Accounting’s ‘sins of omission’: ‘hard’ methods or ‘soft’ stories?

Posted by Alice Bryer - Oct 17, 2019

Economics has committed ‘sins of omission’, George Akerlof (2019), the Nobel Prize winning economist, claims in a recent article.  In a damning critique Akerlof argues that economists commonly avoid important issues in society, including financial crises and climate change, because of an institutionalized bias in favour of ‘hard’ (‘scientific’) methods and against the ‘soft’.  While conceding that hard methods, such as econometrics, have their place, Akerlof calls for serious attention to the soft methods, long favoured by anthropologists and sociologists, particularly focusing on tracing ethnographically the stories that people tell themselves.  Stories provide a more encompassing approach to understanding what motivates people, Akerlof suggests, and are therefore necessary to open up economics, allowing research to explore beyond “a-priori assumptions regarding what people plausibly maximize” (Akerlof, 2019, 14). 

In accounting, while ‘hard’ methodology also drives ‘mainstream’ financial economics-based research, using ethnography to narrate human experiences has gained acceptance amongst researchers concerned to understand accounting in its organizational and societal context (Ahrens and Dent, 1998; Ahrens and Chapman, 2007).  Significant strands of the research have shown an interest in issues of climate change and financial crisis.  Studies of sustainability reporting have contributed to understanding the stories that “justify continued inaction, year after year” (Akerlof, 2019, 17) regarding climate change (e.g. Gray, 2010).  Research of accounting firms and standard setting bodies has shed light on the apparent inability of auditors, regulators, and accountants to change their practices to avert another financial crisis (e.g. Sikka, 2009).  Narrating such stories may not be enough however.  Implicit in Akerlof’s argument is a call for stories that take readers beyond the assumption that individualistic economic motivations necessarily drive individuals and organizations.  Some accounting researchers have recognized that the relationship between economics and accounting is “far from being an unproblematic one”, and is pervaded rather by a “restless tension” (Hopwood, 1992, 129).  The literature, however, has yet to explore how organizational actors might work through this tension, potentially shaping alternative accounting stories.  

In the struggles of worker cooperatives and social movements, for example, accounting is often a focus. In the context of growing public debate and criticism of the negative social effects of neoliberal economics (Edge-Cliffe Johnson, 2019), a burgeoning interdisciplinary literature calls for attention to these alternative organizations (e.g. Butler, 2015; Parker et al. 2014; Reedy et al. 2016; Yates, 2015).  Whereas social activism in the 1960s and 1970s often sought to ‘tune out’ from the economy, growing numbers of activists today strive to engage with and shape an economy that could enact values such as freedom, solidarity, and social responsibility in the ‘here and now’, demanding attention to accounts.  They often seek knowledge and understanding of how they might make accounting practices work for these broad social goals.  Not everyone in accounting is interested in studying alternative organizations, of course, but the point is that there are many more accounting experiences unfolding than are currently encompassed in the field.  

Narrating stories that open up the accounting field does not necessitate visiting exotic, far-flung settings.  It does however require that we seek to understand and communicate accounting experiences that current discourses in mainstream or critical literatures fail to capture.  Rather than say only that ‘context matters’, narrating these stories could help readers to re-evaluate the limits and possibilities of accounting and organizations more generally, to see what ‘could be’ (Suddaby, 2006) in other organizational settings.  Rather than reaffirming narratives of powerlessness and the inevitability of neoliberalism, for example, researchers could help to understand how the experience of vulnerability in neoliberalism could become a focus of resistance and collective strength (Butler, 2015).  Accounting research, which has gained much from drawing on the wider social sciences, might be in a better position, therefore, to ‘give back’.  By encompassing a wider range of experiences, it could finally sound the death knell of the old methodological story that accounting is a ‘specialist’ subject, a technical aspect of business economics, for people who are ‘good with numbers’. 


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