Title: Practice-induced theory reduction in accounting; evolutionary biology, history and the interdisciplinary base

Authors: Max Aiken, David Gowland

Addresses: School of Accounting and Law, RMIT University, Melbourne, Victoria 3000, Australia. ' School of Accounting and Law, RMIT University, Melbourne, Victoria 3000, Australia

Abstract: This article induces the pragmatic structure of what financial reporting can be – it does not deduce what financial reporting should be. Empirical studies can show that opportunism is not a feature generally of financial accounting in practice, but challenges exist in the post-Enron era. One task is to explain the nature of macro evolutionary hypotheses of practice underlying international accounting standardisation for firms as whole entities. These hypotheses are to be applied within an interdisciplinary theoretical structure of financial accounting. The focus of financial accounting research is applied to a philosophical framework of accountability and standardisation of measurement. Interdisciplinary aspects of management accountability can promote identification of the |common good| undefined (Dewey, 1922) for the firm, towards which periodic invested costs are directed for the induction of periodic gain. Non traditional additions of economic values in balance sheets remains subjective for practice in this sense, leading consequently to community uncertainty, chaos and ultimately to uncertainty.

Keywords: cognate disciplines; evolutionary biology; financial reporting; induction of practice; interdependence; interdisciplinary; interfiled; naturalism; objectivity; theoretical reduction; history; critical accounting; international accounting standards; financial accounting; management accountability.

DOI: 10.1504/IJCA.2010.031385

International Journal of Critical Accounting, 2010 Vol.2 No.2, pp.117 - 145

Published online: 02 Feb 2010 *

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