Again, as has been emphasized throughout this book, the views that are presented below are those of a subset of the research community. There will, as we would expect, be other 'subsets' of the research community that challenge such views.

The Role of the State in Supporting Existing Social StructuresResearchers working within the critical perspective typically see the State (government) as being a vehicle of support for the holders of capital, as well as for the capitalist system as a whole. Under this perspective the government will undertake various actions from time to time to enhance the legitimacy of the social system, and thereby protect and advance the power and wealth of those who own capital, even though it might appear (to less critical eyes) that the government was acting in the interests of particular disadvantaged groups. For instance, a government might impose mandatory disclosure requirements for corporations in terms of the disclosure of information about how the corporations attend to the needs of certain minorities, or the disabled. Arnold (1990) would argue, however, that such disclosures (which, on average, really do not cause excessive inconvenience for companies) are really implemented to pacify the challenges, for example by and/or on behalf of particular minorities, that may be made against the capitalist system in which corporations are given many rights and powers, Relating this perspective to the development of various securities acts throughout the world, Merino and Neimark (1982, p. 49) contend that 'the securities acts were designed to maintain the ideological, social, and economic status quo while restoring confidence in the existing system and its institutions'.

It is generally accepted that to make informed decisions, an individual or groups of individuals must have access to information. Restricting the flow of information, or the availability of specific types of information, can restrict the ability of other parties to make informed choices. Hence, restricting available information is one strategy that can be employed to assist in the maintenance of particular organizations and social structures. Puxty (1986, p, 87) promotes this view by arguing that:

... financial information is legislated by the governing body of society (t he state) which is closely linked to the interests of the dominant power group in society (Miliband, 1969, 1983, Offe and Ronge, 1978) and regulated either by agencies of that state or by institutions such as exist within societies like the United Kingdom, United States, and Australia that are linked to the needs of the dominant power group in partnership with the state apparatus (albeit a partnership that is potentially fraught with conflict).

Hence we are left with a view that government does not operate in the public interest, but in the interests of those groups that are already well off and powerful.*

Apart from the State and the accounting profession, researchers and research institutions have also been implicated as assisting in the promotion of particular (inequitable) social structures. We now consider some of the arguments that have been advanced to support this view.

The Role of Accounting Research in Supporting Existing Social StructuresRather than thinking of accounting researchers as being relatively inert with respect to their impact on parties outside their discipline, numerous critical theorists see many accounting researchers as providing research results and perspectives that help to legitimize and maintain particular political ideologies. Again, this is a different perspective than most of us would be used to.

Accounting Research and Support for Deregulation of AccountingAs an example, in the late 1970s and in the 1980s there were moves by particular governments around the world towards deregulation. This was particularly the case in the US and the UK, Around this time, researchers working within the positive accounting framework, and researchers who embraced the efficient market hypothesis, came to prominence.9 These researchers typically took an anti-regulation stance, a stance that matched the views of the government of the time. Coincidentally, perhaps, such research, which supported calls for deregulation, tended to attract considerable government-sourced research funding. 10 As Hopper et al. (1995, p. 518) state:

Academic debates do not exist in a vacuum. It is not enough for a paradigm to be intellectually convincing for its acceptance, it must also be congruent with prevailing powerful beliefs within society more generally. The history of ideas is littered with research that was mocked but which subsequently became the dominant paradigm when other social concerns, ideologies and beliefs became prevalent. The story of PAT (Positive Accounting Theory) can be told in such terms. Its rise was not just due to its addressal of academic threats and concerns at the time of its inception but it was also in tandem with and connected to the right wing political ideologies dominant in the 1980s.

Mouck (1992) also adopts a position that argues that the rise of Positive Accounting Theory was made possible because it was consistent with the political views of those in power (that is, the State). He argues that;

... the credibility of Watts and Zimmerman's rhetoric of revolt against government regulation of corporate accountability was conditioned, to a large extent, by the widespread, ultra-conservative movement toward deregulation that was taking place in society at large.... I would argue that accountants have been willing to accept the PAT (Positive Accounting Theory) story, which is built on Chicago's version of laissez faire economics, because the rhetoric of the story was very much attuned to the Reagan era revolt against government interference in economic affairs.

Consistent with the development of Positive Accounting Theory, in the late 1970s a great deal of accounting research sought to highlight the economic consequences of new accounting regulations. This perspective (which we considered in Chapters 2 and 3) argues that the implementation of new accounting regulations can have many unwanted economic implications, and hence, before a new requirement, such as an accounting standard, is mandated, careful consideration is warranted. Economic consequences analysis often provided a rationale for not implementing accounting regulation. Critical researchers have argued that it was the economic implications for shareholders (for example, through changes in share prices) and managers (for example, through reductions in salary or loss of employment) that were the focus of attention by those who researched the economic consequences of accounting regulation. As Cooper and Sherer (1984, pp. 215,217) argue:

It seems unfortunate, however, that the 'rise of economic consequences' (Zeff, 1978) seems to have been motivated, at least in the United States, by a desire of large corporations to counter attempts to change the existing reporting systems and levels of disclosure. To date, it would seem that accounting researchers have generally reiterated the complaints of investors and businessmen about the consequences of changes in required accounting practice. Studies using EGA (economic consequences analysis) have almost invariably evaluated the consequences of accounting reports solely in terms of the behaviors and interest of the shareholder and/or corporate manager class (Selto and Neumann, 1981).

More fundamentally, studies adopting the EGA approach have focused their attention on a very limited subset of the total economy, namely, the impact on the shareholder or manager class. The effects of accounting reports directly on other users, e.g., governments and unions, and indirectly on 'non-users', e.g. consumers, employees, and taxpayers, hive been ignored. The basis of such a decision can, at best, be that any such effects are either secondary and/or lacking in economic significance. Thus, these studies have made an implicit value statement that the needs of the shareholder and manager class are of primary importance and the concentration on those needs is sufficient for an understanding of the role of accounting reports in society. Unless the insignificance of the effects on other users and 'non-users' is demonstrated rather than merely assumed, the conclusion from this research cannot be generalised for the economy as a whole and these studies are insufficient for making accounting prescriptions intended to improve overall social welfare.

Apart from indicating that economic consequences research focused predominantly on the economic implications for managers and shareholders, Cooper and Sherer (1984) also note that major studies that adopted this paradigm were funded by the US Securities Exchange Commission and the US Financial Accounting Standards Board. It was considered that the interests of these bodies were aligned with the 'shareholder and manager class', rather than society as a whole.

In a similar vein, Thompson (1978) and Burchell et al (1980) suggest that the research efforts into inflation accounting in the 1960s and 1970s were not actually motivated by the rate of inflation per se. Instead, they argue that the research had been motivated by a desire to alleviate the shifts in real wealth away from owners (in the form of lower real profits and dividends) and towards higher wages.