Metaphysics, methodology and theory in classical accounting thought

Abstract

Purpose The received wisdom on classical accounting thought is that its early stages were methodologically vacuous, while, in its “golden” age, it espoused the methods and philosophical commitments of received-view hypothetico-deductivism but actually remained methodologically incoherent. The purpose of this paper is to argue, to the contrary, that classical accounting thought possesses a coherent constitutional structure that qualifies as a methodology and unifies it as a body of argument. Design/methodology/approach The paper draws on Cartwright’s metaphysical nomological pluralism, which holds that we should attend to the actual practices of successful inquiry and the methodologies and metaphysical presuppositions that support it. Findings The paper argues that accounting does achieve disciplinary success and that classical accounting thought, using the methodology of defeasible postulationism, provides the theoretical infrastructure that supports that success. The accounting domain is a world of “dappled realism”, in which theories are useful in the construction of reporting schemes and inform our understanding of the nature of the domain. Research limitations/implications Applying metaphysical nomological pluralism rescues classical accounting thought from the charge of methodological incoherence and metaphysical naivety. Originality/value The paper justifies a place for classical accounting theorising in the endeavours of modern accounting scholarship and moves the analysis of classical accounting thought within a philosophy of science framework towards an approach with a contemporary resonance.

A pragmatist neoclassical accounting research agenda for identifiable intangibles

“…Pertinence and efficacy are, without doubt, difficult to evaluate in the accounting domain because of inherent, and well-known, difficulties in plotting the connections between features of financial reporting and outcomes of investment decision-making, including, “difficulty in conceptualising, operationalising and measuring the target effects; bounded knowledge of means-ends relations; highly complex interactions between the factors involved; the need to specify counterfactuals or manage control groups; reflexivity; and the need to examine outcomes in aggregate rather than individually” (Rutherford, 2019, p. 426). Despite all these challenges, Rutherford (2019) argues that a sufficient degree of evaluative activity can be carried out to qualify as testing accounting knowledge. The paper calls the methodology involved defeasible postulationism and argues that accounting knowledge is embodied in financial reporting schemes that are constructed in two phases.…”

“…Classical accounting research is often attacked as offering only piecemeal and inconsistent theorising, methodologically primitive at best and vacuous at worst (see Rutherford, 2019, for sources). Rutherford (2019) shows that a pragmatist perspective enables us to see how the theorising undertaken by classical thinkers – both scholars and practitioners designing policies, including, latterly, standard-setters – hangs together in the way it relates to the resolution of accounting's problem situation.…”

“…Classical accounting research is often attacked as offering only piecemeal and inconsistent theorising, methodologically primitive at best and vacuous at worst (see Rutherford, 2019, for sources). Rutherford (2019) shows that a pragmatist perspective enables us to see how the theorising undertaken by classical thinkers – both scholars and practitioners designing policies, including, latterly, standard-setters – hangs together in the way it relates to the resolution of accounting's problem situation. The study draws on Nancy Cartwright's metaphysical nomological pluralism (Cartwright, 1999), which argues that epistemology should follow from an understanding of how knowledge building achieves its successes, proposing a dappled world , rich in its variety of objects, natures and behaviours, so that the laws describing it operate as a patchwork rather than an elegant, structured hierarchy.…”

“…A model may serve as a nomological machine if there is sufficient stability in its components, capacities and environment to give rise, after repeated operation, to the regularity that we look for in our theories; theory emerges from modelling and not vice versa. According to Rutherford (2019), accounting's defeasible postulationism, and thus classical accounting theory, fit within metaphysical nomological pluralism [4]; financial reporting schemes are Cartwrightian models and the range and variety of classical theories shows, not error and confusion, but a rich resource base, available for incorporation into reporting schemes in response to particular combinations of contexts, objects, natures and behaviours.…”

“…(2018) offers a useful starting point for a historical PNCAR analysis of identifiable intangibles, although the paper actually deals with goodwill. It reviews historical changes in standards across four jurisdictions, drawing on Mattessich's (1995a, b) conditional-normative methodology, an approach which the defeasible postulationism of Rutherford (2019, p. 497 and note 10) in some ways parallels. Garcia et al.…”