Critical Review: Morgan's Accounting as Reality Construction Analysis

This assignment is a critical review of Gareth Morgan's 1988 article, "Accounting as Reality Construction." The review begins with an overview of Morgan's central argument that accountants actively construct reality rather than passively reflect it, challenging the notion of objectivity in accounting. The author agrees with Morgan, citing supporting arguments from other researchers like Demar (2006), Mayo (2016), and Segal (2009), who discuss the subjective nature of accounting practices and their impact on organizational culture. The review emphasizes how accounting choices influence financial performance and, by extension, the culture of a business. The review concludes by reinforcing Morgan's perspective on the direct relationship between accounting practices and organizational culture.

Critical Review
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Table of Contents
PART ONE................................................................................................................................3
PART TWO...............................................................................................................................3
PART THREE............................................................................................................................4
References..................................................................................................................................5
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PART ONE
Morgan (1988) in his article has argued that accountants put forth effort to create reality
instead of reflecting what reality is. It has been argued that the accountants reflect one sided
views of reality majorly because of the difficulty being faced by the accountants while
representing reality. It has been argued that apart from creating reality, the accountants also
has the ability to shape the culture of an organization. The article also throws light on the
topic that accounting and objectivity is a myth and, it majorly involves subjectivity while
dealing with the reality of the organization. The author, by giving different point of views has
tried to prove his main point that the accountants do not reflect reality and instead they create
reality depending upon the situations and their knowledge and experience.
PART TWO
I agree with the author here that it is a myth that accounting uses objectivity. I believe that the
accountants have adopted the practice of showing the world what they believe is the reality,
as also argued by Demar (2006). Demar (2006) argues that accounting like politics have
started to reflect the story in the best possible light. It has been believed that there are cases
where figures that have no importance are reflected in the accounting statements, which can
be easily ignored. However, this is not a matter of coincidence rather it is done by the
accounting professionals as they chose to remain subjective by reflecting figures and
pretending to be objective. This adds to irrelevancy of figures, which results in compilation of
huge amounts that have no importance. Hence, it is considered by many that objectivity is a
myth in accountancy (Aktoor, 2015). It has been claimed by D. Mayo that the accountants
use subjective factors to represent their work but try to pretend that they are using the
objective factors. Discretionary choices are used by the accountants to test the figures of the
company. These discretionary choices are subjective in nature (Mayo, 2016).Lynn Segal has
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also argued that accountants believe that the world will believe in what we perceive and
know and present to them (Segal, 2009).
I agree with the fact that accounting has impact on culture of an organization. It has been
argued by Jeremy F. Dentthat the accounting practices being adopted by the organizations
have a great impact on the culture of the organization. Adoption of any new accounting
practice influences reconstruction of the organizational culture (Dent, 2010).
PART THREE
This article has helped me to understand the fact that financial performance is one of the main
goals and objectives of any business. As a result, all the possible efforts are taken to achieve
this objective. Accounting plays the main role in financial performance as the choice of
accounting principles and systems has direct impact on the organizations performance. So, it
is not wrong to say that accounting has direct impact on the culture of the organization and
hence, I agree with Morgan’s argument that accounting and organizational culture are
directly related and the accounting practices adopted influence the culture of the organization.
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References
Aktoor, 2015. Is Accounting really Objective? [Online] Available at:
https://medium.com/@Aktoor/is-accounting-really-objective-e30ddfb35474 [Accessed
2018].
DeMar, G., 2006. The Myth of Objectivity. [Online] Available at:
https://americanvision.org/1360/myth-of-objectivity/ [Accessed 4 September 2018].
Dent, J.F., 2010. Accounting and Organizational Cultures: A Field Study of the Emergence of
a New Organizational Reality. Accounting Organizations and Society, 16(8), pp.705-32.
Mayo, 2016. The Myth of ‘The Myth of Objectivity”. [Online] Available at:
https://errorstatistics.com/2016/09/18/the-myth-of-the-myth-of-objectivity-i/ [Accessed
2018].
Segal, L., 2009. The Myth of Objectivity. New York: Springer.
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