Chapter 15

The context of the contemporary accounting professional

Environmental changesChanges in environmental conditions can be characterised by the following trends:

1. technical and ideological proletarisation of accountants in public and private sectors

2. the institutional capitalism of the new governing class

3. the assimilation of academic accountants into a flawed universal class

4. the manufactured consciousness of users

Genesis of emerging structural changes

• Societies are constituted by groups of protagonists competing for economic and social power and political authority

• Dominant modes of interaction consistently favour one category over another and result in exploitation of others

• At every societal level, groups of protagonists face each other over the contradictions that separate them

Genesis of emerging structural changes (cont’d)

• The emerging structural changes in the accounting environment are contradictions created by the global conflicts and the emergence of new protagonists in the accounting and other environments

Technical and ideological proletarianisation of accountants

• The first element in the new-era conflict is the emergence of new class differences among accountants

• Accountants have become proletarianised, working according to a division of labour conceived and monitored by management, following procedural rules and repertoires created by administrative processes and/or fiat

Technical proletariansation

• Has reflected a shift of control towards employers or management and a loss of the creative freedom accountants enjoyed as self-employed professionals

• In the process, as theorised by Marx, they have lost control of both the means and ends of labour, a phenomenon labelled as technical proletarianisation

Ideological proletarianisation

• In addition to technical proletarianistion, the emergence of the ‘new working class’ or ‘professional managerial class’ has led also to an ideological proletarianisation, which refers to the appropriation of control by management for capital, over the goals and social purposes to which work is put

• The accountant has lost control of the nature of the total product and may be indifferent to the outcome of the activities he or she is involved in

Results of the proletarianisation

• May lead to the accountant losing the knowledge base as ‘capital’ restructures through management the specification of the product and management restructures the organisation of work

• Renders the accountant a mere technician of functionaries, separate from the major social, moral and technological issues of his or her profession

• These changes have led to a decrease in the number and quality of people going into accounting programs; the profession lacks ‘glamour’

Effects on the accountant• The accountant may respond by either

ideological desensitisation or ideological cooperation:– ideological desensitisation is a denial or

separation of the self from ideological control of the job, disclaiming either interest or responsibility for the social uses to which one’s work is put

– ideological cooperation is a redefinition of one’s goals to make them consistent with institutional imperatives

• In either case, there is a high likelihood of the accountant being alienated from his or her work

Alienation• Alienation in the domain of work has a fourfold

aspect:1. a human being is alienated from the objects

he/she produces, and2. from the process of production, and3. from him or herself, and4. from the community of his or her fellows

• In this condition, the mindset of accountants, their consciousness, is to a large extent only the reflection of the conditions in which they find themselves and of the position in the process of production

Institutional capitalismThe second element in the new conflictual order concerns the nature of the governing class in corporations and accounting firms:• the corporate community is characterised

by a socially cohesive national upper class• according to Westergaard and Resler, this

governing class is composed of ‘those who own and those who control capital on a larger scale … they have a common stake in one overriding cause: to keep the working rule of society capitalist’

Class-wide rationality• This assumes that the corporate elite is

largely capable of identifying and promoting its common political objectives

• Although corporate rationality still characterises much of the internal organisation of accounting firms, class-wide rationality now characterises its highest circles. Old school ties and kindred signs of proper breeding greatly facilitate access to the highest circles of the CPA firms

Academic accountants

• The third element in the new conflictual order is a new class of academic accountants

• Gouldner advanced two propositions regarding this flawed universal class:1. the rise of a ‘new class’ comprising

humanistic intellectuals and technical intelligentsia, whose universalism is badly flawed

2. the growing dominance of this class as a cultural bourgeoisie and having monopoly over cultural capitalism and professionalism from which it gains its power

Academic accountants (cont’d)

• This new class forms one ‘speech community’, sharing a ‘culture of critical discourse’. This concept is defined as:

– ‘a historically evolved set of rules, a grammar of discourse which:1. is conceived to justify its assertions,2. whose mode of justification does not

proceed by involving authorities and3. prefers to elicit the voluntary consent

of those addressed solely on the basis of arguments addressed’

Academic accountants: a flawed class

• This new class is flawed because it is considered elitist and self-seeking and uses its special knowledge to advance its own interests and power

• Gouldner suggests that the new class uses cultural reproduction to maintain its power just as economic reproduction is used to serve the interests of the holders of economic capital

• Academic accountants are motivated by self-interest and the pressing need to publish

• Academic accountants have gained a power associated with their monopoly over the cultural accounting capital

Capitalist domination of information

The capitalist domination of information can be expressed in three propositions:

1. the class rule of management appropriates the information product they create

2. such domination is maintained by the state’s enforcement of contractual arrangements, protection of property rights and maintenance of public order

3. information tools at the disposition of management, such as annual reports and press releases, allow management to disseminate information useful for the preservation of its interests

The manufactured consciousness of users

• The three propositions amount to three forms of domination:

1. market exploitation2. legal coercion3. ideological domination

• They allow management to convey its beliefs to the users and, in the process, shape users’ consciousness about the firm

• The users acquire a manufactured consciousness compatible with the expectations of management

Manufacturing of consciousness

• The manufacturing of consciousness is an obstacle to the expansion of data that is relevant to the users

• The proper task is to announce the truth, expose the error, and identify all the constraints that can impede enquiring, comprehension and efficient action

• A similar approach, the ethical approach to financial accounting, rests on concepts of fairness, justice, equity and truth

Manufacturing of consciousness (cont’d)

• A user needs to be informed of the wide dissemination of accounting reports

• A better strategy with the attribute of better informing the user is to expose the user to various accounting reports from various sources

• What may result is a shift in the user’s expertise: an expansion of the breadth of knowledge, that the user may acquire a better sense of what is useful and what is not, and an evaluation of the different preparers of accounting information