Accounting. Organizations andSocie!y, Vol. 13, No. 3, pp. 251-261, 1988.

0361-3682/88 $3.00+.00
Pergamon Press plc

Printed in Great Britain

FINANCIAL

ACCOUNTING:

IN COMMUNICATING
REALITY*

REALITY,

WE

CONSTRUCT

RUTH D. H I N E S

Macquarie University, N.S. W., Australia

At first I saw Don Juan simply as a rather peculiar man who knew a great deal.., but the people.., believed
that he had some sort of "secret knowledge", that he was a "brujo". The Spanish word brujo means, in
English... sorcerer. It connotes essentially a person who has extraordinary.., powers.
I had known Don Juan for a whole year before he took me into his confidence. One day he explained that
he possessed a certain knowledge that he had learned from a teacher, a "benefactor" as he called him, who
had directed him in a kind of apprenticeship. Don Juan had, in turn, chosen me to serve as his apprentice,
but he warned me that I would have to make a very deep commitment and that the training was long and
arduous...
My field notes disclose the subjective version of what I perceived while undergoing the experience. That
version is presented h e r e . . .
My field notes also reveal the content of Don Juan's system of beliefs. I have condensed long pages of
questions and answers between Don Juan and myself in order to avoid reproducing the repetitiveness of
conversation... (The Teachings ofDonJuan~.A Yaqui Way of Knowledge, Carlos Castaneda, 1970, pp. 14,
24, 25).

We stood together, looking down into the valley

below...t
"What do you see before you?" said the Master.
"Well, in the valley, I see buildings of various
kinds, spread over a large area, and surrounded
by a fence. There are people inside the fence. A
river runs through the valley, and through the
area enclosed by the fence. And outside the
f e n c e t h e r e a r e t r e e s , u p t h e s i d e s o f t h e valley,
all a r o u n d , as far as t h e e y e c a n s e e . "
" A n d d o y o u k n o w w h a t it is, t h a t y o u see?"
It s e e m e d t o m e t h a t I h a d a c c u r a t e l y , t h o u g h
b r i e f l y , d e s c r i b e d w h a t I saw. B u t I w a s u s e d t o
s u c h q u e s t i o n s f r o m t h e M a s t e r . It w a s h i s w a y o f
guiding me along the path of the special knowledge which he possessed, and which he had dec i d e d t o i m p a r t t o m e , as h i s a p p r e n t i c e . I recalled our previous conversation:
"Is t h i s a n ' o r g a n i z a t i o n ' , p e r h a p s ? "
H e s m i l e d faintly, a n d l o o k e d a t t h e far hills:
" T h a t is g o o d , y o u r e c a l l o u r last l e s s o n . Y o u
a r e p a r t i a l l y r i g h t . P a r t o f w h a t y o u s e e is a n
organization."

" W e l l , I r e a l l y o n l y m e a n t w h a t lies w i t h i n t h e
fence."
"Yes I k n o w y o u did, b u t again, o n l y p a r t o f
t h a t is t h e o r g a n i z a t i o n . . . A n d i n d e e d , p a r t o f
t h e o t h e r is also t h e o r g a n i z a t i o n . "
" P a r t o f t h e o t h e r ? Y o u m e a n , w h a t lies o u t s i d e
the fence -- the hills and trees -- they are also
p a r t o f t h e o r g a n i z a t i o n ? "2
" N o t t h e h i l l s a n d t r e e s , as s u c h , b u t . . . W e
must not get out of our depth before we can
swim. The hills and trees must wait."
"Well then, which parts, within the fence, are
part of the organization? I suppose the buildings
a n d l a n d a r e p a r t o f it?"
" I n all l i k e l i h o o d , t h e y are. B u t n o t n e c e s sarily."
" W h a t a b o u t t h e r i v e r ? It m u s t b e b e c a u s e I
c a n s e e t h a t t h e r i v e r w a t e r is b e i n g u s e d b y t h e
organization. I can see..."
"Yes y o u a r e r i g h t . T h e r i v e r s u p p l i e s w a t e r
vital for the manufacturing processes of the
organization, but nevertheless, the water of the
r i v e r is n o t c o n s i d e r e d t o b e p a r t o f t h e o r g a n i z a -

The author thanks the anonymous reviewers and Michael Miko for their helpful comments.
251

252

RUTHD. HINES

t i o n . . . Unless of c o u r s e the o r g a n i z a t i o n is sold.

If it is sold, t h e n w h o e v e r p u r c h a s e s the organization will pay for the w a t e r of the river, and, it
b e i n g thus recognized, will b e c o m e part of the
organization. It will be n a m e d 'Goodwill'."
"The river - - the w a t e r - - will be called
'Goodwill'? G o o d Heavens. Is t h e r e a n y t h i n g else
of this nature?"
"What do y o u m e a n 'of this nature'? O n e m u s t
b e clear in o n e ' s o w n m i n d , as to w h a t it is precisely that is b e i n g questioned."
"I mean, ugh, in a sense, the river does n o t
exist..."
I h u r r i e d l y reflected o n past conversations. I
did n o t w a n t to appear to b e stupid before the
Master. I tried to c o n v e y m y q u e s t i o n a c c o r d i n g
to the language w h i c h c o m m u n i c a t e d his special
knowledge:
"The river - - the w a t e r in it - - o n l y b e c o m e s
an 'asset' of the organization, w h e n the w h o l e
organization is sold. At that point, the p o i n t of
sale, it b e c o m e s part of the organization's reality.
Like a miracle. Is t h e r e a n y t h i n g e l s e . . , of that
nature?"
"Excellent, y o u see w h a t clarity of m i n d can
achieve? You are a fine apprentice. You will b e a
Master y o u r s e l f someday. A n d in a n s w e r to y o u r
question, e v e r y t h i n g is of this nature.
Now, that p o i n t in time, w h e n s o m e t h i n g bec o m e s real, w h e n w e recognize the reality of
something, w h a t p o i n t in time might that b e
called, do y o u imagine?"
"Well, I w o u l d call it the p o i n t ofreal-ization,
since that is the p o i n t at w h i c h things b e c o m e
real."
"And so w e do. That is just w h a t w e do. Do y o u
see, are y o u b e g i n n i n g to see, w h e r e o u r p o w e r
lies?"
''Yes, I t h i n k I am b e g i n n i n g to see. I t h i n k I und e r s t a n d a b o u t the water. What o t h e r things are
real-ized at certain p o i n t s in time, w h i c h you
decide?"
"Oh everything, everything! W e d e c i d e everything. R e m e m b e r w e talked a b o u t r e v e n u e : rev e n u e less e x p e n s e s equals profit. Remember?"
''Yes."
" W h e n do you t h i n k s o m e t h i n g b e c o m e s revenue?"

" W h e n it is real-ized?"
"That's right. W e r e c o g n i z e r e v e n u e w h e n it is
realized: that's w h a t w e say - - 'we r e c o g n i z e rev e n u e and gains w h e n they are realized'. W e
create the i m p r e s s i o n that they do n o t exist, and
that suddenly, they b e c o m e real, a n d w e recognize t h e m as such. But of course, w e make t h e m
real, b y r e c o g n i z i n g t h e m as real. 3 Until w e recognize them, they are, for just a b o u t all i n t e n t s
a n d purposes, n o t real."
"But a r e n ' t they there? I mean, if they are
there..."
"Again, clarity of mind. What do you m e a n
exactly w h e n y o u say, 'if they are there'?"
"I mean, if they exist, then, e v e n w i t h o u t y o u
r e c o g n i z i n g them, they are real."
"Oh yes, that is o u r everyday c o n c e p t of reality alright. But everyday c o n c e p t s are a cover-up.
Did 'black holes' a n d ' s u b a t o m i c particles' exist,
before physicists c r e a t e d the idea of them? 4 Of
c o u r s e they did not!"
"But..."
"Oh yes, I know, y o u ' r e a literal sort of chap;
y o u will b e a fine master. But e v e n w i t h y o u r literal m i n d , do you b e l i e v e e v e r y t h i n g y o u read
a n d hear? What a b o u t the newspaper? Are all
those stories real?"
"Well, I s u p p o s e it d e p e n d s w h a t y o u m e a n b y
'real'. I mean, I think, s o m e of t h e m are true."
"Unbiased, neutral, do y o u mean?"
"Well, yes."
"Do y o u seriously t h i n k that a n y t h i n g in this
w o r l d c a n b e 'neutral'?"
"Yes, well, ugh, I ' m n o t sure .... "
"Do you t h i n k t h e r e ever was a n e w s story that
took e v e r y t h i n g into a c c o u n t ; left o u t n o t h i n g ;
gave the full picture?"
"It d e p e n d s w h a t y o u m e a n b y 'the full picture'."
"What do you m e a n by it?"
"Agh, I d o n ' t really know. Ha. Ha."
''Yes, good, n o w w e are g e t t i n g s o m e w h e r e .
You ' d o n ' t know'! W h o k n o w s w h a t 'the full picture' is? W h o knows? H o w do you k n o w n w h e n
you have the full picture?
Having the full p i c t u r e - - a true, a fair v i e w of
s o m e t h i n g - - d e p e n d s o n p e o p l e d e c i d i n g that
they have the full picture. Sometimes, they later

FINANCIALACCOUNTINGAND REALITY
d e c i d e t h e y d i d n o t h a v e t h e full p i c t u r e , a n d
t h e n t h e r e are r e c r i m i n a t i o n s : w h y d i d n ' t w e g e t
t h e rest o f t h e p i c t u r e ; o r a different p i c t u r e ? It
can g o o n and on. P e o p l e feel e n t i t l e d to reality.
Did y o u s t u d y h i s t o r y at school?"
"Yes, I did."
"History c r e a t e s p a s t r e a l i t y for us. T h e p a s t is
always b e i n g r e i n t e r p r e t e d . T h e y are always rew r i t i n g t h e h i s t o r y books. T h e y d o n ' t tell y o u
that at s c h o o l though, d o they? W h a t a b o u t hist o r y in y o u r o w n time: Vietnam, for e x a m p l e ?
You m u s t admit, a c c o u n t s have c h a n g e d o v e r
t h e years.5 O r w h a t a b o u t t h e Bible, is that 'real'?"
"I d o see w h a t y o u are saying, b u t s c i e n c e is
different. It d e s c r i b e s real things, p h y s i c a l
things."
"No, m y boy, y o u are q u i t e w r o n g . A b l a c k
h o l e - - m y d e a r fellow, w h a t is it e x a c t l y that t h e
p h y s i c i s t s say is a " b l a c k hole"? C e r t a i n areas in
t h e H e a v e n s p r o d u c e c e r t a i n b e w i l d e r i n g exp e r i m e n t a l r e s u l t s . . . That is all. A n d t h e s e areas
are c a l l e d ' b l a c k holes'. By n a m i n g them, w e
suggest that w e have n a m e d , ' d i s c o v e r e d ' , s o m e thing: s o m e t h i n g real. But m y boy, ' b l a c k holes'?
Even y o u m u s t see.
Black h o l e s are an idea, a m e t a p h o r , a c o n c e p t .
Like atoms. Like e l e c t r o n s . Like organizations!
T h e s e things h e l p s t r u c t u r e o u r lives. Ideas. 6
W h e r e w o u l d w e be, w i t h o u t ideas? But I a m
g o i n g m u c h t o o fast. W h e r e w e r e we?"
" W e w e r e talking a b o u t r e v e n u e a n d gains,
a n d t h e i r p o i n t o f r e c o g n i t i o n . . , a n d realization."
O h yes, that's right. ' W e r e c o g n i z e r e v e n u e
w h e n it is realized'. By n a m i n g it ' r e v e n u e ' , it bec o m e s r e v e n u e . . , just like t h e b l a c k holes."
" H o w d o y o u k n o w w h e n to r e c o g n i z e revenue? O r s h o u l d I say, h o w d o y o u k n o w w h e n
to 'realize' revenue?"
" N o w y o u ' r e g e t t i n g i t . . . R e v e n u e is g e n e r ally r e c o g n i z e d - - c o n s i d e r e d to b e r e a l i z e d - at t h e p o i n t o f sale, b u t n o t always."
" W h y at t h e p o i n t o f sale?"
"This is w h e n g o o d s are c o n s i d e r e d to leave
t h e organization, and to b e c o m e t h e p r o p e r t y o f
s o m e o n e else."
" W h e n t h e g o o d s are taken away, y o u mean?"
"No. T h e g o o d s d o n o t have to actually leave

253

t h e organization. T h e y m e r e l y h a v e to b e
t h o u g h t o f as having d o n e so. See t h o s e b i g containers d o w n there, b e s i d e t h e s q u a r e b u i l d i n g
o v e r o n t h e right? T h o s e g o o d s m a y w e l l b e
sold."
"So, y o u are saying, g o o d s are 'sold', w h e n t h e y
are c o n c e i v e d of, as having left, t h e i d e a o f ' t h e
organization'?"
"Very good."
" H o w d o y o u d e t e r m i n e w h e n to t h i n k o f
t h e m as having left t h e organization?"
"Oh it varies. W e h a v e a lot o f d i s c r e t i o n here.
It is all a r b i t r a r y o f c o u r s e , b u t w e take into
a c c o u n t v a r i o u s factors. You c a n n o t just arbitrarily define t h e s e things: t h e y h a v e to b e s e e n to b e
the product of experience, judgement."
"Why?"
"Well, o t h e r w i s e , a n y o n e c o u l d d o t h e job."
"Oh y e s . . . But, agh, I mean, s u r e l y . . . ? "
"Yes I know, it's confusing. Let m e try a n d explain: t h e r e is n o s u c h t h i n g as t h e truth, b u t
t h e r e is such a t h i n g as s t r e t c h i n g t h e t r u t h t o o
far. T h e r e is a reality: t h e r e ' s s o m e t h i n g t h e r e
alright. Do n o t t h i n k for a m i n u t e that I am saying
w e i m a g i n e t h e w o r l d ! O h no, n o t at all! T h e
b r i c k s are there, and t h e p e o p l e , and t h o s e containers - - n o d o u b t a b o u t it. But t h e organization, a n d t h e m o s t m i n u t e p a r t i c l e s in t h e bricks,
a n d r e v e n u e , well, w e c r e a t e them!
Now, b a c k to w h e r e w e w e r e : ' p o i n t o f recognition', being, p o i n t o f real-ization, being, sometimes, b u t n o t necessarily, p o i n t o f sale. T h e r e
are n u m e r o u s possibilities. S o m e t i m e s w e reco g n i z e r e v e n u e w h e n t h e g o o d s are c o m p l e t e d ;
s o m e t i m e s w h e n t h e y are p a r t l y c o m p l e t e d ;
s o m e t i m e s w h e n t h e c u s t o m e r is invoiced; o r
e v e n w h e n h e t e l e p h o n e s and p l a c e s an o r d e r ; o r
s o m e t i m e s w h e n he is billed; o r w h e n h e pays.
A n d e v e n t h e s e are n o t clear-cut. W h e n is a
b u i l d i n g 'finished', for e x a m p l e ? W h a t p e r c e n t age o f a b u i l d i n g - o r a s h e e p - - is ' c o m p l e t e d ' ?
W h e n d o e s a c u s t o m e r 'pay': w h e n his c h e q u e is
r e c e i v e d ; w h e n it is h o n o u r e d ? "
I felt o v e r w h e l m e d . T h e r e was m o r e h e r e to
l e a r n than I h a d imagined. T h e Master r e a d m y
thoughts:
"It is all a bit c o n f u s i n g n o w , b u t d o n o t b e conc e r n e d , y o u will u n d e r s t a n d . "

254

RUTHD. HINES

"Could w e talk a b o u t what lies o u t s i d e the

organization, b u t is part of it?"
"Lad, y o u are n o t m a k i n g sense."
"I mean, y o u said there w e r e things o u t s i d e
the fence, w h i c h w e r e part of the organization."
"Oh yes. Now, do n o t c o n f u s e the b o u n d a r y of
the organization, w i t h the fence - - that is just to
keep p e o p l e out. You m u s t n o t think of the
organization as e n d i n g at the fence - - that is
c o m m o n sense. That is the w a y lay p e o p l e t h i n k
of the organization. R e m e m b e r , w e are professionals.
Now, y o u see all these trees? The land o n
w h i c h they stand, b e l o n g s to the g o v e r n m e n t ,
b u t the organization is able to take trees from
this forest for its p a p e r manufacturing. That's a
curly one, isn't it? H o w w o u l d y o u a c c o u n t for
that?"
"Well, I s u p p o s e the land is n o t an asset of the
organization, n o t part of it, so as to speak, b u t the
trees are, for as long as the organization is
allowed to take t h e m . . .
But it d o e s n ' t make sense to e x c l u d e the land
and i n c l u d e the trees - - the trees are part of the
land...?"
"'In reality', y o u w e r e a b o u t to say?"
I felt stupid.
" R e m e m b e r , w e are c r e a t i n g reality. W e do
n o t have to be c o n s t r a i n e d b y the everyday w a y
of t h i n k i n g - - it is just a way of thinking, c a n ' t
y o u see? As o r d i n a r y people, w e arbitrarily combine, and define, and add, and s u b t r a c t things
from o u r p i c t u r e of reality. As professional
people, w e arbitrarily c o m b i n e , a n d define, and
add, and s u b t r a c t things, in a different w a y to the
everyday way: that is w h a t differentiates us.
T h e fence does n o t designate the organization. W e do that. W e designate it, b y d e c i d i n g
w h a t things will be part of the organization, and
by d e c i d i n g h o w big or small these things will
be: ' r e c o g n i t i o n ' and ' m e a s u r e m e n t ' . . . C o m e
over h e r e . . . You see that m u r k y b r o w n in the
river, d o w n s t r e a m of the plant? What w o u l d y o u
say of that?"
"It's pollution."
''Yes, b u t do y o u t h i n k it is part of the organization? N o w try to forget a b o u t the fence."
"Well, o r d i n a r y p e o p l e w o u l d say it i s . . . So,

ughm, p e r h a p s an a c c o u n t a n t w o u l d say it is
not."
"It is n o t quite as simple as that. W e do n o t
always define reality differently to the c o m m o n
c o n c e p t i o n . Q u i t e the contrary. In fact w e play
such a large part in c r e a t i n g the c o m m o n conception, and w e have so largely a b s o r b e d the
c o m m o n c o n c e p t i o n s into o u r o w n thinking,
that o n e cannot, by any means, assume that o u r
definitions are always the c o n t r a r y of lay definitions. In this case, you are right in saying that
most p e o p l e w o u l d see the p o l l u t i o n as being, in
s o m e way or another, part of the organization.
T h e y used n o t to. T h e y used to b e q u i t e u n a w a r e
of it. But since they have b e c o m e aware of it, a n d
b e c a u s e they are b e g i n n i n g to see it as b e i n g the
responsibility of the organization, w e inevitably
m u s t do so, in time. O n c e the organization bec o m e s a c c o u n t a b l e for something, w e m u s t
a c c o u n t for it, s o o n e r or later."
"I'm still n o t sure I u n d e r s t a n d . Before, y o u
said y o u d o n ' t have to b e c o n s t r a i n e d b y ordinary p e o p l e ' s notions."
"That's the paradox. That's w h e r e w e walk a
very thin line. W e c o m m u n i c a t e reality: that is
the myth; that is w h a t p e o p l e believe. It is e v e n
what m o s t of us believe. And, in a sense, w e do
c o m m u n i c a t e reality. T h e r e is s o m e t h i n g there:
bricks and p e o p l e a n d so on. And the organization can, say, b e ' d o i n g well', or ' d o i n g badly', in
w h a t e v e r sense y o u take that to mean. And it is
o u r job to c o n v e y it. But w h a t is 'the full picture'?
T h e r e is n o full picture. W e make the picture. 7
That is w h a t gives us o u r power: people think
a n d act on the basis o f thatpicture! Do y o u see?
Are y o u b e g i n n i n g to see?"
" Y e s . . . I t h i n k I am b e g i n n i n g to see. My
word, there's a lot m o r e to it than I r e a l i z e d . . .
R e a l - i z e d . . . Ha, ha, yes I see, 'realized': w e say it
all the time, d o n ' t we? W e t h i n k w e have grasped
reality, w h e n w e 'realize'; b u t really, ha, ha - t h e r e I go again, 'really' - - b u t w e have n o t so
m u c h grasped reality, as c r e a t e d it, by t h i n k i n g of
it in a c e r t a i n way, and treating it in that way!"
"Good, good, well done! Now, m o s t things, w e
are free to define, and shape, a n d mould, and
measure, w i t h o u t interference. But w h e n p e o p l e
have a p r e c o n c e i v e d n o t i o n of what reality is,

FINANCIALACCOUNTINGAND REALITY
well, w e c a n ' t afford to g o against it!"
" W h y not?"
"Because, w e are s u p p o s e d to c o m m u n i c a t e
reality: if p e o p l e have a c e r t a i n c o n c e p t i o n o f
reality, t h e n naturally, w e m u s t r e f l e c t that.
O t h e r w i s e p e o p l e will lose faith in us."
"What h a p p e n s then?"
"Oh, it's terrible, terrible. Hearings, l o b b y i n g ,
investigations, criticisms, p u b l i c i n t e r v e n t i o n .
W e s e e m to g e t m o r e a n d m o r e o f it t h e s e
d a y s . . . But, w e w e r e talking a b o u t t h e pollution."
"Yes, I w a s w o n d e r i n g , h o w c o u l d it b e
'measured'?"
" W e will c o m e u p w i t h s o m e t h i n g . W e always
do. No different to t h e b r i c k s really, o r t h e
people."
" H o w are t h e b u i l d i n g s measured?"
"At t h e a m o u n t that t h e y c o s t t h e organization, generally, a l t h o u g h t h e r e are o t h e r ways."
"And t h e people?"
"The same."
"Isn't that a bit strange?"
" W h y so?"
"Well, b r i c k s a n d p e o p l e , m e a s u r i n g t h e m t h e
s a m e way?"
"Oh, I see w h a t y o u m e a n . . . Well, t h e r e are
p e o p l e - - radical t y p e s - - w h o say w e d e v a l u e
things, like p e o p l e , b y m e a s u r i n g t h e m this way.
T h e y h a t e t h e w h o l e system, I m e a n t h e w h o l e
thing: reality, as w e p e r p e t u a t e it. T h e y say w e
a r e c o n s e r v a t i v e s , d e f i n i n g a n d m e a s u r i n g things
t h e w a y t h e y always h a v e b e e n , a n d n o t t r y i n g to
m a k e it any b e t t e r , n o t trying to m a k e any
changes. But w h e r e w o u l d w e b e if w e t r i e d to
o v e r t h r o w t h e system? W e a r e p a r t o f t h e system...
You see, if w e v a l u e d p e o p l e any differently to
t h e w a y that w e do, say w e t h o u g h t this way: ' t h e
m o r e an o r g a n i z a t i o n p r o d u c e s , t h e m o r e boring, injurious, and so on, it is for t h e w o r k e r s ' .
A n d then, if w e w e r e to take this b o r e d o m , o r injuriousness, into account, t h e n p e o p l e w o u l d
e x p e c t to b e c o m p e n s a t e d for t h e s e things; a n d
if p e o p l e w e r e c o m p e n s a t e d for these, t h e n t h e
o r g a n i z a t i o n w o u l d have to c h a r g e a h i g h e r
p r i c e for its p r o d u c t s . A n d at a h i g h e r p r i c e ,
p e o p l e w o u l d n o t w a n t to b u y so m a n y o f its p r o -

255

ducts. T h e y m i g h t b u y o t h e r things instead. A n d

that, w o u l d c h a n g e everything. Everything!
P e o p l e b u y i n g less o f this, m o r e o f that; i n v e s t i n g
less in this, m o r e in that. N o t h i n g w o u l d b e t h e
same: s o m e p e o p l e w o u l d b e b e t t e r off, s o m e
w o r s e off; w e w o u l d have less o f s o m e goods,
m o r e o f others. It w o u l d c h a n g e w h a t w e call t h e
' i n c o m e d i s t r i b u t i o n ' a n d ' r e s o u r c e a l l o c a t i o n ' in
o u r society. C h a n g i n g that is major; that is social
change.
That p o l l u t i o n , for e x a m p l e : w h a t if that is inc l u d e d in t h e p i c t u r e ? It w o u l d n o t h e l p that
organization, w o u l d it? T h e m o r e g o o d s it p r o duced, the more pollution. Not a pretty picture.
It w o u l d have c o n s e q u e n c e s . "
"And y o u c o u l d d o all that! It's incredible!"
"Well, w e c o u l d n o t d o s o m e t h i n g as big as
that o n o u r own. Social c h a n g e . . , w e c o u l d n o t
c h a n g e t h e p i c t u r e as radically as that, and g e t
a w a y w i t h it. But t h e day will c o m e , w h e n p e o p l e
so c l e a r l y 'see' p o l l u t i o n as p a r t o f the organization, that w e will have to i n c l u d e it in t h e picture. A n d t h e r e will b e c o n s e q u e n c e s . . .
So y o u see, it's n o t w e a l o n e that c r e a t e reality.
E v e r y o n e d o e s it. But as official C o m m u n i c a t o r s
o f Reality, w e have m o r e p o w e r than most."
" H m m . . . . It's v e r y i n t e r e s t i n g . . . . So, ah, if that
h a p p e n s , I m e a n if p e o p l e c o m e to 'real-ize' poll u t i o n as part o f ' t h e organization', and y o u have
to ' m e a s u r e ' t h e p o l l u t i o n , I d o n ' t s e e h o w y o u
can d o it? It d o e s n ' t c o s t t h e o r g a n i z a t i o n anything. O t h e r p e o p l e pay."
" W e will w o r k s o m e t h i n g out. G e t t i n g c o n s e n sus o n it though, that's t h e p r o b l e m . "
"I s u p p o s e p e o p l e d o n ' t t h i n k its real - - t h e
real m e a s u r e m e n t , t h e t r u e o n e - - unless t h e y
c a n see y o u all a g r e e a b o u t it."
"That's right. That is right. It is v e r y b a d for
p e o p l e to s e e us q u a r r e l l i n g a m o n g s t ourselves.
It l o w e r s t h e i r c o n f i d e n c e . It l o w e r s o u r o w n
c o n f i d e n c e too."
"Yes, I s u p p o s e p e o p l e w o u l d n ' t b e h a p p y to
see that t h e i r w o r l d is s o . . . tenuous. I feel uns e t t l e d b y all this myself."
''Yes, t h e y n e e d us. E v e r y t h i n g w o u l d b e in a
m e s s w i t h o u t us. Just a j u m b l e . N o - o n e w o u l d
k n o w w h e r e t h e y w e r e . H o w w o u l d that w o r k ,
eh?"

256

RUTH D. HINES

"Is that w h y s o m e p e o p l e have called y o u t h e

' h a n d m a i d e n s o f t h e status quo'?"
"Ha, h a . . . W h e r e d i d y o u h e a r that?"
"Oh, I d o n ' t know."
"Well, it is n o t us, that t h e y call t h e handm a i d e n s o f t h e status quo. W e just d o o u r job. It
is t h e p e o p l e w h o m a k e u p t h e o r i e s a b o u t us.
T h e y d o n o t really q u e s t i o n w h a t w e do. T h e y
take it all at face value. T h e y a d o p t t h e s a m e pers p e c t i v e w e do. O u r w o r k is officially d e s i g n a t e d
as C o m m u n i c a t i n g Reality, a n d t h e y just a c c e p t
that is w h a t w e do. A c o m m u n i c a t i o n p e r s p e c tive; m e a s u r e m e n t p e r s p e c t i v e ; i n f o r m a t i o n perspective; that sort o f thing. T h e y n e v e r s u s p e c t
w e p l a y a r o l e in constructing t h e status quo."
"Oh, I see."
"They s e e o u r j o b as a t e c h n i c a l o n e - m e a s u r i n g and c o m m u n i c a t i n g reality. Like ordin a r y p e o p l e , t h e y t h i n k that t h e r e is a pre-existing reality, w h i c h w e reveal. T h e y e v e n say that
s o m e p e o p l e c a n ' l o o k b e h i n d '8 a c c o u n t i n g n u m bers; that t h e y c a n ' u n r a v e l '9 them. Imagine!
P e o p l e are n o t 'fooled', t h e y say. Well, I d o n ' t
k n o w a b o u t that! H h m m , I d o n ' t k n o w a b o u t
that!
S o m e o f o u r m e t h o d s , a c c o r d i n g to t h e s e
fellows, are 'trivial', ' c o s m e t i c ' : t h e s e m e t h o d s
d o n o t c o n v e y anything n e w a b o u t reality, a n d
so s o p h i s t i c a t e d p e o p l e d o n o t r e a c t to them.
P e o p l e w h o r e a c t to t h e s e 'arbitrary', m e t h o d s ,
t h e y say, are stupid. T h e y call t h e m 'functionally
fixated'. Imagine, 'functionally f'Lxated'! O t h e r
m e t h o d s , t h e y say, are 'substantive': t h e s e
methods carry additional information content
a b o u t reality, and so p e o p l e r e a c t to them.
This, m y boy, is w h a t c a n c o m e o f n o t b e i n g
c l e a r in y o u r m i n d a b o u t w h a t reality is, a n d
w h a t ' i n f o r m a t i o n ' is. It n e v e r o c c u r s to t h e s e
chaps, that i n f o r m a t i o n plays a p a r t in c r e a t i n g
reality, lo
Well, the theorists, p o o r c h a p s have h a d a
d r e a d f u l t i m e lately: s o m e o f t h e trivial m e t h o d s
s e e m to b e real - - t h e y have c o n s e q u e n c e s ;
s o m e o f t h e real o n e s d o n o t s e e m to have any
c o n s e q u e n c e s , 11 p e o p l e act as if t h e y d o n o t believe in t h e i r theories. Oh, a m e r r y dance! Still, it
suits us."
"Why?"

"It k e e p s t h e m busy. T h e y d o n ' t interfere. 12

W h e r e w o u l d w e b e if t h e w h o l e thing was unm a s k e d ? . . . Still, w e c o u l d d o w i t h a bit o f h e l p at
p r e s e n t . . . 13
"Does e v e r y o n e t h i n k that way? I mean, t h e
theorists, s u r e l y s o m e o f t h e m suspect?"
"Oh yes, s o m e o f t h e m do! But it is up-hill
g o i n g for them. H o w d o y o u g e t it across, that w e
p l a y a p a r t in c r e a t i n g reality, w h e n e v e r y o n e
knows, w i t h c o n v i c t i o n , that reality exists unp r o b l e m a t i c a l l y , o u t there! H o w d o y o u start to
say s o m e t h i n g like that? 'Yes, yes, o f course,
t h e r e is a reality, b u t . . . ' P e o p l e d o n o t w a n t to
h e a r that sort o f thing. You c a n ' t b l a m e them."
" N o . . . Gosh! To b e h o n e s t , I d i d n ' t realize
h o w fascinating this c o u l d be. It's really v e r y interesting!"
"Oh yes. It d o e s n ' t have to b e dull y o u know.
It all just d e p e n d s o n t h e w a y y o u l o o k at things."
"I've b e e n w o n d e r i n g , d o p e o p l e e v e r d e c i d e
that t h e a c c o u n t s o f an o r g a n i z a t i o n don't r e p r e s e n t reality?"
"Oh yes, that d o e s h a p p e n . Always e m b a r r a s sing. P e o p l e g e t v e r y u p s e t indeed."
" C o u l d y o u give m e an example?"
" C o m p a n y failures. They, are o u r b~te noire.
The accounts sometimes present a picture of a
h e a l t h y organization, and then, it fails. W e n e v e r
h e a r t h e e n d o f it! P e o p l e say: 'if this organization's a c c o u n t s w e r e so u n t r u e , w h a t a b o u t
o t h e r organizations?' As I said, t h e r e is n o t r u t h as
such, b u t t h e r e is s u c h a t h i n g as s t r e t c h i n g it t o o
far - - that is w h e n y o u get c a u g h t out.
You see, n o r m a l l y a h e a l t h y - l o o k i n g set o f
a c c o u n t s will get an o r g a n i z a t i o n t h r o u g h difficult t i m e s . . . "
"Save it? Save it, d o y o u mean?"
"Yes. If t h e a c c o u n t s l o o k alright - - so b e it!
W h o is g o i n g to panic? An o r g a n i z a t i o n will generally g e t t h r o u g h r o u g h w a t e r s as l o n g as noo n e r o c k s t h e boat.
But if t h e a c c o u n t s suggest an o r g a n i z a t i o n is
g o i n g to fail, so b e it! Say, w e lift w h a t w e call t h e
' g o i n g - c o n c e r n ' a s s u m p t i o n , and p r e p a r e t h e
a c c o u n t s o f an o r g a n i z a t i o n o n t h e basis o f liquid a t i o n values r a t h e r than costs. W h a t d o y o u
think will happen?"
" P e o p l e w o u l d panic, a n d t h e o r g a n i z a t i o n

FINANCIAL ACCOUNTING AND REALITY

w o u l d fail."
"Self-fulfilling p r o p h e c y . A n d p e o p l e w o u l d
b l a m e us! M a r k m y w o r d . T h e y w o u l d s a y w e
m a d e i t h a p p e n ! I r o n i c , i s n ' t it?"
" I t c e r t a i n l y is."
"So, n o - o n e i n o u r b u s i n e s s l i k e s t o p r e p a r e
accounts which make an organization look bad."
"Do you feel right about that? I mean, I see
n o w t h a t t h e r e is n o t r u t h , as s u c h , b u t , u h m , as
y o u said, s t r e t c h i n g t h e t r u t h . . . "
"Look, many tribes have witchdoctors. They
can will a man to death. Do you want us doing
that?"
"No, of course not... Gosh, you have so much
power... You know, now that I am beginning to
s e e it, I d o n ' t u n d e r s t a n d h o w all t h i s h a s n o t
c o m e o u t . I m e a n , I ' m t h i n k i n g a b o u t all s o r t s o f
things: what we consider to be 'objective', what
we consider to be 'rational', the way we think,
t h e w a y w e act, o u r t h e o r i e s , t h e w a y o u r s o c i e t y
is s t r u c t u r e d - - it's n o t r e a l i n t h e w a y w e t h i n k
it is. It's all j u s t a n idea, i s n ' t it?"
" T h a t ' s r i g h t m y b o y . J u s t a n idea. A n d b y a c t i n g i n a c c o r d a n c e w i t h it, w e m a k e it so! " I f m e n
d e f i n e t h i n g s as r e a l , t h e y a r e r e a l i n t h e i r c o n s e quences."14

257

' e c o n o m y ' , 15 w h a t e v e r y o u like, a n d o n t h e b a s i s

of that picture (not some underlying 'real' reality
o f w h i c h n o - o n e is a w a r e ) , p e o p l e t h i n k a n d act.
And by responding to that picture of reality, they
m a k e it so: it b e c o m e s ' r e a l i n its c o n s e q u e n c e s ' . 16 A n d , w h a t is m o r e , w h e n p e o p l e respond to that picture, and the consequences
o c c u r , t h e y s e e it as p r o o f o f o u r h a v i n g c o r r e c t l y
c o n v e y e d r e a l i t y . C l e v e r , i s n ' t it? T h a t is h o w
society works."
"So, y o u ' r e s a y i n g t h a t a n y o n e c h a r g e d w i t h
the responsibility of providing these pictures,
has a lot of power, because people will respond
to what they draw-up?"
" T h a t is so."
"It s e e m s t o m e , t h a t y o u r p o w e r is a h i d d e n
p o w e r , b e c a u s e p e o p l e o n l y t h i n k o f y o u as comm u n i c a t i n g reality, but in communicating reality, y o u construct r e a l i t y . "
" T h a t ' s r i g h t . A h i d d e n p o w e r . A n d all t h e
m o r e p o t e n t f o r it. T h i s m a y s o u n d silly t o y o u ,
but most of us are only just beginning to realize
ourselves that we have this power. We always
t h o u g h t o f o u r s e l v e s as b e i n g t e c h n i c a l p e o p l e .
B u t it h a s b e e n b e c o m i n g c l e a r lately, t h a t t h e r e
is m u c h m o r e t o o u r w o r k . M u c h m o r e . . . "

We create a picture of an organization, or the

NOTES
1 The process by which society is created is subtle. If individuals were to be serf-consciously aware of the constructed nature
of society, and the part they play in creating and sustaining it, society would not function effectively.
Every word, gesture and deed on the part of an individual or group is either, in conformity with social mores and thus contributes to the maintenance of society as it is, or is deviant and will be tolerated only in small degree, unless the individual
or group can change society - - the latter is the story of minority voices and groups.
Contrary to commonsense intuitions, reality does not concretely exist independently of the concepts, norms, language and
behaviour of people. People create society, but at the same time, their concepts, norms, language and behaviour, become institutionalized. By becoming thus objectified, society acquires a semblance of concreteness. Indeed it is more than a
semblance, as anyone who breaks the rules of social convention quickly learns.
Many readers of this paper will have already lost patience with it, because it does not accord with the norms of academic
reality. Every properly socialized person responds to deviance in this way. Thus, society is stabilized, and protected from
change - - but, in this way also, many interesting things slip past our notice... By taking for granted those things which others
take for granted, we fail to understand how those things arise, and how they are sustained, through being taken for granted
and thereby forming the basis for thought and action. By taking for granted, and rigorously studying, things as they are, one
merely builds on lay conceptions, becoming an expert of description, and a collector of "facts". But too close an attention to
the "facts" leaves unquestioned how the facts arise - - it leaves us bereft of deep explanation.
Academic discourse frequently functions as a stabilizer of society. Conferred with authority and legitimacy by a social
ideology which holds that academics engage in expert and free thought, research of sociai "facts" plays the important role in
society of objectifying, normalizing, and so perpetuating those "facts" and the interests and power relations which give rise
to them.

258

RUTH D. HINES

The "facis" of society such as "crime", "profit", "madness", "marriage", "organizations", "sexuality" and "assets" are generally
taken for granted, but authors such as Berger & Luckmann ( 1966 ), Berger & Kellner (1964), Bittner (1965), Foucault ( 1967,
1977, 1981), Garfinkel (1967), and Giddens (1976, 1984), whilst viewing social reality from different theoretical and
methodological perspectives, all recognize that the facts of society do not pre-exist social practices, but are created and sustained by social action.
Crime, profit, madness, and so on, are socially constructed categories - - they are definitions of reality or "ways of seeing".
Social p o w e r accrues to those w h o can influence conceptions of reality, since by influencing conceptions of reality - - what
is considered to be "rational", "moral", "true", "efficient" - - one influences social action.
Hines ( 1986a, 1987) shows h o w mainstream financial accounting research is based on taken-for-granted commonsense
conceptions and assumptions, which mitigate against the questioning of h o w social reality arises and is maintained and legitimized, and which therefore obscure the roles that financial accounting plays in the creation and maintenance of society.
Mainstream financial accounting research represents a '~ay of seeing" similar to the commonsense '~zeay of seeing", but in
the words of Poggi (1965), a way of seeing is also "a way of not seeing".
It is necessary to breach a way of seeing or worldview, in order to create a new way of seeing (see especially Handel [ 1982,
pp. 55--77 ] and Mehan & Wood [ 1975, pp. 3-33]). Castaneda's master, the sorcerer Don Juan, refers to breaching a worldview
as "stopping the world". "Stopping the world", or dissolving our taken-for-granted conception of reality, and thereby seeing
that it is essentially arbitrary and constructed rather than "true", is the first step to gaining a new reality or a new way of
"seeing" (Castaneda, 1971, 1974). It was some years before Castaneda began to be able to stop his world, and to see h o w that
world which he had taken for granted and had seen as pre-existing his own and others' action, was socially constructed by
the thought and action of himself and others. He was then empowered to experience a new reality, that of Don Juan.
A touching aspect of Castaneda's early apprenticeship to Don Juan, is his dedication to pursuing what he sees as rigorous
research procedures. Eventually Castaneda comes to recognize that these procedures merely serve to sustain his taken-forgranted world, and to prevent him from discovering an alternative world.
Whilst it is recognized in some management accounting research and organization behaviour research, that accounting
practices, as well as communicating reality, also play a part in creating, sustaining and changing social reality, this view of
accounting is not "seen" in mainstream financial accounting research. The present paper represents an attempt to momentarily breach or "stop the world" of mainstream financial accounting research.
2 Reality does not exist independently of accounts of it. As Meyer ( 1983, p.236 ) states, an organization, "is in fact a sprawling,
complex institution, with multiple purposes and disconnected programs (technologies), of unknown production functions,
of competing and autonomous subordinate units". But accounting imposes a conceptual boundary on it: "the accountants
settle the matter by definition, and acquiring boundaries means, for an organization, acquiring reality" (p. 236).
Hines (1986b) shows h o w the financial accounts of an organization do not merely describe, or communicate information
about, an organization, but h o w they also play a part in the construction of the organization, by defining its boundaries. An
organization is not a concrete thing, but a set of interrelationships, and if it is to exist, then it must s o m e h o w be bounded or
defined. Financial accounting controversies are controversies about h o w to define the organization. For example, what
should "assets" and "liabilities" include/exclude: at what point does an asset/liability become so intangible/uncertainfunenforceable/unldentifiable/non-severable, etc., that is ceases to be considered to be a "part" of an organization? The answers to
questions such as these, define the "size", "health", "structure" and "performance", in other words, the reality of an organization.
3 When the constructed nature of social reality is recognized, it becomes readily understandable why, for example, the Financial Accounting Standards Board (FASB, 1984) was unable, in its Conceptual Framework, to divorce measurement from
recognition. It is difficult to "measure" something, before it has been made real, that is, "realized"!
4 Gribbin (1985) elaborates h o w subatomic particles, and other conceptions of physical reality, are the artefact of observation and measurement procedures:
The only things we know about the quantum world are the result of e x p e r i m e n t s . . . The electron is created by our process of experimental probing. The story stresses the fundamental axioms of quantum theory, that no elementary
phenomenon is a p h e n o m e n o n until it is a recorded phenomenon. And the process of recording can play strange tricks
with our everyday concept of reality (pp. 209-210).
In the 1930s physicists were intrigued by the prediction of another new particle, the neutrino, required in order to explain the subleties of the spin interactions of some radioactive decays. "I am not much impressed by the neutrino theory"
said Eddington, "l do not believe in neutrinos". But "dare l say that experimental physicists will not have sufficient ingenuity to make neutrinos?"
Since then, neutrinos have indeed been "discovered" in three different varieties... Can Eddington's doubts really he taken
at face value? Is it possible that the nucleus, the positron and the neutrino did not exist until experimenters discovered
the right sort of chisel with which to reveal their form? Such speculations strike at the roots of sanity, let alone our concept
of reality. But they are quite sensible questions to ask in the quantum world. If we follow the quantum recipe book cor-

FINANCIAL ACCOUNTING AND REALITY

259

rectly, we can perform an experiment that produces a set of pointer readings that we interpret as indicating the existence
of a certain kind of particle. Almost every time we follow the same recipe, we get the same set of pointer readings. But
the interpretation in terms of particles is all in the mind, and may be no more than a consistent delusion (p. 162).
s See, for example, Tucker ( 1981 ). For different accepted versions of the Cuban Missile Crisis, see Allison (1969).
6 It is n o w acknowledged by philosophers of science that predictive success of a theory does not necessarily infer the "truth"
of a theory. Many theories in the history of science which were (are) empirically successful, have been established to be nonreferential, that is, not descriptively valid, with respect to their central explanatory concepts. These include the humoral
theory of medicine, the effiuvial theory of static electricity, the caloric theory of heat, the vibratory theory of heat, the theory
of circular inertia, and theories of spontaneous generation (see Laudan, 1981 and 1984, for many others).
Conversely, many theories which are presently considered to be genuinely referential theories, were previously rejected,
because of their apparent empirical failure. For example, the chemical atomic theory in the eighteenth century was so unsuccessful, that most chemists abandoned it. Wegener's theory of plate tectonics, published at the beginning of this century, was
ridiculed on the basis of its empirical support, until the 1960s, w h e n it became geological orthodoxy.
Furthermore, according to the formal rules of logic, the predictive success of a theory does not logically infer the descriptive validity of a theory (Hesse, 1975). For example, alternative theories can predict equally well. Laudan (1977) discusses
many cases of scientific theories which successfully predicted, but were eventually determined not to be descriptively valid.
Feyerabend ( 1978 ), Kuhn (1962) and Laudan ( 1981, 1984 ) illustrate by reference to many episodes in science, that scientific observations and theories, are a product of a researcher's expectations, sensory impressions, cognitive processes,
research methods, ideological prejudices, epistemological assumptions, categories and assumptions embedded in their language, and auxiliary theories such as measurement theories. Gribbin (1985) and Pickering ( 1984 ) illustrate this in relation
to atoms and quarks respectively.
A growing literature describes the processes by which theories and knowledge are socially constructed and negotiated, for
example, [Gilbert ( 1976 ), Latour & Woolgar (1979), Myers (1985) and Schuster ( 1984 )].
Foucault ( 1967, 1977, 1980) goes even further, to show h o w socially constructed "truth" and "knowledge", are the product of interests and p o w e r relations [see also Dreyfus & Rabinow ( 1982 ) and Racevskis ( 1983 )].
From the perspective of Foucault's writings, it may be suggested that it is not merely chance that has determined the preeminence of positivist financial accounting research, such as capital market research and agency theory. Since this type of research uncritically and unreflectively investigates "what is", without questioning h o w the status quo arose, and is ongoingly
sustained and legitimated, such research legitimizes, rather than threatens, the social, political and economic interests vested
in the status quo. It is thus the type of research that will be encouraged, admired and funded by those interests.
7 The themes in this paper emphasize the constructionist view of society, because it has not generally been acknowledged
in mainstream financial accounting research, that social reality, whilst tangibly pre-existing the individual, arises interactively
with social action. It is therefore in an effort to partially redress this imbalance, that the constructed nature of social reality
has been emphasized in this paper.
Various critiques have been made of the constructionist viewpoint for its neglect of social structure (for example Giddens,
1976 ). However, the present paper, whilst emphasizing that people construct social relations and social structure in an ongoing fashion, also recognizes that social structures, such as organizations, pre-exist the individual. As the title of this paper
reflects, social reality exists tangibly, and accounting practices communicate that reality, but in so doing, such practices play
a part in creating, shaping and changing, that is, in constructing reality. Thus the overall theoretical position of this paper corresponds more to the position of Berger & Luckmann ( 1 9 6 6 ) or Giddens (1984) [although these are not unproblematic perspectives - - see, for example, Smith & Turner ( 1986)].
8 Beaver ( 1973, p. 51 ).
Holthausen & Leftwich ( 1983, p. 81 ).
~oWhen accounting is seen as merely reflecting or communicating or monitoring the characteristics of organizations, then
many accounting methods are seen as "cosmetic" or "arbitrary" and it is supposed that investors can "see through" these
methods to the "real" company. Indeed early efficient markets research tested for those methods and standards which were
"cosmetic". Moreover, certain accounting changes and standards were held as being "cosmetic", and market efficiency was
tested on the basis of this maintained assumption. However, no clear or consistent picture emerged from this research as to
which methods, issues or standards are indeed "cosmetic" i.e. do not have "information content" about reality (Lev & Ohlson
( 1982 ), Hines ( 1984 ) ). This state of affairs ceases to be surprising or to seem anomalous, w h e n it is acknowledged that reality
does not pre-exist financial accounting practice, but rather arises reflexively and interactively with inter alia financial
accounting practices.
Such a recognition also throws light on why companies have so strongly opposed apparently "cosmetic" accounting stand
ards, and why their managements have gone to such lengths in order to mitigate the effects of them. It is not necessarily that

260

RUTH D. HINES

m a n a g e m e n t s do not believe or do not understand the Efficient Market Hypothesis, it is rather that they do not think of their
company's "size", "performance", "stability", etc. as existing concretely and independently of financial accounting practices,
so that sophisticated investors can "see through" accounting n u m b e r s to it. For this reason m a n a g e m e n t s often go to expensive lengths, in order to manage their company's appearance [see Wyatt ( 1 9 8 3 ) for s o m e of these costly circumventions of
accounting standards].
i i For example, the stock market does not appear to react to replacement cost disclosures, but it appears that it may react to
depreciation changes (see Lev & Ohlson, 1982).
2 "A grequent topic of debate in the literature is the impact of accounting research on the accounting profession; the general
conclusion is that the direct impact has been minimal" (Ball & Foster, 1982, p. 166).
t3 The accounting profession in Europe, the United States and Australia, is increasingly attracting investigation and governmental intervention. The following statement was made by Arthur M. Wood, chairman of the Public Oversight Board of the
Securities and Exchange Commission practice section of the AICPA division for CPA firms:
This is a critical time in the history of the accounting profession. To believe that the crisis exists because of the hearings
being held by the House Subcommittee on Oversight and Investigations is in m y estimation a serious error. Congressman
Dingelrs hearings are a symptom, not a cause. The cause of this crisis is in fact that investors and depositors are losing faith
in the ability of the accounting profession to perform the job that has historically been its unique function: assuring the
integrity of the financial information on w h i c h our capitalistic society d e p e n d s ( From "Statements in Quotes",Journal o f
Accountancy(August, 1985, p. 142)).
14 Handel ( 1982, p. 36), first stated by W. I. Thomas in the 1930s. Handel ( 1 9 8 2 ) and Mehan & W o o d ( 1 9 7 5 ) elaborate h o w
assumptions about reality predispose one to interpreting events in h a r m o n y with those assumptions. W h e n acted upon, these
assumptions perpetuate or create the conditions that one already assumed to have existed.
~s See Miller ( 1 9 8 6 ) for a review of Fourquet's La Comptes de la Puissance (Encres, Editions Recherches, 1980), w h i c h
shows h o w national accounts are instrumental in shaping economic behaviour.
16 See Zeff ( 1 9 7 8 ) for discussion of the power struggles w h i c h have surrounded a n u m b e r of U.S. accounting standards, as
various groups have sought to impose their definition of reality, and the consequences of it, u p o n society.

BIBLIOGRAPHY
Allison, G. T., Conceptual Models and the Cuban Missile Crisis, The American Political Science Review
(September 1969) pp. 689-718.
Ball, R. & Foster, G., Corporate Financial Reporting: A Methodological Review of Empirical Research,
Journal o f Accounting Research, Supplement ( 1 9 8 2 ) pp. 161-234.
Beaver, W. H., What Should be the FASB's Objectives?Journal o f Accountancy (August 1973) pp. 49-56.
Berger, P. L & Luckmann, T., The Social Construction o f Reality (Harmondsworth: Penguin, 1966).
Berger, P. L. & Kellner, H., Marriage and the Construction of Reality, Diogenes (1964) pp. 1-24.
Bitmer, E., The Concept of Organisation, SocialResearch (1965) pp. 239-255.
Boatsman, J. R., Why Are There Tigers and Things?, Abacus ( D e c e m b e r 1977) pp. 155-167.
Castaneda, C., The Teachings o f DonJuan: A Yaqui Way o f Knowledge ( Harmondsworth: Penguin, 1970 ).
Castaneda, C., A Separate Reality (Harmondsworth: Penguin, 1971 ).
Castaneda, C.,Journey to lxtlan: The Lessons o f Don Juan (Harmondsworth: Penguin, 1974).
Dreyfus, H. L. & Rabinow, P., Michel Foucault. Beyond Structuralism and Hermeneutics (Brighton:
Harvester Press, 1982).
Feyerabend, P., Against Method (London: Verso, 1978).
Financial Accounting Standards Board, Statement o f Financial Accounting Concepts No. 5: Recognition
and Measurement in Financial Statements o f Businesa Enterprises ( FASB, 1984 ).
Findlay, M. C., On Market Efficiency and Financial Accounting, Abacus ( D e c e m b e r 1977) pp. 106-122.
Foucault, M., Madness and Civilization: A History o f lnsanity in the Age o f Reasor6 translated by Richard
Howard (London: Tavistock, 1967).
Foucault, M., Discipline and Punish: The Birth o f the Prison, translated by Alan Sheridan (London: Allen
Lane, 1977).
Foucault, M., Power~Knowledge: Selected Interviews and Other Writings 1 9 7 2 - 1 9 7 7 ( N e w York:
Pantheon, 1980).

FINANCIALACCOUNTING AND REALITY

Foucault, M., The History o f Sexuality: An Introduction, translated by Robert Hurley (Harmondsworth:
Penguin, 1981 ).
Garfinkel, H., Studies in Ethnomethodology (Englewood Cliffs, NJ: Prentice-Hall, 1967).
Giddens, A., New Rules o f Sociological Method ( London: Hutchinson, 1976 ).
Giddens, A., The Constitution o f Society: Outline o f the Theory o f Structuration (Cambridge: Polity Press,
1984).
Gilbert, G. N., The Transformation of Research Findings into Scientific Knowledge, SocialStudies o f Science
(1976) pp. 281-306.
Goodman, N., Ways o f Worldmaking (Brighton: Harvester Press, 1978).
Gribbin, J., In Search o f SchrOdinger's Cat: Quantum Physics and Reality (London: Corgi, 1985 ).
Handel, W.,Ethnomethodology: How People Make Sense ( Englewood Cliffs, NJ: Prentice-Hall, 1982).
Hines, R. D., The Implications of Stock Market Reaction (Non-reaction) for Financial Accounting Standard
Setting, Accounting and Business Research (Winter 1984), pp. 3-14.
Hines, R. D., Towards a Sociopolitical Research Programme in Financial Accounting, working paper,
Macquarie University, Australia (1986a).
Hines, R. D., Why Won't the FASB Conceptual Framework Work? Working Paper, Macquarie University,
fi~ustralia (1986b).
Hines, R. D., The Social Roles and Consequences of Financial Accounting, working paper, Macquarie
University, Australia ( 1987 ).
Holthausen, R. W. & Leftwich, R. W., The Economic Consequences of Accounting Choice: Implications of
Costly Contracting and Monitoring,Journal o f Accounting andEconomics (August 1983) pp. 77-118.
Jones, R. S., Physics as Metaphor (London: Wildwood House, 1983).
Knorr-Cetina, K. D., Social and Scientific Method or What Do We Make of the Distinction Between
the Natural and the Social Sciences? Philosophy o f the Social Sciences ( 1981 ) pp. 335--359.
Kuhn, T. S., The Structure o f Scientific Revolutions (Chicago: University of Chicago Press, 1962).
Latour, B. & Woolgar, S.,Laboratory Life: The Social Construction o f Scientific Facts ( London: Sage, 1979 ).
Laudan, L., A Confutation of Convergent Realism, Philosophy o f Science ( 1981 ) pp. 19--49.
Laudan, L., Discussion: Realism without the Real Philosophy o f Science (1984) pp. 156-162.
Lev, B. & Ohlson, J. A., Market-Based Empirical Research in Accounting: A Review, Interpretation, and
Extention,Journal o f Accounting Research, supplement ( 1982 ) pp. 249-311.
Mehan, H. & Wood, H., The Reality o f Ethnomethodology (New York: John Wiley, 1975 ).
Meyer, J. W., On the Celebration of Rationality: Some Comments on Boland and Pondy, Accounting
Organizations and Society (1983) pp. 235-241.
Miller, P., Accounting for Progress - - National Accounting and Planning in France: A Review Essay,
Accounting Organizations and Society (1986) pp. 83-104.
Myers, G., Texts as Knowledge Claims: The Social Construction of Two Biology Articles, Social Studies o f
Science ( 1985 ) pp. 593--630.
Pickering, A., Constructing Quarks: A Sociological History o f Particle Physics (Chicago: University of
Chicago Press, 1984).
Poincar6, H., The Foundations o f Science ( Princeton, NJ: Science Press, 1913 ).
Racevskis, K~,Michel Foucault and the Subversion o f lntellect (London: Corneli University Press, 1983).
Schuster, J. A., Methodologies as Mythic Structures: A Preface to the Future Historiography of Method,
Metascience (1984) pp. 15-36.
Scott, M. B. & Lyman, S. M., ACcounts, American Sociological Review (February 1968) pp. 46-62.
Silverman, D., Accounts of Organizations, in McKinlay, J. B., Processing People: Cases in Organizational
Behaviour (New York: Holt, Rinehart and Winston, 1975)pp. 269-302.
Smith, J. W. & Turner, B. S., Review article: Constructing Social Theory and Constituting Society,
Theo~, Culture and Society (1986) pp. 125-133.
Tucker, R. W., Spoils of Defeat: Rationalizing Vietnam, Harpers (November 1981 ) pp. 85-88.
Wyatt, A. R., Efficient Market Theory: Its Impact on Accounting, Journal o f Accountancy (February
1983) pp. 56--62.
Zeff, S. A., The Rise of 'Economic Consequences', The Journal o f Accountancy, (December 1978)
pp. 56-63.

261