Reality and Accounting: The Case for Interpretive Accounting Research

Abstract

Economic reality plays an important role in accounting practice and standard setting process. Different views exist on the nature of economic reality and how to approach it; while advocates of the positivism paradigm view reality as independently existing, advocates of interpretive paradigm view reality as socially constructed. It is argued in this paper that utilizing interpretive view to the world in accounting research is better able to capture the economic reality that is socially constructed and much affected by our account of it. This is because accounting is a social science and is better understood by gaining the views of different parties involved, which is largely done by utilizing interpretive accounting research.