Description
Doubts were raised within the accounting research program in the United States in the late 1980s about its progress
and future potential. In this paper, we develop criteria for ‘‘good’’ scientific conversation, which leads to progress
(defined as innovation and relevance). The key to this process is critical evaluation of background assumptions. The
structure of scientific conversation in accounting and economics, whose theories and practices accountants adopted,
are examined
The structure and progressivity of accounting research:
the crisis in the academy revisited
Sara Ann Reiter
a,
*, Paul F. Williams
b
a
School of Management, Binghamton University, Binghamton, NY 13902-6015, USA
b
Department of Accounting, Box 8113, North Carolina State University, Raleigh, NC 27695-8113, USA
Abstract
Doubts were raised within the accounting research program in the United States in the late 1980s about its progress
and future potential. In this paper, we develop criteria for ‘‘good’’ scienti?c conversation, which leads to progress
(de?ned as innovation and relevance). The key to this process is critical evaluation of background assumptions. The
structure of scienti?c conversation in accounting and economics, whose theories and practices accountants adopted,
are examined. We conclude that structural barriers result in a lack of adequate transformative critique, which
contributes to the lack of progress in the accounting research program. # 2002 Elsevier Science Ltd. All rights
reserved.
You have to stand by your theories because
they’re for that, otherwise there’s no sense in
making them up. (Lovejoy
1
)
Doubts were expressed within the mainstream
accounting research program in the United States
in the late 1980s and early 1990s about its progress
and future potential (Demski, Douch, Lev,
Ronen, Searfoss, & Sunder, 1991). The ensuing
‘‘crisis’’ in ?nancial accounting research raises
questions about how the progressivity and poten-
tial of research programs should be evaluated.
This paper develops criteria for evaluation of the
scienti?c conversation within a discipline (Arring-
ton & Schweiker, 1992; Longino, 1990; McClos-
key 1985, 1996, 1998) and applies them to an
assessment of the crisis in accounting. We argue
that scienti?c progress is dependent on the quality
of critical conversation within a discipline and that
progress, de?ned as innovation and relevance, is
an important feature of good science or good
scholarship in general.
2
0361-3682/02/$ - see front matter # 2002 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00050- 2
Accounting, Organizations and Society 27 (2002) 575–607
www.elsevier.com/locate/aos
* Corresponding author. Tel.: +1-607-777-6174; fax +1-
607-777-4422.
E-mail addresses: [email protected] (S.A. Reiter),
[email protected] (P.F. Williams).
1
Lovejoy is a character created by the mystery writer Jona-
than Gash. Quote is from Gash (1989, p. 121).
2
Although Longino’s (1990) account is of the practice of
science in the natural sciences (particularly biology), we believe
it is applicable to accounting research. Accounting researchers
talk about their practice in essentially ‘‘scienti?c’’ terms bor-
rowed from the natural sciences and the North American
accounting research program, like economics, follows a natural
science tradition. Also, the distinction between natural science,
social science, and non-science may not be particularly relevant
to epistemological issues since the same process of evaluation
of truth claims through social discourse operates in all scho-
larly arenas (Arrington & Schweiker, 1992, p. 528; McCloskey,
1985, p. 56).
The goals of science may be stated variously as
‘‘construction of comprehensive accounts of the
natural world’’ (Longino, 1990, p. 32), ‘‘discovery
of truth about the natural world’’ (p. 32), or the
‘‘search for descriptions of the natural world that
allow for the prediction and control of an
increasing number of its aspects’’ (p. 33). How-
ever, in the absence of an adequate critical con-
versation, particularly regarding the validity of
background and contextual assumptions, dis-
ciplines become ?xed and overly stable, no longer
concerned with ‘‘the truth’’ (p. 224). Arrington
and Schweiker (1992, p. 524) argue that ‘‘social
forces within research communities can constrain
possibilities for argument, innovation, and even
action.’’ Emphasizing the structural components
of the criteria for ‘‘good’’ scienti?c conversation,
we investigate the US accounting academy to
assess whether the ‘‘crisis’’ in ?nancial accounting
research may be due to self-limiting features of its
scienti?c conversation.
There was a revolutionary change in accounting
research in the 1960s and 1970s from a so-called a
priori, normative approach to an empirical, eco-
nomic-based research program (Mouck, 1993,
1995b; Wells, 1976). The beginning of this
‘‘accounting revolution’’ (Beaver, 1989) has been
traced to the publication of Ball and Brown’s
(1968) study relating accounting earnings and
market returns. By the 1980’s, the positive
accounting research program, based on positive
economic theory (Watts & Zimmerman, 1986),
dominated mainstream accounting research in the
USA (Brown, 1996; Lee, 1995; Mouck, 1995a;
Rodgers & Williams, 1996; Williams & Rodgers,
1995). The in?uence of positive accounting, which
Chua (1996) calls the ‘‘empirical/calculative tradi-
tion,’’ has spread beyond North America and
become a major global accounting research mode.
Clarke, Craig, and Amernic (1999) document the
prevalence of North American research meth-
odologies in Australian doctoral research and
Chua (1996, p. 137) observes that the empirical/
calculative tradition has spread as graduates of
North American universities have returned to
teach and set up doctoral programs in non-Wes-
tern and ‘‘dominion capitalistic’’ countries. Lukka
and Kasanen (1996) review publications in six top
journals
3
from 1984 through 1993 and note that
the ‘‘U.S.A. dominates the scene in many ways:
U.S. data was used in 69% of papers; 70% of all
authors came from the U.S.A.. . .’’(p. 769).
4
Nearly a generation after the publication of Ball
and Brown (1968), mainstream US accounting
academics were becoming troubled about the lack
of success of the positive accounting research pro-
gram. Critical and questioning reviews of the
positive accounting research program were pub-
lished by mainstream accounting researchers such
as Lev (1989), Bernard (1989), and Abdel-Khalik,
Regier, and Reiter (1989). A group of researchers
(Demski, Dopuch, Lev, Ronen, & Searfoss, 1991)
who met under the auspices of the American
Accounting Association to discuss the state of
accounting research, produced a discussion docu-
ment about the ‘‘serious crisis’’ in academic
accounting. The document identi?ed a number of
speci?c symptoms of the ‘‘crisis’’:
1. Unlike many other professional disciplines,
(e.g. ?nance, medicine, architecture),
accounting research does not lead practice
and/or policymaking (p. 1).
2. Most academic research areas are character-
ized by cycles of signi?cant innovations—i.e.
new ideas and concepts that periodically
revolutionize the ?eld, such as rational
expectations in economics, and options
models in ?nance. Such innovations in
accounting research are practically non-exis-
tent (p. 1).
3. Despite considerable research e?ort, it does
not seem that we are any closer now than we
were 20–30 years ago to addressing the
3
The six journals analyzed by Lukka and Kasanen (1996)
are The Accounting Review (TAR), Journal of Accounting and
Economics (JAE), Journal of Accounting Research (JAR),
Accounting, Organizations and Society (AOS), Accounting and
Business Research (ABR), and Abacus.
4
Panozzo (1997) notes that the most active group of dis-
senters to the dominant US research models are European
scholars. Ryan, Scapens, and Theobald (1992) explain that
theoretical work on income theory remained central to UK
accounting research long after normative work had been sup-
planted by the empirical/calculative tradition in the US. In
addition, UK academics retained a concern with wider social
issues and began ‘‘exploring accounting regulation as a social
process’’ (p. 71) in contrast to the US’s economic orientation.
576 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
fundamental issues in accounting such as the
optimal choice of accounting standards and
the optimal structure of accounting institu-
tions (pp. 1–2);.
4. There appears to be no discernible demand
for academic accountants or for accounting
research by accounting ?rms (except in
auditing), by industrial ?rms, or by reg-
ulators. A strong demand for academicians
exists in most other professional disciplines,
such as ?nance. . .(p. 2).
‘‘Thus,’’ the discussion document concludes,
‘‘we seem to be witnessing a ‘market failure’ phe-
nomenon in academic accounting, particularly in
research’’. While the possibility of progress in
science has recently been questioned by post-
modern philosophers (Chua, 1996, p. 132), we
derive a notion of progress from the implicit
expectations of the authors of the crisis docu-
ment.
5
Their expectations fall into two categories.
First, a progressive research program should have
vitality as evidenced by innovation, progress in
resolving fundamental issues, and generation of
new issues for study. Second, a progressive
research program should be appreciated by prac-
tice constituencies beyond the research commu-
nity—it should lead practice and guide
policymakers and regulators, in?uence education,
and generate demand for academic accountants
and accounting research (Demski et al., 1991).
Progressive goals represent an ideal, and di?erent
research communities di?er in the extent to which
they appear to meet these goals. There is wide-
spread angst, for example, in the academic eco-
nomics community about whether similar goals
are being met (Redman, 1991),
6
while there is a
common perception that academic ?nance,
accounting’s close cousin, is ‘‘both ‘scienti?c’ and
‘successful’’’ (Chua, 1996, p. 146).
7
The serious questions raised by Demski’s group
about the past success and future potential of the
research program are still unresolved. In part this
may be because accounting researchers do not
have the inclination to engage in philosophical
and methodological introspection. For elite
accounting academics, the current social structure
of the academy ‘‘works’’ quite well. A certain
amount of introspection and self-analysis, how-
ever, is critical to progress in any scholarly ?eld as
explained by Ryan, Scapens, and Theobald (1992):
Within a research community . . . the cultiva-
tion of sound method and a strong critical
approach are necessary conditions for healthy
and productive research to ?ourish. Further-
more, we believe that there is a place within
every research community for continuous
reappraisal of the methodological preconcep-
tions upon which its work is based (p. viii).
5
The authors of the white paper describe the crisis in
accounting in a language that suggests a Kuhnian (Kuhn, 1970)
characterization of crisis, for example using the phrase ‘‘cycles
of signi?cant innovation.’’ They represent the crisis they
describe as analogous to Kuhn’s examples of crises in the nat-
ural sciences, such as the inadequacy of the Ptolemaic model,
the pholgiston theory, and Newtonian absolute space (Kuhn,
1970, pp. 68–70), which in turn were resolved through para-
digm shifts. Crises could be understood in ways other than this
Kuhnian sense. For example, crises can arise over doctrines,
which are not resolved by paradigm shifts but more likely by
?ssion. Two paradigms persist, constituting di?erent belief sys-
tems while perhaps sharing some common features, et al., Pro-
testantism and Roman Catholicism. Kuhn’s (1970) crisis and
overthrow model may also be a faulty model for scienti?c pro-
gress. Popper’s critical rationalism, for example, is a theory of
learning where bad theories are not overthrown, but rather
evolve into better theories through incorporation of transfor-
mative critique (Redman, 1991, p. 133). Abbott (2001) theo-
rizes that disciplines divide along predictable lines creating a
fractal pattern of change over time. According to Abbott
(2001), the history of the social sciences is one of recurring
themes emerging through time in di?erent guises. The result is
progressive uniquely in the sense that disciplines approach
problems from a multitude of viewpoints over time.
6
Redman (1991) explains that talk about a ‘‘crisis’’ in eco-
nomics began in Britain in the 1970s, spreading to the USA in
the 1980s. She quotes a sample of perceived de?ciencies from
Coats (p. 97, note 3). These include inadequacies in the
empirical foundations of economics, over-development of
mathematical economics and econometrics to the detriment of
intellectual development, irrelevance or lack of contribution of
most economists’ e?orts toward the solution of major practical
problems, and a state of mental confusion in a profession
whose members su?er from a problem of ‘‘collective hubris.’’
7
See, for example, Reiter (1998), McGoun (1992, 1995),
and Frankfurter et al (1994) for a dissident view on the ‘‘suc-
cess’’ of the ?nancial economic paradigm.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 577
Evaluating the future potential of an academic
?eld is a daunting task, and we make no claims of
reaching ?nal and totalizing judgments in this
paper. What we seek to contribute is an applica-
tion of contemporary thought in the philosophy
and sociology of science, about the workings of
scienti?c disciplines to the problem of a lack of
scienti?c progress in accounting. The next section
of the paper reviews the basic premises of the
rhetoric of inquiry movement and sets out the
rationale for, and indications of, ‘‘good’’ scienti?c
conversation, i.e. one that permits progress. The
following section traces the incorporation of eco-
nomic theory into accounting research and reviews
the structure of scienti?c conversation in econom-
ics and how it is replicated in positive accounting
research. The analysis concludes that structural
barriers exist that impede the possibility of eco-
nomic theory development within the accounting
context and keep accounting researchers from
evaluating the extent to which accounting phe-
nomena are adequately modeled using economic
theory. Ironically, the structural barriers that
impede progress appear to result from the attempt
to make accounting research more ‘‘scienti?c’’ by
adopting economic theory and methods. Subse-
quently, we analyze several cases of conversation
in the mainstream US accounting academy to see
if transformative criticism is made, heard, and
acted upon. Finally, we provide an overall eva-
luation of the state of the mainstream US
accounting research conversation, discuss the
implications of our conclusions for both the USA
and the international accounting research com-
munities, and make suggestions for promoting
better conversation in accounting research.
1. Progressive science as ‘‘good’’ conversation
It is widely acknowledged that science is accom-
plished within communities that have developed
their own sets of rules (Arrington & Schwieker,
1992, p. 551; Kuhn, 1970; Longino, 1990; Lukka
& Kasanen, 1996, p. 771; McCloskey, 1998, p. xx).
What counts as knowledge in any scholarly ?eld is
determined by how that ?eld is organized socially
(Barnes, Bloor, & Henry, 1996; Whitley, 1984;
Fuchs & Turner, 1986; Hagstrom, 1965; Knorr-
Cetina, 1981). When the need arises, scienti?c
practices and rules within disciplines are often
legitimized, particularly to outsiders or critics
within, by reference to some ‘‘philosophy of
science’’. For example, Watts and Zimmerman
(1995, p. 12) invoke philosophers of science such
as Toulmin, Friedman, and Popper in support of
the following summary of the scienti?c process:
Logic plays a role in developing theories.
Theories are based on assumptions and logic
is used to derive propositions. However, given
the logic of the theory is correctlydeveloped,
logic does not determine whether a theory is
supported by the scienti?c community or not.
Acceptance depends on the extent to which the
empirical propositions (predictions) of the the-
ory are consistent with observed phenomena.
Following assorted rules identi?ed by certain
prominent philosophers of science to make deci-
sions about the truth of hypotheses and the valid-
ity of research programs is called the logic of
inquiry approach.
A number of di?erent theories of the practice of
science and the philosophy of science have been
developed and discussed in the past thirty years.
Several theories, for example Popper’s falsi?cation
theory, concentrated on ?nding demarcation cri-
teria that could distinguish between science and
non-science. Other theory developments, for
example by Kuhn (1970) and Lakatos (1970),
attempted to describe what scientists seem to do in
their practice of science. There are well-docu-
mented problems (McCloskey, 1994) with the
logic of inquiry approach in providing strong
demarcation criteria for choosing between true
and false theories and progressing and deteriorat-
ing research programs. These problems have led
students of science (including Popper) to interpret
scienti?c practice in more sociological terms. Sci-
enti?c knowledge is seen not as the result of some
universal application of the rules of scienti?c
method, but as the temporary consensus embraced
by a community of scientists with shared norms,
methods, assumptions, traditions, values, etc.
These communities are bounded (Fuller, 1993;
578 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Whitley, 1984) and have di?erent structures that
change through time. Depending on how commu-
nities are able to create self-correcting mechanisms
within the conduct of research, the scienti?c work
of the discipline will move forward in a pro-
gressive manner by allowing unproductive theories
and beliefs to be amended or discarded. The
metaphor of conversation is the most apt to a
contemporary understanding of scienti?c commu-
nities because scientists are engaged mainly in acts
of persuasion, which constitute the means of cor-
recting errors within the community of scientists.
McCloskey (1985, p. 153) explains this rheto-
rical turn thusly, ‘‘[t]he rhetoric of conversation,
not the logic of inquiry, provides the standards for
science.’’ The quality of scienti?c conversation
itself is seen as the ultimate justi?cation strategy
for a research program:
What distinguishes good from bad in learned
discourse, then, is not the adoption of a par-
ticular methodology, but the earnest and
intelligent attempt to contribute to a con-
versation (McCloskey, 1985, p. 27).
‘‘Good’’ conversation promotes progress in sci-
enti?c research through concern with good pro-
cess.
8
Lack of progress in scienti?c research is not
a matter of adopting a ‘‘bad’’ philosophy of
science, but of lacking a structure conducive to
good process. The rhetorical practices, or conversa-
tions, within a discipline become very important
since they determine whether an appropriate cri-
tical focus can be maintained and operationalized.
As Sanders (1990) notes:
The rhetorical practices of creating, revising,
and challenging discursive constructions that
cohere distinct knowledge claims are the only
independent tests (i.e. extrascienti?c but not
epistemologically opposed) that the scienti?c
community has of its research agenda, meth-
ods, paradigms, interpretations, and theories’’
(p. 154).
9
Longino’s theory of Science as Social Knowledge
(1990), describes characteristics of a ‘‘good’’ con-
versation.
10
Longino asserts that it is the colla-
borative social process of ‘‘transformative
interrogation’’ of scienti?c ideas that makes scien-
ti?c knowledge objective, at least in the sense that
it does not exhibit individual subjectivity (p. 224).
With Longino, the concern shifts from developing
demarcation rules to show which research pro-
grams are most scienti?c or truthful or fruitful,
toward concern with improving the process of sci-
enti?c inquiry. Good conversational process then
acts to promote good research programs by
exposing all elements of research, including back-
ground assumptions, to critical scrutiny and
debate by the scienti?c community.
8
While we agree with McCloskey about the importance of
rhetoric of inquiry in the practice of science, we disagree with
her belief that revealing the rhetorical nature of scienti?c con-
versation will be su?cient to get a discipline back on track.
McCloskey (1985, 1994, 1996, 1998) seems to think that if
economists, in particular leading economists, would come to
understand and respect the role of rhetoric in economic con-
versation, the conversation could be cured of its modernist,
positivist faults. We place more emphasis on the ways that the
structure of the conversation, which has de?ned power dimen-
sions, makes self-reform di?cult and problematic. McCloskey
has been accused of relativism by more conservative economic
philosophers (see McCloskey, 1994, for a blow by blow refuta-
tion of her critic’s misunderstandings). This assertion is wide of
the mark, however, as McCloskey is very much a believer in
scienti?c truth, which she believes is not likely to be arrived at
without good quality argumentation and persuasion within the
scienti?c community.
9
See also Pera (1994) who o?ers a dialectical model, which
acknowledges the argumentative and transformative nature of
science.
10
Longino (1990) is concerned with epistemological pro-
blems, particularly relating to objectivity, in the biological sci-
ences. The issues of epistemology raised by Longino (1990) are
applicable to the process of any scholarly community seeking
to pursue and recognize the truth—whether in the natural sci-
ences, social sciences or humanities. The natural sciences and
social sciences di?er on issues of ontology—di?erences in the
problems of knowing physical facts versus social facts—but
that is not particularly important to the problem we are dis-
cussing in this paper. Longino’s adherence to scienti?c realism
and belief in the possibility of a form of objectivity would likely
be seen as bourgeois science by neo-Marxists, as, perhaps, too
positivistic by Habermas, as too na?¨ve by philosophers such as
Foucault who put ideology at the heart of science, and as too
dismissive of issues of domination by feminist philosophers
(Longino, 1990, pp. 194–213). Her stance, however, is more in
tune with the philosophies of accounting and economics
researchers, particularly in the USA.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 579
Even Sir Karl Popper, most notably identi?ed
with the logic of inquiry approach, towards the
end of his life embraced an evolution metaphor
(evolutionary epistemology) for scienti?c progress
where the key feature is critique within a commu-
nity of scholars (Popper, 1972, pp. 239–240):
I only wish to stress that critical arguments
are a means of control [emphasis in original]:
they are a means ofeliminating errors, a
means of selection. We solve our problems
[emphasis in original] by tentatively propos-
ing various competing theories and hypoth-
eses, as trial balloons, as it were; and by
submitting them to critical discussions and to
empirical tests, for the purpose of error-elim-
ination.
For Popper, this argumentative process becomes
an ethic by requiring the individual scientist to
argue with him or herself (Popper, 1972, p. 266):
Be clear as you can about the various theories
you hold, and be aware that we all hold the-
ories unconsciously, or take them for granted,
although most of them are almost certain to
be false. Try again and again to formulate the
theories which you are holding and to criti-
cize them. And try to construct alternative
theories—alternatives even to those theories
which appear to you inescapable; for only in
thisway will you understand the theories you
hold.
Further,
And let it be your ambition to refute and
replace your own theories [emphasis added];
this is better than defending them, and leav-
ing it to others to refute them.
In addition to the critical attitude promoted by
Popper, Longino (1990) emphasizes the impor-
tance of questioning the contextual framework of
scienti?c research. Scienti?c practice is shown to
be in?uenced by contextual values in a number of
ways (see also Barnes et al., 1996; Fuller, 1988).
Those most relevant for understanding accounting
research include contextual values ‘‘expressed in
or motivating background assumptions facilitat-
ing inferences in speci?c areas of inquiry’’ and
contextual values ‘‘expressed in or motivating
acceptance of global, frameworklike assumptions
that determine the character of research in an
entire ?eld’’ (Longino, 1990, p. 104).
‘‘Transformative criticism’’ is crucial to the
social process by which background assumptions
are questioned:
A method of inquiry is objective to the degree
that it permits transformative criticism. Its
objectivity consists not just in the inclusion of
intersubjective criticism but in the degree to
which both its procedures and its results are
responsive to the kinds of criticism described
. . . Scienti?c communities will be objective to
the degree that they satisfy four criteria
necessary for achieving the transformative
dimension of critical discourse: (1) there must
be recognized avenues for the criticism of
evidence, of methods, and of assumptions
and reasoning; (2) there must exist shared
standards that critics can invoke; (3) the
community as a whole must be responsive to
such criticism; (4) intellectual authority must
be shared equally among quali?ed practi-
tioners (Longino, 1990, p. 76).
Expanding on the points noted above, the ?rst
criterion means that criticism must be valued, not
repressed, and there must be some way for criti-
cism to interact with accepted theories, i.e. there
must be some forum in which to express criticism.
The second criterion relates to the standards and
values of the scienti?c community that are needed
to make possible attention to criticism. These
types of shared standards could include values
such as empirical adequacy, truth, expansion of
the existing knowledge framework, reliability as a
guide to action, relevance or satisfaction of social
needs, or consistency with theories from other
domains (p. 77). The third criterion is that ‘‘the
beliefs of the scienti?c community as a whole and
over time change in response to critical discussion
taking place within it’’ (p.78). The fourth criterion
relates to equality of intellectual authority. This
580 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
criterion is ‘‘intended to disqualify a community in
which a set of assumptions dominates by virtue of
the political power of its adherents’’ (p. 78). In
summary, the central characteristic necessary for
‘‘good conversation’’ is that criticism must be
encouraged and taken seriously. It is not just that
criticism must be produced and heard, it must also
be incorporated into the research program:
When critical discussion becomes repetitive
and ?xed at a metalevel, or when criticism of
one set of assumptions ceases to have or does
not eventually develop a connection to an
empirical research program, it loses its rele-
vance to the construction of empirical
knowledge (Longino, 1990, p. 79).
In addition, a particular type of criticism is
vital—criticism that questions the relevance of
background assumptions. It is also important that
the results of empirical studies are used to evaluate
the adequacy of the theory and its background
assumptions.
Progress in accounting research is de?ned by the
authors of the white paper (Demski et al., 1991)
both in terms of innovation and relevance to the
practice community. Innovation comes from
understanding contextual and background assump-
tions su?ciently well to ‘‘see’’ new and productive
ways of thinking and doing. Relevance to the
practice community is related to Mattessich’s
(1984) concept of applied science. Applied science
must be concerned with ‘‘goals, norms and pre-
scriptive conclusions’’ (p. 2). In order to be useful to
practitioners and policy-makers, accounting research
must have a prescriptive or ethical awareness. As
Chua (1996) explains, accounting researchers have
moved away from the possibility of relevance
through their vigorous process of ‘‘scientization’’:
. . . over the last twenty-?ve years in account-
ing science, a concern with quantitative rigour
has not only encouraged researchers to desist
from talking about values and ends, it has
relegated such speech acts to a lower form of
academic practice. In the process, the dis-
cipline has moved to a point just beyond the
reach (and beneath the notice) of policy-
makers, practising accountants and the public
at large (p. 147).
11
It is through re-examining the contextual
assumptions of positive accounting and assessing
their relevance to the accounting research project,
a process of transformative criticism, that
accounting researchers can hope to re-achieve
relevance. The remainder of this paper seeks to
locate the US accounting academy relative to
Longino’s (1990) four criteria for ‘‘good’’ con-
versation—avenues for critique, shared values,
community response, and shared intellectual
authority. All particular disciplines deviate to a
greater or lesser extent from this ideal model of
scienti?c process. However, the conversational
structures and practices of a discipline must
encourage production of some degree of transfor-
mative criticism to achieve progress in the form of
innovation and relevance.
2. Economics and the structure of accounting
‘‘science’’
One of the principal characteristics of the
empirical/calculative tradition in accounting
research is its reliance on economic theory. In this
section, we trace the history of economic theory in
accounting research and establish the dominance
of economics as a theoretical paradigm. We then
explain how several characteristics of the way
accountants use economic theory contribute to the
noted lack of innovation and relevance. Accoun-
tants have not only imported the theoretical struc-
tures of economics, they have also imported
economics’ reputation structures and conversational
rules. We draw implications for the conversation in
accounting research from a review of sociology of
science characterizations of the reputation struc-
ture of economics since accounting has adopted
similar structures. Finally, we develop evidence
about the ability of accounting researchers to parti-
cipate in the economics research conversation.
11
This phenomenon is not unique to accounting. Abbott
(2001, p. 146) notes that all academic disciplines ‘‘. . . are sub-
ject to a ‘‘regression’’ into professional purity.’’
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 581
2.1. The empirical research revolution
The publication of Ball and Brown’s (1968)
article may be viewed as a prominent moment in
the scienti?c transformation of accounting—a
transformation similar to that undergone by all
business disciplines (except perhaps business law)
after World War II. This scienti?c transformation
enabled the various business disciplines to resem-
ble the rest of the university, which, by the mid-
nineteenth century, increasingly organized its cog-
nitive task through ?ner and ?ner partitions of
narrowly specialized and professional ?elds
(Fuller, 1988; McIntyre, 1990). Whitley (1986)
provides an analysis of the conditions, which
enabled economists to transform business ?nance
into ?nancial economics during the 1960s. The
a?nity between accounting and ?nance led to a
similar transformation in accounting. The trans-
formation or scientization of accounting was
motivated by a desire for academic respect-
ability (Ryan et al., 1992, p. 46) and resulted in the
choice of a social science rather than an applied
science research model (Bricker & Previts, 1990,
p. 10).
That the social science model would be neo-
classical economics was abetted by the aggressive-
ness with which the University of Chicago asserted
its particular brand of positive social science
(Devine, 1999; Fleming, Graci, & Thompson,
2000). For example, Nicholas Dopuch, the editor
of the Journal of Accounting Research (JAR), dur-
ing the transition period emphatically stated: ‘‘. . .
I do believe that the traditional form of normative
income theorizing is [dead], and I have done my
best as editor of JAR to encourage this end (quo-
ted from Bell, 1984, p. 63).’’
Because of actions by powerful gatekeepers such
as Dopuch, the expurgation from the accounting
academy of traditional brands of normative theo-
rizing happened very quickly. The rapidity of
change was not exclusively the result of the super-
iority of positive economic science as an explana-
tory tool. It also served the ideological and career
interests of both academics and large public
accounting ?rms (Williams, 2001). However, in
the practical realm of accounting policy, norma-
tive theories are still the rule.
This positive research model described by Chua
(1996) as NIRD (New, Innovative, Rigourous,
Defensible), because it ‘‘prizes scienti?c ‘objectiv-
ity,’ positivistic hypothesis-testing, [and] gen-
eralisable conclusions derived from large-sample
studies’’ (p. 131), became the norm. The transfor-
mation was enabled by the advent of computers,
large-scale data bases, and standardized faculty
training reinforced by imposition of accreditation
requirements for doctoral degrees (Ryan et al.,
1992, p. 77).
12
The end result is that neo-classical
economic theory is the theoretical basis for most
?nancial reporting research (capital markets or
principal/agent; for example, Beaver, 1989; Watts
& Zimmerman, 1986) and for much of manage-
ment accounting research (Ryan et al., 1992, p. 58).
The pace of the empirical research revolution
was rapid. Bricker and Previts (1990, p. 12) quote
from an American Accounting Association Com-
mittee report that the percentage of published
research employing a ‘‘rigorous’’ method rose
from 12% in 1963 to 86% in 1975 to 98% in 1986.
The domination of economic theory in this trans-
formation is demonstrated through citation ana-
lysis. Rodgers and Williams (1996) studied the
construction of articles written by prominent
authors (the accounting elite
13
) in The Accounting
Review (TAR) for the period 1967–1993.
Throughout the period, the importance of ?nance
and economic journals as sources for constructing
accounting knowledge steadily increased among
12
In addition to institutional reasons for the empirical
accounting revolution, there are also explanations for the indi-
vidual appeal of the empirical/calculative tradition. These
include a psychological attraction to the simple expression of
complex realities (McGoun, 1992), resonance with conservative
social context and values (Mouck, 1992), and the rhetorical
power of inscriptions (Chua, 1996).
13
‘‘Elite’’ is used in this paper as a shorthand term to refer to
those who act as powerful gatekeepers, as shapers of the
research agenda. Elite is not necessarily approbation, but it
does connote power. Lee (1999) uses the term elite to connote
over-representation of a certain group in positions of power in
relation to their proportions in the population. For example,
while the over-representation of the graduates of certain doc-
toral programs on the American Accounting Association’s
Executive Committee could be interpreted ‘‘as signals of the
existence of a meritocracy’’ (p. 260), there is no evidence that
Executive Committee members are selected on the basis of
extraordinary competence.
582 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
the elite authors at TAR. In the latest period
studied, 1985–1993, the most important journals
after Journal of Accounting Research (JAR) and
Journal of Accounting and Economics (JAE) for
constructing TAR articles were, in order, Journal
of Financial Economics, Journal of Finance, var-
ious species of the Bell Journal, and American
Economic Review. In addition, Econometrica was
also in the 10 most frequently cited journals. The
citation analysis ?ndings are consistent with the
historical accounts of the change in accounting
research given by Ze? (1966, 1978) and Flesher
(1991).
Brown (1996) provides a list of the 26 ‘‘classic’’
articles most frequently cited in the most presti-
gious accounting journals
14
for a 30-year period
starting in 1963. Each of the articles is classi?ed by
‘‘paradigm’’. All of the ‘‘classics’’ published in
North American journals utilized an economics
based framework: 63.6% of them used the capital
market ‘‘paradigm’’, 18.2% utilized a positive
theory ‘‘paradigm’’, and 18.2% used a forecasting
‘‘paradigm’’. Since Brown’s agency ‘‘paradigm’’ is
also economics based, 79.5% of all 83 articles
identi?ed by Brown (classic, near classic, and rest)
published in North American journals are
unquestionably economics based. Economic dom-
ination of the US academy is also documented in
Lee (1995), Williams and Rodgers (1995), and
Rodgers and Williams (1996).
2.2. Innovation and relevance
The empirical revolution in accounting research,
achieved by importing economic theory, has
implications for progressive possibilities such as
innovation and relevance. Chua’s (1996, p. 131)
previously described NIRD model is now the
mainstream research model in North America. It
‘‘uses a form of hypothetico-deductive logic and/
or a series of mathematically-grounded deductive
arguments,’’ frames research hypotheses to ‘‘mini-
mize issues of social welfare or distribution,’’ and
uses ‘‘empirical evidence collected by standardised
data collection and analytical methods’’ to ‘‘‘test’
the defensibility of a priori hypotheses (p. 131).
One requirement for publishable research under
NIRD criteria is methodological innovation
(Ryan et al., 1992, p. 139). However, the type of
innovation called for by journal editors is quite
minor—studies must adhere closely to the frame-
work of previous work using a di?erent sample or
di?erent measurement for a variable or a di?erent
model speci?cation or a di?erent statistical tech-
nique. In fact, Clarke et al. (1999, pp. 67–70) argue
that the scienti?c imitation of ?nancial accounting
research results in an emphasis on quantity of
publications rather than quality of ideas, intoler-
ance or ‘‘tunnel-vision’’, and emphasis on sup-
porting current accounting methods rather than
searching for the truth.
The norms for research production under the
NIRD model do not lend themselves to develop-
ment of, or tolerance for, startling innovation. In
addition, we will suggest that the social structure
of academic accounting does not permit much
individual choice.
15
Economic theories in accounting research, such
as capital market theory and principal/agent the-
ory, were originally justi?ed on the grounds of
relevance to the problems of accounting practice.
One of the ?rst indicators of usefulness identi?ed
was ‘‘predictive ability’’ (Beaver, Kenelly, & Voss,
14
Brown (1996) considers the most prestigious accounting
journals to be TAR, JAR, JAE, Accounting, Organizations and
Society (AOS), and Contemporary Accounting Research (CAR).
15
Reiman (1990) notes a particularly relevant feature of
social structures:
as long as the group is constrained such that its members
must choose among the situations in the array deter-
mined by the structure, all the individuals are ‘‘forced
into’’ the particular situations in which they end up—
even if they made some free and rational choices on the
way. Structural force can operate through free and
rational choices because force need not only take advan-
tage of one’s fear (say, of dying); it can also work, often
more e?ectively, by taking advantage of one’s rationality
(p. 220).
Further:
we must abandon the notion that force occurs only when
a person is presented with only one acceptable alter-
native. Otherwise we shall miss the way in which social
structures force fates on people while appearing to leave
their fates up to them (p. 221).
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 583
1968). Predictive ability, it was argued, logically
leads to the relevance of the association between
accounting data and security prices and returns.
Beaver (1972, pp. 408–409) stated that relevance
emphatically:
For this reason, the behavior of security pri-
ces is a necessary (emphasis in original) con-
sideration in a complete system of accounting
research into external information issues. If
we accept the premise that the purpose of
accounting is to facilitate decision making,
then accounting research can be de?ned, and
in fact must (emphasis in original) bede?ned,
to include any research e?orts that help us to
address the issue of providing the optimal
information set for some de?ned class of
decision makers.
Approximately a decade after the importation
of capital market theory into accounting, Watts
and Zimmerman (1978) imported (from Jensen &
Meckling, 1976) a second theoretical component,
principal/agent theory, from ?nancial economics
into accounting by employing the same usefulness
rationale. According to Watts and Zimmerman
(1978, pp. 112–113), this theory is of relevance to
accounting because:
Such a theory will help us to understand bet-
ter the source of the pressures driving the
accounting standard-setting process, the
e?ects of various accounting standards on
di?erent groups of individuals and the allo-
cation of resources, and why various groups
are willing to expend resources trying to a?ect
the standard-setting process. This under-
standing is necessary to determine if pre-
scriptions from normative theories (e.g.
current cash equivalents) are feasible.
Thus, accounting research informed by princi-
pal/agent theory promises to contribute to produ-
cing improved decision making about accounting
practice.The initial reaction of the practice com-
munity to the empirical revolution in accounting
research was enthusiastic. At the ?rst JAR con-
ference, sponsored by the Ford Foundation at the
University of Chicago in 1966, a prominent prac-
titioner exclaimed that ‘‘I am extremely pleased
that research practitioners in accounting have
?nally discovered numbers’’ (Davidson, 1966, p.
181). He continues:
. . . I believe that this conference, with its
focus on evidence, is one of the most healthy
and signi?cant developments that have taken
place in accounting in many years. Although
none of the papers presented here may shake
the foundations of the accounting world, I
believe that, ten years hence, the cumulative
e?ort of many such empirical investigations
will have radically changed the nature of the
accounting profession’s thought (p. 161).
However, the decade of the 1960s marks the
beginning of a deepening schism ‘‘characterized by
a diminished sense of communication and funda-
mental di?erences in interests between academics
and practitioners’’ (Bricker & Previts, 1990, p. 10).
One reason why empirical research in account-
ing has not lived up to academics’ or practitioner’s
expectations is the ways accounting researchers
use economic theory. In the proceedings of the
1984 American Accounting Association’s Doc-
toral Program Conference, one of the authors of
the ‘‘crisis document’’ o?ers a normative theory of
innovation:
The ?ow should be from the original idea into
an accommodating model, into data and
analysis, rather than an opposite ?ow. . .: a
known tool, often originating in another dis-
ciplines (sic), is applied to sets of data already
available or that can be easily made available.
The hypothesis generated becomes a function
of data availability and known [emphasis in
original] tools of analysis (Ronen, 1984, pp.
89–90).
Much use of economic theory in accounting is
of the second type that uses imported tools on
easily available date, rather than being truly inte-
grated into and altered by the accounting context.
In addition, accounting researchers are subject to
the empirical indeterminacy of economic
584 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
phenomena.
16
It is the case that the use of positive
economic theories in accounting is not as a ‘‘tool’’
applied to solve accounting problems but as the-
ory qua theory, i.e. economic theories are, ‘‘in
theory’’, being tested! Any accounting problem’s
resistance to a solution is conceptually as much a
strong test of the theory as the theory is a ‘‘solu-
tion’’ to the problem. Thus, rather than becoming
‘‘solvers of accounting problems’’ the application
of positive economic theories to accounting turns
accounting researchers simply into economic sci-
entists. Mattessich (1984, p. x) warns against this
tendency toward treating accounting as a ‘‘pure or
positive’’ science rather than an applied discipline.
One of the problems he sees from the adoption of
economic theory is
. . .rooted in the fundamental dilemma of eco-
nomic sciences . . . Too often they are assumed
to be rigorous empirical sciences, without,
however, having reached that stage. Most of
them are quasi-empirical sciences, with a more
or less heavy analytical framework resting on
a host of unrealistic assumptions (p. 5).
If the discipline is not prepared to question the
background assumptions, little progress in under-
standing accounting phenomena is likely to result
from application of economic theory to account-
ing problems.
2.3. Reputation structure of economics
By becoming economic scientists, accounting
scholars have also, thus, imported reputation
structures for knowledge production and valida-
tion from economics because the social structure
of economics is inextricably connected to the nat-
ure of economic theory itself. This reputation
structure may be a source of impediment to good
conversation in accounting. Whitley (1982, 1984)
presents a theory of the organizational structure of
sciences as reputation work organizations or sys-
tems in which participants control work processes
and goals in light of the particular beliefs and
purposes of the reputation community of which
they are members. Tasks are selected, carried out,
and coordinated by scientists seeking reputations
on the basis of their contributions to the intellec-
tual goals of the ?eld. As academic disciplines are
formed and perpetuated through the training of
doctoral students and publication in academic
journals, the control of academic practitioners
through practices such as hiring, promotions, and
salary decisions is primarily in?uenced by the cri-
teria for academic reputation in that ?eld.
The extent to which a single scienti?c establish-
ment with a particular theoretical orientation is
able to dominate a given ?eld varies between
?elds. Some of the factors determining this varia-
tion are centralization of funding sources, auton-
omy from other organizations, standardization of
techniques, and existence of a formal communica-
tion system (Whitley, 1982, p. 315). In some dis-
ciplines, for example engineering and arti?cial
intelligence, outside organizations have consider-
able in?uence on research agendas due to exten-
sive outside funding. In other areas, such as
economics, the reputational structure is tightly
controlled from within the discipline.
Whitley (1984) classi?es the natural and social
sciences into seven distinct organizational forms
based on the degrees of mutual dependence among
scientists and task uncertainty related to scienti?c
projects. Whitley classi?es the discipline of eco-
nomics as a partitioned bureaucracy. Partitioned
bureaucracies are highly rule governed and hier-
archically organized ?elds. Standardization of
training programs and skills in the central core
enables the reputational elite to control research
strategies and problem selection. However, the
lack of consistent empirical results, which are the
basis for legitimacy claims, threatens the stability
of the structure.
The solution to instability is that ‘‘(t)heoretical
elaboration becomes more prestigious than empiri-
cal exploration and ‘application’ of the dominant
analytical skills and concepts to empirical objects
16
As Thurow (1984, p. 105) observed:
. . . the stable equations that economic theory depends on
don’t seem to exist. Economic evidence is often contra-
dictory, and even where it is consistent, the conclusions
have been wrong so many times that the credibility of
even consistent results is suspect and can be ignored by
those who want to.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 585
is partitioned o? into sub-?elds in a way which
does not threaten the prevailing framework and
standardized skills (Whitley, 1984, p. 160).’’ In
other words, a partition is created between the
theoretical and empirical domain to protect the
theory from confrontation with the data.
17
Thus,
sub-?elds like ?nance are used to apply economic
concepts to the empirical world. The empirical
results, or lack thereof, in the sub-?elds do not
interact with theory development in the core, and,
therefore, cannot threaten the core beliefs (Whit-
ley, 1991, p. 27). In fact, one of the key proposi-
tions of ?nancial economics is that most common
knowledge understandings of ?nance are false and
instead highly theoretical understandings (like
dividend irrelevance) represent the ‘‘truth’’. Thus,
in Whitley’s view, testing theory is not the main
point of empirical work in economics:
Thus, empirical work in economics is not so
much concerned withunderstanding complex,
dynamic phenomena as with reformulating
puzzles so that the analytical engine can
generate the correct solution.. In many ways
the function of empirical research in eco-
nomics is more to demonstrate the essential
correctness of the paradigm and its wide
applicability than to drive theoretical devel-
opment and change and deepen our under-
standing of market systems. . . A key feature
of this domination is, of course, the strong
prestige hierarchy of journals and their con-
trol over the legitimation of knowledge claims
(p. 20).
Accounting research may be useful to econo-
mists in justifying their models
18
as Whitley’s
(1984) account of economic imperialism suggests.
However, this is not a two-way street—economists
may point to empirical results in ?nance and eco-
nomics to validate their theories, but not to ques-
tion them or to help them develop.
How does the reputation and justi?cation struc-
ture of economics relate to accounting? We have
earlier in the paper provided considerable evidence
that economistic formulation of accounting pro-
blems is the dominant mode of knowledge pro-
duction in accounting in the USA which, in turn,
constitutes the primary exemplar through which
accounting academic reputations are made and
the accounting academy strati?ed. One particu-
larly signi?cant feature of the organization or
structure of scienti?c ?elds is the process of elite
formation (Whitley, 1977). Scholarly ?elds are
strati?ed, that is, they are hierarchic with a small
number of elite practitioners identi?ed by the
number of their research publications in the most
prestigious journals (Allison, 1980; Crane, 1965,
1967, 1970, 1972; McGinnis, Allison, & Long,
1982; Merton & Zuckerman, 1973). How these
elite construct their knowledge claims represents
the ‘‘exemplar’’ (Kuhn, 1970), which all aspirants
to prestige and success in the ?eld must reproduce
in their own work. That is, the elite have the
17
This attribute led Rosenburg (1992, p. 64) to make the
following observation about the failure of economics to make
any predictive progress:
So, it is not just the unreality of the assumptions of eco-
nomic theory that results in its lack of predictive pro-
gress; it is also the fact that economists do not or cannot
augment the data that will enable them to identify pro-
gress in prediction, nor have their econometric techniques
proved powerful enough to derive results above the slim
body of data already in hand. And, worst of all, there is
no institutional motivation in the discipline to improve
on this database: advances in formal modeling or the
mathematics of statistical testing are more highly prized
in economics than the augmentation of data. Further,
Rosenburg concludes (1992, p. 65):
In short, economists have had the same theory in hand
for upwards of two hundred years. The theory has not
been increasingly accommodated to data it has led us to
uncover; it has not even motivated much augmentation of
data.This lack of progress may have signi?cant con-
sequences beyond the con?nes of economic academia.
For example, the Harvard biologist and father of socio-
biology, Edward O. Wilson, (1998, p. 290) recently
lamented, ‘‘The single greatest intellectual obstacle to
environmental realism, as opposed to practical di?culty,
is the myopia of most professional economists.’’
18
For example, Jensen (1988) asserts that ‘‘(a)lthough the
evidence is not literally 100% in support of the e?cient-market
hypothesis, there is no better documented proposition in any of
the social sciences’’ (p. 320). The evidence cited by Jensen is
from accounting studies showing a lack of market reaction to
changes in accounting methods for investment credits and
depreciation.
586 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
power to control the scholarly agenda. Rodgers
and Williams (1996) and Lee (1995) have studied
the process of elite formation in the U.S. academy,
which appears to have an hierarchical reputation
structure similar to that of mainstream econom-
ics.
19
Ryan et al. (1992) conclude that ‘‘[t]here is
considerable evidence which supports the view
that there is a relatively small elite of academics
and institutions which control, through editorial
memberships, the conduct of the discourse in
accounting and ?nance’’ (p. 136).
2.4. Interaction between accounting and economics
The ‘‘crisis in the academy’’, admitted to by the
academy’s elite, explicitly opens up the issue of
whether the strategy of organizing the accounting
academy over the last 30–35 years into a commu-
nity of ‘‘economic scientists’’ has been bene?cial.
This is particularly so if this organization con-
tributes to the lack of progress in the mainstream
accounting conversation. As ‘‘economic scien-
tists’’, where are accounting researchers currently
located in the wider academy? Fig. 1 is a schematic
that locates accounting relative to economics and
other disciplines. This is based on Rosenburg’s
(1992, p. 237) argument ‘‘. . .that economics is a
branch of applied mathematics. . .’’
20
Fig. 1. Accounting located relative to economics as an academic discipline (based on Rosenberg, 1992).
19
This is not to say that there is no resistance to ‘‘the sti?ing
hegemony of ‘‘mainstream’’ accounting research with its posi-
tivistic pretensions, emotivistic moral arrogance, economistic
self-understandings, and indi?erence to the arguments of others’’
(Arrington & Schweiker, 1992, p. 531). There is another reputa-
tional center in the UK centered around AOS focusing on inter-
pretive and critical approaches to behavioral, organizational, and
social issues (Lukka &Kasanen, 1996, p. 771; Ryan et.al., 1992, p.
5). A less organized ‘‘resistance’’ in the US has led to a prolifera-
tion of ‘‘niche’’ journals in ?elds such as systems and informa-
tion technology, education and faculty issues, international
focus, critical studies, management accounting, bridge between
research and practice, and history (Ze?, 1996, p. 161). To
accommodate this wider set of interests, 48 new journals deal-
ing with accounting topics were started in the period 1987–1996
(p. 161). Ze? notes, however, a problem with ‘‘balkanization’’
of the research literature, ‘‘to the point where the work pub-
lished in most of the younger journals is not noticed (to say
nothing of cited) in the larger literature’’ (p. 163).
20
Rosenberg (1992, p. 37) notes that:
Much of the mystery surrounding the actual development
of economic theory—its shifts in formalism, its insulation
from empirical assessment, its interest in proving purely
formal, abstract possibilities, its unchanged character
over a period of centuries, the controversies about its
cognitive status—can be comprehended and properly
appreciated if we give up on the notion that economics
any longer has the aims or makes the claims of an
empirical science of human behavior. Rather we should
view it as a branch of mathematics, one devoted to
examining the formal properties of a set of assumptions
about the transitivity of abstract relations: axioms that
implicitly de?ne a technical notion of ‘‘rationality,’’ just
as geometry examines the formal properties of abstract
points and lines.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 587
Accounting could conceivably occupy a position
as an academic discipline at the same level as
mathematics. Law, a kindred discipline to
accounting, retains its autonomous professional
school status within the academy without having
‘‘scientized’’ itself through adoption of a social
science model of research. Law retained its tradi-
tions, including methodology and a porous
boundary between practice and the academy (as
have medicine and, to a degree, engineering). The
irony of the accounting revolution in the academy
has been the practice of accounting’s relegation to
a low level in the academic hierarchy. As Mattes-
sich (1984) notes, ‘‘[t]here can be no question that
our exports in the recent past have been much
smaller than our imports’’ (p. 61).
21
In order to gain some evidence about the rela-
tionship of accounting research to economics’
theory, illustrated in Fig. 1, we compiled citations
from a number of leading economics and ?nance
journals. Citation analysis su?ers from several
weaknesses. It is a counting approach, which notes
the frequency of citation but cannot trace the
magnitude or in?uence of one work upon others.
It also fails to measure quality of a work unless
one accepts frequency with which other scholars
cite the work as indicative of quality. In spite of its
shortcomings, citation analysis is a principal
means by which faculty in many disciplines are
evaluated. Journal editors work diligently to have
their journals included in the major citation ser-
vices. Our use of citation analysis in this paper is
not to determine the most signi?cant works, but
only to provide a general outline of the webs of
interaction between various research literatures,
e.g. accounting and economics as compared to, for
example, accounting and sociology. Our citation
data are consistent with accounting being located
as in Fig. 1 and being sustained in that position by
accounting’s academic elite.
We collected the bibliographies of all of the
articles published in three leading accounting
journals: Journal of Accounting Research (JAR),
Journal of Accounting and Economics (JAE), The
Accounting Review (TAR); three leading ?nance
journals: Journal of Finance (JF), Journal of
Financial Economics (JFE), Journal of Business
(JB); and four leading economics journals: Amer-
ican Economic Review (AER), Econometrica
(ECT), Journal of Political Economy (JPE), and
the Rand Journal (which absorbed the Bell jour-
nals; R/BJ) for the years 1990 and 1991. These
years permit us to describe the relationship
between economics, ?nance, and accounting con-
temporaneously with the publication of the ‘‘cri-
sis’’ white paper by Demski et al. (1991). The
journals were selected because they are generally
regarded as the most prestigious in their respective
?elds. In addition, the nonaccounting journals
selected were found by Rodgers and Williams
(1996) to be the ?nance and economics journals
most frequently cited by elite authors publishing
in the three leading accounting journals listed
here.
Table 1 A contains a breakdown of the number
and percentage of articles containing at least one
citation to any article published in the other jour-
nals.
22
For example, 223 articles (64.3%) pub-
lished in AER during 1990 and 1991 contained at
least one citation to an article published in AER.
Among economics journals very few citations were
being made to any accounting literature at the
time the crisis in accounting was being noted. The
percentages in the table re?ect the hierarchy of
intellectual dependency among economics,
?nance, and accounting. Economics cites itself
most, then ?nance to a very modest extent, and
accounting virtually not at all. Finance cites itself
most, then economics to a greater extent than
economics cites ?nance, and then accounting to a
modest amount. Finally, accounting cites itself the
most, and cites both ?nance and economics to a
much greater extent than either ?nance or eco-
nomics cite it.
21
It is not inevitable that accounting would have nothing of
value to export back to economics. Mattessich (1984, p. 61)
points out the export potential in innovations to deal with the
multidimensionality of the basic accounting model, with its
multiple objective functions and stakeholders, and the institu-
tional richness of the accounting practice environment.
22
Citations to all other accounting journals appearing in the
journals selected are included. No attempt was made to count
citations to the selected journals that appeared in all other
accounting journals.
588 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Table 1
Citation dependency
a
Citing
journal
Cited journals
AER JPE ECT R/BJ JF JFE JB JAR JAE TAR OTHER
(A) Number of articles (percentages) Citing at least one article published in the indicated journals
AER 223 (64.3) 153 (44.1) 126 (36.3) 65 (18.7) 23 (4.0) 14 (6.6) 13 (3.7) 0 (0) 2 (0.6) 0 (0) 0 (0)
JPE 80 (63.5) 110 (87.3) 70 (55.6) 27 (21.4) 17 (13.5) 18 (14.3) 19 (15.1) 1 (0.8) 2 (1.6) 0 (0) 0 (0)
ECT 43 (30.3) 43 (30.3) 133 (93.7) 15 (10.6) 7 (4.9) 10 (7.0) 5 (3.5) 2 (1.4) 0 (0) 0 (0) 0 (0)
R/BJ 51 (63.8) 38 (47.5) 44 (55.0) 61 (76.3) 6 (7.5) 8 (10.0) 5 (6.3) 5 (6.3) 4 (5.0) 1 (1.3) 3 (3.8)
JF 67 (38.7) 85 (49.1) 74 (42.8) 43 (24.9) 160 (92.5) 148 (85.5) 79 (45.7) 11 (6.4) 18 (10.4) 7 (4.0) 10 (5.8)
JFE 28 (39.4) 31 (43.7) 20 (28.2) 25 (35.2) 54 (76.1) 66 (93.0) 30 (42.3) 9 (12.7) 9 (12.7) 5 (7.0) 1 (1.4)
JB 19 (33.9) 36 (64.3) 22 (39.3) 16 (28.6) 36 (64.4) 35 (62.5) 34 (60.7) 3 (5.4) 2 (3.6) 1 (1.8) 1 (1.8)
JAR 12 (16.9) 8 (11.3) 17 (23.9) 15 (21.1) 20 (28.2) 15 (21.1) 12 (16.9) 60 (84.5) 38 (53.5) 50 (70.4) 32 (45.1)
JAE 3 (10.3) 5 (17.2) 12 (41.4) 7 (24.1) 14 (48.3) 20 (69.0) 6 (20.7) 20 (69.0) 26 (89.7) 20 (69.0) 7 (24.1)
TAR 27 (28.1) 19 (19.8) 29 (30.2) 23 (24.0) 24 (25.0) 25 (26.0) 18 (18.8) 80 (83.3) 50 (52.1) 86 (89.6) 66 (68.8)
(B) Cross-citation indices based on total citations normalized on host journal
AER 1.00 0.58 0.48 0.20 0.07 0.05 0.03 0 0 0 0
JPE 0.55 1.00 0.51 0.13 0.16 0.20 0.09 0 0.02 0 0
ECT 0.14 0.17 1.00 0.04 0.02 0.03 0.01 0 0 0 0
R/BJ 0.43 0.27 0.39 1.00 0.09 0.19 0.02 0.04 0.02 0.01 0.03
JF 0.18 0.23 0.24 0.09 1.00 1.15 0.20 0.02 0.04 0.01 0.01
JFE 0.09 0.12 0.10 0.08 0.46 1.00 0.09 0.03 0.03 0.02 0
JB 0.58 0.86 0.46 0.34 1.73 1.59 1.00 0.07 0.05 0.01 0.01
JAR 0.06 0.05 0.14 0.10 0.15 0.12 0.05 1.00 0.35 0.39 0.32
JAE 0.03 0.06 0.12 0.10 0.50 0.66 0.10 0.83 1.00 0.44 0.11
TAR 0.13 0.08 0.16 0.14 0.24 0.27 0.08 1.17 0.57 1.00 0.68
a
Journals: AER, American Economic Review; JAE, Journal of Accounting and Economics; JPE, Journal of Political Economy; TAR,
The Accounting Review; ECT, Econometrica; R/BJ, Rand/Bell Journals; JF, Journal of Finance; JFE, Journal of Financial Economics;
JB, Journal of Business; JAR, Journal of Accounting Research.
Table 2
Citations in economics and ?nance
a
Journals AER JPE ECT R/BJ Total
Authors cited during 1990 and 1991 in economics journals by doctoral origins
Elite 15 2 5 3 16 26
Nonelite – 3 – 10 13
Nonaccounting – 8 – 7 15
Total 2 16 3 33 50
(B) Authors cited two or more times during 1990 and 1991 in Finance Journals (JF, JFE, JB) by doctoral origins
Number of cites 2 3 4 >4
Elite 15 11 10 2 4 27
Nonelite – 1 1 1 3
Nonaccounting 6 7 – – 13
Total 17 18 3 5 43
a
Journals: AER, American Economic Review; JPE, Journal of Political Economy; ECT, Econometrica; R/BJ, Rand/Bell Journals;
JF, Journal of Finance; JFE, Journal of Financial Economics; JB, Journal of Business. Elite 15 Schools: Illinois, Chicago, Stanford,
Carnegie Mellon, Ohio State, Cornell, Michigan, Michigan State, Iowa, Texas, Wisconsin, Berkeley, Rochester, Minnesota, and
University of Washington.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 589
A second view of citation dependency is pre-
sented in Table 1 B. The indices presented are
based on total citations normalized by total self-
citations for each journal. For example, referring
to the row for AER, for every citation to an AER
article made in AER, 0.588 citations were made to
articles in JPE. The index numbers in this table
provide indicators of the in?uence of each journal
relative to the host journal. These data illustrate
the relative insigni?cance of accounting to eco-
nomics. Citation in economics to accounting is nil,
even to an accounting journal that calls itself an
economics journal (the Journal of Accounting and
Economics). It is also evident that JAR is the most
in?uential of the accounting journals.
The data in Table 1 overstate the relative in?u-
ence of accounting because many of the articles
cited, though published in accounting journals,
were not written by accounting researchers, but by
individuals who are economists, ?nance research-
ers, etc. We also analyzed the authors of cited
accounting articles to determine the extent to
which these authors were graduates of ‘‘elite’’
(dominant) accounting doctoral institutions (Lee,
1995; Rodgers & Williams, 1996; Williams &
Rodgers, 1995). Utilizing Williams and Rodgers’
(1995) set of ‘‘elite’’ schools, we tabulated author-
ship of articles cited in both the economics and
?nance journals into three categories: Elite, Non-
elite, and Nonaccountant.
23
Table 2 A contains
the breakdown for any authorship cited in an
economics journal, while Table 2 contains
authorship of two or more cited in JF, JFE, and
JB. Since most of the citations in the economics
and ?nance journals were to JAR, JAE, and TAR,
and since these journals are controlled by the elite
schools, the results in Table 2 are not surprising.
With the exception of accounting authors cited in
R/BJ, elite graduates account for 86% of the small
number of accounting authors cited in economics
and ?nance.
24
One ?nal analysis was performed to assess the
number of citations in the economics and ?nance
journals to the most important papers published
in accounting. Citations to any of Brown’s (1996)
list of the most in?uential papers published in
accounting since 1963 are compiled in Table 3.
Most of the articles on Brown’s list were not cited.
Of those cited, most citations were in JF. Elite
status is re?ected in this group of authors, also.
Eighty-seven percent of the accounting authors of
these articles were graduates of elite schools.
The picture that emerges from our citation ana-
lysis lends a note of irony to the declaration of a
crisis in accounting by Demski et al. (1991). At the
time when the lack of progress of accounting
research was noted, the organization of the U.S.
accounting academy was such as to make scienti?c
progress nearly impossible. Accounting’s aca-
demic elite had constructed academic accounting
research as a ‘‘partition’’ of economics. Thus, as a
scienti?c enterprise, accounting is situated as a
largely empirical sub-discipline of a sub-discipline
of a discipline for which empirical work is of little
relevance to ‘‘progress’’.
25
Given its current posi-
tion, accounting research cannot satisfy Longino’s
criteria for a good scienti?c conversation.
Accounting is not part of the relevant scienti?c
conversation about the development of the theory
which it uses. The economic community of which
accounting is a part is not responsive to critique or
empirical evidence from accounting research
because accountants do not share equally in intel-
lectual authority. Instead, any changes, improve-
ments, alterations, etc. in the theories accounting
researchers use in conducting their empirical work
must await development by economic scientists.
Accounting seems to have placed itself in so
23
The elite doctoral programs identi?ed by Williams and
Rodgers (1995) are Illinois, Chicago, Stanford, Carnegie Mel-
lon, Ohio State, Cornell, Michigan, Michigan State, Iowa,
Texas, Wisconsin, Berkeley, Rochester, Minnesota, and Uni-
versity of Washington. Graduates of these schools predominate
on editorial boards of the US journals perceived to be the most
prestigious. These schools help comprise a powerful social sys-
tem which shapes the nature of accounting discourse and
selects the people who will speak authoritatively for the US
academy.
24
A possible reason for the larger percentage of non-elite
authors cited in R/BJ may be the more ‘‘managerial’’ content of
R/BJ.
25
Bricker, Borokhivich, and Simkins (1999), in a study of the
e?ect of accounting research on ?nance, ?nd results like ours.
The e?ect has been virtually nil.
590 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
subordinate and stable a position that it simply
cannot make progress.
26
Accounting research is
largely irrelevant to the scienti?c discipline of
economics into which it has been subsumed. Fur-
thermore accounting su?ers from the problemof
‘‘interdisciplinary ?elds’’ described by Fuller
(1993, p. 221):
If interdisciplinary ?elds rarely become dis-
ciplines in their own right, that is only
because their central problems continue to be
de?ned in terms of the old discipline.
The accounting revolution described earlier in
this paper was the transformation of accounting
into an interdisciplinary ?eld with accounting
subservient to economics. This posed formidable
tasks for accounting researchers since they now
burdened themselves with economic’s problems as
well as their own and surrendered the intellectual
authority to solve them. Small-wonder that the
interdisciplinary ?eld of accounting/economics has
yet to emerge as a progressive, autonomous scien-
ti?c discipline. Furthermore, the non-egalitarian
reputation and power structure of accounting,
adopted from economics, seriously compromises
the quality of scienti?c conversation in accounting
as long as ‘‘a set of assumptions dominates by
virtue of the political power of its adherents’’
(Longino, 1990, p. 78).
26
Longino (1990) explains the danger to any discipline that
attends the overstabilization of a research program through the
suppression of background assumptions, which for accounting
are economic idealizations:
A methodology that legitimates the stabilization of
inquiry . . . must also, however, subordinate science’s cri-
tical function . . . and it must disguise that subordination
to de?ect the accusation that the sciences are not after all
concerned with the truth. One way to achieve this dis-
guise is through the adoption of an account that mini-
mizes the need for and role of criticism beyond
hypothesis testing, that is, by an account that can render
invisible the role of background assumptions. The meth-
odologies of logical positivism did render them invisible,
which is, I suspect, one reason why they remain persua-
sive among scientists even after being abandoned by phi-
losophers (pp. 224) . . . The myth of scienti?c value
neutrality that is a consequence of the more general view
that scienti?c inquiry is independent of its social context
is, thus, a functional myth. It clears the way, con-
ceptually, for the elaboration of a particular approach to
a set of phenomena once that approach has attracted the
consensus of a signi?cant portion of the scienti?c com-
munity (pp. 224–225) . . . Viewed from another angle,
however, the myth is clearly dysfunctional. By concealing
the reliance of inquiry on a background of assumptions
of very mixed character, it discourages the investigation
of alternative frameworks (p. 225).
Table 3
Citations of signi?cant accounting papers in economics and
?nance journals: 1990 and 1991 (based on Brown, 1996 most
cited papers)
Citing journal
a
JF JFE JB AER JPE ECT R/BJ
Classics
Atiase (1985) 2 – – – – – –
Ball and Brown (1968) 3 – – – – – –
Beaver (1968) – 1 – – – – –
Beaver, Clarke,
and Wright (1979)
1 – 1 – – – –
Bernard (1987) – – 1 – – – –
Christie (1987) – – 1 – – – –
O’Brien (1988) 2 – – 2 – – –
Patell (1976) 2 3 – – – – –
18 classics not cited
Near classics
Bernard and
Thomas (1989)
1 – – – – – –
Leftwich (1981) – – 1 – – – –
23 near classics not cited
The rest
Antle and Smith (1986) 1 – – – – – –
Baiman and Evans (1983) – – – – – – 1
Foster (1981) 2 – – – – – 1
Fried and Givoly (1982) 1 – – – – – –
Hughes (1986) 1 – – – – – –
Penman (1980) – 1 – – – – –
Schipper and
Thompson (1983)
1 1 – – – – 1
Simunic (1980) – – – – – – 1
Titman and
Trueman (1986)
2 1 – – – – –
Wilson (1986) 2 – – – – – –
43 of the rest not cited
a
Journals: AER, American Economic Review; JPE, Journal
of Political Economy; ECT, Econometrica; R/BJ, Rand/Bell
Journals; JF, Journal of Finance; JFE, Journal of Financial
Economics; JB, Journal of Business.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 591
3. Transformative criticism in accounting
We have argued that accountants have chosen
to become ‘‘economic scientists’’ but are not full
participants in scienti?c conversations in econom-
ics and, therefore, lack the ability to in?uence
economic theory. However, accounting research-
ers could modify economic theory in confronting
accounting problems and synthesize economic
theories with theories from other disciplines (e.g.
psychology, sociology, strategy). Transformative
criticism could operate on the uses of economic
theory within accounting even if these uses and
transformations were not shared with economics.
Such an enterprise would require careful con-
sideration of the nature of background assump-
tions and the ?t of economic-based models with
accounting phenomena studied.
We investigate three ‘‘cases’’ to evaluate the
quality of the mainstream US accounting research
conversation. We are looking for the presence of
Longino’s (1990) criteria of avenues for critique,
shared values that promote critique, and commu-
nity response to critique. First, we investigate the
response of positive accounting to the consider-
able body of critique that it has generated. Next,
we explore possibilities for transformative critique
in the conversations at JAR conferences. Finally,
we evaluate the responses to the crisis in mainstream
US ?nancial accounting to see if they represent
incorporation of transformative criticism.
3.1. The case of positive accounting
Many critiques have been launched at the posi-
tive accounting research program over the years
on methodological, theoretical, logical, and ethical
grounds. Ball and Foster (1982), Holthausen and
Leftwich (1983), Abdel-Khalik et al. (1989), and
McKee, Bell, and Boatsman (1984) provide meth-
odological critiques. For theoretical critiques, see
Tinker, Merino, and Neimark (1982), Hunt and
Hogler (1990) and Armstrong (1991). Critiques on
logical and philosophy of science grounds include
Christenson (1983), Lowe, Puxty, and Laughlin
(1983), Peasnell and Williams (1986), Chua (1986),
Whittington (1987), Whitley (1988), Williams
(1989), Arrington and Francis (1989), Hines
(1988) and Mouck (1992). Ethical critiques include
Williams (1987, 1995), Arrington and Schweiker
(1992), and Mouck (1995a).
This is by no means an exhaustive list of pub-
lished critique of the positive accounting research
program, so there is no lack of production of cri-
ticism. However, little confrontation of ideas or
debate between positive accountants and their
critics has taken place (Chua, 1996, p. 130). Watts
and Zimmerman (1990) simply asserted that the
theoretical and philosophical critiques have
‘‘failed the market test because they have had little
in?uence on accounting research.’’
27
Their ability
to dismiss the extensive critique is not surprising,
given that most of the articles were published in
the non-North American research literature which
has little overlap with the North American
research literature (Lee & Williams, 1998; Lukka
& Kasenan, 1996).
Watts and Zimmerman (1990) have contended
that, to be e?ective, critics should replicate studies
using better methods, rather than explain pro-
blems in abstract terms. Also, they should stop
making unrealistic demands on individual studies,
particularly those at the beginning of a research
program (even though positive accounting is no
longer near its beginning). They further argue that
philosophical debates about methodology are
futile because of the incommensurability problem
where each side argues from a fundamentally dif-
ferent viewpoint. Boland and Gordon (1992)
complain that philosophical critiques have been
overly pedantic and become ‘‘exercises designed to
impress philosophers and . . . thereby of little use
to accounting researchers’’ (p. 153). They go on to
explain that only ‘‘internal criticism based on the
same paradigm using the same rules will be an
e?ective and interesting criticism worthy of con-
sideration’’ (p. 164).
Conversational rules o?ered by Watts and Zim-
merman (1990) and Boland and Gordon (1992) do
not allow transformative criticism to be heard or
27
Brown (1996) demonstrates that this statement simply isn’t
true by noting that there existed in 1990 a ‘‘classic’’ accounting
literature produced as a result of these critiques. Besides, as our
analysis of JAR conferences suggests, markets for scienti?c
theories are highly regulated and the barriers to entry in many
of them are very high.
592 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
incorporated. Such rules permit only critique that
is ?rmly within the worldview of a research pro-
gram and that makes no challenges on the validity
of background and framework assumptions and
other aspects a?ecting evidentiary reasoning. This
type of critique, while necessary, is not su?cient to
promote good scienti?c conversation, because the
contextual and background assumptions remain
unexamined.
To provide additional insight into how criticism
is incorporated, we performed a citation analysis
for two articles critical of the dominant episte-
mology of the leading US journals, which were
published in the American Accounting Associa-
tion’s journal TAR. These two articles were by
Chua (1986) and Christenson (1983). Chua (1986)
sought to explain the implications of di?erent
viewpoints on epistemology and ontology com-
mon in sociological studies as a way of illustrating
shortcomings in the mainstream research para-
digm. Christenson’s (1983) article was a critique of
positive accounting from a philosophical and
methodological viewpoint (for not adhering to
falsi?cation criteria). The critique was aimed at
the research program of positive accounting in a
broad sense. Christenson’s challenge to the posi-
tive theorists was essentially to design an experi-
ment around a negative implication of positive
theory as articulated by Watts and Zimmerman
(1978), i.e. test a proposition about what positive
theory implies cannot happen.
We compiled all citations to these two articles
appearing in the Social Sciences Citation Index
from the time of their respective publications
through March 1997. The results are presented in
Table 4. Citation analysis may be a crude indi-
cator of the ?ows of thought, but used in con-
junction with a reading of the articles to see how
the material is cited it can indicate something use-
ful about the impact of ideas on the research
community.
Most of the citations to these critical articles
appeared in AOS. The citations to Chua’s article
appearing in the leading North American journals
(JAR, TAR, and JAE) were in articles by other
positive accounting critics. Hines (1988) wrote a
critical piece that addressed the shortcomings of
Christenson’s critique and Bricker (1989) dis-
cussed Chua in a work concerned with the struc-
ture of accounting research. The only references to
Christenson’s piece by the leading North Amer-
ican accounting journals appeared in TAR. Three
of those citations were by Chua (1986), Hines
(1988), and Williams (1985), authors of critical
pieces themselves. One citation was by Watts and
Zimmerman (1990) in their ten-year retrospective
on positive accounting research. Only three of the
citations were by authors who may have been
in?uenced by the critique: McKee et al. (1984),
Uecker, Schepanski, and Shin (1985), and Deakin
(1989). Christenson’s challenge has yet to be taken
up explicitly by any accounting researcher doing
positive accounting work.
In summary, numerous basic critiques of the
philosophy and methodology of positive account-
ing have been published and widely read by others
(see footnote 27), but have not been taken into
account in the positive accounting research pro-
gram. This demonstrates a lack of avenues for
critique to be heard and incorporated and a lack
of responsiveness to basic critique. Indeed, the
history of the Chua and Christenson articles is
Table 4
Citations to several notable critical works
Journals
a
AOS TAR JAR JAE Other accounting Non-accounting
Chua (1986) 24 1 1 0 4 7
Christenson (1983) 17 7 0 0 8 6
(Source: Social Science Citation Index).
a
Journals: AOS, Accounting Organizations and Society; TAR, The Accounting Review; JAR, Journal of Accounting Research; JAE,
Journal of Accounting and Economics.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 593
consistent with McIntyre’s description of how
academic organizations exclude alternative points
of view (McIntyre, 1990, p. 219):
Academic organizational forms can on occa-
sion e?ectively exclude from academic debate
and enquiry points of view insu?ciently assim-
ilable by the academic status quo, and they
characteristically achieve this exclusion not by
formally placing the excluded doctrine under a
ban or a prohibition, but by admitting it only
in reduced and distorted versions, so that it
unavoidably becomes an ine?ective contender
forintellectual and moral allegiance.
Neither Chua’s nor Christenson’s contribution
became an enduring part of the lexicon by which
subsequent submissions to TAR were discussed by
editors and reviewers. Chua and Christenson were
e?ectively silenced through the device of allowing
them to speak only once.
3.2. Conversation at the JAR conference
We analyzed selected examples of critical con-
versation from the published discussion from the
JAR conferences to determine whether transfor-
mative criticism is o?ered and accepted (Longino,
1990). The JAR conference is a particularly pro-
minent component of the current elite structure of
the accounting academy since JAR is an ‘‘elite’’
journal published by the University of Chicago,
one of the ‘‘elite’’ schools (see footnote 23 for dis-
cussion of elite schools in accounting). Schwartz,
Williams, and Williams (2001) found that JAR is
second only to TAR in its recognition by US doc-
toral students. Conversations at the JAR con-
ference are a public instance of how the
accounting conversation in the USA is managed.
We analyzed critiques at the ?rst JAR conference
in 1966, ‘‘Empirical Research in Accounting:
Selected Studies, 1966’’, and subsequent con-
ferences at approximately 5-year intervals
28
(‘‘Empirical Research in Accounting: Selected
Studies, 1971’’, ‘‘Studies on Human Information
Processing in Accounting’’ 1976, ‘‘An Assessment
of Alternative Institutional Arrangements’’ 1981,
‘‘Studies on Stewardship Uses of Accounting
Information’’ 1987, ‘‘Studies in Accounting Insti-
tutions in Markets and Organizations’’ 1991, and
‘‘Studies on Recognition, Measurement, and Dis-
closure Issues in Accounting’’ 1996). The pub-
lished conference materials contains the articles
(revised) and comments by discussants re?ecting
both their own critiques at the conference and
discussion of the participants. In addition, for the
JAR conferences from 1966 through 1996, we
analyzed selected characteristics of the partici-
pants in order to gain some insight into the struc-
tural properties of the conferences.
Longino (1990, pp. 71–73) explains that criti-
cism can be classi?ed as evidential or conceptual
in nature. There are three types of evidential
issues—the extent to which a hypothesis is sup-
ported by evidence (E1); the accuracy, extent, and
conditions of performance of the experiment and
collecting the observations serving as evidence
(E2); and analysis and reporting of results (E3).
There are three types of conceptual issues—the
conceptual soundness of the hypotheses (C1); the
consistency of the hypotheses with accepted the-
ory (C2); and the relevance of evidence in support
of the hypothesis, in light of the assumptions in
which the data are interpreted (C3). E1, the extent
to which hypotheses are supported by the evi-
dence, has some power to motivate inquiry into
reasons why a theory or method does not lead to
adequate empirical explanation. However, as
explained earlier, the methodology used by eco-
nomics and its sub-?elds uncouples empirical
results from theory so that weak results do not
challenge theory. The conceptual soundness of the
hypothesis, C1, generally means the ?t of the
hypothesis with the theory within the context of
the theory’s assumptions and methodology. It is
the last type of conceptual criticism C3, the rele-
vance of the evidence in light of the background
assumptions, that Longino (1990) would expect to
have particular power to be transformative, to
trigger progress in the research program. This is
because of the explicit consideration of often hid-
den background assumptions.
28
By sampling the published conversation from the JAR
conferences twice each decade, we feel we get a sense of the
nature of critique at the conferences and the changes over time.
594 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Critiques on evidentiary and conceptual (except
C3) issues are common in the critical conversa-
tions at the conferences. For example, in discuss-
ing an article by Eggleton (1976), Cohen (1976)
raises concerns about whether experimental design
can be used to address the principal hypotheses of
the study (E1); nonrandom selection of subjects
(E2); and the use of absolute value design to test a
directional hypothesis (E3). Commenting on the
same study, Mock (1976) is concerned that the
decision context of rapid human information pro-
cessing is not related to any accounting context
(C1) and with the lack of connection to related
accounting literature (C2).
Critique of background assumptions is more
rare. The 1966 and 1971 conferences have a pur-
pose of promoting empirical studies in accounting
and the 1976 and 1981 conferences have a purpose
of introducing new economic-based theories for
use in accounting research. The 1976 and 1981
conferences had a synthesis piece by a prominent
researcher. The mood of the 1966 conference was
of almost unbridled optimism for the prospects of
empirical studies in accounting. There was little dis-
cussion of the underlying assumptions of empirical
research except a cautionary caveat from Vatter
(1966) ‘‘to be alert that our zeal for empirical study
does not lead us to distort the dictum of Lord Kel-
vin, to read: ‘When you cannot measure, measure
anyhow!’ (p. 233).’’
29
In the 1976 conference, Hil-
lel Einhorn (1976, p. 197) explained how the new
human information processing theories are similar
to neo-classical economic theories of behavior—
the only assumption altered is that of pure ration-
ality of economic actors (a non-trivial di?erence,
trivialized). Other assumptions of the economic
behavioral model were not discussed.
30
Plott and
Sunder (1981) discussed economic-based political
science theories available for use in studying
accounting issues. They reiterated the importance
of using welfare economic tools to assess institu-
tional arrangements and promoted the potential
for experimental methodologies in understanding
political actions in an accounting setting. They did
not discuss the assumptions or potential short-
comings of economic approaches to these pro-
blems, nor did they mention the existence of other
political/ethical frameworks and alternative his-
torical and institutional methodologies that could
be used to study these problems.
An article by Copeland and Shank (1971)
exploring LIFO as an example of di?usion of
innovation at the 1971 empirical research con-
ference generated several instances of transforma-
tive criticism. Brummet (1971) criticized the
authors for their unjusti?ed assumption of the
rationality of decision-makers. Nash (1971), an
anthropology professor, strongly criticized the
model used in the paper for omission of socio-
logical variables like channels of communication
and social structure and anthropological variables
of culture and values. This may seem like critique
about the consistency of hypotheses with accepted
theory (C2), but Nash made a deeper point when
he noted that
the authors seem to prefer the Rogers model
because of its operational utility compared to
the messier notions of social structure and
cultural values. This seems to me short-sigh-
ted at least and an arrogant primitive positi-
vism at worst. One needs models which
handle the phenomenal world rather than just
models for the ease of manipulation or the
joys of quantifying the trivial (p. 229).
Nash concluded that failure to use a more
sophisticated model ‘‘vitiates both the data and its
interpretation’’ (p. 229). In addition, the study’s
survey of CFOs implies that accounting decisions
are a one-decision-maker model while little is
actually known about who makes such decisions
and what environmental factors, like industry
e?ects, social status, or managerial values, might
be important. Nash called for
29
The undistorted dictum by Lord Kelvin appearing on a
building on the University of Chicago campus ‘‘reads: ‘When
you cannot measure, your knowledge is meager and unsa-
tisfactory’’’ (Vatter, 1966, p. 229).
30
Gardner (1985, pp. 41–42) notes that one of the principal
features of the newcognitive science, fromwhich the psychological
and political science theories introduced at the JARconference are
derived, is a de-emphasis on a?ect, culture and history. This de-
emphasis is similar to the approach taken in neo-classical eco-
nomic theory. Critics maintain that cognitive scientists should
incorporate such dimensions into their models of behavior.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 595
some anthropological ?eld work in at least
two locales: in some ?rms to understand how
decisions about accounting (and other) inno-
vations are reached; and in the professional
accounting world to ascertain the hierarchy
of values by which innovations are judged
and rated. This of course requires going to
where the natives are, mucking around in
their daily lives via observation and eliciting,
and ?nally getting an empirical basis for the
actual units, processes, channels, and values
that govern the acceptance or rejection of
innovations. After that essential task is
completed, then the designing of ques-
tionnaires is relatively simple, and the mak-
ing of regression analyses is but child’s play
(p.230).
It is this type of activity that can lead to pro-
gress in a ?eld. We noted no other instances of
critique of background assumptions in the exam-
ined JAR conferences, nor do any researchers
appear to have followed Nash’s advice.
One of the purposes of the JAR conferences was
to introduce newempirical (economic) methods into
accounting, and yet the potential e?cacy of those
methods for researching accounting problems was
not generally discussed. Issues of ?t with account-
ing problems were raised mostly by practitioner
discussants. For example, Pearson [1976—com-
menting on Ashton (1976)] noted that ‘‘[a]fter
reading Professor Ashton’s paper a number of
times and discussing it with others, including
account-handling auditors, psychologists, and
accounting professors, I have come to the conclu-
sion that the paper does not have any signi?cance
for practitioners, nor, as I understand it, was it
intended to’’ (p. 25). An academic at the same
conference (Dickhaut, 1976) compared the sim-
plistic heuristics tested in the studies with the rich
and complex set of heurisitics he had observed
corporate controllers using. He concluded that the
‘‘chances of discovering heuristics of people like
my controller using this research paradigm are, at
most, slim’’ (p. 191). In the 1981 conference,
Sandy Burton, former SEC Chief Accountant,
complained that ‘‘[a]fter reading the paper, I am
left with the question, ‘So what?’’’ (1981, p. 79).
Burton (1981) proceeded to explain that his cri-
tique applies to ‘‘most empirical analysis’’:
We are looking at and for small, perhaps even
trivial, cost- bene?t e?ects. These are di?cult
to measure, particularly when looking at
aggregate ?rm evaluations, such as the mar-
ket value of securities, or broad-based judg-
ments, such as the selection of directors (p.
79).
Robert Sprouse (1981) of the Financial
Accounting Standards Board critiqued the attempt
by Newman (1981) to compute ‘‘power indices’’
that show the SEC’s in?uence on accounting
standard setting by noting that:
Newman is to be commended for attempting
to use a method of analysis developed in
another discipline to better understand the
institutional relationships in the ?eld of
?nancial reporting. An explicit description of
the perceived institutional relationships is
essential, however, if fact is to be dis-
tinguished from ?ction and the results are not
to be misunderstood (1981, pp. 168–169).
As economic modeling became one of the pre-
dominant methodologies for exploring institu-
tional arrangements, the concern that phenomena
modeled in the paper describe the real world was
raised by most discussants. For example, Lanen
and Verrecchia (1987, p. 181) concluded that,
‘‘Clearly, the results obtained above depend on the
assumptions made in the model.’’ However, dis-
cussion of assumptions often focused on matters
such as which factors are exogenous and which
endogenous leaving unconsidered more basic
assumptions about whether individual and ?rm
behavior can usefully be modeled using this
approach.
The issues brought up by the practitioners did
not lead to widespread introspection about the
usefulness of empirical economic approaches to
accounting problems. There was widespread con-
cern in the earlier conferences that papers had not
accomplished what they set out to do. This con-
cern was seldom expressed in the later conferences
596 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
where the studies generally built narrowly on
previous, well-accepted accounting work.
31
Our suspicions about the changing nature of the
conversation at the JAR conference are supported
when we review the nature of changing participa-
tion at the conference. Table 5 contains the year-
by-year distribution of authors among four cate-
gories: academics with a doctoral degree from an
elite school; academics with a doctoral degree
from a non-elite school; academics of unknown
degree origin because they are not listed as
accounting academics in Hasselback (1998); and
practitioners, i.e. persons in nonacademic roles.
32
Table 6 contains the year-by-year distribution of
JAR conference discussants organized into the
same four categories.
A number of notable trends are evident. First,
with rare exceptions, the majority of authors, as
well as the majority of academic discussants, have
PhDs from one of the elite schools (the school-by-
school breakdown is presented in the Appendix).
The growing dominance through time of the elite
schools, who de?ne the structure of the US acad-
emy, is even more apparent when articles, rather
than authors, are the unit of analysis. For the four
conferences in the 1960s, 88% of the articles pre-
sented had at least one author with a PhD from an
elite school; it was 78.6% during the 1970s. Dur-
ing the 1980s the percentage for this same category
was 85.7%, and for the 1990
0
s, it has increased to
95.5%. When one considers that the proportion of
the US PhD population represented by elite gradu-
ates went from 60% to approximately 30% (Wil-
liams & Rodgers, 1995) during this time period, this
is evidence of dramatically narrowing participation.
It is also the case that the proportions of ‘‘out-
siders’’ as discussants (as well as authors; Table 6)
has dropped fairly dramatically. In the early years,
many of the unknowns were non-accounting aca-
demics from ?nance, economics, psychology, law,
etc. By the 1990s, these outside experts virtually
disappeared. The same is true of the practitioners
who in the early conferences provided the most
skeptical voices. This skepticism was dealt with by
simply dispensing with practitioners as published
participants.
33
Lastly the mission of the con-
ference seems to have changed since the number of
authors has increased through time, while the
number of discussants (critics) has decreased.
Elite school dominance is also evident in those per-
sons with recurring involvement. Of the total number
of persons who participated over the 1966–1996
period, only 23% participated as either author or
discussant more than once. Of those persons, 79%
were graduates of elite schools. Only 9.1% of parti-
cipants served in some capacity more than twice and
84.2% of those individuals were elite graduates.
34
As an example of scienti?c conversation in
accounting, the JAR conferences evidence a hier-
archically controlled forum providing an ever-
diminishing opportunity for any transformative
criticism to occur. Early practitioner discussants
raised issues about underlying assumptions and
the ?t between methods employed and problems
addressed, but these concerns were not addressed
and eventually the dissenting voices were no
longer invited to speak.
35
By the mid-1990s, parti-
cipation had been greatly restricted. In addition,
the discursive warrants were now limited and did
not include the claims of practice or those of the-
oreticians from any discipline other than econom-
ics. Even the number of accounting academics
who were permitted to participate had diminished;
the majority of US schools currently producing
doctoral educated accountants have never had one
of their graduates participate. This is evidence of a
hierarchical reputational structure in US mainstream
31
For example, Verrecchia (1996) noted that the study he
was discussing (Bushman, Gigler, & Indejikian, 1996 or BGI)
uses a mathematical structure ‘‘just like Kim and Verrecchia
(1994) . . . Needless to say, I view no aspects or BGI that are
compatible with Kim and Verrecchia (1996) as in any way
controversial’’ (p. 75).
32
Twelve of the practitioners had PhD’s in accounting, but
were employed by various non-university organizations. Eleven
of the 12 (92%) had received their PhD’s from one of the elite
schools.
33
Since 1981, only one practitioner has served as a dis-
cussant. That was Tim Bell, a former academic working for
KPMG Peat Marwick, in 1994. KPMG Peat Marwich provides
funding for the conferences.
34
All of the authors of the white paper (Demski et al., 1991)
have participated in JAR conferences. All have PhDs from elite
schools save one, D. Gerald Searfoss. He is the only one of the
group who participated just once.
35
Note how drastically this contrasts with our earlier obser-
vations about law, which maintains respect for its black-letter
tradition.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 597
accounting research that does not provide avenues
for basic critique, is not responsive to basic cri-
tique, and gives intellectual authority to an elite
group.
3.3. Responses to the crisis in accounting research
Finally, we consider the responses of the US
accounting research community to the aforemen-
tioned crisis in accounting research to determine
whether these responses led to incorporation of
transformative criticism. Reiter (1998) notes four
di?erent types of response. The ?rst, and over-
whelmingly most common, response has been to
carry on business as usual. This response does not
evidence a potential for incorporating transfor-
mative criticism. In fact, it may be very di?cult for
the mainstream accounting research community to
respond to perceived threats or crises. Chua (1996)
questions whether graduate education in the
empirical/calculative tradition, with its emphasis
on abstract mathematical and statistical model
building skills, prepares accounting researchers for
dealing with problems such as the ‘‘crisis’’ in
accounting research. Clarke et al. (1999) assert
that the cultural illiteracy produced by the narrow
focus of doctoral training ‘‘encourages replication
and sti?es the desire to push beyond existing
boundaries of knowledge’’ (p. 78).
The second response, to expand and re?ne basic
theory, is typi?ed by Ohlson (1991). He revisited
the basic research paradigm of earnings and
Table 5
Year-by-year distribution in percent of authors participating at JAR conferences
Year Number of authors Elite PhD
a
Nonelite PhD Unknown PhD Practitioner
1966 9 100.0 0.0 0.0 0.0
1967 10 60.0 10.0 30.0 0.0
1968 8 75.0 0.0 25.0 0.0
1969 8 87.5 0.0 0.0 12.5
1970 11 63.6 9.1 27.3 0.0
1971 8 75.0 12.5 0.0 12.5
1972 11 63.6 0.0 18.2 18.2
1973 7 57.1 14.4 14.3 14.3
1974 8 75.0 0.0 12.5 12.5
1975 8 37.5 0.0 25.0 37.5
1976 7 100.0 0.0 0.0 0.0
1977 5 40.0 20.0 20.0 20.0
1978 9 88.9 11.1 0.0 0.0
1979 12 50.0 16.7 33.3 0.0
1980 11 81.8 9.1 9.1 0.0
1981 7 85.7 14.3 0.0 0.0
1982 9 77.8 0.0 22.2 0.0
1984 8 87.5 12.5 0.0 0.0
1985 11 81.8 9.1 9.1 0.0
1986 8 87.5 12.5 0.0 0.0
1987 12 41.7 33.3 25.0 0.0
1988 11 36.4 36.4 27.2 0.0
1989 9 100.0 0.0 0.0 0.0
1990 8 75.0 25.0 0.0 0.0
1991 12 58.3 33.3 8.4 0.0
1992 16 68.8 12.5 12.5 6.2
1993 21 71.4 19.0 4.8 4.8
1994 12 75.0 25.0 0.0 0.0
1995 14 64.3 35.7 0.0 0.0
1996 19 78.9 15.8 5.3 0.0
a
Elite 15 Schools: Illinois, Chicago, Stanford, Carnegie Mellon, Ohio State, Cornell, Michigan, Michigan State, Iowa, Texas,
Wisconsin, Berkeley, Rochester, Minnesota, and University of Washington.
598 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
returns and concluded that earnings, rather than
unexpected earnings, is the correct variable to
explain returns. This insight has led to new theo-
retical work and to the appearance of new vari-
ables in empirical models seeking to explain
earnings/return associations. Ohlson and others
(e.g. Feltham & Ohlson, 1995; Ohlson, 1995) have
investigated how accounting data relate to value
by explaining why market value di?ers from book
value, the meaning of price/earnings ratios, how
value is related to expectations about accounting
data, and the role of pro?tability in the valuation
process. This line of research illustrates the bene-
?ts of questioning background assumptions. Ohl-
son (1995) and Feltham and Ohlson (1995) both
return to basic unresolved issues, place a renewed
emphasis on the relation between accounting data
and ?rm value, and question the basic assumption
that the important relationship to study is between
accounting information and stock price behavior.
This shift in focus opens up many possibilities for
further work in fundamental analysis and in pre-
dicting future earnings and future growth in book
value (Bernard, 1995).
Mainstream acceptance of this work has been
slow with papers appearing mostly in the newer
journals like CAR and Review of Accounting
Studies. This slow acceptance raises questions
about how important gatekeepers in the account-
ing conversation react to innovation—even rela-
tively minor innovations squarely within the
empirical/calculative tradition. One might also
Table 6
Year-by-year distribution in percent of discussants at JAR conferences
Year Number of discussants Elite PhD
a
Nonelite PhD Unknown PhD Practitioner
1966 14 50.0 0.0 0.0 50.0
1967 14 35.7 7.0 21.4 35.7
1968 10 30.0 10.0 0.0 60.0
1969 12 50.0 8.3 8.3 33.3
1970 11 54.5 9.1 0.0 36.4
1971 12 33.3 16.7 16.7 33.3
1972 13 38.5 7.6 38.5 15.4
1973 12 50.0 8.3 25.0 16.7
1974 9 33.3 11.1 11.1 44.5
1975 9 44.4 0.0 0.0 55.6
1976 6 66.7 0.0 16.7 16.6
1977 10 30.0 0.0 40.0 30.0
1978 13 38.5 23.1 7.6 30.8
1979 13 46.2 7.7 7.6 38.5
1980 11 27.3 36.4 18.2 18.1
1981 10 30.0 20.0 20.0 30.0
1982 9 55.6 0.0 44.4 0.0
1984 4 100.0 0.0 0.0 0.0
1985 7 71.4 28.6 0.0 0.0
1986 6 83.3 16.7 0.0 0.0
1987 6 66.7 33.3 0.0 0.0
1988 6 66.7 33.3 0.0 0.0
1989 5 80.0 20.0 0.0 0.0
1990 6 50.0 33.3 16.7 0.0
1991 7 85.7 0.0 14.3 0.0
1992 6 66.7 33.3 0.0 0.0
1993 6 66.7 33.3 0.0 0.0
1994 6 66.7 16.7 0.0 16.7
1995 6 66.7 33.3 0.0 0.0
1996 3 100.0 0.0 0.0 0.0
a
Elite 15 Schools: Illinois, Chicago, Stanford, Carnegie Mellon, Ohio State, Cornell, Michigan, Michigan State, Iowa, Texas,
Wisconsin, Berkeley, Rochester, Minnesota, and University of Washington.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 599
question whether this research stream really incor-
porates transformative criticism in that it largely
accepts the problem de?nitions and methodologies
of the positive accounting research program.
The third response was to break away from
positive accounting theory while retaining its eco-
nomic viewpoint and empirical and analytical
tools. Healy (1995) concluded that neither the
e?cient markets nor the contracting theory litera-
tures have produced interesting insights into the
area of disclosure, but information economics
interpreted with a managerial bent may be more
promising. In a world of imperfect ?nancial
reporting, managers’ accounting choices and ana-
lysts’ critiques of ?rms can a?ect stock prices, and
management responses, such as voluntary dis-
closure, reputation building, and signaling, become
potentially important. Issues studied include the
e?ect of ?rm’s disclosure on stock prices (Healy &
Palepu, 1993), discretionary disclosure (e.g. Byrd,
Johnson & Porter, 1998; Francis, Philbrick, &
Schipper, 1994; Frankel, McNichols, & Wilson,
1995; Kasznik & Lev, 1995), analysts’ ratings of
corporate disclosures (Lang & Lundholm, 1993),
and investor reactions to analysts’ reports (e.g.
Hirst, Koonce, & Simko, 1995).
By focusing concern on problems in ?nancial
reporting rather than on applying economic the-
ory, the third approach has the potential for gen-
erating innovation and for bridging the gap
between theory and practice. This potential has
not been realized to date, however. Wilson (1996)
called for an interdisciplinary approach, grounded
in accounting knowledge, using more than eco-
nomic theory:
To get signi?cant breakthroughs in this area,
others will have to capitalize more e?ectively
on the competitive advantage of accounting
researchers; we best understand how concepts
and theories from economics, ?nance, orga-
nizational behavior, and other disciplines
a?ect and are a?ected by measurement and
disclosure decisions in complex business and
regulatory contexts (pp. 171–172).
Restoring the focus of research to solving
important problems rather than generating evi-
dence in support of economic theory is a promis-
ing development. However, successful applied
theory requires considerable introspection and a
keen appreciation of models used and their back-
ground assumptions, which is the introspection
that is missing in this literature to date.
The ?nal response to the crisis in ?nancial
accounting research was to colonize previously
‘‘uninvestigated’’ research areas. These areas
include historical markets, international account-
ing, and environmental accounting.
36
Considerable
research literatures on international accounting
(Prather & Rueschho?, 1996) and environmental
accounting (see Gray, 1993) already existed at the
time these topics became interesting to positive
accounting researchers. Possibilities for transfor-
mative criticism and growth from imperialist ven-
tures depend on whether the investigation caused
researchers to interact with di?erent research lit-
eratures from which they might acquire new per-
spectives, ideas, and viewpoints. The interaction
has varied in the case of these recent expansions of
capital markets methods (Reiter, 1998) but the
emphasis appears to be on exporting tools of
capital markets analysis rather than on absorbing
new institutional richness.
In summary, our ‘‘cases’’ suggest problems in
production of transformative critique within the
mainstream US research community. Little trans-
formative criticism was generated in JAR con-
ference discussions and the large volumes of
critique aimed at the positive accounting move-
ment have been mostly not addressed. Longino
(1990) does not suggest that researchers must
recant their work, but critique should have an
e?ect on the work of others within the research
community. Nor does the mainstream US
accounting research community appear to have
shared values that promote transformative cri-
tique. As Chua (1996) notes, ‘‘students are taught
that legitimacy=rigour= ’’the scienti?c method’’
=calculation’’ (p. 131). There is not much about
rigor, narrowly perceived as formal abstraction
36
Alan Wolfe (1989) notes this imperialistic tendency on the
part of University of Chicago economists like Gary Becker to
bring all human behavior under the sway of subjective expected
utility theory.
600 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
and statistical and mathematical sophistication,
that motivates individual researchers to apply
standards of critical rationality to their or others’
work. Finally, the marked inequality of intellec-
tual authority and domination of the academic
accounting reputational hierarchy by a class of
elite ?gs. impedes the generation and free ?ow of
ideas necessary for transformative critique.
4. Implications and suggestions
Overall, our investigation has concluded that
the structure of the US accounting academy pro-
duces insu?cient opportunity for and commit-
ment to incorporation of transformational
criticism. Production and dissemination of poten-
tially transformative critiques are limited. Intel-
lectual authority derives from fastidious adherence
to the norms of economic science and not from
innovation or connection with the accounting
practice community. Consequences of the lack of
‘‘good’’ scienti?c conversation in accounting
include extremely slow progress toward better
explanations and understandings, waning rele-
vance of the research program to outside con-
stituents, and less likelihood of future innovations.
These problems are important to more than just
the US academic community. Lukka and Kasanen
(1996) show how the mainstream US academy
dominates accounting knowledge production and
publication well beyond the shores of North
America.
37
Ze? (1996) notes that the US domina-
tion of global accounting research is partly based
on the greater numbers and more stringent publish-
ing requirements of US academics. Most non-US
academics, however, have to interact with Amer-
ican academia. This is troubling in that if there are
structural ?aws in the scienti?c conversation in
accounting, such that it cannot progress, the
exportation of American research culture may lead
to a similar lack of progress in other venues around
the world. As Panozzo (1997, p. 475) notes, in a
‘‘. . .multicultural and multilingual world which is
said to face the challenge of globalization, new
generations of researchers will probably need to be
trained to cope with variety rather than be equip-
ped with techniques based on assumptions of uni-
formity across cultures and social contexts.’’
Several of the particular factors limiting the
transformative potential of US accounting research
result from importation and over-reliance on posi-
tive economic theory and methodology. To the
extent that accountants simply serve to validate
economic theory without being able to a?ect the
theory in return, there will be little progress in
accounting research. Some researchers have respon-
ded to this crisis by placing the accounting issues
at the center of concern and using theory to
advance understanding of these issues, rather than
using accounting situations to validate economic
theory. On this score, Barnes et al.’s (1996, p. 105)
description of the role of Kuhnian exemplars is
good advice:
How a theory is to be applied is not ?xed by
rule or de?nitions, or by deductions there-
from; it is decided by those using the theory,
who take its existing applications as pre-
cedents and proceed from them on the basis
of analogy. A theory is its exemplary applica-
tions at a given point of time, and that these
are the resources for deciding what other
applications will be made, the precedents for
further problem-solving, the basis for further
case-to-case development of ‘the theory’.
What this means for accounting research is that
no theory is sacred and that accounting research-
ers should be free to alter theories as it seems
appropriate or jettison them as they prove to be
ine?ective. In other words to use economic the-
ories as applied theories to solve accounting pro-
blems rather than transform accounting into a
convenient laboratory to test economic theories.
Transformative criticism is necessary for use of
theories in an applied science since the role and
37
The concluding sentences of Brown’s (1996, p. 745)
assessment of the academic elite, published in AOS, refers to
the locations of the most in?uential non-US academics:
As 13 Canadian universities o?er PhDs in accounting,
approximately 15% of these universities have two such
individuals on their faculties. England has only one such
individual as a faculty member. No other country has even
one (emphasis added).
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 601
relevance of the background assumptions must be
explicitly debated. Furthermore, goals and values
must necessarily come to the fore in applied
science (Mattessich, 1984) and it is necessary to
examine the underlying assumptions of theories in
light of those goals and values.
Another barrier to progress in accounting
research is the hierarchical reputation structure
that forces most US accounting researchers to
narrowly de?ne their work within the economic
paradigm. Lee (1995) traces the formation of a
core of elite researchers within accounting. He
notes that the process of production of an
accounting academic elite has ‘‘been achieved
within the US academy by mechanisms such as
doctoral programs, journals and author rankings;
editorial boards; promotion and tenure processes;
research awards; subject specialisms; and internal
con?icts’’ (p. 250). Journals are particularly
important in this process:
Publications in what are perceived to be elite
journals enhances the ability of the researcher
to progress in a career as an educator. The
editors and editorial board members of these
journals not only determine what is or is not
published as accounting research. . .The edi-
torial function basically sets the agenda for
what is or is not publishable accounting
research, and researchers respond to this if
they wish to get published. . . (p. 252).
Therefore, one solution to the crisis in account-
ing research would be to work on ways to open up
the academy to a broader range of researchers and
research interests. Community responsiveness to
criticism can be enhanced by broader doctoral
education and more contact with colleagues in
other disciplines. Accounting researchers should
try to understand and appreciate research pub-
lished in a wider set of journals in order to over-
come the limitations of a narrow training. Instead
of solving problems with journal access by creat-
ing more and more specialized journals, account-
ing academics should create more interdisciplinary
journals, and journals and projects organized
around a central research question where di?erent
research approaches might interact. Abbott (2001,
pp. 230–231) observe that the value of inter-
disciplinary studies does not lie in mimicry, i.e.:
The real utility of contacting others is in the
way it opens up new choices for us—not to
become like them, or even to steal their
methodologies directly—but rather to enact
what they enact but in our own place and
time, in our own tradition; in short, to make a
translation.
Finally, accounting researchers need to ?nd
ways to promote more egalitarian practices and
structures within the research community. This
requires some sober thought and open discussion
about the manner in which the U.S. accounting
research community is managed (or mismanaged).
A progressive step would be for the accounting
academy to shift the burden of proof onto the
members of the power structure of the accounting
academy. One seemingly essential step to accom-
plishing such proof shifting is reforming the Amer-
ican Accounting Association (AAA) which Lee
(1999) documents as being controlled by repre-
sentatives of the elite schools thoroughly schooled in
the rituals of economic science. The AAA tightly
controls the legitimate scholarly agenda through
its journals, programs, and awards. As member-
ship continues to decline (AAA, 1999), even in the
face of an expanding global population of
accounting academics, the AAA resists any
alterations to its structure. ‘‘Progress’’ or a sense
of movement is di?cult to achieve within an
organizational structure erected mainly to guar-
antee that control remains with an elite group.
Members of the accounting academy are enti-
tled to a serious and objective answer to the ques-
tion, ‘‘What has the elite accomplished in 30 years
of leadership to bring us to this self-admitted cri-
sis?’’ The US accounting academy is not now par-
ticularly well organized to make progress; it seems
now to be organized mainly to produce politically
correct academic reputations. The question every
member of the accounting academy should ask is,
‘‘How may leadership of the US academy justify
its consolidation of power through practices and
structures that preclude progress in accounting
research?’’
602 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Appendix. Distribution of JAR conference
authors and discussants with PhDs by degree
school from 1966 to 1996
School Number of
authors
Number of
discussants
Chicago* 49 22
Stanford* 30 18
Texas* 19 8
Illinois* 19 16
Michigan* 16 12
Berkeley* 14 6
Cornell* 14 9
Carnegie Melon* 12 13
Michigan State* 11 3
Minnesota* 9 15
Rochester* 7 4
Northwestern 6 3
University of Washington* 5 6
UCLA 4 5
Penn 4 4
Iowa* 4 2
Arizona 3 0
Kansas 2 3
Harvard 2 1
Penn State 2 2
Wisconsin* 2 0
SUNY-Bu?alo 2 0
British Columbia 2 0
Arizona State 2 0
Ohio State* 2 6
Purdue 2 2
Columbia 1 2
Florida 1 3
Indiana 1 2
Washington University 1 1
NYU 1 2
Pitt 1 1
Syracuse 1 0
Virginia Tech 1 0
Florida St. 1 0
Baruch 1 0
N.S. Wales 1 0
Warwick 1 0
Georgia St. 1 0
Odense 0 1
MIT 0 2
Hebrew 0 1
Southern Cal 0 1
Missouri 0 1
Lancaster 0 1
*Designates an elite school.
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doc_818337860.pdf
Doubts were raised within the accounting research program in the United States in the late 1980s about its progress
and future potential. In this paper, we develop criteria for ‘‘good’’ scientific conversation, which leads to progress
(defined as innovation and relevance). The key to this process is critical evaluation of background assumptions. The
structure of scientific conversation in accounting and economics, whose theories and practices accountants adopted,
are examined
The structure and progressivity of accounting research:
the crisis in the academy revisited
Sara Ann Reiter
a,
*, Paul F. Williams
b
a
School of Management, Binghamton University, Binghamton, NY 13902-6015, USA
b
Department of Accounting, Box 8113, North Carolina State University, Raleigh, NC 27695-8113, USA
Abstract
Doubts were raised within the accounting research program in the United States in the late 1980s about its progress
and future potential. In this paper, we develop criteria for ‘‘good’’ scienti?c conversation, which leads to progress
(de?ned as innovation and relevance). The key to this process is critical evaluation of background assumptions. The
structure of scienti?c conversation in accounting and economics, whose theories and practices accountants adopted,
are examined. We conclude that structural barriers result in a lack of adequate transformative critique, which
contributes to the lack of progress in the accounting research program. # 2002 Elsevier Science Ltd. All rights
reserved.
You have to stand by your theories because
they’re for that, otherwise there’s no sense in
making them up. (Lovejoy
1
)
Doubts were expressed within the mainstream
accounting research program in the United States
in the late 1980s and early 1990s about its progress
and future potential (Demski, Douch, Lev,
Ronen, Searfoss, & Sunder, 1991). The ensuing
‘‘crisis’’ in ?nancial accounting research raises
questions about how the progressivity and poten-
tial of research programs should be evaluated.
This paper develops criteria for evaluation of the
scienti?c conversation within a discipline (Arring-
ton & Schweiker, 1992; Longino, 1990; McClos-
key 1985, 1996, 1998) and applies them to an
assessment of the crisis in accounting. We argue
that scienti?c progress is dependent on the quality
of critical conversation within a discipline and that
progress, de?ned as innovation and relevance, is
an important feature of good science or good
scholarship in general.
2
0361-3682/02/$ - see front matter # 2002 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00050- 2
Accounting, Organizations and Society 27 (2002) 575–607
www.elsevier.com/locate/aos
* Corresponding author. Tel.: +1-607-777-6174; fax +1-
607-777-4422.
E-mail addresses: [email protected] (S.A. Reiter),
[email protected] (P.F. Williams).
1
Lovejoy is a character created by the mystery writer Jona-
than Gash. Quote is from Gash (1989, p. 121).
2
Although Longino’s (1990) account is of the practice of
science in the natural sciences (particularly biology), we believe
it is applicable to accounting research. Accounting researchers
talk about their practice in essentially ‘‘scienti?c’’ terms bor-
rowed from the natural sciences and the North American
accounting research program, like economics, follows a natural
science tradition. Also, the distinction between natural science,
social science, and non-science may not be particularly relevant
to epistemological issues since the same process of evaluation
of truth claims through social discourse operates in all scho-
larly arenas (Arrington & Schweiker, 1992, p. 528; McCloskey,
1985, p. 56).
The goals of science may be stated variously as
‘‘construction of comprehensive accounts of the
natural world’’ (Longino, 1990, p. 32), ‘‘discovery
of truth about the natural world’’ (p. 32), or the
‘‘search for descriptions of the natural world that
allow for the prediction and control of an
increasing number of its aspects’’ (p. 33). How-
ever, in the absence of an adequate critical con-
versation, particularly regarding the validity of
background and contextual assumptions, dis-
ciplines become ?xed and overly stable, no longer
concerned with ‘‘the truth’’ (p. 224). Arrington
and Schweiker (1992, p. 524) argue that ‘‘social
forces within research communities can constrain
possibilities for argument, innovation, and even
action.’’ Emphasizing the structural components
of the criteria for ‘‘good’’ scienti?c conversation,
we investigate the US accounting academy to
assess whether the ‘‘crisis’’ in ?nancial accounting
research may be due to self-limiting features of its
scienti?c conversation.
There was a revolutionary change in accounting
research in the 1960s and 1970s from a so-called a
priori, normative approach to an empirical, eco-
nomic-based research program (Mouck, 1993,
1995b; Wells, 1976). The beginning of this
‘‘accounting revolution’’ (Beaver, 1989) has been
traced to the publication of Ball and Brown’s
(1968) study relating accounting earnings and
market returns. By the 1980’s, the positive
accounting research program, based on positive
economic theory (Watts & Zimmerman, 1986),
dominated mainstream accounting research in the
USA (Brown, 1996; Lee, 1995; Mouck, 1995a;
Rodgers & Williams, 1996; Williams & Rodgers,
1995). The in?uence of positive accounting, which
Chua (1996) calls the ‘‘empirical/calculative tradi-
tion,’’ has spread beyond North America and
become a major global accounting research mode.
Clarke, Craig, and Amernic (1999) document the
prevalence of North American research meth-
odologies in Australian doctoral research and
Chua (1996, p. 137) observes that the empirical/
calculative tradition has spread as graduates of
North American universities have returned to
teach and set up doctoral programs in non-Wes-
tern and ‘‘dominion capitalistic’’ countries. Lukka
and Kasanen (1996) review publications in six top
journals
3
from 1984 through 1993 and note that
the ‘‘U.S.A. dominates the scene in many ways:
U.S. data was used in 69% of papers; 70% of all
authors came from the U.S.A.. . .’’(p. 769).
4
Nearly a generation after the publication of Ball
and Brown (1968), mainstream US accounting
academics were becoming troubled about the lack
of success of the positive accounting research pro-
gram. Critical and questioning reviews of the
positive accounting research program were pub-
lished by mainstream accounting researchers such
as Lev (1989), Bernard (1989), and Abdel-Khalik,
Regier, and Reiter (1989). A group of researchers
(Demski, Dopuch, Lev, Ronen, & Searfoss, 1991)
who met under the auspices of the American
Accounting Association to discuss the state of
accounting research, produced a discussion docu-
ment about the ‘‘serious crisis’’ in academic
accounting. The document identi?ed a number of
speci?c symptoms of the ‘‘crisis’’:
1. Unlike many other professional disciplines,
(e.g. ?nance, medicine, architecture),
accounting research does not lead practice
and/or policymaking (p. 1).
2. Most academic research areas are character-
ized by cycles of signi?cant innovations—i.e.
new ideas and concepts that periodically
revolutionize the ?eld, such as rational
expectations in economics, and options
models in ?nance. Such innovations in
accounting research are practically non-exis-
tent (p. 1).
3. Despite considerable research e?ort, it does
not seem that we are any closer now than we
were 20–30 years ago to addressing the
3
The six journals analyzed by Lukka and Kasanen (1996)
are The Accounting Review (TAR), Journal of Accounting and
Economics (JAE), Journal of Accounting Research (JAR),
Accounting, Organizations and Society (AOS), Accounting and
Business Research (ABR), and Abacus.
4
Panozzo (1997) notes that the most active group of dis-
senters to the dominant US research models are European
scholars. Ryan, Scapens, and Theobald (1992) explain that
theoretical work on income theory remained central to UK
accounting research long after normative work had been sup-
planted by the empirical/calculative tradition in the US. In
addition, UK academics retained a concern with wider social
issues and began ‘‘exploring accounting regulation as a social
process’’ (p. 71) in contrast to the US’s economic orientation.
576 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
fundamental issues in accounting such as the
optimal choice of accounting standards and
the optimal structure of accounting institu-
tions (pp. 1–2);.
4. There appears to be no discernible demand
for academic accountants or for accounting
research by accounting ?rms (except in
auditing), by industrial ?rms, or by reg-
ulators. A strong demand for academicians
exists in most other professional disciplines,
such as ?nance. . .(p. 2).
‘‘Thus,’’ the discussion document concludes,
‘‘we seem to be witnessing a ‘market failure’ phe-
nomenon in academic accounting, particularly in
research’’. While the possibility of progress in
science has recently been questioned by post-
modern philosophers (Chua, 1996, p. 132), we
derive a notion of progress from the implicit
expectations of the authors of the crisis docu-
ment.
5
Their expectations fall into two categories.
First, a progressive research program should have
vitality as evidenced by innovation, progress in
resolving fundamental issues, and generation of
new issues for study. Second, a progressive
research program should be appreciated by prac-
tice constituencies beyond the research commu-
nity—it should lead practice and guide
policymakers and regulators, in?uence education,
and generate demand for academic accountants
and accounting research (Demski et al., 1991).
Progressive goals represent an ideal, and di?erent
research communities di?er in the extent to which
they appear to meet these goals. There is wide-
spread angst, for example, in the academic eco-
nomics community about whether similar goals
are being met (Redman, 1991),
6
while there is a
common perception that academic ?nance,
accounting’s close cousin, is ‘‘both ‘scienti?c’ and
‘successful’’’ (Chua, 1996, p. 146).
7
The serious questions raised by Demski’s group
about the past success and future potential of the
research program are still unresolved. In part this
may be because accounting researchers do not
have the inclination to engage in philosophical
and methodological introspection. For elite
accounting academics, the current social structure
of the academy ‘‘works’’ quite well. A certain
amount of introspection and self-analysis, how-
ever, is critical to progress in any scholarly ?eld as
explained by Ryan, Scapens, and Theobald (1992):
Within a research community . . . the cultiva-
tion of sound method and a strong critical
approach are necessary conditions for healthy
and productive research to ?ourish. Further-
more, we believe that there is a place within
every research community for continuous
reappraisal of the methodological preconcep-
tions upon which its work is based (p. viii).
5
The authors of the white paper describe the crisis in
accounting in a language that suggests a Kuhnian (Kuhn, 1970)
characterization of crisis, for example using the phrase ‘‘cycles
of signi?cant innovation.’’ They represent the crisis they
describe as analogous to Kuhn’s examples of crises in the nat-
ural sciences, such as the inadequacy of the Ptolemaic model,
the pholgiston theory, and Newtonian absolute space (Kuhn,
1970, pp. 68–70), which in turn were resolved through para-
digm shifts. Crises could be understood in ways other than this
Kuhnian sense. For example, crises can arise over doctrines,
which are not resolved by paradigm shifts but more likely by
?ssion. Two paradigms persist, constituting di?erent belief sys-
tems while perhaps sharing some common features, et al., Pro-
testantism and Roman Catholicism. Kuhn’s (1970) crisis and
overthrow model may also be a faulty model for scienti?c pro-
gress. Popper’s critical rationalism, for example, is a theory of
learning where bad theories are not overthrown, but rather
evolve into better theories through incorporation of transfor-
mative critique (Redman, 1991, p. 133). Abbott (2001) theo-
rizes that disciplines divide along predictable lines creating a
fractal pattern of change over time. According to Abbott
(2001), the history of the social sciences is one of recurring
themes emerging through time in di?erent guises. The result is
progressive uniquely in the sense that disciplines approach
problems from a multitude of viewpoints over time.
6
Redman (1991) explains that talk about a ‘‘crisis’’ in eco-
nomics began in Britain in the 1970s, spreading to the USA in
the 1980s. She quotes a sample of perceived de?ciencies from
Coats (p. 97, note 3). These include inadequacies in the
empirical foundations of economics, over-development of
mathematical economics and econometrics to the detriment of
intellectual development, irrelevance or lack of contribution of
most economists’ e?orts toward the solution of major practical
problems, and a state of mental confusion in a profession
whose members su?er from a problem of ‘‘collective hubris.’’
7
See, for example, Reiter (1998), McGoun (1992, 1995),
and Frankfurter et al (1994) for a dissident view on the ‘‘suc-
cess’’ of the ?nancial economic paradigm.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 577
Evaluating the future potential of an academic
?eld is a daunting task, and we make no claims of
reaching ?nal and totalizing judgments in this
paper. What we seek to contribute is an applica-
tion of contemporary thought in the philosophy
and sociology of science, about the workings of
scienti?c disciplines to the problem of a lack of
scienti?c progress in accounting. The next section
of the paper reviews the basic premises of the
rhetoric of inquiry movement and sets out the
rationale for, and indications of, ‘‘good’’ scienti?c
conversation, i.e. one that permits progress. The
following section traces the incorporation of eco-
nomic theory into accounting research and reviews
the structure of scienti?c conversation in econom-
ics and how it is replicated in positive accounting
research. The analysis concludes that structural
barriers exist that impede the possibility of eco-
nomic theory development within the accounting
context and keep accounting researchers from
evaluating the extent to which accounting phe-
nomena are adequately modeled using economic
theory. Ironically, the structural barriers that
impede progress appear to result from the attempt
to make accounting research more ‘‘scienti?c’’ by
adopting economic theory and methods. Subse-
quently, we analyze several cases of conversation
in the mainstream US accounting academy to see
if transformative criticism is made, heard, and
acted upon. Finally, we provide an overall eva-
luation of the state of the mainstream US
accounting research conversation, discuss the
implications of our conclusions for both the USA
and the international accounting research com-
munities, and make suggestions for promoting
better conversation in accounting research.
1. Progressive science as ‘‘good’’ conversation
It is widely acknowledged that science is accom-
plished within communities that have developed
their own sets of rules (Arrington & Schwieker,
1992, p. 551; Kuhn, 1970; Longino, 1990; Lukka
& Kasanen, 1996, p. 771; McCloskey, 1998, p. xx).
What counts as knowledge in any scholarly ?eld is
determined by how that ?eld is organized socially
(Barnes, Bloor, & Henry, 1996; Whitley, 1984;
Fuchs & Turner, 1986; Hagstrom, 1965; Knorr-
Cetina, 1981). When the need arises, scienti?c
practices and rules within disciplines are often
legitimized, particularly to outsiders or critics
within, by reference to some ‘‘philosophy of
science’’. For example, Watts and Zimmerman
(1995, p. 12) invoke philosophers of science such
as Toulmin, Friedman, and Popper in support of
the following summary of the scienti?c process:
Logic plays a role in developing theories.
Theories are based on assumptions and logic
is used to derive propositions. However, given
the logic of the theory is correctlydeveloped,
logic does not determine whether a theory is
supported by the scienti?c community or not.
Acceptance depends on the extent to which the
empirical propositions (predictions) of the the-
ory are consistent with observed phenomena.
Following assorted rules identi?ed by certain
prominent philosophers of science to make deci-
sions about the truth of hypotheses and the valid-
ity of research programs is called the logic of
inquiry approach.
A number of di?erent theories of the practice of
science and the philosophy of science have been
developed and discussed in the past thirty years.
Several theories, for example Popper’s falsi?cation
theory, concentrated on ?nding demarcation cri-
teria that could distinguish between science and
non-science. Other theory developments, for
example by Kuhn (1970) and Lakatos (1970),
attempted to describe what scientists seem to do in
their practice of science. There are well-docu-
mented problems (McCloskey, 1994) with the
logic of inquiry approach in providing strong
demarcation criteria for choosing between true
and false theories and progressing and deteriorat-
ing research programs. These problems have led
students of science (including Popper) to interpret
scienti?c practice in more sociological terms. Sci-
enti?c knowledge is seen not as the result of some
universal application of the rules of scienti?c
method, but as the temporary consensus embraced
by a community of scientists with shared norms,
methods, assumptions, traditions, values, etc.
These communities are bounded (Fuller, 1993;
578 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Whitley, 1984) and have di?erent structures that
change through time. Depending on how commu-
nities are able to create self-correcting mechanisms
within the conduct of research, the scienti?c work
of the discipline will move forward in a pro-
gressive manner by allowing unproductive theories
and beliefs to be amended or discarded. The
metaphor of conversation is the most apt to a
contemporary understanding of scienti?c commu-
nities because scientists are engaged mainly in acts
of persuasion, which constitute the means of cor-
recting errors within the community of scientists.
McCloskey (1985, p. 153) explains this rheto-
rical turn thusly, ‘‘[t]he rhetoric of conversation,
not the logic of inquiry, provides the standards for
science.’’ The quality of scienti?c conversation
itself is seen as the ultimate justi?cation strategy
for a research program:
What distinguishes good from bad in learned
discourse, then, is not the adoption of a par-
ticular methodology, but the earnest and
intelligent attempt to contribute to a con-
versation (McCloskey, 1985, p. 27).
‘‘Good’’ conversation promotes progress in sci-
enti?c research through concern with good pro-
cess.
8
Lack of progress in scienti?c research is not
a matter of adopting a ‘‘bad’’ philosophy of
science, but of lacking a structure conducive to
good process. The rhetorical practices, or conversa-
tions, within a discipline become very important
since they determine whether an appropriate cri-
tical focus can be maintained and operationalized.
As Sanders (1990) notes:
The rhetorical practices of creating, revising,
and challenging discursive constructions that
cohere distinct knowledge claims are the only
independent tests (i.e. extrascienti?c but not
epistemologically opposed) that the scienti?c
community has of its research agenda, meth-
ods, paradigms, interpretations, and theories’’
(p. 154).
9
Longino’s theory of Science as Social Knowledge
(1990), describes characteristics of a ‘‘good’’ con-
versation.
10
Longino asserts that it is the colla-
borative social process of ‘‘transformative
interrogation’’ of scienti?c ideas that makes scien-
ti?c knowledge objective, at least in the sense that
it does not exhibit individual subjectivity (p. 224).
With Longino, the concern shifts from developing
demarcation rules to show which research pro-
grams are most scienti?c or truthful or fruitful,
toward concern with improving the process of sci-
enti?c inquiry. Good conversational process then
acts to promote good research programs by
exposing all elements of research, including back-
ground assumptions, to critical scrutiny and
debate by the scienti?c community.
8
While we agree with McCloskey about the importance of
rhetoric of inquiry in the practice of science, we disagree with
her belief that revealing the rhetorical nature of scienti?c con-
versation will be su?cient to get a discipline back on track.
McCloskey (1985, 1994, 1996, 1998) seems to think that if
economists, in particular leading economists, would come to
understand and respect the role of rhetoric in economic con-
versation, the conversation could be cured of its modernist,
positivist faults. We place more emphasis on the ways that the
structure of the conversation, which has de?ned power dimen-
sions, makes self-reform di?cult and problematic. McCloskey
has been accused of relativism by more conservative economic
philosophers (see McCloskey, 1994, for a blow by blow refuta-
tion of her critic’s misunderstandings). This assertion is wide of
the mark, however, as McCloskey is very much a believer in
scienti?c truth, which she believes is not likely to be arrived at
without good quality argumentation and persuasion within the
scienti?c community.
9
See also Pera (1994) who o?ers a dialectical model, which
acknowledges the argumentative and transformative nature of
science.
10
Longino (1990) is concerned with epistemological pro-
blems, particularly relating to objectivity, in the biological sci-
ences. The issues of epistemology raised by Longino (1990) are
applicable to the process of any scholarly community seeking
to pursue and recognize the truth—whether in the natural sci-
ences, social sciences or humanities. The natural sciences and
social sciences di?er on issues of ontology—di?erences in the
problems of knowing physical facts versus social facts—but
that is not particularly important to the problem we are dis-
cussing in this paper. Longino’s adherence to scienti?c realism
and belief in the possibility of a form of objectivity would likely
be seen as bourgeois science by neo-Marxists, as, perhaps, too
positivistic by Habermas, as too na?¨ve by philosophers such as
Foucault who put ideology at the heart of science, and as too
dismissive of issues of domination by feminist philosophers
(Longino, 1990, pp. 194–213). Her stance, however, is more in
tune with the philosophies of accounting and economics
researchers, particularly in the USA.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 579
Even Sir Karl Popper, most notably identi?ed
with the logic of inquiry approach, towards the
end of his life embraced an evolution metaphor
(evolutionary epistemology) for scienti?c progress
where the key feature is critique within a commu-
nity of scholars (Popper, 1972, pp. 239–240):
I only wish to stress that critical arguments
are a means of control [emphasis in original]:
they are a means ofeliminating errors, a
means of selection. We solve our problems
[emphasis in original] by tentatively propos-
ing various competing theories and hypoth-
eses, as trial balloons, as it were; and by
submitting them to critical discussions and to
empirical tests, for the purpose of error-elim-
ination.
For Popper, this argumentative process becomes
an ethic by requiring the individual scientist to
argue with him or herself (Popper, 1972, p. 266):
Be clear as you can about the various theories
you hold, and be aware that we all hold the-
ories unconsciously, or take them for granted,
although most of them are almost certain to
be false. Try again and again to formulate the
theories which you are holding and to criti-
cize them. And try to construct alternative
theories—alternatives even to those theories
which appear to you inescapable; for only in
thisway will you understand the theories you
hold.
Further,
And let it be your ambition to refute and
replace your own theories [emphasis added];
this is better than defending them, and leav-
ing it to others to refute them.
In addition to the critical attitude promoted by
Popper, Longino (1990) emphasizes the impor-
tance of questioning the contextual framework of
scienti?c research. Scienti?c practice is shown to
be in?uenced by contextual values in a number of
ways (see also Barnes et al., 1996; Fuller, 1988).
Those most relevant for understanding accounting
research include contextual values ‘‘expressed in
or motivating background assumptions facilitat-
ing inferences in speci?c areas of inquiry’’ and
contextual values ‘‘expressed in or motivating
acceptance of global, frameworklike assumptions
that determine the character of research in an
entire ?eld’’ (Longino, 1990, p. 104).
‘‘Transformative criticism’’ is crucial to the
social process by which background assumptions
are questioned:
A method of inquiry is objective to the degree
that it permits transformative criticism. Its
objectivity consists not just in the inclusion of
intersubjective criticism but in the degree to
which both its procedures and its results are
responsive to the kinds of criticism described
. . . Scienti?c communities will be objective to
the degree that they satisfy four criteria
necessary for achieving the transformative
dimension of critical discourse: (1) there must
be recognized avenues for the criticism of
evidence, of methods, and of assumptions
and reasoning; (2) there must exist shared
standards that critics can invoke; (3) the
community as a whole must be responsive to
such criticism; (4) intellectual authority must
be shared equally among quali?ed practi-
tioners (Longino, 1990, p. 76).
Expanding on the points noted above, the ?rst
criterion means that criticism must be valued, not
repressed, and there must be some way for criti-
cism to interact with accepted theories, i.e. there
must be some forum in which to express criticism.
The second criterion relates to the standards and
values of the scienti?c community that are needed
to make possible attention to criticism. These
types of shared standards could include values
such as empirical adequacy, truth, expansion of
the existing knowledge framework, reliability as a
guide to action, relevance or satisfaction of social
needs, or consistency with theories from other
domains (p. 77). The third criterion is that ‘‘the
beliefs of the scienti?c community as a whole and
over time change in response to critical discussion
taking place within it’’ (p.78). The fourth criterion
relates to equality of intellectual authority. This
580 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
criterion is ‘‘intended to disqualify a community in
which a set of assumptions dominates by virtue of
the political power of its adherents’’ (p. 78). In
summary, the central characteristic necessary for
‘‘good conversation’’ is that criticism must be
encouraged and taken seriously. It is not just that
criticism must be produced and heard, it must also
be incorporated into the research program:
When critical discussion becomes repetitive
and ?xed at a metalevel, or when criticism of
one set of assumptions ceases to have or does
not eventually develop a connection to an
empirical research program, it loses its rele-
vance to the construction of empirical
knowledge (Longino, 1990, p. 79).
In addition, a particular type of criticism is
vital—criticism that questions the relevance of
background assumptions. It is also important that
the results of empirical studies are used to evaluate
the adequacy of the theory and its background
assumptions.
Progress in accounting research is de?ned by the
authors of the white paper (Demski et al., 1991)
both in terms of innovation and relevance to the
practice community. Innovation comes from
understanding contextual and background assump-
tions su?ciently well to ‘‘see’’ new and productive
ways of thinking and doing. Relevance to the
practice community is related to Mattessich’s
(1984) concept of applied science. Applied science
must be concerned with ‘‘goals, norms and pre-
scriptive conclusions’’ (p. 2). In order to be useful to
practitioners and policy-makers, accounting research
must have a prescriptive or ethical awareness. As
Chua (1996) explains, accounting researchers have
moved away from the possibility of relevance
through their vigorous process of ‘‘scientization’’:
. . . over the last twenty-?ve years in account-
ing science, a concern with quantitative rigour
has not only encouraged researchers to desist
from talking about values and ends, it has
relegated such speech acts to a lower form of
academic practice. In the process, the dis-
cipline has moved to a point just beyond the
reach (and beneath the notice) of policy-
makers, practising accountants and the public
at large (p. 147).
11
It is through re-examining the contextual
assumptions of positive accounting and assessing
their relevance to the accounting research project,
a process of transformative criticism, that
accounting researchers can hope to re-achieve
relevance. The remainder of this paper seeks to
locate the US accounting academy relative to
Longino’s (1990) four criteria for ‘‘good’’ con-
versation—avenues for critique, shared values,
community response, and shared intellectual
authority. All particular disciplines deviate to a
greater or lesser extent from this ideal model of
scienti?c process. However, the conversational
structures and practices of a discipline must
encourage production of some degree of transfor-
mative criticism to achieve progress in the form of
innovation and relevance.
2. Economics and the structure of accounting
‘‘science’’
One of the principal characteristics of the
empirical/calculative tradition in accounting
research is its reliance on economic theory. In this
section, we trace the history of economic theory in
accounting research and establish the dominance
of economics as a theoretical paradigm. We then
explain how several characteristics of the way
accountants use economic theory contribute to the
noted lack of innovation and relevance. Accoun-
tants have not only imported the theoretical struc-
tures of economics, they have also imported
economics’ reputation structures and conversational
rules. We draw implications for the conversation in
accounting research from a review of sociology of
science characterizations of the reputation struc-
ture of economics since accounting has adopted
similar structures. Finally, we develop evidence
about the ability of accounting researchers to parti-
cipate in the economics research conversation.
11
This phenomenon is not unique to accounting. Abbott
(2001, p. 146) notes that all academic disciplines ‘‘. . . are sub-
ject to a ‘‘regression’’ into professional purity.’’
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 581
2.1. The empirical research revolution
The publication of Ball and Brown’s (1968)
article may be viewed as a prominent moment in
the scienti?c transformation of accounting—a
transformation similar to that undergone by all
business disciplines (except perhaps business law)
after World War II. This scienti?c transformation
enabled the various business disciplines to resem-
ble the rest of the university, which, by the mid-
nineteenth century, increasingly organized its cog-
nitive task through ?ner and ?ner partitions of
narrowly specialized and professional ?elds
(Fuller, 1988; McIntyre, 1990). Whitley (1986)
provides an analysis of the conditions, which
enabled economists to transform business ?nance
into ?nancial economics during the 1960s. The
a?nity between accounting and ?nance led to a
similar transformation in accounting. The trans-
formation or scientization of accounting was
motivated by a desire for academic respect-
ability (Ryan et al., 1992, p. 46) and resulted in the
choice of a social science rather than an applied
science research model (Bricker & Previts, 1990,
p. 10).
That the social science model would be neo-
classical economics was abetted by the aggressive-
ness with which the University of Chicago asserted
its particular brand of positive social science
(Devine, 1999; Fleming, Graci, & Thompson,
2000). For example, Nicholas Dopuch, the editor
of the Journal of Accounting Research (JAR), dur-
ing the transition period emphatically stated: ‘‘. . .
I do believe that the traditional form of normative
income theorizing is [dead], and I have done my
best as editor of JAR to encourage this end (quo-
ted from Bell, 1984, p. 63).’’
Because of actions by powerful gatekeepers such
as Dopuch, the expurgation from the accounting
academy of traditional brands of normative theo-
rizing happened very quickly. The rapidity of
change was not exclusively the result of the super-
iority of positive economic science as an explana-
tory tool. It also served the ideological and career
interests of both academics and large public
accounting ?rms (Williams, 2001). However, in
the practical realm of accounting policy, norma-
tive theories are still the rule.
This positive research model described by Chua
(1996) as NIRD (New, Innovative, Rigourous,
Defensible), because it ‘‘prizes scienti?c ‘objectiv-
ity,’ positivistic hypothesis-testing, [and] gen-
eralisable conclusions derived from large-sample
studies’’ (p. 131), became the norm. The transfor-
mation was enabled by the advent of computers,
large-scale data bases, and standardized faculty
training reinforced by imposition of accreditation
requirements for doctoral degrees (Ryan et al.,
1992, p. 77).
12
The end result is that neo-classical
economic theory is the theoretical basis for most
?nancial reporting research (capital markets or
principal/agent; for example, Beaver, 1989; Watts
& Zimmerman, 1986) and for much of manage-
ment accounting research (Ryan et al., 1992, p. 58).
The pace of the empirical research revolution
was rapid. Bricker and Previts (1990, p. 12) quote
from an American Accounting Association Com-
mittee report that the percentage of published
research employing a ‘‘rigorous’’ method rose
from 12% in 1963 to 86% in 1975 to 98% in 1986.
The domination of economic theory in this trans-
formation is demonstrated through citation ana-
lysis. Rodgers and Williams (1996) studied the
construction of articles written by prominent
authors (the accounting elite
13
) in The Accounting
Review (TAR) for the period 1967–1993.
Throughout the period, the importance of ?nance
and economic journals as sources for constructing
accounting knowledge steadily increased among
12
In addition to institutional reasons for the empirical
accounting revolution, there are also explanations for the indi-
vidual appeal of the empirical/calculative tradition. These
include a psychological attraction to the simple expression of
complex realities (McGoun, 1992), resonance with conservative
social context and values (Mouck, 1992), and the rhetorical
power of inscriptions (Chua, 1996).
13
‘‘Elite’’ is used in this paper as a shorthand term to refer to
those who act as powerful gatekeepers, as shapers of the
research agenda. Elite is not necessarily approbation, but it
does connote power. Lee (1999) uses the term elite to connote
over-representation of a certain group in positions of power in
relation to their proportions in the population. For example,
while the over-representation of the graduates of certain doc-
toral programs on the American Accounting Association’s
Executive Committee could be interpreted ‘‘as signals of the
existence of a meritocracy’’ (p. 260), there is no evidence that
Executive Committee members are selected on the basis of
extraordinary competence.
582 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
the elite authors at TAR. In the latest period
studied, 1985–1993, the most important journals
after Journal of Accounting Research (JAR) and
Journal of Accounting and Economics (JAE) for
constructing TAR articles were, in order, Journal
of Financial Economics, Journal of Finance, var-
ious species of the Bell Journal, and American
Economic Review. In addition, Econometrica was
also in the 10 most frequently cited journals. The
citation analysis ?ndings are consistent with the
historical accounts of the change in accounting
research given by Ze? (1966, 1978) and Flesher
(1991).
Brown (1996) provides a list of the 26 ‘‘classic’’
articles most frequently cited in the most presti-
gious accounting journals
14
for a 30-year period
starting in 1963. Each of the articles is classi?ed by
‘‘paradigm’’. All of the ‘‘classics’’ published in
North American journals utilized an economics
based framework: 63.6% of them used the capital
market ‘‘paradigm’’, 18.2% utilized a positive
theory ‘‘paradigm’’, and 18.2% used a forecasting
‘‘paradigm’’. Since Brown’s agency ‘‘paradigm’’ is
also economics based, 79.5% of all 83 articles
identi?ed by Brown (classic, near classic, and rest)
published in North American journals are
unquestionably economics based. Economic dom-
ination of the US academy is also documented in
Lee (1995), Williams and Rodgers (1995), and
Rodgers and Williams (1996).
2.2. Innovation and relevance
The empirical revolution in accounting research,
achieved by importing economic theory, has
implications for progressive possibilities such as
innovation and relevance. Chua’s (1996, p. 131)
previously described NIRD model is now the
mainstream research model in North America. It
‘‘uses a form of hypothetico-deductive logic and/
or a series of mathematically-grounded deductive
arguments,’’ frames research hypotheses to ‘‘mini-
mize issues of social welfare or distribution,’’ and
uses ‘‘empirical evidence collected by standardised
data collection and analytical methods’’ to ‘‘‘test’
the defensibility of a priori hypotheses (p. 131).
One requirement for publishable research under
NIRD criteria is methodological innovation
(Ryan et al., 1992, p. 139). However, the type of
innovation called for by journal editors is quite
minor—studies must adhere closely to the frame-
work of previous work using a di?erent sample or
di?erent measurement for a variable or a di?erent
model speci?cation or a di?erent statistical tech-
nique. In fact, Clarke et al. (1999, pp. 67–70) argue
that the scienti?c imitation of ?nancial accounting
research results in an emphasis on quantity of
publications rather than quality of ideas, intoler-
ance or ‘‘tunnel-vision’’, and emphasis on sup-
porting current accounting methods rather than
searching for the truth.
The norms for research production under the
NIRD model do not lend themselves to develop-
ment of, or tolerance for, startling innovation. In
addition, we will suggest that the social structure
of academic accounting does not permit much
individual choice.
15
Economic theories in accounting research, such
as capital market theory and principal/agent the-
ory, were originally justi?ed on the grounds of
relevance to the problems of accounting practice.
One of the ?rst indicators of usefulness identi?ed
was ‘‘predictive ability’’ (Beaver, Kenelly, & Voss,
14
Brown (1996) considers the most prestigious accounting
journals to be TAR, JAR, JAE, Accounting, Organizations and
Society (AOS), and Contemporary Accounting Research (CAR).
15
Reiman (1990) notes a particularly relevant feature of
social structures:
as long as the group is constrained such that its members
must choose among the situations in the array deter-
mined by the structure, all the individuals are ‘‘forced
into’’ the particular situations in which they end up—
even if they made some free and rational choices on the
way. Structural force can operate through free and
rational choices because force need not only take advan-
tage of one’s fear (say, of dying); it can also work, often
more e?ectively, by taking advantage of one’s rationality
(p. 220).
Further:
we must abandon the notion that force occurs only when
a person is presented with only one acceptable alter-
native. Otherwise we shall miss the way in which social
structures force fates on people while appearing to leave
their fates up to them (p. 221).
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 583
1968). Predictive ability, it was argued, logically
leads to the relevance of the association between
accounting data and security prices and returns.
Beaver (1972, pp. 408–409) stated that relevance
emphatically:
For this reason, the behavior of security pri-
ces is a necessary (emphasis in original) con-
sideration in a complete system of accounting
research into external information issues. If
we accept the premise that the purpose of
accounting is to facilitate decision making,
then accounting research can be de?ned, and
in fact must (emphasis in original) bede?ned,
to include any research e?orts that help us to
address the issue of providing the optimal
information set for some de?ned class of
decision makers.
Approximately a decade after the importation
of capital market theory into accounting, Watts
and Zimmerman (1978) imported (from Jensen &
Meckling, 1976) a second theoretical component,
principal/agent theory, from ?nancial economics
into accounting by employing the same usefulness
rationale. According to Watts and Zimmerman
(1978, pp. 112–113), this theory is of relevance to
accounting because:
Such a theory will help us to understand bet-
ter the source of the pressures driving the
accounting standard-setting process, the
e?ects of various accounting standards on
di?erent groups of individuals and the allo-
cation of resources, and why various groups
are willing to expend resources trying to a?ect
the standard-setting process. This under-
standing is necessary to determine if pre-
scriptions from normative theories (e.g.
current cash equivalents) are feasible.
Thus, accounting research informed by princi-
pal/agent theory promises to contribute to produ-
cing improved decision making about accounting
practice.The initial reaction of the practice com-
munity to the empirical revolution in accounting
research was enthusiastic. At the ?rst JAR con-
ference, sponsored by the Ford Foundation at the
University of Chicago in 1966, a prominent prac-
titioner exclaimed that ‘‘I am extremely pleased
that research practitioners in accounting have
?nally discovered numbers’’ (Davidson, 1966, p.
181). He continues:
. . . I believe that this conference, with its
focus on evidence, is one of the most healthy
and signi?cant developments that have taken
place in accounting in many years. Although
none of the papers presented here may shake
the foundations of the accounting world, I
believe that, ten years hence, the cumulative
e?ort of many such empirical investigations
will have radically changed the nature of the
accounting profession’s thought (p. 161).
However, the decade of the 1960s marks the
beginning of a deepening schism ‘‘characterized by
a diminished sense of communication and funda-
mental di?erences in interests between academics
and practitioners’’ (Bricker & Previts, 1990, p. 10).
One reason why empirical research in account-
ing has not lived up to academics’ or practitioner’s
expectations is the ways accounting researchers
use economic theory. In the proceedings of the
1984 American Accounting Association’s Doc-
toral Program Conference, one of the authors of
the ‘‘crisis document’’ o?ers a normative theory of
innovation:
The ?ow should be from the original idea into
an accommodating model, into data and
analysis, rather than an opposite ?ow. . .: a
known tool, often originating in another dis-
ciplines (sic), is applied to sets of data already
available or that can be easily made available.
The hypothesis generated becomes a function
of data availability and known [emphasis in
original] tools of analysis (Ronen, 1984, pp.
89–90).
Much use of economic theory in accounting is
of the second type that uses imported tools on
easily available date, rather than being truly inte-
grated into and altered by the accounting context.
In addition, accounting researchers are subject to
the empirical indeterminacy of economic
584 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
phenomena.
16
It is the case that the use of positive
economic theories in accounting is not as a ‘‘tool’’
applied to solve accounting problems but as the-
ory qua theory, i.e. economic theories are, ‘‘in
theory’’, being tested! Any accounting problem’s
resistance to a solution is conceptually as much a
strong test of the theory as the theory is a ‘‘solu-
tion’’ to the problem. Thus, rather than becoming
‘‘solvers of accounting problems’’ the application
of positive economic theories to accounting turns
accounting researchers simply into economic sci-
entists. Mattessich (1984, p. x) warns against this
tendency toward treating accounting as a ‘‘pure or
positive’’ science rather than an applied discipline.
One of the problems he sees from the adoption of
economic theory is
. . .rooted in the fundamental dilemma of eco-
nomic sciences . . . Too often they are assumed
to be rigorous empirical sciences, without,
however, having reached that stage. Most of
them are quasi-empirical sciences, with a more
or less heavy analytical framework resting on
a host of unrealistic assumptions (p. 5).
If the discipline is not prepared to question the
background assumptions, little progress in under-
standing accounting phenomena is likely to result
from application of economic theory to account-
ing problems.
2.3. Reputation structure of economics
By becoming economic scientists, accounting
scholars have also, thus, imported reputation
structures for knowledge production and valida-
tion from economics because the social structure
of economics is inextricably connected to the nat-
ure of economic theory itself. This reputation
structure may be a source of impediment to good
conversation in accounting. Whitley (1982, 1984)
presents a theory of the organizational structure of
sciences as reputation work organizations or sys-
tems in which participants control work processes
and goals in light of the particular beliefs and
purposes of the reputation community of which
they are members. Tasks are selected, carried out,
and coordinated by scientists seeking reputations
on the basis of their contributions to the intellec-
tual goals of the ?eld. As academic disciplines are
formed and perpetuated through the training of
doctoral students and publication in academic
journals, the control of academic practitioners
through practices such as hiring, promotions, and
salary decisions is primarily in?uenced by the cri-
teria for academic reputation in that ?eld.
The extent to which a single scienti?c establish-
ment with a particular theoretical orientation is
able to dominate a given ?eld varies between
?elds. Some of the factors determining this varia-
tion are centralization of funding sources, auton-
omy from other organizations, standardization of
techniques, and existence of a formal communica-
tion system (Whitley, 1982, p. 315). In some dis-
ciplines, for example engineering and arti?cial
intelligence, outside organizations have consider-
able in?uence on research agendas due to exten-
sive outside funding. In other areas, such as
economics, the reputational structure is tightly
controlled from within the discipline.
Whitley (1984) classi?es the natural and social
sciences into seven distinct organizational forms
based on the degrees of mutual dependence among
scientists and task uncertainty related to scienti?c
projects. Whitley classi?es the discipline of eco-
nomics as a partitioned bureaucracy. Partitioned
bureaucracies are highly rule governed and hier-
archically organized ?elds. Standardization of
training programs and skills in the central core
enables the reputational elite to control research
strategies and problem selection. However, the
lack of consistent empirical results, which are the
basis for legitimacy claims, threatens the stability
of the structure.
The solution to instability is that ‘‘(t)heoretical
elaboration becomes more prestigious than empiri-
cal exploration and ‘application’ of the dominant
analytical skills and concepts to empirical objects
16
As Thurow (1984, p. 105) observed:
. . . the stable equations that economic theory depends on
don’t seem to exist. Economic evidence is often contra-
dictory, and even where it is consistent, the conclusions
have been wrong so many times that the credibility of
even consistent results is suspect and can be ignored by
those who want to.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 585
is partitioned o? into sub-?elds in a way which
does not threaten the prevailing framework and
standardized skills (Whitley, 1984, p. 160).’’ In
other words, a partition is created between the
theoretical and empirical domain to protect the
theory from confrontation with the data.
17
Thus,
sub-?elds like ?nance are used to apply economic
concepts to the empirical world. The empirical
results, or lack thereof, in the sub-?elds do not
interact with theory development in the core, and,
therefore, cannot threaten the core beliefs (Whit-
ley, 1991, p. 27). In fact, one of the key proposi-
tions of ?nancial economics is that most common
knowledge understandings of ?nance are false and
instead highly theoretical understandings (like
dividend irrelevance) represent the ‘‘truth’’. Thus,
in Whitley’s view, testing theory is not the main
point of empirical work in economics:
Thus, empirical work in economics is not so
much concerned withunderstanding complex,
dynamic phenomena as with reformulating
puzzles so that the analytical engine can
generate the correct solution.. In many ways
the function of empirical research in eco-
nomics is more to demonstrate the essential
correctness of the paradigm and its wide
applicability than to drive theoretical devel-
opment and change and deepen our under-
standing of market systems. . . A key feature
of this domination is, of course, the strong
prestige hierarchy of journals and their con-
trol over the legitimation of knowledge claims
(p. 20).
Accounting research may be useful to econo-
mists in justifying their models
18
as Whitley’s
(1984) account of economic imperialism suggests.
However, this is not a two-way street—economists
may point to empirical results in ?nance and eco-
nomics to validate their theories, but not to ques-
tion them or to help them develop.
How does the reputation and justi?cation struc-
ture of economics relate to accounting? We have
earlier in the paper provided considerable evidence
that economistic formulation of accounting pro-
blems is the dominant mode of knowledge pro-
duction in accounting in the USA which, in turn,
constitutes the primary exemplar through which
accounting academic reputations are made and
the accounting academy strati?ed. One particu-
larly signi?cant feature of the organization or
structure of scienti?c ?elds is the process of elite
formation (Whitley, 1977). Scholarly ?elds are
strati?ed, that is, they are hierarchic with a small
number of elite practitioners identi?ed by the
number of their research publications in the most
prestigious journals (Allison, 1980; Crane, 1965,
1967, 1970, 1972; McGinnis, Allison, & Long,
1982; Merton & Zuckerman, 1973). How these
elite construct their knowledge claims represents
the ‘‘exemplar’’ (Kuhn, 1970), which all aspirants
to prestige and success in the ?eld must reproduce
in their own work. That is, the elite have the
17
This attribute led Rosenburg (1992, p. 64) to make the
following observation about the failure of economics to make
any predictive progress:
So, it is not just the unreality of the assumptions of eco-
nomic theory that results in its lack of predictive pro-
gress; it is also the fact that economists do not or cannot
augment the data that will enable them to identify pro-
gress in prediction, nor have their econometric techniques
proved powerful enough to derive results above the slim
body of data already in hand. And, worst of all, there is
no institutional motivation in the discipline to improve
on this database: advances in formal modeling or the
mathematics of statistical testing are more highly prized
in economics than the augmentation of data. Further,
Rosenburg concludes (1992, p. 65):
In short, economists have had the same theory in hand
for upwards of two hundred years. The theory has not
been increasingly accommodated to data it has led us to
uncover; it has not even motivated much augmentation of
data.This lack of progress may have signi?cant con-
sequences beyond the con?nes of economic academia.
For example, the Harvard biologist and father of socio-
biology, Edward O. Wilson, (1998, p. 290) recently
lamented, ‘‘The single greatest intellectual obstacle to
environmental realism, as opposed to practical di?culty,
is the myopia of most professional economists.’’
18
For example, Jensen (1988) asserts that ‘‘(a)lthough the
evidence is not literally 100% in support of the e?cient-market
hypothesis, there is no better documented proposition in any of
the social sciences’’ (p. 320). The evidence cited by Jensen is
from accounting studies showing a lack of market reaction to
changes in accounting methods for investment credits and
depreciation.
586 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
power to control the scholarly agenda. Rodgers
and Williams (1996) and Lee (1995) have studied
the process of elite formation in the U.S. academy,
which appears to have an hierarchical reputation
structure similar to that of mainstream econom-
ics.
19
Ryan et al. (1992) conclude that ‘‘[t]here is
considerable evidence which supports the view
that there is a relatively small elite of academics
and institutions which control, through editorial
memberships, the conduct of the discourse in
accounting and ?nance’’ (p. 136).
2.4. Interaction between accounting and economics
The ‘‘crisis in the academy’’, admitted to by the
academy’s elite, explicitly opens up the issue of
whether the strategy of organizing the accounting
academy over the last 30–35 years into a commu-
nity of ‘‘economic scientists’’ has been bene?cial.
This is particularly so if this organization con-
tributes to the lack of progress in the mainstream
accounting conversation. As ‘‘economic scien-
tists’’, where are accounting researchers currently
located in the wider academy? Fig. 1 is a schematic
that locates accounting relative to economics and
other disciplines. This is based on Rosenburg’s
(1992, p. 237) argument ‘‘. . .that economics is a
branch of applied mathematics. . .’’
20
Fig. 1. Accounting located relative to economics as an academic discipline (based on Rosenberg, 1992).
19
This is not to say that there is no resistance to ‘‘the sti?ing
hegemony of ‘‘mainstream’’ accounting research with its posi-
tivistic pretensions, emotivistic moral arrogance, economistic
self-understandings, and indi?erence to the arguments of others’’
(Arrington & Schweiker, 1992, p. 531). There is another reputa-
tional center in the UK centered around AOS focusing on inter-
pretive and critical approaches to behavioral, organizational, and
social issues (Lukka &Kasanen, 1996, p. 771; Ryan et.al., 1992, p.
5). A less organized ‘‘resistance’’ in the US has led to a prolifera-
tion of ‘‘niche’’ journals in ?elds such as systems and informa-
tion technology, education and faculty issues, international
focus, critical studies, management accounting, bridge between
research and practice, and history (Ze?, 1996, p. 161). To
accommodate this wider set of interests, 48 new journals deal-
ing with accounting topics were started in the period 1987–1996
(p. 161). Ze? notes, however, a problem with ‘‘balkanization’’
of the research literature, ‘‘to the point where the work pub-
lished in most of the younger journals is not noticed (to say
nothing of cited) in the larger literature’’ (p. 163).
20
Rosenberg (1992, p. 37) notes that:
Much of the mystery surrounding the actual development
of economic theory—its shifts in formalism, its insulation
from empirical assessment, its interest in proving purely
formal, abstract possibilities, its unchanged character
over a period of centuries, the controversies about its
cognitive status—can be comprehended and properly
appreciated if we give up on the notion that economics
any longer has the aims or makes the claims of an
empirical science of human behavior. Rather we should
view it as a branch of mathematics, one devoted to
examining the formal properties of a set of assumptions
about the transitivity of abstract relations: axioms that
implicitly de?ne a technical notion of ‘‘rationality,’’ just
as geometry examines the formal properties of abstract
points and lines.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 587
Accounting could conceivably occupy a position
as an academic discipline at the same level as
mathematics. Law, a kindred discipline to
accounting, retains its autonomous professional
school status within the academy without having
‘‘scientized’’ itself through adoption of a social
science model of research. Law retained its tradi-
tions, including methodology and a porous
boundary between practice and the academy (as
have medicine and, to a degree, engineering). The
irony of the accounting revolution in the academy
has been the practice of accounting’s relegation to
a low level in the academic hierarchy. As Mattes-
sich (1984) notes, ‘‘[t]here can be no question that
our exports in the recent past have been much
smaller than our imports’’ (p. 61).
21
In order to gain some evidence about the rela-
tionship of accounting research to economics’
theory, illustrated in Fig. 1, we compiled citations
from a number of leading economics and ?nance
journals. Citation analysis su?ers from several
weaknesses. It is a counting approach, which notes
the frequency of citation but cannot trace the
magnitude or in?uence of one work upon others.
It also fails to measure quality of a work unless
one accepts frequency with which other scholars
cite the work as indicative of quality. In spite of its
shortcomings, citation analysis is a principal
means by which faculty in many disciplines are
evaluated. Journal editors work diligently to have
their journals included in the major citation ser-
vices. Our use of citation analysis in this paper is
not to determine the most signi?cant works, but
only to provide a general outline of the webs of
interaction between various research literatures,
e.g. accounting and economics as compared to, for
example, accounting and sociology. Our citation
data are consistent with accounting being located
as in Fig. 1 and being sustained in that position by
accounting’s academic elite.
We collected the bibliographies of all of the
articles published in three leading accounting
journals: Journal of Accounting Research (JAR),
Journal of Accounting and Economics (JAE), The
Accounting Review (TAR); three leading ?nance
journals: Journal of Finance (JF), Journal of
Financial Economics (JFE), Journal of Business
(JB); and four leading economics journals: Amer-
ican Economic Review (AER), Econometrica
(ECT), Journal of Political Economy (JPE), and
the Rand Journal (which absorbed the Bell jour-
nals; R/BJ) for the years 1990 and 1991. These
years permit us to describe the relationship
between economics, ?nance, and accounting con-
temporaneously with the publication of the ‘‘cri-
sis’’ white paper by Demski et al. (1991). The
journals were selected because they are generally
regarded as the most prestigious in their respective
?elds. In addition, the nonaccounting journals
selected were found by Rodgers and Williams
(1996) to be the ?nance and economics journals
most frequently cited by elite authors publishing
in the three leading accounting journals listed
here.
Table 1 A contains a breakdown of the number
and percentage of articles containing at least one
citation to any article published in the other jour-
nals.
22
For example, 223 articles (64.3%) pub-
lished in AER during 1990 and 1991 contained at
least one citation to an article published in AER.
Among economics journals very few citations were
being made to any accounting literature at the
time the crisis in accounting was being noted. The
percentages in the table re?ect the hierarchy of
intellectual dependency among economics,
?nance, and accounting. Economics cites itself
most, then ?nance to a very modest extent, and
accounting virtually not at all. Finance cites itself
most, then economics to a greater extent than
economics cites ?nance, and then accounting to a
modest amount. Finally, accounting cites itself the
most, and cites both ?nance and economics to a
much greater extent than either ?nance or eco-
nomics cite it.
21
It is not inevitable that accounting would have nothing of
value to export back to economics. Mattessich (1984, p. 61)
points out the export potential in innovations to deal with the
multidimensionality of the basic accounting model, with its
multiple objective functions and stakeholders, and the institu-
tional richness of the accounting practice environment.
22
Citations to all other accounting journals appearing in the
journals selected are included. No attempt was made to count
citations to the selected journals that appeared in all other
accounting journals.
588 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Table 1
Citation dependency
a
Citing
journal
Cited journals
AER JPE ECT R/BJ JF JFE JB JAR JAE TAR OTHER
(A) Number of articles (percentages) Citing at least one article published in the indicated journals
AER 223 (64.3) 153 (44.1) 126 (36.3) 65 (18.7) 23 (4.0) 14 (6.6) 13 (3.7) 0 (0) 2 (0.6) 0 (0) 0 (0)
JPE 80 (63.5) 110 (87.3) 70 (55.6) 27 (21.4) 17 (13.5) 18 (14.3) 19 (15.1) 1 (0.8) 2 (1.6) 0 (0) 0 (0)
ECT 43 (30.3) 43 (30.3) 133 (93.7) 15 (10.6) 7 (4.9) 10 (7.0) 5 (3.5) 2 (1.4) 0 (0) 0 (0) 0 (0)
R/BJ 51 (63.8) 38 (47.5) 44 (55.0) 61 (76.3) 6 (7.5) 8 (10.0) 5 (6.3) 5 (6.3) 4 (5.0) 1 (1.3) 3 (3.8)
JF 67 (38.7) 85 (49.1) 74 (42.8) 43 (24.9) 160 (92.5) 148 (85.5) 79 (45.7) 11 (6.4) 18 (10.4) 7 (4.0) 10 (5.8)
JFE 28 (39.4) 31 (43.7) 20 (28.2) 25 (35.2) 54 (76.1) 66 (93.0) 30 (42.3) 9 (12.7) 9 (12.7) 5 (7.0) 1 (1.4)
JB 19 (33.9) 36 (64.3) 22 (39.3) 16 (28.6) 36 (64.4) 35 (62.5) 34 (60.7) 3 (5.4) 2 (3.6) 1 (1.8) 1 (1.8)
JAR 12 (16.9) 8 (11.3) 17 (23.9) 15 (21.1) 20 (28.2) 15 (21.1) 12 (16.9) 60 (84.5) 38 (53.5) 50 (70.4) 32 (45.1)
JAE 3 (10.3) 5 (17.2) 12 (41.4) 7 (24.1) 14 (48.3) 20 (69.0) 6 (20.7) 20 (69.0) 26 (89.7) 20 (69.0) 7 (24.1)
TAR 27 (28.1) 19 (19.8) 29 (30.2) 23 (24.0) 24 (25.0) 25 (26.0) 18 (18.8) 80 (83.3) 50 (52.1) 86 (89.6) 66 (68.8)
(B) Cross-citation indices based on total citations normalized on host journal
AER 1.00 0.58 0.48 0.20 0.07 0.05 0.03 0 0 0 0
JPE 0.55 1.00 0.51 0.13 0.16 0.20 0.09 0 0.02 0 0
ECT 0.14 0.17 1.00 0.04 0.02 0.03 0.01 0 0 0 0
R/BJ 0.43 0.27 0.39 1.00 0.09 0.19 0.02 0.04 0.02 0.01 0.03
JF 0.18 0.23 0.24 0.09 1.00 1.15 0.20 0.02 0.04 0.01 0.01
JFE 0.09 0.12 0.10 0.08 0.46 1.00 0.09 0.03 0.03 0.02 0
JB 0.58 0.86 0.46 0.34 1.73 1.59 1.00 0.07 0.05 0.01 0.01
JAR 0.06 0.05 0.14 0.10 0.15 0.12 0.05 1.00 0.35 0.39 0.32
JAE 0.03 0.06 0.12 0.10 0.50 0.66 0.10 0.83 1.00 0.44 0.11
TAR 0.13 0.08 0.16 0.14 0.24 0.27 0.08 1.17 0.57 1.00 0.68
a
Journals: AER, American Economic Review; JAE, Journal of Accounting and Economics; JPE, Journal of Political Economy; TAR,
The Accounting Review; ECT, Econometrica; R/BJ, Rand/Bell Journals; JF, Journal of Finance; JFE, Journal of Financial Economics;
JB, Journal of Business; JAR, Journal of Accounting Research.
Table 2
Citations in economics and ?nance
a
Journals AER JPE ECT R/BJ Total
Authors cited during 1990 and 1991 in economics journals by doctoral origins
Elite 15 2 5 3 16 26
Nonelite – 3 – 10 13
Nonaccounting – 8 – 7 15
Total 2 16 3 33 50
(B) Authors cited two or more times during 1990 and 1991 in Finance Journals (JF, JFE, JB) by doctoral origins
Number of cites 2 3 4 >4
Elite 15 11 10 2 4 27
Nonelite – 1 1 1 3
Nonaccounting 6 7 – – 13
Total 17 18 3 5 43
a
Journals: AER, American Economic Review; JPE, Journal of Political Economy; ECT, Econometrica; R/BJ, Rand/Bell Journals;
JF, Journal of Finance; JFE, Journal of Financial Economics; JB, Journal of Business. Elite 15 Schools: Illinois, Chicago, Stanford,
Carnegie Mellon, Ohio State, Cornell, Michigan, Michigan State, Iowa, Texas, Wisconsin, Berkeley, Rochester, Minnesota, and
University of Washington.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 589
A second view of citation dependency is pre-
sented in Table 1 B. The indices presented are
based on total citations normalized by total self-
citations for each journal. For example, referring
to the row for AER, for every citation to an AER
article made in AER, 0.588 citations were made to
articles in JPE. The index numbers in this table
provide indicators of the in?uence of each journal
relative to the host journal. These data illustrate
the relative insigni?cance of accounting to eco-
nomics. Citation in economics to accounting is nil,
even to an accounting journal that calls itself an
economics journal (the Journal of Accounting and
Economics). It is also evident that JAR is the most
in?uential of the accounting journals.
The data in Table 1 overstate the relative in?u-
ence of accounting because many of the articles
cited, though published in accounting journals,
were not written by accounting researchers, but by
individuals who are economists, ?nance research-
ers, etc. We also analyzed the authors of cited
accounting articles to determine the extent to
which these authors were graduates of ‘‘elite’’
(dominant) accounting doctoral institutions (Lee,
1995; Rodgers & Williams, 1996; Williams &
Rodgers, 1995). Utilizing Williams and Rodgers’
(1995) set of ‘‘elite’’ schools, we tabulated author-
ship of articles cited in both the economics and
?nance journals into three categories: Elite, Non-
elite, and Nonaccountant.
23
Table 2 A contains
the breakdown for any authorship cited in an
economics journal, while Table 2 contains
authorship of two or more cited in JF, JFE, and
JB. Since most of the citations in the economics
and ?nance journals were to JAR, JAE, and TAR,
and since these journals are controlled by the elite
schools, the results in Table 2 are not surprising.
With the exception of accounting authors cited in
R/BJ, elite graduates account for 86% of the small
number of accounting authors cited in economics
and ?nance.
24
One ?nal analysis was performed to assess the
number of citations in the economics and ?nance
journals to the most important papers published
in accounting. Citations to any of Brown’s (1996)
list of the most in?uential papers published in
accounting since 1963 are compiled in Table 3.
Most of the articles on Brown’s list were not cited.
Of those cited, most citations were in JF. Elite
status is re?ected in this group of authors, also.
Eighty-seven percent of the accounting authors of
these articles were graduates of elite schools.
The picture that emerges from our citation ana-
lysis lends a note of irony to the declaration of a
crisis in accounting by Demski et al. (1991). At the
time when the lack of progress of accounting
research was noted, the organization of the U.S.
accounting academy was such as to make scienti?c
progress nearly impossible. Accounting’s aca-
demic elite had constructed academic accounting
research as a ‘‘partition’’ of economics. Thus, as a
scienti?c enterprise, accounting is situated as a
largely empirical sub-discipline of a sub-discipline
of a discipline for which empirical work is of little
relevance to ‘‘progress’’.
25
Given its current posi-
tion, accounting research cannot satisfy Longino’s
criteria for a good scienti?c conversation.
Accounting is not part of the relevant scienti?c
conversation about the development of the theory
which it uses. The economic community of which
accounting is a part is not responsive to critique or
empirical evidence from accounting research
because accountants do not share equally in intel-
lectual authority. Instead, any changes, improve-
ments, alterations, etc. in the theories accounting
researchers use in conducting their empirical work
must await development by economic scientists.
Accounting seems to have placed itself in so
23
The elite doctoral programs identi?ed by Williams and
Rodgers (1995) are Illinois, Chicago, Stanford, Carnegie Mel-
lon, Ohio State, Cornell, Michigan, Michigan State, Iowa,
Texas, Wisconsin, Berkeley, Rochester, Minnesota, and Uni-
versity of Washington. Graduates of these schools predominate
on editorial boards of the US journals perceived to be the most
prestigious. These schools help comprise a powerful social sys-
tem which shapes the nature of accounting discourse and
selects the people who will speak authoritatively for the US
academy.
24
A possible reason for the larger percentage of non-elite
authors cited in R/BJ may be the more ‘‘managerial’’ content of
R/BJ.
25
Bricker, Borokhivich, and Simkins (1999), in a study of the
e?ect of accounting research on ?nance, ?nd results like ours.
The e?ect has been virtually nil.
590 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
subordinate and stable a position that it simply
cannot make progress.
26
Accounting research is
largely irrelevant to the scienti?c discipline of
economics into which it has been subsumed. Fur-
thermore accounting su?ers from the problemof
‘‘interdisciplinary ?elds’’ described by Fuller
(1993, p. 221):
If interdisciplinary ?elds rarely become dis-
ciplines in their own right, that is only
because their central problems continue to be
de?ned in terms of the old discipline.
The accounting revolution described earlier in
this paper was the transformation of accounting
into an interdisciplinary ?eld with accounting
subservient to economics. This posed formidable
tasks for accounting researchers since they now
burdened themselves with economic’s problems as
well as their own and surrendered the intellectual
authority to solve them. Small-wonder that the
interdisciplinary ?eld of accounting/economics has
yet to emerge as a progressive, autonomous scien-
ti?c discipline. Furthermore, the non-egalitarian
reputation and power structure of accounting,
adopted from economics, seriously compromises
the quality of scienti?c conversation in accounting
as long as ‘‘a set of assumptions dominates by
virtue of the political power of its adherents’’
(Longino, 1990, p. 78).
26
Longino (1990) explains the danger to any discipline that
attends the overstabilization of a research program through the
suppression of background assumptions, which for accounting
are economic idealizations:
A methodology that legitimates the stabilization of
inquiry . . . must also, however, subordinate science’s cri-
tical function . . . and it must disguise that subordination
to de?ect the accusation that the sciences are not after all
concerned with the truth. One way to achieve this dis-
guise is through the adoption of an account that mini-
mizes the need for and role of criticism beyond
hypothesis testing, that is, by an account that can render
invisible the role of background assumptions. The meth-
odologies of logical positivism did render them invisible,
which is, I suspect, one reason why they remain persua-
sive among scientists even after being abandoned by phi-
losophers (pp. 224) . . . The myth of scienti?c value
neutrality that is a consequence of the more general view
that scienti?c inquiry is independent of its social context
is, thus, a functional myth. It clears the way, con-
ceptually, for the elaboration of a particular approach to
a set of phenomena once that approach has attracted the
consensus of a signi?cant portion of the scienti?c com-
munity (pp. 224–225) . . . Viewed from another angle,
however, the myth is clearly dysfunctional. By concealing
the reliance of inquiry on a background of assumptions
of very mixed character, it discourages the investigation
of alternative frameworks (p. 225).
Table 3
Citations of signi?cant accounting papers in economics and
?nance journals: 1990 and 1991 (based on Brown, 1996 most
cited papers)
Citing journal
a
JF JFE JB AER JPE ECT R/BJ
Classics
Atiase (1985) 2 – – – – – –
Ball and Brown (1968) 3 – – – – – –
Beaver (1968) – 1 – – – – –
Beaver, Clarke,
and Wright (1979)
1 – 1 – – – –
Bernard (1987) – – 1 – – – –
Christie (1987) – – 1 – – – –
O’Brien (1988) 2 – – 2 – – –
Patell (1976) 2 3 – – – – –
18 classics not cited
Near classics
Bernard and
Thomas (1989)
1 – – – – – –
Leftwich (1981) – – 1 – – – –
23 near classics not cited
The rest
Antle and Smith (1986) 1 – – – – – –
Baiman and Evans (1983) – – – – – – 1
Foster (1981) 2 – – – – – 1
Fried and Givoly (1982) 1 – – – – – –
Hughes (1986) 1 – – – – – –
Penman (1980) – 1 – – – – –
Schipper and
Thompson (1983)
1 1 – – – – 1
Simunic (1980) – – – – – – 1
Titman and
Trueman (1986)
2 1 – – – – –
Wilson (1986) 2 – – – – – –
43 of the rest not cited
a
Journals: AER, American Economic Review; JPE, Journal
of Political Economy; ECT, Econometrica; R/BJ, Rand/Bell
Journals; JF, Journal of Finance; JFE, Journal of Financial
Economics; JB, Journal of Business.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 591
3. Transformative criticism in accounting
We have argued that accountants have chosen
to become ‘‘economic scientists’’ but are not full
participants in scienti?c conversations in econom-
ics and, therefore, lack the ability to in?uence
economic theory. However, accounting research-
ers could modify economic theory in confronting
accounting problems and synthesize economic
theories with theories from other disciplines (e.g.
psychology, sociology, strategy). Transformative
criticism could operate on the uses of economic
theory within accounting even if these uses and
transformations were not shared with economics.
Such an enterprise would require careful con-
sideration of the nature of background assump-
tions and the ?t of economic-based models with
accounting phenomena studied.
We investigate three ‘‘cases’’ to evaluate the
quality of the mainstream US accounting research
conversation. We are looking for the presence of
Longino’s (1990) criteria of avenues for critique,
shared values that promote critique, and commu-
nity response to critique. First, we investigate the
response of positive accounting to the consider-
able body of critique that it has generated. Next,
we explore possibilities for transformative critique
in the conversations at JAR conferences. Finally,
we evaluate the responses to the crisis in mainstream
US ?nancial accounting to see if they represent
incorporation of transformative criticism.
3.1. The case of positive accounting
Many critiques have been launched at the posi-
tive accounting research program over the years
on methodological, theoretical, logical, and ethical
grounds. Ball and Foster (1982), Holthausen and
Leftwich (1983), Abdel-Khalik et al. (1989), and
McKee, Bell, and Boatsman (1984) provide meth-
odological critiques. For theoretical critiques, see
Tinker, Merino, and Neimark (1982), Hunt and
Hogler (1990) and Armstrong (1991). Critiques on
logical and philosophy of science grounds include
Christenson (1983), Lowe, Puxty, and Laughlin
(1983), Peasnell and Williams (1986), Chua (1986),
Whittington (1987), Whitley (1988), Williams
(1989), Arrington and Francis (1989), Hines
(1988) and Mouck (1992). Ethical critiques include
Williams (1987, 1995), Arrington and Schweiker
(1992), and Mouck (1995a).
This is by no means an exhaustive list of pub-
lished critique of the positive accounting research
program, so there is no lack of production of cri-
ticism. However, little confrontation of ideas or
debate between positive accountants and their
critics has taken place (Chua, 1996, p. 130). Watts
and Zimmerman (1990) simply asserted that the
theoretical and philosophical critiques have
‘‘failed the market test because they have had little
in?uence on accounting research.’’
27
Their ability
to dismiss the extensive critique is not surprising,
given that most of the articles were published in
the non-North American research literature which
has little overlap with the North American
research literature (Lee & Williams, 1998; Lukka
& Kasenan, 1996).
Watts and Zimmerman (1990) have contended
that, to be e?ective, critics should replicate studies
using better methods, rather than explain pro-
blems in abstract terms. Also, they should stop
making unrealistic demands on individual studies,
particularly those at the beginning of a research
program (even though positive accounting is no
longer near its beginning). They further argue that
philosophical debates about methodology are
futile because of the incommensurability problem
where each side argues from a fundamentally dif-
ferent viewpoint. Boland and Gordon (1992)
complain that philosophical critiques have been
overly pedantic and become ‘‘exercises designed to
impress philosophers and . . . thereby of little use
to accounting researchers’’ (p. 153). They go on to
explain that only ‘‘internal criticism based on the
same paradigm using the same rules will be an
e?ective and interesting criticism worthy of con-
sideration’’ (p. 164).
Conversational rules o?ered by Watts and Zim-
merman (1990) and Boland and Gordon (1992) do
not allow transformative criticism to be heard or
27
Brown (1996) demonstrates that this statement simply isn’t
true by noting that there existed in 1990 a ‘‘classic’’ accounting
literature produced as a result of these critiques. Besides, as our
analysis of JAR conferences suggests, markets for scienti?c
theories are highly regulated and the barriers to entry in many
of them are very high.
592 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
incorporated. Such rules permit only critique that
is ?rmly within the worldview of a research pro-
gram and that makes no challenges on the validity
of background and framework assumptions and
other aspects a?ecting evidentiary reasoning. This
type of critique, while necessary, is not su?cient to
promote good scienti?c conversation, because the
contextual and background assumptions remain
unexamined.
To provide additional insight into how criticism
is incorporated, we performed a citation analysis
for two articles critical of the dominant episte-
mology of the leading US journals, which were
published in the American Accounting Associa-
tion’s journal TAR. These two articles were by
Chua (1986) and Christenson (1983). Chua (1986)
sought to explain the implications of di?erent
viewpoints on epistemology and ontology com-
mon in sociological studies as a way of illustrating
shortcomings in the mainstream research para-
digm. Christenson’s (1983) article was a critique of
positive accounting from a philosophical and
methodological viewpoint (for not adhering to
falsi?cation criteria). The critique was aimed at
the research program of positive accounting in a
broad sense. Christenson’s challenge to the posi-
tive theorists was essentially to design an experi-
ment around a negative implication of positive
theory as articulated by Watts and Zimmerman
(1978), i.e. test a proposition about what positive
theory implies cannot happen.
We compiled all citations to these two articles
appearing in the Social Sciences Citation Index
from the time of their respective publications
through March 1997. The results are presented in
Table 4. Citation analysis may be a crude indi-
cator of the ?ows of thought, but used in con-
junction with a reading of the articles to see how
the material is cited it can indicate something use-
ful about the impact of ideas on the research
community.
Most of the citations to these critical articles
appeared in AOS. The citations to Chua’s article
appearing in the leading North American journals
(JAR, TAR, and JAE) were in articles by other
positive accounting critics. Hines (1988) wrote a
critical piece that addressed the shortcomings of
Christenson’s critique and Bricker (1989) dis-
cussed Chua in a work concerned with the struc-
ture of accounting research. The only references to
Christenson’s piece by the leading North Amer-
ican accounting journals appeared in TAR. Three
of those citations were by Chua (1986), Hines
(1988), and Williams (1985), authors of critical
pieces themselves. One citation was by Watts and
Zimmerman (1990) in their ten-year retrospective
on positive accounting research. Only three of the
citations were by authors who may have been
in?uenced by the critique: McKee et al. (1984),
Uecker, Schepanski, and Shin (1985), and Deakin
(1989). Christenson’s challenge has yet to be taken
up explicitly by any accounting researcher doing
positive accounting work.
In summary, numerous basic critiques of the
philosophy and methodology of positive account-
ing have been published and widely read by others
(see footnote 27), but have not been taken into
account in the positive accounting research pro-
gram. This demonstrates a lack of avenues for
critique to be heard and incorporated and a lack
of responsiveness to basic critique. Indeed, the
history of the Chua and Christenson articles is
Table 4
Citations to several notable critical works
Journals
a
AOS TAR JAR JAE Other accounting Non-accounting
Chua (1986) 24 1 1 0 4 7
Christenson (1983) 17 7 0 0 8 6
(Source: Social Science Citation Index).
a
Journals: AOS, Accounting Organizations and Society; TAR, The Accounting Review; JAR, Journal of Accounting Research; JAE,
Journal of Accounting and Economics.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 593
consistent with McIntyre’s description of how
academic organizations exclude alternative points
of view (McIntyre, 1990, p. 219):
Academic organizational forms can on occa-
sion e?ectively exclude from academic debate
and enquiry points of view insu?ciently assim-
ilable by the academic status quo, and they
characteristically achieve this exclusion not by
formally placing the excluded doctrine under a
ban or a prohibition, but by admitting it only
in reduced and distorted versions, so that it
unavoidably becomes an ine?ective contender
forintellectual and moral allegiance.
Neither Chua’s nor Christenson’s contribution
became an enduring part of the lexicon by which
subsequent submissions to TAR were discussed by
editors and reviewers. Chua and Christenson were
e?ectively silenced through the device of allowing
them to speak only once.
3.2. Conversation at the JAR conference
We analyzed selected examples of critical con-
versation from the published discussion from the
JAR conferences to determine whether transfor-
mative criticism is o?ered and accepted (Longino,
1990). The JAR conference is a particularly pro-
minent component of the current elite structure of
the accounting academy since JAR is an ‘‘elite’’
journal published by the University of Chicago,
one of the ‘‘elite’’ schools (see footnote 23 for dis-
cussion of elite schools in accounting). Schwartz,
Williams, and Williams (2001) found that JAR is
second only to TAR in its recognition by US doc-
toral students. Conversations at the JAR con-
ference are a public instance of how the
accounting conversation in the USA is managed.
We analyzed critiques at the ?rst JAR conference
in 1966, ‘‘Empirical Research in Accounting:
Selected Studies, 1966’’, and subsequent con-
ferences at approximately 5-year intervals
28
(‘‘Empirical Research in Accounting: Selected
Studies, 1971’’, ‘‘Studies on Human Information
Processing in Accounting’’ 1976, ‘‘An Assessment
of Alternative Institutional Arrangements’’ 1981,
‘‘Studies on Stewardship Uses of Accounting
Information’’ 1987, ‘‘Studies in Accounting Insti-
tutions in Markets and Organizations’’ 1991, and
‘‘Studies on Recognition, Measurement, and Dis-
closure Issues in Accounting’’ 1996). The pub-
lished conference materials contains the articles
(revised) and comments by discussants re?ecting
both their own critiques at the conference and
discussion of the participants. In addition, for the
JAR conferences from 1966 through 1996, we
analyzed selected characteristics of the partici-
pants in order to gain some insight into the struc-
tural properties of the conferences.
Longino (1990, pp. 71–73) explains that criti-
cism can be classi?ed as evidential or conceptual
in nature. There are three types of evidential
issues—the extent to which a hypothesis is sup-
ported by evidence (E1); the accuracy, extent, and
conditions of performance of the experiment and
collecting the observations serving as evidence
(E2); and analysis and reporting of results (E3).
There are three types of conceptual issues—the
conceptual soundness of the hypotheses (C1); the
consistency of the hypotheses with accepted the-
ory (C2); and the relevance of evidence in support
of the hypothesis, in light of the assumptions in
which the data are interpreted (C3). E1, the extent
to which hypotheses are supported by the evi-
dence, has some power to motivate inquiry into
reasons why a theory or method does not lead to
adequate empirical explanation. However, as
explained earlier, the methodology used by eco-
nomics and its sub-?elds uncouples empirical
results from theory so that weak results do not
challenge theory. The conceptual soundness of the
hypothesis, C1, generally means the ?t of the
hypothesis with the theory within the context of
the theory’s assumptions and methodology. It is
the last type of conceptual criticism C3, the rele-
vance of the evidence in light of the background
assumptions, that Longino (1990) would expect to
have particular power to be transformative, to
trigger progress in the research program. This is
because of the explicit consideration of often hid-
den background assumptions.
28
By sampling the published conversation from the JAR
conferences twice each decade, we feel we get a sense of the
nature of critique at the conferences and the changes over time.
594 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Critiques on evidentiary and conceptual (except
C3) issues are common in the critical conversa-
tions at the conferences. For example, in discuss-
ing an article by Eggleton (1976), Cohen (1976)
raises concerns about whether experimental design
can be used to address the principal hypotheses of
the study (E1); nonrandom selection of subjects
(E2); and the use of absolute value design to test a
directional hypothesis (E3). Commenting on the
same study, Mock (1976) is concerned that the
decision context of rapid human information pro-
cessing is not related to any accounting context
(C1) and with the lack of connection to related
accounting literature (C2).
Critique of background assumptions is more
rare. The 1966 and 1971 conferences have a pur-
pose of promoting empirical studies in accounting
and the 1976 and 1981 conferences have a purpose
of introducing new economic-based theories for
use in accounting research. The 1976 and 1981
conferences had a synthesis piece by a prominent
researcher. The mood of the 1966 conference was
of almost unbridled optimism for the prospects of
empirical studies in accounting. There was little dis-
cussion of the underlying assumptions of empirical
research except a cautionary caveat from Vatter
(1966) ‘‘to be alert that our zeal for empirical study
does not lead us to distort the dictum of Lord Kel-
vin, to read: ‘When you cannot measure, measure
anyhow!’ (p. 233).’’
29
In the 1976 conference, Hil-
lel Einhorn (1976, p. 197) explained how the new
human information processing theories are similar
to neo-classical economic theories of behavior—
the only assumption altered is that of pure ration-
ality of economic actors (a non-trivial di?erence,
trivialized). Other assumptions of the economic
behavioral model were not discussed.
30
Plott and
Sunder (1981) discussed economic-based political
science theories available for use in studying
accounting issues. They reiterated the importance
of using welfare economic tools to assess institu-
tional arrangements and promoted the potential
for experimental methodologies in understanding
political actions in an accounting setting. They did
not discuss the assumptions or potential short-
comings of economic approaches to these pro-
blems, nor did they mention the existence of other
political/ethical frameworks and alternative his-
torical and institutional methodologies that could
be used to study these problems.
An article by Copeland and Shank (1971)
exploring LIFO as an example of di?usion of
innovation at the 1971 empirical research con-
ference generated several instances of transforma-
tive criticism. Brummet (1971) criticized the
authors for their unjusti?ed assumption of the
rationality of decision-makers. Nash (1971), an
anthropology professor, strongly criticized the
model used in the paper for omission of socio-
logical variables like channels of communication
and social structure and anthropological variables
of culture and values. This may seem like critique
about the consistency of hypotheses with accepted
theory (C2), but Nash made a deeper point when
he noted that
the authors seem to prefer the Rogers model
because of its operational utility compared to
the messier notions of social structure and
cultural values. This seems to me short-sigh-
ted at least and an arrogant primitive positi-
vism at worst. One needs models which
handle the phenomenal world rather than just
models for the ease of manipulation or the
joys of quantifying the trivial (p. 229).
Nash concluded that failure to use a more
sophisticated model ‘‘vitiates both the data and its
interpretation’’ (p. 229). In addition, the study’s
survey of CFOs implies that accounting decisions
are a one-decision-maker model while little is
actually known about who makes such decisions
and what environmental factors, like industry
e?ects, social status, or managerial values, might
be important. Nash called for
29
The undistorted dictum by Lord Kelvin appearing on a
building on the University of Chicago campus ‘‘reads: ‘When
you cannot measure, your knowledge is meager and unsa-
tisfactory’’’ (Vatter, 1966, p. 229).
30
Gardner (1985, pp. 41–42) notes that one of the principal
features of the newcognitive science, fromwhich the psychological
and political science theories introduced at the JARconference are
derived, is a de-emphasis on a?ect, culture and history. This de-
emphasis is similar to the approach taken in neo-classical eco-
nomic theory. Critics maintain that cognitive scientists should
incorporate such dimensions into their models of behavior.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 595
some anthropological ?eld work in at least
two locales: in some ?rms to understand how
decisions about accounting (and other) inno-
vations are reached; and in the professional
accounting world to ascertain the hierarchy
of values by which innovations are judged
and rated. This of course requires going to
where the natives are, mucking around in
their daily lives via observation and eliciting,
and ?nally getting an empirical basis for the
actual units, processes, channels, and values
that govern the acceptance or rejection of
innovations. After that essential task is
completed, then the designing of ques-
tionnaires is relatively simple, and the mak-
ing of regression analyses is but child’s play
(p.230).
It is this type of activity that can lead to pro-
gress in a ?eld. We noted no other instances of
critique of background assumptions in the exam-
ined JAR conferences, nor do any researchers
appear to have followed Nash’s advice.
One of the purposes of the JAR conferences was
to introduce newempirical (economic) methods into
accounting, and yet the potential e?cacy of those
methods for researching accounting problems was
not generally discussed. Issues of ?t with account-
ing problems were raised mostly by practitioner
discussants. For example, Pearson [1976—com-
menting on Ashton (1976)] noted that ‘‘[a]fter
reading Professor Ashton’s paper a number of
times and discussing it with others, including
account-handling auditors, psychologists, and
accounting professors, I have come to the conclu-
sion that the paper does not have any signi?cance
for practitioners, nor, as I understand it, was it
intended to’’ (p. 25). An academic at the same
conference (Dickhaut, 1976) compared the sim-
plistic heuristics tested in the studies with the rich
and complex set of heurisitics he had observed
corporate controllers using. He concluded that the
‘‘chances of discovering heuristics of people like
my controller using this research paradigm are, at
most, slim’’ (p. 191). In the 1981 conference,
Sandy Burton, former SEC Chief Accountant,
complained that ‘‘[a]fter reading the paper, I am
left with the question, ‘So what?’’’ (1981, p. 79).
Burton (1981) proceeded to explain that his cri-
tique applies to ‘‘most empirical analysis’’:
We are looking at and for small, perhaps even
trivial, cost- bene?t e?ects. These are di?cult
to measure, particularly when looking at
aggregate ?rm evaluations, such as the mar-
ket value of securities, or broad-based judg-
ments, such as the selection of directors (p.
79).
Robert Sprouse (1981) of the Financial
Accounting Standards Board critiqued the attempt
by Newman (1981) to compute ‘‘power indices’’
that show the SEC’s in?uence on accounting
standard setting by noting that:
Newman is to be commended for attempting
to use a method of analysis developed in
another discipline to better understand the
institutional relationships in the ?eld of
?nancial reporting. An explicit description of
the perceived institutional relationships is
essential, however, if fact is to be dis-
tinguished from ?ction and the results are not
to be misunderstood (1981, pp. 168–169).
As economic modeling became one of the pre-
dominant methodologies for exploring institu-
tional arrangements, the concern that phenomena
modeled in the paper describe the real world was
raised by most discussants. For example, Lanen
and Verrecchia (1987, p. 181) concluded that,
‘‘Clearly, the results obtained above depend on the
assumptions made in the model.’’ However, dis-
cussion of assumptions often focused on matters
such as which factors are exogenous and which
endogenous leaving unconsidered more basic
assumptions about whether individual and ?rm
behavior can usefully be modeled using this
approach.
The issues brought up by the practitioners did
not lead to widespread introspection about the
usefulness of empirical economic approaches to
accounting problems. There was widespread con-
cern in the earlier conferences that papers had not
accomplished what they set out to do. This con-
cern was seldom expressed in the later conferences
596 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
where the studies generally built narrowly on
previous, well-accepted accounting work.
31
Our suspicions about the changing nature of the
conversation at the JAR conference are supported
when we review the nature of changing participa-
tion at the conference. Table 5 contains the year-
by-year distribution of authors among four cate-
gories: academics with a doctoral degree from an
elite school; academics with a doctoral degree
from a non-elite school; academics of unknown
degree origin because they are not listed as
accounting academics in Hasselback (1998); and
practitioners, i.e. persons in nonacademic roles.
32
Table 6 contains the year-by-year distribution of
JAR conference discussants organized into the
same four categories.
A number of notable trends are evident. First,
with rare exceptions, the majority of authors, as
well as the majority of academic discussants, have
PhDs from one of the elite schools (the school-by-
school breakdown is presented in the Appendix).
The growing dominance through time of the elite
schools, who de?ne the structure of the US acad-
emy, is even more apparent when articles, rather
than authors, are the unit of analysis. For the four
conferences in the 1960s, 88% of the articles pre-
sented had at least one author with a PhD from an
elite school; it was 78.6% during the 1970s. Dur-
ing the 1980s the percentage for this same category
was 85.7%, and for the 1990
0
s, it has increased to
95.5%. When one considers that the proportion of
the US PhD population represented by elite gradu-
ates went from 60% to approximately 30% (Wil-
liams & Rodgers, 1995) during this time period, this
is evidence of dramatically narrowing participation.
It is also the case that the proportions of ‘‘out-
siders’’ as discussants (as well as authors; Table 6)
has dropped fairly dramatically. In the early years,
many of the unknowns were non-accounting aca-
demics from ?nance, economics, psychology, law,
etc. By the 1990s, these outside experts virtually
disappeared. The same is true of the practitioners
who in the early conferences provided the most
skeptical voices. This skepticism was dealt with by
simply dispensing with practitioners as published
participants.
33
Lastly the mission of the con-
ference seems to have changed since the number of
authors has increased through time, while the
number of discussants (critics) has decreased.
Elite school dominance is also evident in those per-
sons with recurring involvement. Of the total number
of persons who participated over the 1966–1996
period, only 23% participated as either author or
discussant more than once. Of those persons, 79%
were graduates of elite schools. Only 9.1% of parti-
cipants served in some capacity more than twice and
84.2% of those individuals were elite graduates.
34
As an example of scienti?c conversation in
accounting, the JAR conferences evidence a hier-
archically controlled forum providing an ever-
diminishing opportunity for any transformative
criticism to occur. Early practitioner discussants
raised issues about underlying assumptions and
the ?t between methods employed and problems
addressed, but these concerns were not addressed
and eventually the dissenting voices were no
longer invited to speak.
35
By the mid-1990s, parti-
cipation had been greatly restricted. In addition,
the discursive warrants were now limited and did
not include the claims of practice or those of the-
oreticians from any discipline other than econom-
ics. Even the number of accounting academics
who were permitted to participate had diminished;
the majority of US schools currently producing
doctoral educated accountants have never had one
of their graduates participate. This is evidence of a
hierarchical reputational structure in US mainstream
31
For example, Verrecchia (1996) noted that the study he
was discussing (Bushman, Gigler, & Indejikian, 1996 or BGI)
uses a mathematical structure ‘‘just like Kim and Verrecchia
(1994) . . . Needless to say, I view no aspects or BGI that are
compatible with Kim and Verrecchia (1996) as in any way
controversial’’ (p. 75).
32
Twelve of the practitioners had PhD’s in accounting, but
were employed by various non-university organizations. Eleven
of the 12 (92%) had received their PhD’s from one of the elite
schools.
33
Since 1981, only one practitioner has served as a dis-
cussant. That was Tim Bell, a former academic working for
KPMG Peat Marwick, in 1994. KPMG Peat Marwich provides
funding for the conferences.
34
All of the authors of the white paper (Demski et al., 1991)
have participated in JAR conferences. All have PhDs from elite
schools save one, D. Gerald Searfoss. He is the only one of the
group who participated just once.
35
Note how drastically this contrasts with our earlier obser-
vations about law, which maintains respect for its black-letter
tradition.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 597
accounting research that does not provide avenues
for basic critique, is not responsive to basic cri-
tique, and gives intellectual authority to an elite
group.
3.3. Responses to the crisis in accounting research
Finally, we consider the responses of the US
accounting research community to the aforemen-
tioned crisis in accounting research to determine
whether these responses led to incorporation of
transformative criticism. Reiter (1998) notes four
di?erent types of response. The ?rst, and over-
whelmingly most common, response has been to
carry on business as usual. This response does not
evidence a potential for incorporating transfor-
mative criticism. In fact, it may be very di?cult for
the mainstream accounting research community to
respond to perceived threats or crises. Chua (1996)
questions whether graduate education in the
empirical/calculative tradition, with its emphasis
on abstract mathematical and statistical model
building skills, prepares accounting researchers for
dealing with problems such as the ‘‘crisis’’ in
accounting research. Clarke et al. (1999) assert
that the cultural illiteracy produced by the narrow
focus of doctoral training ‘‘encourages replication
and sti?es the desire to push beyond existing
boundaries of knowledge’’ (p. 78).
The second response, to expand and re?ne basic
theory, is typi?ed by Ohlson (1991). He revisited
the basic research paradigm of earnings and
Table 5
Year-by-year distribution in percent of authors participating at JAR conferences
Year Number of authors Elite PhD
a
Nonelite PhD Unknown PhD Practitioner
1966 9 100.0 0.0 0.0 0.0
1967 10 60.0 10.0 30.0 0.0
1968 8 75.0 0.0 25.0 0.0
1969 8 87.5 0.0 0.0 12.5
1970 11 63.6 9.1 27.3 0.0
1971 8 75.0 12.5 0.0 12.5
1972 11 63.6 0.0 18.2 18.2
1973 7 57.1 14.4 14.3 14.3
1974 8 75.0 0.0 12.5 12.5
1975 8 37.5 0.0 25.0 37.5
1976 7 100.0 0.0 0.0 0.0
1977 5 40.0 20.0 20.0 20.0
1978 9 88.9 11.1 0.0 0.0
1979 12 50.0 16.7 33.3 0.0
1980 11 81.8 9.1 9.1 0.0
1981 7 85.7 14.3 0.0 0.0
1982 9 77.8 0.0 22.2 0.0
1984 8 87.5 12.5 0.0 0.0
1985 11 81.8 9.1 9.1 0.0
1986 8 87.5 12.5 0.0 0.0
1987 12 41.7 33.3 25.0 0.0
1988 11 36.4 36.4 27.2 0.0
1989 9 100.0 0.0 0.0 0.0
1990 8 75.0 25.0 0.0 0.0
1991 12 58.3 33.3 8.4 0.0
1992 16 68.8 12.5 12.5 6.2
1993 21 71.4 19.0 4.8 4.8
1994 12 75.0 25.0 0.0 0.0
1995 14 64.3 35.7 0.0 0.0
1996 19 78.9 15.8 5.3 0.0
a
Elite 15 Schools: Illinois, Chicago, Stanford, Carnegie Mellon, Ohio State, Cornell, Michigan, Michigan State, Iowa, Texas,
Wisconsin, Berkeley, Rochester, Minnesota, and University of Washington.
598 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
returns and concluded that earnings, rather than
unexpected earnings, is the correct variable to
explain returns. This insight has led to new theo-
retical work and to the appearance of new vari-
ables in empirical models seeking to explain
earnings/return associations. Ohlson and others
(e.g. Feltham & Ohlson, 1995; Ohlson, 1995) have
investigated how accounting data relate to value
by explaining why market value di?ers from book
value, the meaning of price/earnings ratios, how
value is related to expectations about accounting
data, and the role of pro?tability in the valuation
process. This line of research illustrates the bene-
?ts of questioning background assumptions. Ohl-
son (1995) and Feltham and Ohlson (1995) both
return to basic unresolved issues, place a renewed
emphasis on the relation between accounting data
and ?rm value, and question the basic assumption
that the important relationship to study is between
accounting information and stock price behavior.
This shift in focus opens up many possibilities for
further work in fundamental analysis and in pre-
dicting future earnings and future growth in book
value (Bernard, 1995).
Mainstream acceptance of this work has been
slow with papers appearing mostly in the newer
journals like CAR and Review of Accounting
Studies. This slow acceptance raises questions
about how important gatekeepers in the account-
ing conversation react to innovation—even rela-
tively minor innovations squarely within the
empirical/calculative tradition. One might also
Table 6
Year-by-year distribution in percent of discussants at JAR conferences
Year Number of discussants Elite PhD
a
Nonelite PhD Unknown PhD Practitioner
1966 14 50.0 0.0 0.0 50.0
1967 14 35.7 7.0 21.4 35.7
1968 10 30.0 10.0 0.0 60.0
1969 12 50.0 8.3 8.3 33.3
1970 11 54.5 9.1 0.0 36.4
1971 12 33.3 16.7 16.7 33.3
1972 13 38.5 7.6 38.5 15.4
1973 12 50.0 8.3 25.0 16.7
1974 9 33.3 11.1 11.1 44.5
1975 9 44.4 0.0 0.0 55.6
1976 6 66.7 0.0 16.7 16.6
1977 10 30.0 0.0 40.0 30.0
1978 13 38.5 23.1 7.6 30.8
1979 13 46.2 7.7 7.6 38.5
1980 11 27.3 36.4 18.2 18.1
1981 10 30.0 20.0 20.0 30.0
1982 9 55.6 0.0 44.4 0.0
1984 4 100.0 0.0 0.0 0.0
1985 7 71.4 28.6 0.0 0.0
1986 6 83.3 16.7 0.0 0.0
1987 6 66.7 33.3 0.0 0.0
1988 6 66.7 33.3 0.0 0.0
1989 5 80.0 20.0 0.0 0.0
1990 6 50.0 33.3 16.7 0.0
1991 7 85.7 0.0 14.3 0.0
1992 6 66.7 33.3 0.0 0.0
1993 6 66.7 33.3 0.0 0.0
1994 6 66.7 16.7 0.0 16.7
1995 6 66.7 33.3 0.0 0.0
1996 3 100.0 0.0 0.0 0.0
a
Elite 15 Schools: Illinois, Chicago, Stanford, Carnegie Mellon, Ohio State, Cornell, Michigan, Michigan State, Iowa, Texas,
Wisconsin, Berkeley, Rochester, Minnesota, and University of Washington.
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 599
question whether this research stream really incor-
porates transformative criticism in that it largely
accepts the problem de?nitions and methodologies
of the positive accounting research program.
The third response was to break away from
positive accounting theory while retaining its eco-
nomic viewpoint and empirical and analytical
tools. Healy (1995) concluded that neither the
e?cient markets nor the contracting theory litera-
tures have produced interesting insights into the
area of disclosure, but information economics
interpreted with a managerial bent may be more
promising. In a world of imperfect ?nancial
reporting, managers’ accounting choices and ana-
lysts’ critiques of ?rms can a?ect stock prices, and
management responses, such as voluntary dis-
closure, reputation building, and signaling, become
potentially important. Issues studied include the
e?ect of ?rm’s disclosure on stock prices (Healy &
Palepu, 1993), discretionary disclosure (e.g. Byrd,
Johnson & Porter, 1998; Francis, Philbrick, &
Schipper, 1994; Frankel, McNichols, & Wilson,
1995; Kasznik & Lev, 1995), analysts’ ratings of
corporate disclosures (Lang & Lundholm, 1993),
and investor reactions to analysts’ reports (e.g.
Hirst, Koonce, & Simko, 1995).
By focusing concern on problems in ?nancial
reporting rather than on applying economic the-
ory, the third approach has the potential for gen-
erating innovation and for bridging the gap
between theory and practice. This potential has
not been realized to date, however. Wilson (1996)
called for an interdisciplinary approach, grounded
in accounting knowledge, using more than eco-
nomic theory:
To get signi?cant breakthroughs in this area,
others will have to capitalize more e?ectively
on the competitive advantage of accounting
researchers; we best understand how concepts
and theories from economics, ?nance, orga-
nizational behavior, and other disciplines
a?ect and are a?ected by measurement and
disclosure decisions in complex business and
regulatory contexts (pp. 171–172).
Restoring the focus of research to solving
important problems rather than generating evi-
dence in support of economic theory is a promis-
ing development. However, successful applied
theory requires considerable introspection and a
keen appreciation of models used and their back-
ground assumptions, which is the introspection
that is missing in this literature to date.
The ?nal response to the crisis in ?nancial
accounting research was to colonize previously
‘‘uninvestigated’’ research areas. These areas
include historical markets, international account-
ing, and environmental accounting.
36
Considerable
research literatures on international accounting
(Prather & Rueschho?, 1996) and environmental
accounting (see Gray, 1993) already existed at the
time these topics became interesting to positive
accounting researchers. Possibilities for transfor-
mative criticism and growth from imperialist ven-
tures depend on whether the investigation caused
researchers to interact with di?erent research lit-
eratures from which they might acquire new per-
spectives, ideas, and viewpoints. The interaction
has varied in the case of these recent expansions of
capital markets methods (Reiter, 1998) but the
emphasis appears to be on exporting tools of
capital markets analysis rather than on absorbing
new institutional richness.
In summary, our ‘‘cases’’ suggest problems in
production of transformative critique within the
mainstream US research community. Little trans-
formative criticism was generated in JAR con-
ference discussions and the large volumes of
critique aimed at the positive accounting move-
ment have been mostly not addressed. Longino
(1990) does not suggest that researchers must
recant their work, but critique should have an
e?ect on the work of others within the research
community. Nor does the mainstream US
accounting research community appear to have
shared values that promote transformative cri-
tique. As Chua (1996) notes, ‘‘students are taught
that legitimacy=rigour= ’’the scienti?c method’’
=calculation’’ (p. 131). There is not much about
rigor, narrowly perceived as formal abstraction
36
Alan Wolfe (1989) notes this imperialistic tendency on the
part of University of Chicago economists like Gary Becker to
bring all human behavior under the sway of subjective expected
utility theory.
600 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
and statistical and mathematical sophistication,
that motivates individual researchers to apply
standards of critical rationality to their or others’
work. Finally, the marked inequality of intellec-
tual authority and domination of the academic
accounting reputational hierarchy by a class of
elite ?gs. impedes the generation and free ?ow of
ideas necessary for transformative critique.
4. Implications and suggestions
Overall, our investigation has concluded that
the structure of the US accounting academy pro-
duces insu?cient opportunity for and commit-
ment to incorporation of transformational
criticism. Production and dissemination of poten-
tially transformative critiques are limited. Intel-
lectual authority derives from fastidious adherence
to the norms of economic science and not from
innovation or connection with the accounting
practice community. Consequences of the lack of
‘‘good’’ scienti?c conversation in accounting
include extremely slow progress toward better
explanations and understandings, waning rele-
vance of the research program to outside con-
stituents, and less likelihood of future innovations.
These problems are important to more than just
the US academic community. Lukka and Kasanen
(1996) show how the mainstream US academy
dominates accounting knowledge production and
publication well beyond the shores of North
America.
37
Ze? (1996) notes that the US domina-
tion of global accounting research is partly based
on the greater numbers and more stringent publish-
ing requirements of US academics. Most non-US
academics, however, have to interact with Amer-
ican academia. This is troubling in that if there are
structural ?aws in the scienti?c conversation in
accounting, such that it cannot progress, the
exportation of American research culture may lead
to a similar lack of progress in other venues around
the world. As Panozzo (1997, p. 475) notes, in a
‘‘. . .multicultural and multilingual world which is
said to face the challenge of globalization, new
generations of researchers will probably need to be
trained to cope with variety rather than be equip-
ped with techniques based on assumptions of uni-
formity across cultures and social contexts.’’
Several of the particular factors limiting the
transformative potential of US accounting research
result from importation and over-reliance on posi-
tive economic theory and methodology. To the
extent that accountants simply serve to validate
economic theory without being able to a?ect the
theory in return, there will be little progress in
accounting research. Some researchers have respon-
ded to this crisis by placing the accounting issues
at the center of concern and using theory to
advance understanding of these issues, rather than
using accounting situations to validate economic
theory. On this score, Barnes et al.’s (1996, p. 105)
description of the role of Kuhnian exemplars is
good advice:
How a theory is to be applied is not ?xed by
rule or de?nitions, or by deductions there-
from; it is decided by those using the theory,
who take its existing applications as pre-
cedents and proceed from them on the basis
of analogy. A theory is its exemplary applica-
tions at a given point of time, and that these
are the resources for deciding what other
applications will be made, the precedents for
further problem-solving, the basis for further
case-to-case development of ‘the theory’.
What this means for accounting research is that
no theory is sacred and that accounting research-
ers should be free to alter theories as it seems
appropriate or jettison them as they prove to be
ine?ective. In other words to use economic the-
ories as applied theories to solve accounting pro-
blems rather than transform accounting into a
convenient laboratory to test economic theories.
Transformative criticism is necessary for use of
theories in an applied science since the role and
37
The concluding sentences of Brown’s (1996, p. 745)
assessment of the academic elite, published in AOS, refers to
the locations of the most in?uential non-US academics:
As 13 Canadian universities o?er PhDs in accounting,
approximately 15% of these universities have two such
individuals on their faculties. England has only one such
individual as a faculty member. No other country has even
one (emphasis added).
S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607 601
relevance of the background assumptions must be
explicitly debated. Furthermore, goals and values
must necessarily come to the fore in applied
science (Mattessich, 1984) and it is necessary to
examine the underlying assumptions of theories in
light of those goals and values.
Another barrier to progress in accounting
research is the hierarchical reputation structure
that forces most US accounting researchers to
narrowly de?ne their work within the economic
paradigm. Lee (1995) traces the formation of a
core of elite researchers within accounting. He
notes that the process of production of an
accounting academic elite has ‘‘been achieved
within the US academy by mechanisms such as
doctoral programs, journals and author rankings;
editorial boards; promotion and tenure processes;
research awards; subject specialisms; and internal
con?icts’’ (p. 250). Journals are particularly
important in this process:
Publications in what are perceived to be elite
journals enhances the ability of the researcher
to progress in a career as an educator. The
editors and editorial board members of these
journals not only determine what is or is not
published as accounting research. . .The edi-
torial function basically sets the agenda for
what is or is not publishable accounting
research, and researchers respond to this if
they wish to get published. . . (p. 252).
Therefore, one solution to the crisis in account-
ing research would be to work on ways to open up
the academy to a broader range of researchers and
research interests. Community responsiveness to
criticism can be enhanced by broader doctoral
education and more contact with colleagues in
other disciplines. Accounting researchers should
try to understand and appreciate research pub-
lished in a wider set of journals in order to over-
come the limitations of a narrow training. Instead
of solving problems with journal access by creat-
ing more and more specialized journals, account-
ing academics should create more interdisciplinary
journals, and journals and projects organized
around a central research question where di?erent
research approaches might interact. Abbott (2001,
pp. 230–231) observe that the value of inter-
disciplinary studies does not lie in mimicry, i.e.:
The real utility of contacting others is in the
way it opens up new choices for us—not to
become like them, or even to steal their
methodologies directly—but rather to enact
what they enact but in our own place and
time, in our own tradition; in short, to make a
translation.
Finally, accounting researchers need to ?nd
ways to promote more egalitarian practices and
structures within the research community. This
requires some sober thought and open discussion
about the manner in which the U.S. accounting
research community is managed (or mismanaged).
A progressive step would be for the accounting
academy to shift the burden of proof onto the
members of the power structure of the accounting
academy. One seemingly essential step to accom-
plishing such proof shifting is reforming the Amer-
ican Accounting Association (AAA) which Lee
(1999) documents as being controlled by repre-
sentatives of the elite schools thoroughly schooled in
the rituals of economic science. The AAA tightly
controls the legitimate scholarly agenda through
its journals, programs, and awards. As member-
ship continues to decline (AAA, 1999), even in the
face of an expanding global population of
accounting academics, the AAA resists any
alterations to its structure. ‘‘Progress’’ or a sense
of movement is di?cult to achieve within an
organizational structure erected mainly to guar-
antee that control remains with an elite group.
Members of the accounting academy are enti-
tled to a serious and objective answer to the ques-
tion, ‘‘What has the elite accomplished in 30 years
of leadership to bring us to this self-admitted cri-
sis?’’ The US accounting academy is not now par-
ticularly well organized to make progress; it seems
now to be organized mainly to produce politically
correct academic reputations. The question every
member of the accounting academy should ask is,
‘‘How may leadership of the US academy justify
its consolidation of power through practices and
structures that preclude progress in accounting
research?’’
602 S.A. Reiter, P.F. Williams / Accounting, Organizations and Society 27 (2002) 575–607
Appendix. Distribution of JAR conference
authors and discussants with PhDs by degree
school from 1966 to 1996
School Number of
authors
Number of
discussants
Chicago* 49 22
Stanford* 30 18
Texas* 19 8
Illinois* 19 16
Michigan* 16 12
Berkeley* 14 6
Cornell* 14 9
Carnegie Melon* 12 13
Michigan State* 11 3
Minnesota* 9 15
Rochester* 7 4
Northwestern 6 3
University of Washington* 5 6
UCLA 4 5
Penn 4 4
Iowa* 4 2
Arizona 3 0
Kansas 2 3
Harvard 2 1
Penn State 2 2
Wisconsin* 2 0
SUNY-Bu?alo 2 0
British Columbia 2 0
Arizona State 2 0
Ohio State* 2 6
Purdue 2 2
Columbia 1 2
Florida 1 3
Indiana 1 2
Washington University 1 1
NYU 1 2
Pitt 1 1
Syracuse 1 0
Virginia Tech 1 0
Florida St. 1 0
Baruch 1 0
N.S. Wales 1 0
Warwick 1 0
Georgia St. 1 0
Odense 0 1
MIT 0 2
Hebrew 0 1
Southern Cal 0 1
Missouri 0 1
Lancaster 0 1
*Designates an elite school.
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