of course, each attempt at providing a conceptual framework definition of the underlying purposes sets out a
different interpretation of what these terms mean and represent. This lead Hines in a series of papers, 1989,
1990 and 1991, to argue that conceptual framework projects are essentially a political process: “a strategic
manoeuvre for providing legitimacy to standard-setting bodies during periods of competition or threatened
government intervention”.
123
Institute of Chartered Accountants of New Zealand [ICANZ] New Zealand Accounting Standards
(Wellington, ICANZ, 2003) 4 of the ‘Statement of Concepts’.
124
New Zealand Accounting Standards, above.
125
Christopher J Napier “Intersections of Law and Accountancy: Unlimited Auditor Liability in the United
Kingdom” (1998) 23 Accounting, Organizations and Society 105-128.
126
Of course, this is not to expect that every member of the public is aware of the legal status of the rules of
accounting, as delegated legislation.
21
white. In essence, the law of murder is clear – ‘do not murder’. Of course, many
critical legal theorists would argue that any law is inherently indeterminate and of
course, it is more complicated than this, but it is illustrative. Most people,
especially in criminal law are generally aware of the law, but few are aware of the
rules of accounting. Accounting’s rules are much different. Accounting’s rules
merely provide guidance. They are not as ‘black and white’ as the impression held
by the general public about parliamentary laws; the rules of accounting are more
‘grey’. The structure of rules in accounting is equally murky, with the
introduction of International Financial Reporting Standards (IFRS), modified
IFRS for sector neutrality, New Zealand’s Statement of Concepts, and the
overarching notion of authoritative support and GAAP. Indeed, the measure of a
good accountant is their ability to argue for an accounting treatment that best suits
their client, and this results in the old accounting joke, of 100 accountants looking
at the same figures providing 100 different results. In short, and as an example of
this, consider the view that Moore presents of the rules of accounting. Moore
equates the rules of law with the rules of accounting by holding that there are
similarities between the disciplines in the claim to bodies of written and unwritten
rules of judgment and conduct.127
Thus, it is submitted that the general accounting ‘expectation gap’ is relevant to the
consideration of the lessons that critical accounting can learn from CLS. Although the law is
riddled with attempts to gain a strategic advantage, the judicial process lays out much of this
for public scrutiny. This is not the case in accounting; in part, this relates to the difference in
the adversarial processes of law and accounting.
C
The Adversarial Nature of Law and Accounting
Law is inherently an adversarial process. In terms of legal positivism, it is this
adversarial nature that often allows law to escape criticism, as it is perceived as being
inherently critical. For although law is adversarial, it is adversarial within a tight confined
framework – that is the confines of legal positivism limit the practice of law to a
consideration of a limited notion of adversary – there are degrees of critical. But in this light,
the adversarial nature is a public process. Think of the courtroom. The notion of judges,
lawyers, witnesses, defendants, and prosecutors is a forum that displays at its every turn, the
processes of adversary. Lawyers contend, counter-contend, judges intervene and question,
witnesses are examined and cross-examined. This is a process of adversary. Consider for a
moment a legal judgment (especially under a common law jurisdiction). Most judgments
follow a similar pattern. The presiding Judge presents an outline of the case, and the primary
issues of law in relation to the case. This is usually followed by an outline of the arguments
presented before the court. The judge the presents his or her (and still this is primarily his)
detailed analysis of the issues, law, facts, witnesses, submissions, and any other ‘relevant’
material. Based on this the judge will determine the case at hand. In this light, it is not
uncommon to see the adversarial nature of the judgment process enter into to a judgment, in
that a common phrase uttered in the Courtroom is “if I am wrong, then the matter would be
decided this way …”.
127
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for
Radical Accounting” (1991) 16 Accounting, Organizations and Society 763.
22
What is the point of this discussion? For me as a lawyer and an accountant, this is
illustrative of a key point of distinction between the professions. If there is a dispute in law,
then the public has access to the terms of the dispute. But for Moore, the role of the auditor is
the equivalent of the role of the judge. If there is a dispute in the audit process, do the public
have access to the terms of the dispute? In most cases, the answer is no, unless the dispute
results in a judicial proceeding. Law is an inherently adversarial process, but that adversary is
deliberately public.128 That is, the legal system has been established with the basic tenet that
law changes over time (that is law is challengeable and changes). Of course the rhetoric of
liberal legal theory is that law should change gradually over time, but within the boundaries,
due to essential adversarial nature of law, there is scope for change. There are a number of
ways of course to attempt to persuade a judge:
a) The weight of authority - through the process of stare decisis (the rules of
precedent) change can occur. For example, within stare decisis there exists for
scope about authority, including jurisdictional weight. That is, in New Zealand, a
judgment from the House of Lords or High Court of Australia is likely to have
more authoritative effect in a New Zealand Court than, say, a judgment of the
United States Supreme Court due to the similarities of the Australian and United
Kingdom legal systems in comparison to the Constitutional based Supreme Court.
b) The presentation of evidence and fact - New Zealand Courts operate within an
open adversary process. As a consequence, formal briefs of evidence are passed
between Counsel. Thus the scope for court theatrics is diminished, but there is
still scope in cross-examination to convince the court of your particular case.
c) Public policy – In relation to statutory law, there is a need for interpretation, and
again, within a limited framework, there is scope for arguing for alternative
meanings and intentions. This allows the introduction of other forms of evidence
such as Parliamentary debates to provide more informed understandings of the
text of statutes. Further, the law is open to arguments based on public policy.
These can be successful, but the general rule is that such arguments should be
factually based.
Accounting, similarly, is an inherently adversarial process – accounting is built
around suggested practice, authoritative support, conceptual frameworks, and GAAP.
Essentially, then, there is an adversarial process within accounting, but it plays a significantly
different role than the adversarial nature of law. The adversarial nature of accounting is not
for public display, nor publicly available – all that the public receives is the public accounts
(the annual reports). This numerical document is not particularly informative, and it is even
harder to argue with. What does a profit mean? How does one challenge it? If the adversarial
process that leads to the construction of these results is not publicly open to challenge and is
locked in the vault of the accounting firm and the preparing accountants, then this represents
a significant difference between law and accounting. The process of accounting, then, is not
the equivalent of the process of law. The practice of accounting, contrary to the impression
from Moore’s original paper, is essentially hidden from public consideration, observation,
criticism, and discussion. This is the power of the categories, representation, summation, and
aggregation of the process of accounting. Assets, liabilities, revenues, expenses, capital, and
128
Of course, there are areas of private law, say a contract, which will never see the light of day, as they will not
be disputed before a court.
23
profits, for example, are integral accounting concepts, but they are the result of a process of
subjective, value-laden choice. In that sense, evidence of the adversarial process of
accounting is lost in the translation of that process to the technical categories and formal
presentation of the accounts of a business.
At no stage is this paper attempting to deny that accounting has many public
functions, or that there is public space within accounting. Of course there are examples of
public contestation of accounting figures, and there are examples where the Courts and other
regulators have ‘questioned’ accounting figures. In particular, one of the key policy decisions
facing the area in which I live is the ‘best’ method of improving a section of road known as
the Western Corridor. It is clear that improvements are required to this section of road, or that
an alternative route must be constructed. This has resulted in considerable public debate
about the ‘best’ option, and a number of factions have emerged. However, the result of this
division is that the Transit New Zealand’s costing estimates are fair game. People do contest
accounting figures, with costs varying for one project from $683 million to $1.3 billion.129
But the degree of this contestation is significantly reduced from the public contestation of
law and legal processes, and significantly less common.130
Finally, on this point, the challenge for critical accounting does remain. In essence,
who is the client? It is my belief that critical accounting should not merely be the sole
domain for critical accounting academics. CLS, itself, is not solely confined to CLS
academics, and can always appeal to the openly adversarial nature of law. Critical
Accountants, here, face a hurdle. If, as Althusser, argued, ‘accounting is the language of
capitalism’, then critical accountants will struggle in their pursuits if it is an attempt to
convince capitalists that they should change their accountings. Clearly, that is a difficult, if
not a hopeless task. Given the tenets of the accounting system that the neo-classical
economic platform of rational actors, shareholder wealth maximisation, and agency theory,
there is little room for the acceptance and introduction of alternatives.131 Of course, there will
always be exceptions, but are we searching for the exception? The challenge to critical
accounting, and this is definitely improving, is to find the client. In terms of lessons to be
drawn from CLS, critical accountants should be looking to successful CLS work concerning
the essentially private areas of law, which are not subject to the open adversarial processes of
other areas of law.
D
Evaluating the Differences
129
See <www.stuff.co.nz> for more debate on the proposed Western Corridor road improvements.
For example, consider a legal or accounting firm. In short, what is the driving force behind the success or
failure of any accounting firm? Of course, many will argue that profits drawn from a client base is the key
to success, but before we can claim that, it is necessary to have human capital. That is, without the
accountants and lawyers to aid and advise clients, there would be no profits being drawn. Question: how
does accounting treat the vital component of human capital, so important to success or failure? Accounting
treats human capital as a cost. Accounting has no ‘accepted’ method for the recording of human capital. It
is argued that such recognition is too ‘subjective’, and that ‘human capital’ in today’s society is simply too
mobile, and that there are difficulties over the notion of ‘control’ within the definition of assets in
accounting. Yet, what is the implication of treating the lifeblood of a business as a cost? Traditional
management accounting theory, of course, would argue (in a simplified form) that any business should seek
to minimise costs.
131
In some ways, this will serve as a thinly veiled critique of the engagement practices of social accountants and
the business-praxis model. Many social and environmental accountants favour working with and alongside
business. I am not sure, personally, if this strategy is likely to be successful.
130
24
These subtle theoretical differences between law and accounting, between the
position of the two disciplines: critical audience, the accounting expectation gap, and the
differences in the adversarial nature of the two disciplines are important. We accept that law
and accounting are broadly similar, but the differences are significant, and consequently it is
difficult to draw direct comparisons between CLS and critical accounting. The submission is
not that the two disciplines and the two critical movements are not interrelated or that they
cannot learn from each other, but that there are significant differences that inhibit and
challenge a mere translation between the two disciplines and critical movements. Thus, in
drawing the lessons from CLS to critical accounting, and mindful of the fundamental
difference in audience, we should be aware of certain differences between law and
accounting.
V
SUBMISSION TWO – THE ‘DEATH’ OF CRITICAL LEGAL STUDIES
Moore was correct in that critical accounting could learn from CLS. However, this
second part of the paper will argue that there are important lessons that critical accounting
should draw from CLS that Moore fails to acknowledge. There are three areas in particular
that draw from the experience of CLS that critical accounting should learn from:
1) The perceived failure of CLS to be ‘critical’, ‘radical’, or to put things at risk;
2) The need for a supportive, committed community; and
3) The CLS scholars and the tenure wars.
A
Putting Things at Risk: Accounting and Law
One of Moore’s prime critiques of the critical accounting movement is that it places
nothing major at risk. However, for me, one of the primary reasons underpinning this
difference is critical accounting’s pre-occupation with methodology. Moore criticises
accounting for “[t]he hopelessly indirect social-science prose style of accounting
research”.132 Methodological issues are vitally important, but in attempting to exist in both
CLS and critical accounting environs, there is a significant difference between the
scholarship of CLS and critical accounting. A lot of accounting research is directed to
following the pattern of previous research. In writing my first accounting research project as
an Honours student, I struggled immensely with attempting to follow this pattern: method,
methodology, a structured literature review, and research limitations. In short, for an
experienced researcher in law, this was a completely foreign experience. For law, there is a
plethora of research, but a dearth of research processes or methodology. Legal research
focuses much more heavily on the problem, which is a method in its own right. However,
accounting research focuses much more on methodology. In my respectful submission, this is
falling into the hands of the accounting positivists. That is, accounting positivists are able to
essentially ignore the critical attack on accounting by focusing on the methodological
differences. For example, three common limitations presented in critical research is that the
research is subjective, the research is not repeatable, and that the research is not
generalisable. Provided that there is an accepted or acceptable methodology and method
applied to the collection and analysis of data relevant to the site of study, then it is counterintuitive to attempt to apply ‘objectivity’ criteria to the material. If, as Morgan discusses,
132
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for
Radical Accounting” (1991) 16 Accounting, Organizations and Society 763, 783.
25
“objectivity is always as much as part of the observer as the object observed”, then all
research is subjective. Equally so, on a strict basis, no research is repeatable, because all
research is particular to the observer, and further all research is particular to the conditions
and time of the original research. Finally, in this respect, the failure to generalise from
alternative research is an overplayed card – research will always be limited by the
particularities of the site of study. Let me simply state that critical and alternative research is
generally based upon a social constructionist epistemology – subjectivity and subjectivism
abounds.
It is vital that all researchers are aware of alternative research paradigms, as it should
provide valuable insight into a researchers particular paradigm at any one time, but there is
no meta-paradigm. All research should not be adjudged according to the rules of a leading
paradigm. Just because positivism dominates both the practice of law and accounting should
not result in all research being judged in relation to the foundations of the positivist
paradigm. As Moore notes about CLS and claims to ‘scientific objectivity’, the language of
the positivist accounting researcher is “one more rhetorical strategy”, which is “conservative
in nature”, and “historically been possessed by those already in power”. 133 In my experience
in accounting research, compared to legal research, accounting research critical theorists and
other alternative researchers spend too much time addressing the positivist paradigm. In
doing this, it is easy to fall into the positivist traps. In this sense, nothing major is placed at
risk because serious research is discarded on the basis of methodology and method.
1
Evaluating the Risks Taken by Critical Accounting
Moore argues that:134
“[Critical accounting] suggest[s] no serious or consistent consequences for its critique …
the critical attacks have placed nothing major at stake”.
In essence, I have never been fully comfortable with this claim, largely due to Moore
underlying reasoning for this claim. Essentially, Moore argues that critical accounting has
failed to put anything at risk, as comparatively, CLS has achieved much more influence and
‘success’ than critical accounting. In contrast, Moore comments that:135
CLS also sees reality not as objectively available outside of discourse, but as socially
constituted in signifying systems. But unlike critical accounting, CLS makes clear what is
at stake in this battle over reality: control over social ‘facts’, and control over the US
Constitution.
As a consequence, critical accounting has ‘placed nothing major at stake’, for as Moore
discusses:136
Why is this? Is it because accounting’s Critical epistemological theorizing has gone on n
closed rooms only? If so, then, this is a major weakness, for how can you claim to have
attacked, if your adversaries are still not aware that they have anything to lose … the point
for accounting, though, remains: claims to epistemology do have consequences, and these
consequences must be insisted upon if one wishes anybody to engage you in serious debate.
133
Moore, above, 776.
Moore, above, 775.
135
Moore, above, 775.
136
Moore, above, 775-776.
134
26
Argument over the comparative successes of the critical schools is a particularly
misleading and ‘dangerous’ exercise. ‘Success’ and critical theory, conceptually, do not
necessarily see eye-to-eye. Critical theory will often seek change, but measures of change are
difficult to gauge. My worry is that if we begin to consider success, then this seems to
implicate natural progression and some finality. Sure in law we can point to human rights,
gender equality, discrimination laws, and the list goes on; but in accounting we could point to
sustainability accounting, increasing access to accounts for Trade Unions and employees, and
changes to the education process. But in short, a huge number of problems exist in both
disciplines. And further, are we happy or satisfied with the changes that have occurred: Do
we really have equality? Are there issues with the notion of ‘universal’ human rights? Why
do we need discrimination laws in the first place? Are we really sustainable? Critical theory
is not medicinal; it is not supposed to be a panacea. In discourse terminology, any ‘solution’
is contested and contestable. Changes do not eliminate power from society; power relations
still exist and may change form and influence. To me, the risk of claiming successes would
seem to implicate some sort of positivist agenda, in the capacity of gradual change over time.
2
Evaluating the Risks taken by CLS
If Moore critiques of critical accounting for the failure to place nothing major at
stake, then the impression from this evaluative statement must be that CLS, comparatively,
had been successful at placing major things at stake. Moore argues that CLS has been “much
more aggressive in pointing to the consequences of the various theoretical stances … CLS …
is a much broader-gauge movement than Critical Accounting insofar as … CLS has extended
the scope of its critiques to may everyday practices, has taken a maverick stance within the
legal profession, and has gone beyond pure critique by presenting alternative program for
justice”.137
Really? With respect to Moore, this overly romanticises CLS, the significance of
CLS, and the success of the CLS movement. There is a distinct thread of CLS scholarship
that criticises the attempts of CLS for failure to put anything major at risk in liberal legal
theory. For example, Goodrich, in a ‘famed’ article challenges the politics of the CLS
movement in the United States of America.138 “Sleeping with the Enemy” is an essay that
examines contemporary CLS and its attempts to create “a justice of the future”. For
Goodrich, CLS fails in its ‘radicalism’ because it focuses on “a reality whose object is
defined by the citation of other critical legal texts”.139 In a call to CLS to engage in the
political-praxis invoked by critical theory (and this, in my mind, is one of the lessons that
critical accounting must learn), Goodrich argues:140
The politics of legal critique are the politics of a particular profession, a questioning of the
law of law, and also a questioning of our place within and responsibility for the tradition.
The marks of politics in the discourse of critique are neither familiar nor obvious: they do
not relate directly to a specific content or program but rather to an ethics; they do not
belong directly to a given tradition but rather to a necessarily ambiguous and potentially
137
Moore, above, 780-781.
Peter Goodrich “Sleeping with the Enemy: An Essay on the Politics of Critical Legal Studies in America”
(1993) 68 New York University Law Review 389.
139
Goodrich, above, 420.
140
Goodrich, above, 422. Boyle raises similar polemical concerns about the nature of CLS jurisprudence in
James Boyle “The Politics of Reason: Critical Legal Theory and Local Social Thought” (1985) 133
University of Pennsylvania Law Review 685.
138
27
subversive place or space in the legal academy … The politics of reason is not simply a
local politics; it is oppositional, fragmentary, and frequently obscure.
Brosnan provides a detailed critique of the CLS movement in relation to its attacks on
liberal legal theory (LLT), the dominant (legal positivist) paradigm through which law
operates.141 Brosnan carefully enunciates a critique of CLA holding the thesis that:142
CLS … has not succeeded in forming, or perhaps even laying the foundations of, a radical
critique of LLT …
Simply, Moore has overstated the case for CLS. Critical theory, in general, faces this
issue, and thus, while critical accounting has not necessarily succeeded in avoiding this
problem, neither has law. For ‘progressive social change’, critical theory must put something
at risk. Critical accounting can learn from the inability of CLS to make significant steps in
forming a critique of liberal legal theory.
B
The CLS Community?
Moore argued that one of the key problems facing critical accounting in relation to
CLS was that there was “[a] lack of Critical self-declaration of community”.143 Moore
comments, further, that, “it is worth noting again that CLS has been an independent
membership organization since its earliest days in the 1970s”.144 But while the early years
were perhaps marked by the existence of the Conference of Critical Legal Studies, this was a
fairly short-lived experience, and was essentially gone by the mid-1980s.
In short, the CLS ‘community’ is non-existent. Duncan Kennedy, arguably the most
well-known CLS scholar, is famous for commenting that CLS in the United States is “dead,
dead, dead’.145 For many contemporary CLS scholars, the lack of a CLS ‘community’ is
exactly the challenge facing CLS today. For CLS, there is no “venue within which everyone
who identifies himself or herself as a critical legal scholar can come together”.146 For
example, Tushnet notes that in the early development of CLS, the leading scholars rejected
the idea of creating a specialised journal.147 Drucilla Cornell, a well-known Feminist Legal
Theorist, comments in an interview that:148
Donald F Brosnan “Serious but not Critical” (1987) 60 Southern California Law Review 259.
Brosnan, above, 263.
143
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its Lessons for
Radical Accounting” (1991) 16 Accounting, Organizations and Society 763, 783.
144
Moore, above, 783.
145
See Robert C Ellickson “Trends in Legal Scholarship: A Statistical Study” (2000) 29 Journal of Legal
Studies 517, 525 in footnote 21.
146
Mark Tushnet “Survery Article: Critical Legal Theory (without Modifiers) in the United States” (2005) 13
The Journal of Political Philosophy 99. Tushnet also argues that Kennedy over-stated the death of CLS,
commenting that: 1) “those who wrote important articles early in the career of critical legal studies continue
to do so” and 2) “major components of critical legal studies have become the common sense of the legal
academy”.
147
Tushnet, above, 101. Reasons cited for this choice include the diversion of energy required to establish a
journal, that the large number of existing journals provided adequate outlets for publications, and that
publishing in a ‘captive’ journal would affect tenure for junior staff.
148
The text of the interview with Professor Drucilla Cornell can be found at
<http://www.radicalphilosophy.com/default.asp?channel_id=2190&editorial_id=10754> (last accessed 28
February 2006).
141
142
28
Regrettably there's very little organized presence of either Critical Legal Studies or what
were called the `femcrits' in the legal academy in the United States in 1994. In the late
seventies and early eighties when I was a law student, there was something that was called
the Conference of Critical Legal Studies, and it had the effect of being a movement. We
had yearly conferences; there was a sense of political intervention in the academy, as well
as academic discourse promoted by critical legal studies. The femcrits came out of a
confrontation of feminists with critical legal studies over the impossibility of feminists
being heard … For several years the femcrits were an organized presence, but all that has
been dispersed. There are still women who would consider themselves as writing in
feminist jurisprudence, and there are still people who would consider themselves associated
with the Conference of Critical Legal Studies, but the experience of movement has
disappeared. There was some repression, meaning that people were fired - myself and Clare
Dalton being two examples, although there are many more.
Critical accounting, comparatively, despite the difficulties in achieving institutional
‘acceptance’ has managed to achieve, I would submit, a fairly strong sense of community. It
is not particularly large, but the community of like-minded or like-motivated individuals are
committed to the ‘cause’. The existence of the tri-annual cycle of the IPA conference
(Interdisciplinary Perspectives in Accounting), CPA (Critical Perspectives on Accounting),
and APIRA (Asia Pacific Interdisciplinary Research in Accounting) are illustrative of the
success of the drives in accounting to develop ‘community’.
In this respect, critical accountants have been, I would argue, more ‘successful’ in
fostering a community of support than CLS. The lessons to learn include: a) ensuring that
there is space for the publication and debate of critical accounting work, and consequently,
the ‘alternative’ or critical journal arrangements need to continue; and b) it is vital to
continue the conference program, as the conference atmosphere is vital for support,
community, and the building of more informed, more developed research.
C
Tenure Wars
A short Internet search on Critical Legal Studies and tenure soon highlights the issues
for CLS scholars in relation to obtaining tenure in the United States. There are many
examples, some of them high profile, of ‘tenure wars’ over CLS scholars being denied
tenure. In particular, major examples include Harvard Law School, Yale Law School, and
Minnesota Law School. The clashes between the critical theorists and the liberal legal
theorists escalated to the extent that Harvard was labelled “the Beirut of legal education”.149
Cornell, in the same interview comments that:150
[The denial of tenure] was seen by people in the Conference of Critical Legal Studies as a
response to our association with them. I'm a leftist, so when I became a law professor I
affiliated with the left that was available to me, but my own intellectual and political
history is very different from the Conference of Critical Legal Studies.
Austin discusses the Harvard conflict at length in a book entitled The Empire Strikes
Back. He summarises the Harvard conflict in the following manner:
149
150
Arthur Austin The Empire Strikes Back: Outsiders and the Struggle over Legal Education (New York
University Press: New York, 1998).
The text of the interview with Professor Drucilla Cornell can be found at
<http://www.radicalphilosophy.com/default.asp?channel_id=2190&editorial_id=10754> (last accessed 28
February 2006).
29
The Harvard conflict revealed much about power, motive, and strategy. Even with support
from a circle of sympathetic friends, the Crits did not have the numbers to pose a serious
threat. On the Liberal side, the bitterness cut deep, prompting liberals to retaliate against
the Crits with the ultimate academic weapon: a lockout on promotion and tenure. As a
tactic it was successful; as strategy it was a disaster. The Crits wrapped themselves in the
cloak of martyrdom, yelled about academic class warfare, and accused the dominant
Liberal authoritarians of beating up on the vulnerable Critical Legal Studies people. They
played the oppression game of victimology politics. Within a short time the oppressed
category was expanded to include feminists and minorities.
…
Push always comes to shove when the issue is scholarship. As the Harvard experience
demonstrates, scholarship is where the power resides, and control of scholarship is control
of the legal academy. Since the turn of the century, Liberals have used the treatise and the
analytical style of the doctrinal methodology to educate and guide judges, lawyers, and law
professors. Everything in the academy, from hiring, promotion, tenure, and salary to the
world of perquisites, depends on adherence to the accepted criteria of scholarship.
Perhaps CLS is not dead. Tushnet is correct to point out that the leading CLS
scholars, “those who wrote important articles early in the career of critical legal studies,
continue to do so”.151 There have been changes in legal education, and as Moore argues there
have been significant institutional, legal changes which could be tied to the CLS movement,
such as gender equality and discrimination laws. However, Tushnet is equally correct in
pointing out that CLS scholars are far less likely to use the label CLS in their work: “Works
self identified as critical legal studies, full stop … are rare”.152
In a different sense, critical accounting has dealt with this issue, in relation to journal
publications. The existence of gatekeepers of knowledge will always be an issue in academia.
For accounting, the existence of gatekeepers is no better illustrated than in relation to the
journals and the Atlantic divide. Academic accounting in the United States is dominated by
the positivism. There are the academic exceptions who have enjoyed successful careers in the
US, but few Critical Accountants have managed to enjoy success at the top US business
schools – and this partly to do with the control that businesses have over US business
schools. But in saying that, most accounting academics would note that the perceived top
accounting journals tend to be positivist, and tend to be based in the US. The CLS, tenure
experience is a lesson that critical accounting should learn.
VI
CONCLUSION
This response does not dispute the main message from Moore’s original article in that
critical accounting can learn valuable lessons from CLS, but rather, this response seeks to
argue that the lessons to be learned requires modification from those identified by Moore.
The essence of the original judgment is that critical accounting can learn from CLS, as they
are broadly similar disciplines. I cannot agree. It is not possible, in my submission, to directly
translate CLS to critical accounting. Rather, there are lessons that critical accounting can
draw from CLS, but in doing that, critical accountants need to draw out the nuances and
subtleties of accounting that render it sufficiently different from law. In particular, this
includes the differences in the critical audiences of law and accounting, the general
accounting expectation gap, and the private adversarial process of accounting.
Mark Tushnet “Survery Article: Critical Legal Theory (without Modifiers) in the United States” (2005) 13
The Journal of Political Philosophy 99-100.
152
Tushnet, above, 99.
151
30
In the latter part of the paper, it is argued that there are a series of lessons that critical
accounting could draw from CLS based on the difficulties and challenges faced by CLS.
These include the perceived failure of CLS to be ‘critical’, ‘radical’, or to put things at risk,
the failure of CLS to develop a supportive, committed community, and the experience of
CLS scholars in relation to the denial of tenure and the associated tenure wars.
In short, critical accounting can learn many important lessons from CLS, but
unfortunately, it is not a direct translation due to the subtle differences between the two
disciplines.
VII
BIBLIOGRAPHY AND REFERENCES
Books and Article
Louis Althusser Avertissement aux Lectures du Livre du Captial: Karl Marx, Le Capital
(Flammarion, Paris, 1969).
Andrew Altman “Legal Realism, Critical Legal Studies, and Dworkin” (1986) 15 Philosophy
and Public Affairs 1.
Arthur Austin The Empire Strikes Back: Outsiders and the Struggle over Legal Education
(New York University Press: New York, 1998).
Katharine T Bartlett “Feminist Legal Methods” (1990) 103 Harvard LR 829.
Leslie Bender “An Overview of Feminist Torts Scholarship” (1993) 78 Cornell L Rev 575.
James Boyle “The Politics of Reason: Critical Legal Theory and Local Social Thought”
(1985) 133 University of Pennsylvania Law Review 685.
Michael Bromwich and Anthony Hopwood ‘The Intertwining of Accounting and the Law’ in
Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall
International (UK) Ltd, Hertfordshire, 1992).
Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice Hall
International (UK) Ltd, Hertfordshire, 1992).
Donald F Brosnan “Serious but not Critical” (1987) 60 Southern California LR 259.
David Gray Carlson “Duellism in Modern American Jurisprudence” (1999) 99 Columbia LR
1908.
Wai Fong Chua “Radical Developments in Accounting Thought” (1986) 61 The Accounting
Review 601-632.
Roger Cotterrell The Politics of Jurisprudence: A Critical Introduction to Legal Philosophy
(University of Pennsylvania Press, Philadelphia, 1989).
31
Roger Cotterrell The Sociology of Law: An Introduction (2 ed, London, Butterworths, 1992).
RJ Craig and JH Amernic “Enron Discourse: The Rhetoric of a Resilient Capitalism (2004)
15 Critical Perspectives on Accounting 813-852.
Charlie Cullinan “Enron as a Symptom of Audit Process Breakdown: Can the SarbanesOxley Act Cure the Disease?” (2004) 15 Critical Perspectives on Accounting 853-864.
Margaret Davies Asking the Law Question: The Dissolution of Legal Theory (2 ed, The Law
Book Company, Sydney, 2002).
Craig Deegan and Grant Samkin New Zealand Financial Accounting (McGraw-Hill Book
Company, Auckland, 2001).
Robert C Ellickson “Trends in Legal Scholarship: A Statistical Study” (2000) 29 Journal of
Legal Studies 517.
Eric M Fink “Post-Realism, or the Jurisprudential Logic of Late Capitalism: A Socio-Legal
Analysis of the Rise and Diffusion of Law and Economics” (2004) 55 Hastings LJ 931.
Alan D Freeman “Truth and Mystification in Legal Scholarship” (1981) 90 Yale Law Journal
1229.
Peter Goodrich “Sleeping with the Enemy: An Essay on the Politics of Critical Legal Studies
in America” (1993) 68 NYULR 389.
Rob Gray, Dave Owen, and Carol Adams Accounting and Accountability: Changes and
Challenges in Corporate Social and Environmental Reporting (Prentice Hall, London,
1996).
Rob Gray “Of Messiness, Systems and Sustainability: Towards a more Social and
Environmental Finance and Accounting” (2002) 34 The British Accounting Review 357386.
Tom Hadden and Denis Boyd ‘The Legal Control of Accounting Standards: A Critical View’
in Michael Bromwich and Anthony Hopwood (eds) Accounting and the Law (Prentice
Hall International (UK) Ltd, Hertfordshire, 1992).
Institute of Chartered Accountants of New Zealand New Zealand Accounting Standards
(Wellington, ICANZ, 2003).
Bernard E Jacob “Ancient Rhetoric, Modern Legal Thought, and Politics: A Review Essay
on the Translation of Viehweg’s “Topics and Law”” (1995) 89 Nw U L Rev 1622.
Cheryl R Lehman and Gahrettin Okcabol “Accounting for Crime” (2005) 16 Critical
Perspectives on Accounting 613-639.
Dennis Lloyd The Idea of Law (Penguin Books, Harmondsworth, 1983).
32
Christopher McCrudden (ed) Regulation and Deregulation: Policy and Practice in the
Utilities and Financial Services Industries (Oxford, Oxford University Press, 1999).
A Mitchell, P Sikka, and H Willmott “Sweeping it Under the Carpet: The Role of
Accountancy Firms in Moneylaundering” (1998) 23 Accounting, Organizations and
Society 589-607.
Francis J Mootz III “Rhetorical Knowledge in Legal Practice and Theory” (1998) 6 S Cal
Interdisc LJ 491.
David Chioni Moore “Accounting on Trial: The Critical Legal Studies Movement and its
Lessons for Radical Accounting” (1991) 16 Accounting, Organizations and Society 763.
Gareth Morgan “Accounting as Reality Construction: Towards a New Epistemology for
Accounting Practice” (1988) Accounting, Organizations and Society 477-485.
Christopher Napier and Christopher Noke ‘Accounting and the Law: An Historical Overview
of an Uneasy Relationship’ in Michael Bromwich and Anthony Hopwood (eds)
Accounting and the Law (Prentice Hall International (UK) Ltd, Hertfordshire, 1992).
Christopher J Napier “Intersections of Law and Accountancy: Unlimited Auditor Liability in
the United Kingdom” (1998) 23 Accounting, Organizations and Society 105-128
Dean Neu and Monica Heincke “The Subaltern Speaks: Financial Relations and the Limits of
Governmentality” (2004) 15 Critical Perspectives on Accounting 179-206.
Richard Posner Economic Analysis of Law (4 ed, Boston, Little, Brown, and Company,
1992).
Prem Sikka and Mark P Hampton “The Role of Accountancy Firms in Tax Avoidance: Some
Evidence and Issues” (2005) 29 Accounting Forum 325-343.
Stephen Todd (ed) The Law of Torts in New Zealand (3 ed, Wellington, Brookers, 2001).
Mark Tushnet “Survery Article: Critical Legal Theory (without Modifiers) in the United
States” (2005) 13 The Journal of Political Philosophy 99.
33