Recent corporate reporting history is well–known for its corporate failures andquestionable accountancy practices, many of which caused the profession to befrowned upon. However, the splodge on the accounting profession?s reputationgoes deeper than its corporate reporting failures. The scientific foundationthereof is also being questioned in academic circles. Even though accountingscholars have been trying to formulate foundational accounting theories, it hasbeen the accounting regulators that have been more successful in promotingtheir versions of what accounting theory should be, which place a questionmark on the legitimacy of current day accounting theory. This thesis aims todelve deeper into the foundational philosophies of accounting and its impact onthe practice of accounting.With the current accounting globalisation efforts, the profession?s stewardshipfunction is becoming less prominent in its promulgated standards, which inturn brings the focus on the many questionable ethical practices found in theprofession. Even though the regulatory bodies require their members to committhemselves to professional codes of conduct, which entails competency,integrity, objectivity and confidentiality, the 1st article in this thesis claims thatethical conduct is more than mere adherence to rules and regulations. It is alsoabout the image of not only the profession, but also accounting research andeducation.Accounting is broadly practised, researched and taught within its so–calledconceptual framework, of which a key objective is to guide and inform accounting practice. The conceptual framework became the basis upon whichaccounting theory is based. However, many accounting scholars are openlycritical of presenting accounting theory as a set of practical guidelines. The 2ndarticle in the thesis concludes that, from an academic perspective, accountingtheory should be based on three quintessential guidelines. The first of which isits primary purpose of reporting on the historic economic events, secondly theprovision of useable and comparable information about these events and finally,the facilitation of business decisions based on relevant and reliable information.In the above mentioned business decisions, the concept of value is often takenfor granted and many accounting techniques? effectiveness is judged on howwell it approximates an item?s value. The 3rd article argues that the multiplepurposes for which accounting information is used complicates the issue ofvalue, as reported by accounting. Two key conflicting valuation perspectives arethe so–called decision–usefulness and true income perspectives. The currentdrive towards fair value accounting, as opposed to historic cost accounting, castdoubts on the reliability and relevance of accounting information. Even thoughit may be argued that value–based techniques are more relevant because it is abetter reflection of the current business conditions, the mere subjective naturethereof and the accountant?s objective valuation skills make the true relevanceof this information questionable. Furthermore, mixed model valuations found infinancial statements makes cross–company information unreliable.Accountancy research of the past four decades focussed on the concept of userdecision–usefulness. The user is also pre–eminent in the globalisation ofaccounting standards of the FASB and the IASB, where users are specified asthe equity investors, lenders and capital providers. The 4th article acknowledgesthat although these user categories are important consumers of the financialdata, there are other users which are also impacted by the financial informationand the company?s operational performances. There are also concerns overaccounting?s key assumptions, such as its quantification and predictiveabilities, which are fundamental to the decision–usefulness objective.Furthermore, there are questions around how the regulators decided whatinformation is suppose to be useful and what type of utility is being sought. In summary, the focus on the vocational aspects of accountancy stands incontrast to claims of accounting as an academic discipline in the socialsciences. The reality is that the practices of the profession will probably alwaysplay a central role in what is taught at university level, and the regulators, asthe final authority on accounting standards, will probably remain dictatorial inpromulgating their versions of accounting theory. Yet, accounting and its widespread impact on society, makes it a key discipline within the economical andmanagement sciences. It is therefore essential for the resurrection of accountingas a social scientific discipline that there is a return to foundational accountingresearch that will prepare (and enable) prospective practitioners and academicsto question the status quo and push back on accounting practices that arethreatening to extinguish the flame of accounting scholarship.
