Accounting and philosophy: The construction of social reality framework

Abstract

Accounting scandals and their severe consequences shed light on the ambiguity of accounting. This paper attempts to explore philosophical roots of accounting in an attempt to remove, or at least mitigate, this ambiguity. The study employs Searle's social construction framework (1995) as an approach to achieve this aim. It is argued that the main problem of accounting is its failure to faithfully represent economic reality. The evaluation of recent developments in accounting suggests that although these attempts are a step towards reaching a better representation of economic reality, they are insufficient. A great deal of accounting ambiguity still exists, and thus future accounting scandals are likely. It is therefore suggested that a deeper understanding of the philosophical aspects of accounting should be taken into consideration by the setters of accounting standards.