Critical Perspectives on Accounting 22 (2011) 105–109

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Critical Perspectives on Accounting

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Editorial

Developing the research of Norman Macintosh

For over three decades, Norman Macintosh has been instrumental in shaping the frontiers of accounting scholarship.Author of over 30 refereed articles, five books, and numerous book chapters and monographs, Macintosh’s intellectualcuriosity is evidenced by the unparalleled diversity of theoretical and methodological approaches he has employed in thecourse of his research career. Theoretically, these range from his early use of contingency theory and human relations theory,to social psychology, macro organizational theory, critical social theory, literary theory, interpretive ethnography, and, mostrecently, various strains of poststructuralist theory.

Methodologically, Macintosh’s research is no less diverse. Through the end of the 1980s, Macintosh utilized standardmethods of social science to investigate organizational and behavioral influences on management accounting and informa-tion systems – what he termed the “social software” of these systems (e.g., Daft and Macintosh, 1981, 1984; Macintosh, 1980,1985; Macintosh and Daft, 1978, 1987; Macintosh and Williams, 1992; Williams et al., 1990). In the early 1990s, however,his interest shifted to Anthony Giddens’s structuration theory, and he produced a brief series of articles that were, and thatcontinue to be, very influential in the management accounting and control systems literature (Macintosh, 1994a; Macintoshand Scapens, 1990, 1991; Scapens and Macintosh, 1996). The decade of the 1990s proved to be an experimental one, however,and during this period Macintosh also drew on critical theory (Macintosh, 1994a, 1994b) to investigate managerial profitmanipulation, and – together with co-author Sten Jonsson – experimented with ethnographic research in a comparativestudy of rational accounting theory, critical accounting theory, and ethnomethodology (Jonsson and Macintosh, 1997).

The 1990s were also notable for producing the first suggestion in Macintosh’s published work of his immanent aban-donment of modernist theory and methodology for poststructuralism, a philosophical perspective that he still embraces. In1993, with co-author Trevor Hopper, Macintosh published a Foucauldian analysis of ITT under Harold Geneen’s manage-ment (Hopper and Macintosh, 1993). Foucauldian theory and analysis also feature prominently in his books, ManagementAccounting and Control: An Organizational and Sociological Perspective (1994a) and Accounting, Accountants and Accountabil-ity: Poststructuralist Positions (2002). In addition to Foucault, Macintosh has marshaled the insights of, inter alios, Baudrillard(Macintosh and Shearer, 2000; Macintosh et al., 2000), Bakhtin (Macintosh and Baker, 2002), Derrida (Macintosh, 2002),Levinas (Macintosh, 2004a; Macintosh et al., 2009) Nietzsche (Macintosh, 2002, 2009a), and, recently, Bourdieu to shed lighton the state of contemporary accounting practice.

Macintosh’s turn to poststructuralism is also marked by a shift in concern from internal accounting and informationsystems to external accounting and reporting practices. With the exception of his Foucauldian studies, his poststructuralistwork has evidenced an increasing concern with how to maintain integrity in financial reporting when the idea of an inde-pendent financial reality is no longer tenable. In an interview with Harvey Schachter in 2004, Macintosh summarizes hisideas on how this might be done:

There are some practical actions that could be taken in the short run. Government could begin by outlawing stockoptions. It’s very clear that when top executives have stock options and there is flexibility in generally acceptedaccounting principles, that increases the likelihood of earnings manipulation, also referred to as earnings management,in order to met analysts’ targets or even exceed them a little. If you take away the stock options, that might mitigateearnings manipulation.Forty or fifty years ago life was simpler: A company conducted its operations and the accountants reported on them.Today, however, the tail is wagging the dog. The market indicates what sort of earnings are required to get the stockmoving and the company arranges it affairs in such a way that the accounting for it will achieve those earningsestimates, in most cases without violating generally accepted accounting principles. So instead of accounting cominginto play after the fact, ex post, in many cases the facts get arranged ex ante to accommodate the desired accountingoutcome. The cart comes before the horse.

1045-2354/$ – see front matter © 2010 Elsevier Ltd. All rights reserved.doi:10.1016/j.cpa.2010.11.003

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Another improvement would be to separate auditing firms from their consulting arms, which Canada has been makingsome progress on. This is now the law in France. We also need to outlaw lobbying on GAAP development by accountingfirms and others. For example, in the early 1990s the U.S. Congress was seriously considering making it mandatoryfor stock options to be recorded as an expense at the time of their issue, a position supported by FASB and academicaccountants. But the lobbying from industry was so strong it did not get legislated until some years after the Enron-likespate of so-called accounting scandals.I also think we need to pay auditors from some government-run fund, not by the companies themselves. I am not surewho would supply the money in the fund. Perhaps the taxpayers, or the companies being audited would all chip in toa central fund to be administered by some independent agent. As it is now, the companies pay the auditors so as thesaying goes, “whoever pays the piper calls the tunes.” And we need to rotate the auditors every few years. As well, weshould make the financial statements the auditor’s instead of the company’s. The CEO and CFO of the company signthem now. If instead we make the auditors responsible for preparing the statements, then there is much more onuson all parties not to get into earnings management.We could also boycott and outlaw tax havens. Instead of attacking Iraq, the U.S. could attack the tax havens! Companiescan move money around almost at will to minimize tax expenses. Enron, for example, had over 900 special purposeenterprises set up in the Caymans for avoiding income taxes.Finally, we could consider the ideas of poststructuralism, which go beyond these reforms, to look at the fundamentalissues through a new theoretical perspective. It could open up a new way of thinking that might be profitably pickedup in the accounting academy. I’m not optimistic it will happen in my lifetime. But we have passed through differenteras in accounting thought and theory over the years and maybe it is time to open up to this change (Macintosh,2004b).

The response reproduced above is exemplary of Macintosh’s approach to accounting scholarship. In it we see reflectedhis genuine concern for the social consequences of accounting practice, a concern that drives him to continue his searchfor solutions, and a concern that ensures that even his most heavily theoretic research retains its relevance to accountingpractice. In this response we also see the hope that Macintosh invests in new ways of thinking and speaking – a hope thathas animated Macintosh’s scholarly journey for the past 30 years, and that perhaps explains why this journey has led to somany and disparate places.

The contributors to this special edition share in this journey. In challenging and extending Macintosh’s research, theseauthors ensure that the concerns central to Macintosh’s scholarship are sustained, and that they contribute to the re-invigoration of the critical accounting project.

Richard Baker’s paper engages Macintosh’s use of poststructuralist and postmodern theory in accounting research. Thepaper chronicles Macintosh’s use of Derridean deconstruction to investigate a series of accounting issues, including fullversus variable cost accounting and accounting for oil and gas exploration. Baker then examines Macintosh’s use of thepoststructuralist literary theory of Mikhail Bakhtin, especially Bakhtin’s notion of the heteroglossic text, which Macintoshused to elaborate a vision of heteroglossic accounting reports. The paper then turns to examine Macintosh’s use of post-modern theory, which Baker identifies as comprising his Foucauldian studies as well as those that draw on Baudrillard. Theprimary contribution of Macintosh’s poststructuralist and postmodern work is, Baker argues, to illustrate how mainstreamaccounting rests on a realist ontology and a positivist epistemology that do not bear scrutiny. Finally, the paper turns toexamine the notion of “truth” in accounting, including the difficulty of challenging the mainstream realist ontology. On thispoint, Baker identifies two impediments: the institutional structure of accounting standard setting and problems associatedwith the social construction of reality. Drawing on the work of Searle, Baker offers a considered discussion of both issues,and suggests how Macintosh’s poststructuralist work both illuminates and challenges these.

Macintosh’s use of literary theory and his insistence on embracing “the linguistic turn” taken in the humanities and socialsciences form the starting point for Jane Davison’s study of paratextuality in annual reports. Davison’s analysis extendsMacintosh’s use of structuralist and poststructuralist literary theorists Barthe, Derrida, and Bakhtin, by introducing the ideasof another prominent literary theorist, Gerard Genette. Davison elaborates Genette’s analysis of the paratext – defined asthe surround of the text – and illustrates its relevance to annual reports by way of examples drawn from the reports of U.K.companies. An extended analysis of The British Land Company PLC illustrates the importance of the paratext in influencingthe reader’s reception of the text, providing a broader context for the text, and facilitating or impeding the reader’s attentionto the text. Ultimately, paratext performs a persuasive role, influencing the way in which the financial information is received.Thus the paper extends in significant ways Macintosh’s insight that financial reports can usefully be read as texts.

Jesse Dillard and Robin Roslender engage and extend Macintosh’s studies of the ethicality and morality of managementaccounting and control systems. Starting with Macintosh’s 1995 study of the ethics of profit manipulation using a structura-tion theory analysis, Dillard and Roslender trace his return to an explicit consideration of ethics in 2009 with a Levinasiananalysis of the use of management accounting and control systems in the takeover of an Italian firm by General Electric. Whileboth theoretical perspectives on ethics emphasize the importance of respecting “difference” in ethical action, Dillard andRoslender argue that neither work engages with the question of how one respects difference in a pluralistic society in whichinterests legitimately compete. Picking up on Macintosh’s own efforts to envision a “heteroglossic” accounting (Macintoshand Baker, 2002) as well as Brown’s (2009) “critical dialogic framework,” Dillard and Roslender explore how “alternativeaccountings” may support ethical decision making in an agonistic democracy in which power is acknowledged to be con-

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stitutive of actors’ identities. The potential of heteroglossic accounting, as well as barriers to recognizing this potential, areexplored.

Based on an insightful historical analysis of Macintosh’s published works, Jeff Everett argues that Macintosh’s researchhas exhibited three overlapping phases: rational skepticism, critical stoicism, and proactive kynicism (a term of approbationintended to distinguish the life-affirming philosophy of the ancient Cynics from the debilitating attitude to which the term‘cynic’ now refers). In the rational skepticism phase, Everett argues, Macintosh’s work evidenced faith in scientific method togenerate truths about phenomena presumed to exist as unproblematic components of the social world. Quantitative analysiswas Macintosh’s method of choice, and issues of power did not concern him. Around 1990, however, Macintosh entered whatEverett calls his critical stoicism phase, and issues of legitimation and power became central to his research questions. Whilenot without resonances of the ancient Cynics’ position, Everett demonstrates that during this period, Macintosh’s researchpredominantly evidenced the rational truth-seeking impulse of the ancient Stoics. Macintosh’s current phase of research –and that with which Everett is most sympathetic – is characterized by a playful excess that provokes conflict with the eliteof academic accounting by challenging their most sacred ideals. This phase, dubbed by Everett “proactive kynicism,” standsin marked contrast to the position of accounting’s [modern] “cynics-in-power,” thus enabling Everett to raise in closing thequestion of whether the academy – historically one of a very few sites in which kynicism is fostered – has not in modernitybecome the refuge of the cynic.

Darlene Himick responds to Macintosh’s call for genealogical analyses of accounting practices by investigating the useof relative performance evaluation to motivate and control pension fund managers. In doing so, Himick is careful to heedMacintosh’s admonition to use the history of the past to critique the present; hence, the study considers how the use ofrelative performance evaluation may impede the use of non-financial “environmental, social, and governance” investmentcriteria. Specifically, the study demonstrates how relative performance evaluation creates a “performance cult” amongfund managers, which encourages the single-minded pursuit of maximum financial return. Himick argues that despitegrowing interest in extra-financial investment criteria, the continuing dominance of relative performance assessment offund managers actively impedes these managers’ ability to respond to this interest. The study also confirms the importanceof attending to the organizational and behavioural consequences of management accounting and control systems, and inthis it affirms the continuing significance of the social software of these systems, as Macintosh first argued in 1985.

Sten Jonsson’s contribution to this special issue also builds on Macintosh’s investigations into the social software ofaccounting, through an ethnographic study of managerial decision making in a machinery components supplier. The decisionanalyzed by Jonsson was taken by a group of nine managers in a context of extreme uncertainty. Because of the high degree ofuncertainty, managers were unable to rationally calculate a course of action. Instead, Jonsson argues, their deliberations wereguided and shaped by the idea of “virtuous action,” one facet of which was to mobilize the virtues of hope and courage, thuspromoting action despite the potentially crippling uncertainty of the outcome. The analysis highlights the interdependenceof the social software and the economic facets of the decision, as each both presupposes and realizes the other. Jonsson alsoaddresses methodological considerations arising from ethnographic research.

Eksa Kilfoyle and Alan Richardson provide a thoughtful and comprehensive review of the budgeting literature in man-agement accounting, focusing on the roles of agency and structure within this body of research. Traditionally, the authorsobserve, agency and structure have been treated as a dualism: depending on the research tradition, the focus has beenon either the instrumental use of budgets by rational agents or the use of budgets to reflect broad institutional logics thatshape society’s judgment of the legitimacy of the organization. The dualism, however, proves unruly: structure surrepti-tiously enters agency-centred studies as reputation costs or multi-dimensional preference functions, and structure-focusedanalyses acknowledge that agency can prevail at the local level, leading to instrumental action that is decoupled fromthe symbolic compliance with institutional norms. Moreover, the authors argue, theoretical efforts to combine structureand agency while maintaining their dualism frustrates the effort to understand the theoretical relationship between them.Rather, what is needed is a synthesis between the two, and here Kilfoyle and Richardson identify a major contribution ofMacintosh to the management accounting literature: in introducing structuration theory, Macintosh also introduced (withco-author Robert Scapens) the first true synthesis of agency and structure, one that recognized them as a duality rather thana dualism. Kilfoyle and Richardson conclude with three suggestions for taking the synthetic approach forward.

Macintosh’s Foucauldian analyses of management accounting and control systems are the starting point for Daniel Mar-tinez’s critical exploration of the nature of control in contemporary society. Whereas Macintosh conceived of managementcontrol systems as mechanisms of Foucault’s disciplinary society, Martinez argues that the technologies of disciplinary con-trol that Macintosh identifies, such as enclosure and panoptic surveillance, are characteristic of the modern period and are nolonger the primary means by which control is exercised today. Drawing on Deleuze’s concept of the “control society,” Mar-tinez argues that, with the emergence of post-industrial capitalism, control no longer relies on confinement to institutionalenclosures such as the factory. Instead, control is exercised through simultaneous and overlapping networks of digitalizedinformation that extend beyond the organization’s boundaries, effecting multiple normalizing influences from which theindividual – now in its mobile but digitized form as the ‘dividual’ – cannot escape. Management accounting and controlsystems, then, are best understood in the context of the numerous other information systems with which they intersect inthe normalization of the employee’s mind.

Macintosh’s pioneering efforts to introduce structuration theory into the management accounting literature are recalledand summarized by David Moore, who extends these ideas in a detailed examination of the adoption of an EmissionsTrading System in the European Union, and its subsequent consequences for financial accounting standard setting processes.

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The examination highlights aspects of signification, domination, and legitimation – as well as the impact of unintendedconsequences – in the adoption of the trading system, the introduction and subsequent withdrawal of an interpretivestandard to guide accounting for the resultant assets and liabilities, and the formation of the Agenda project, a coalitionof IASB and FASB board members whose aim is to develop a new accounting standard for emissions trading schemes. Theanalysis demonstrates the ongoing usefulness of structuration theory as a sensitizing device in the study of accountingpractice, and illustrates Scapens and Macintosh’s (1996) methodological conviction that both institutional analysis and theanalysis of strategic action are necessary to enable understanding of accounting in practice.

Jan Mouritsen’s challenge to Macintosh takes the form of questioning Macintosh’s philosophical dismissal of corre-spondence in accounting representation (see e.g., Macintosh, 2009b; Macintosh et al., 2000). While accepting Macintosh’sargument that there is no objective reality to which accounting signs such as “income” can correspond, Mouritsen argues thatrepresentation nonetheless has political and social dimensions that are important for the practice of accounting Drawingon the work of Hacking and Latour, Mouritsen develops a distinction between “matters of fact” and “matters of concern”;while the former entails a correspondence with reality that is problematic for accounting, the latter views representation asa provisional activity that enables a community of interested actors to construct a “likeness” that is “fitting for the purposesat hand.” The role of representation in matters of concern is illustrated by way of a case study of the development of state-ments of intellectual capital by a working group of Danish business people, government representatives, and academics.Based on the case study, Mouritsen concludes that a concern for the “materiality” behind accounting representations wascentral to the group’s aspiration to develop a functional representation, even though this materiality could not be said tohave a singular objective nature to which the statements could correspond. In such cases, Mouritsen concludes, the role ofrepresentation is to enable intervention; correspondence in the philosophical sense is neither relevant nor necessary.

Macintosh’s (2006, 2009b) depiction of the “bullshit accountant” serves as the point of departure for Noriaki Okamoto’sthoughtful investigation of aggressive earnings management practices. Noting that the bullshit accountant’s indifference totruth in accounting – when combined with the ontological obscurity of increasingly complex financial transactions – maygive rise to rampant and aggressive earnings management practices, Okamoto sets out to consider whether it is possibleto identify an institutional framework within which these might be curtailed. Drawing on Searle’s notion of “collectiveintentionality,” Okamoto argues that the appropriateness of any given attempt to manage earnings must be socially judgedrather than left to the discretion of individuals, some of whom will inevitably resemble Macintosh’s bullshitters. Based onthe argument that detailed accounting standards play to the hand of those indifferent to the truth, Okamoto concludesthat aggressive earnings management practices are best curtailed – and bullshit accountants best restrained – by adoptingprinciples-based standard setting, accompanied by a “true and fair” override.

In sum, the eleven articles in this special issue are as theoretically and methodologically diverse as is the body of scholar-ship from which they were inspired – a result that is very much in accord with the philosophical convictions that Macintoshhas come to hold:

In philosophy it is called the pragmatic ironic liberal approach. You try to develop a new, final vocabulary – a newway of talking about accounting even though you know it won’t be final. There will never be a final vocabulary – afinal, perfect way of doing accounting – but you put it to the public and see if it opens a conversation leading towardsa new, so-called final accounting vocabulary (Macintosh, 2004b; see also Macintosh, 2002, p. 133).

The articles in this special issue are efforts to continue conversations begun by Norman Macintosh. Listen in.

References

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Science Quarterly 1981:207–24.Daft RL, Macintosh NB. The nature and use of formal control systems for management control and strategy implementation. Journal of Management

1984:43–66.Hopper TM, Macintosh NB. Management accounting as disciplinary practice: The case of ITT under Harold Geneen. Management Accounting Research

1993;4(2):181–216.Jonsson S, Macintosh NB. CATS, RATS and EARS: Making the case for ethnographic accounting research. Accounting, Organizations and Society 1997:367–86.Macintosh NB. The social software of accounting and information systems. Chichester, UK: John Wiley & Sons; 1985.Macintosh NB. A contextual model of information systems. Accounting, Organizations and Society 1980:81–90.Macintosh NB. Management accounting and control: An organizational and sociological perspective. Chichester, UK: John Wiley & Sons; 1994a.Macintosh NB. The ethics of profit manipulation: A dialectic of control analysis. Critical Perspectives on Accounting 1994b;6(2):289–315.Macintosh NB. Accounting, accountants and accountability: Poststructuralist positions. Routledge: Oxford; 2002.Macintosh NB. A comment on: Recovering Accounting. Critical Perspectives on Accounting 2004a;15(4–5):529–41.Macintosh NB. 2004b. Unpublished transcript of an interview by Harvey Schachter, Queen’s University.Macintosh NB. Commentary: Accounting – Truth, Lies, or ‘Bullshit’? A philosophical investigation. Accounting and the Public Interest 2006(6):22–36.Macintosh NB. “Effective” genealogical history: Possibilities for critical accounting historical research. Accounting Historians Journal 2009a;36(1):1–28.Macintosh NB. Accounting and the truth of earnings reports: Philosophical considerations. European Accounting Review 2009b;18(1):141–75.Macintosh NB, Baker R. A literary perspective of accounting: Towards heteroglossic accounting reports. Accounting, Auditing and Accountability

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Macintosh NB, Scapens RW. Management accounting and control systems: A structuration theory analysis. Journal of Management Accounting Research1991:131–58.

Macintosh NB, Shearer T. The accounting profession today: A poststructural critique. Critical Perspectives on Accounting 2000;11(50):607–26.Macintosh NB, Williams JJ. Managerial roles and budgeting behavior. Behavioral Research in Accounting 1992:23–48.Macintosh NB, Shearer T, Thornton D, Welker M. Accounting as simulacra and hyperreality: Perspectives on income and capital. Accounting, Organizations

and Society 2000;25(1):13–50.Macintosh NB, Shearer T, Ricabonni A. A Levinasian ethics critique of the role of management accounting and control systems by large global organizations:

the General Electric/Nuovo Penogne example. Critical Perspectives on Accounting 2009;20(5):751–61.Scapens RW, Macintosh NB. Structure and agency in management accounting research: A response to Boland’s interpretive act. Accounting, Organizations

and Society 1996;21(7/8):675–90.Williams JJ, Macintosh NB, Moore JC. Budget-related behavior in public sector organizations: Some empirical evidence. Accounting, Organizations and

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Cameron GrahamSchulich School of Business, York University, 4700 Keele Street, Toronto, Ontario M3J 1P3, Canada

Teri ShearerQueen’s School of Business, Queen’s University, 143 Union Street, Kingston, Ontario K7L 3N6, Canada

E-mail addresses: cgraham@schulich.yorku.ca (C. Graham), tshearer@business.queensu.ca (T. Shearer)