Critical Analysis: Accounting, Reality Construction, and Culture

This report presents a critical review of Gareth Morgan's article, "Accounting as Reality Construction: Towards a New Epistemology for Accounting Practice." The student analyzes Morgan's argument that accountants construct reality in limited ways, challenging the concept of objectivity in accounting. The review includes an overview of the article, critical reflections supported by research, and an evaluation of the relationship between accounting and corporate culture. The student explores how accounting systems both monitor and construct reality, using examples to illustrate the impact of financial controls on company culture. The analysis also references other researchers to support Morgan's claims about accounting's role in social constructs and myth-making.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
CONTEMPORARY ISSUES IN ACCOUNTING
Name of the student
Name of the University
Author Note

1CONTEMPORARY ISSUES IN ACCOUNTING
Part One:
Overview of the article:
Gareth Morgan, in his article “Accounting as Reality Construction: Towards a New
Epistemology for Accounting Practice”, tried to argue that accountants can construct reality in
typically limited as well as one-sided ways. This article further has reflected that in accounting,
the concept of objectivity is a myth through which interesting future developments can be done.
Hence, the chief focus of the author was to develop an alternative way regarding the nature of the
process of accounting along with formation of insights due to interpretive as well as
metaphorical nature of accounting (Morgan 1988). Moreover, the article has also argued that
accounting needs to be presented as a form of “dialogue” with the help of which accountants can
build, analyse and investigate the situations in various ways. In this context, the author took the
concept “lithograph” to discuss the situation, stating that accountants experience the same
problem, where accountants cannot understand their actual role.
Part Two:
Critical reflection of the article:
Example 1: Accountants are enmeshed in a process of reality construction.
Economic reality can be considered as a social construct, affected by various cultural
factors. Many researchers related with accounting have challenged the concept of external
realism. They stated for a socially constructed presentation of accounting. Hence, through
studying accounting as a part of social construct, one can provide a better understanding
regarding the concept of accounting uses (Ezzamel and Xiao 2015). This depends on its
fundamental characteristics and consequently this process leads towards a better understanding

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of the roles of accounting. Hence, this statement provide by Morgan can be supported in reality
with the help of arguments provided by other researchers.
Example 2: “the view that accounting systems provide a societal resource to be used in
sustaining myths of rationality”
Accounting does not act as a technical apparatus only. This also makes a clear social
dimension. Hence, according to some other researchers, accounting is a variable and complex
form of myth making, which makes a consistent theory in societies. It is stated that these
mythical features maintain the existence as well as acceptance of accounting. Moreover, its
outcomes also sustains in societies for a long time (Williams 2014). A theoretical exploration
related with accounting is a type of myth that describes accounting as culturally sensitive and
pluralistic. This type of analysis challenges accounting, based on its theoretical explanations.
Expressions of the attributes related with myth can be described in the artefacts and calculus of
accounting practice (Doron 2015). This further can demonstrate that how accounting stories as
well as beliefs are used as myth by people to interpret and inform world picture. Hence, this
argument stated by Morgan can also be supported with the help of other researchers.
Part Three:
Through evaluating the article of Morgan, one can evaluate the relation between
accounting and corporate culture. Accounting systems have performed many activities including
monitoring the reality. This system also constructs reality (Morgan 1988). For instance, it
considers that how rigorous financial controls can reform the generic orientation and culture of a
company.
With the help of proper example, Morgan helped to develop the argument about
accounting and culture. For instance, hospitals introduce new systems to make departments and

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patients as centre of costs or profits. In new financial system, nurses and staffs are used as
extension for recording as well as allocating their time rigorously compare to the traditional way
of management system.

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References:
Doron, M.E., 2015. The Colonel Carter myth and the Securities Act: Using accounting history to
establish institutional legitimacy. Accounting History, 20(1), pp.5-19.
Ezzamel, M. and Xiao, J.Z., 2015. The development of accounting regulations for foreign
invested firms in China: The role of Chinese characteristics. Accounting, Organizations and
Society, 44, pp.60-84.
Morgan, G., 1988. Accounting as reality construction: towards a new epistemology for
accounting practice. Accounting, Organizations and Society, 13(5), pp.477-485.
Williams, P.F., 2014. The myth of rigorous accounting research. Accounting Horizons, 28(4),
pp.869-887.