Does accounting construct the identity of firms as purely self-interested or as socially responsible?

Abstract

Purpose

The purpose of this paper is to argue that it is time for change in the way the paper teach, theories and practice accounting. Traditional accounting practice constructs the identity of the accountable entity as purely self-interested. Yet, there is evidence that firms do engage in broader activities. This paper aims to explain and illustrate that there are groups of firms that engage in socially responsible activities, yet their accounting systems still assume autopoietic behavior. Accounting should resonate with social expectations, but at present it does not.

Design/methodology/approach

Literature concerning theories of biological autopoiesis and social equivalents are reviewed. They are related to accounting practices, and to concepts of open and closed systems. The theories are related to survey results of socially responsible activities practiced by firms. National surveys undertaken in New Zealand at three-year intervals are the basis of the empirical content of the paper.

Findings

There is evidence that firms behave socially and environmentally responsibly. Yet accounting practice does not encourage such behaviour. Accounting practice has to be able to construct the identity of the accountable entity so that it pursues more than its own self-interest, and resonate with societal expectations.

Research limitations/implications

The paper is unconventional. It challenges extant practice. Its theoretical content may not appeal to many traditional accountants.

Originality/value

The theory and empirics are original. The theory of autopoiesis is illustrated through survey evidence of business practices.

Citation

Raymond Lawrence, S., Botes, V., Collins, E. and Roper, J. (2013), "Does accounting construct the identity of firms as purely self-interested or as socially responsible?", Meditari Accountancy Research, Vol. 21 No. 2, pp. 144-160. https://doi.org/10.1108/MEDAR-09-2012-0030