Agency theory as ideology: a comparative analysis based on critical legal theory and radical accounting

Article Abstract:

Accounting theory, like legal theory, has roots in neoclassical economics, which is predicated on a minimization of government interference in employment as individual contracts are held to be a superior means to resolve conflict. A new intellectual movement in accounting theory referred to as 'radical accounting' (Chua, 1986; Tinker et al., 1987) challenges theoretical assumptions in mainstream accounting research, insisting that traditional accounting practices are rooted in the interests of the dominant economic group. The theory states that accounting practices are ideological in content and serve to perpetuate the power of the dominant group. Analysis reveals that there is common ground between radical and traditional accounting theory, and a comparative analysis of both reveals their utility in elucidating the structure of capitalist organizations, particularly as regards employment relationships.

Research, Legal research, Neoclassical economics, Chua, W.F., Tinker, A.M.

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An institutional analysis of accounting growth and regulation in the United States

Article Abstract:

An institutional perspective is used to explain the phenomena of rapid growth and self-regulation in accounting. The increase in the number of people employed and studying in the field of accounting, and its largely self-regulating capacity, has yet to be explained by theories that do not take an armchair philosophical-theoretical perspective. Instead, analysis of the accounting phenomenon within the institutions that it occurs provides a more empirical andmeaningful view of this social phenomenon. Analyses using organizational modelsof contractualism, hierarchy and Fligstein's organizational fields indicate that insitutions have a stake in ensuring that accounting standards are fair and consistent. These results indicate that the internal and external uses of accounting differ and that institutional realities are central to this distinction.

Laws, regulations and rules, Accounting firms, Accounting services

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Accounting standards, health care, and retired American workers: an institutional critique

Article Abstract:

The Financial Accounting Standards Board's (FASB) accounting standard SFAS 106 had severe effects on employee postretirement health care benefits. The SFAS 106 was issued in Dec 1990 and requires companies to adopt accrual-based accounting methods for postretirement benefits other than pensions (OPRB). It also states the employers promising OPRBs have incurred a liability which must be recognized during an employee's working years. However, neither employees nor labor groups participated in the FASB's hearings prior to the issuance of the standard. Moreover, the standard prompted major companies like General Electric to set caps for its contributions retiree health care benefit plans while others opted to eliminate retiree health care benefits.

Retirement Benefits, Accrual Accounting, Social aspects, Standards, Accounting and auditing, Financial Accounting Standards Board, Accrual basis accounting

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