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The purpose of this paper is to provide a soundly based epistemological underpinning for the kind of theorisation in which many classical financial accounting researchers engaged and thus to support a renewal of this programme.

The paper draws on pragmatist philosophy and, in particular, on Jules Coleman’s theory of “explanation by embodiment”. The applicability of this theory to the world of financial reporting is discussed. Various theorists and schools within classical accounting theory are examined from the perspective of Coleman’s ideas, focusing particularly on A.C. Littleton’s Structure of Accounting Theory.

The paper finds that classical accounting research works such as Structure of Accounting Theory can be interpreted as the search for Colemanian explanation by embodiment and that this provides them with a soundly based pragmatist underpinning for their theorisation.

This paper supports the resumption by academics, qua academics, of work to contribute to accounting standard-setting by offering argumentation that addresses accounting principles and methods directly, rather than only via the social scientific investigation of behaviour in the accounting arena.

Such a resumption would contribute positively to future standard-setting.

This paper contributes to the defence of classical financial accounting research from the charge of lacking theoretical rigour.

During the first half of the twentieth century, “accounting theory,” developed primarily by accounting scholars and academics, provided the primary basis for the practice and teaching of financial accounting in the United States. Since the creation of the Financial Accounting Standards Board (FASB) in the early 1970s, the FASB conceptual framework has provided the primary basis for accounting standards setting as well as for the practice and teaching of financial accounting. While the purpose of creating a conceptual framework has been to develop an agreed upon set of concepts and principles to guide accounting standards setting, a related goal has been to reduce diversity in accounting practice and to move toward greater uniformity. This chapter traces the influence of accounting theory on the conceptual framework and explores some of the consequences of this influence.