Article2012

Money talks: the language of the Rochester School

46 citations0/0 files storedAccounting Auditing & Accountability Journal

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Accounting Theory and Financial Reporting Auditing, Earnings Management, Governance Accounting and Organizational Management

Abstract

Purpose Since the late 1970s, research in accounting has been colonized by positive accounting theory (PAT) despite strong claims that it is fundamentally flawed in terms of epistemology and methodology. This paper aims to offer new insights to PAT by critically examining its basic tenets. Design/methodology/approach The paper subjects the language of the Rochester School to a deconstruction that is a transformational reading. This uncovers rhetorical operations and unveils hidden associations with other texts and ideas. Findings A new interpretation of the Rochester School discourse is provided. To afford scientific credibility to deregulation within the accounting field, Watts and Zimmerman used supplements and missing links to enhance the authority of PAT. They placed supplements inside their texts to provide a misleading image of PAT. These supplements rest on von Hayek's long‐term shaping blueprint to defeat apostles of the welfare state. Yet, to set PAT apart from normative theories that Watts and Zimmerman claimed were contaminated by value judgments, they made no reference in their text to the tight links between the Rochester School and the libertarian project initiated by von Hayek. Research limitations/implications Any reading of PAT cannot present the infinite play of meaning that is possible within a text. Deconstruction involves a commitment to on‐going, eternal questioning. Originality/value The paper provides evidence of the relation between PAT and the neoliberal (libertarian) project of von Hayek. PAT is viewed as part of the institutional infrastructure and ideological apparatus that legitimates the hegemony of markets.

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References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1937The Nature of the Firm 1976Markets and Hierarchies: Analysis and Antitrust Implications.1996Production, Information Costs and Economic Organization 1933The Modern Corporation and Private Property 1968An Empirical Evaluation of Accounting Income Numbers 1985Positive Accounting Theory 2003Conservatism in Accounting Part I: Explanations and Implications

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