Accounting as an Instrument of Social Justice
Affiliation(s)
1 Seton Hall University, South Orange, NJ, USA. 2 Queens College, City University of New York (CUNY), Queens, NY, USA.
1 Seton Hall University, South Orange, NJ, USA. 2 Queens College, City University of New York (CUNY), Queens, NY, USA.
ABSTRACT
This article builds upon calls for a shift in the paradigm of the accounting discipline, away from preparing or certifying financial reporting of management activities aimed at maximizing share-holder wealth toward recognition that businesses must also be accountable to other stakeholders and indeed the community at large. If individuals in business apply a sound moral compass to their activities and decisions, we believe that commerce can shift toward outcomes that may not only satisfy shareholders but also contribute to the common good. In this article, we are concerned with the role of accounting and business education. We enumerate recommendations toward achieving this paradigm shift from profit maximization to social justice. In some cases, the instructor may implement changes in their pedagogy at their discretion, while in other cases the change may require approval at the department or at higher levels of the university administration. We begin with a discussion of recent accounting and financial reporting failures as well as the global financial crisis. The dangers created by risky practices of financial institutions “too big to fail” and the systemic risk of a global marketplace have not been resolved. We articulate the need for ethics in the accounting and business curricula, a need that is hardly satisfied by the one course typically offered by universities at the graduate level. We propose that businesses and the accounting profession can realize change by redefining accounting as an instrument of accountability. To accomplish this change, each university must critically examine its curricula and reflect topics and material most important to ethical and moral behavior, including borrowing from the liberal arts disciplines. Finally, this article shows how an interfaith approach grounded in social justice to infuse ethical and moral behavior within the accounting curriculum can work.
This article builds upon calls for a shift in the paradigm of the accounting discipline, away from preparing or certifying financial reporting of management activities aimed at maximizing share-holder wealth toward recognition that businesses must also be accountable to other stakeholders and indeed the community at large. If individuals in business apply a sound moral compass to their activities and decisions, we believe that commerce can shift toward outcomes that may not only satisfy shareholders but also contribute to the common good. In this article, we are concerned with the role of accounting and business education. We enumerate recommendations toward achieving this paradigm shift from profit maximization to social justice. In some cases, the instructor may implement changes in their pedagogy at their discretion, while in other cases the change may require approval at the department or at higher levels of the university administration. We begin with a discussion of recent accounting and financial reporting failures as well as the global financial crisis. The dangers created by risky practices of financial institutions “too big to fail” and the systemic risk of a global marketplace have not been resolved. We articulate the need for ethics in the accounting and business curricula, a need that is hardly satisfied by the one course typically offered by universities at the graduate level. We propose that businesses and the accounting profession can realize change by redefining accounting as an instrument of accountability. To accomplish this change, each university must critically examine its curricula and reflect topics and material most important to ethical and moral behavior, including borrowing from the liberal arts disciplines. Finally, this article shows how an interfaith approach grounded in social justice to infuse ethical and moral behavior within the accounting curriculum can work.
Cite this paper
Henry, T. , Murtuza, A. and Weiss, R. (2015) Accounting as an Instrument of Social Justice. Open Journal of Social Sciences, 3, 66-81. doi: 10.4236/jss.2015.31009.
Henry, T. , Murtuza, A. and Weiss, R. (2015) Accounting as an Instrument of Social Justice. Open Journal of Social Sciences, 3, 66-81. doi: 10.4236/jss.2015.31009.
References
[1] Pope John Paul II. (1991) “Centesimus Annus” on the Hundreth Anniversary of Rerum Novarum. http://www.vatican.va/holy_father/john_paul_ii/encyclicals/documents/hf_jp-ii_enc_01051991_centesimus-annus_en.html [2] Henry, T.F. (2010) Does Equity Compensation Induce Executives to Maximize Firm Value or Their Own Personal Wealth? Advances in Public Interest Accounting, 15, 111-139. http://dx.doi.org/10.1108/S1041-7060(2010)0000015008 [3] US Department of Justice (2013) Justice Department, Federal and State Partners Secure Record $13 Billion Global Settlement with JPMorgan for Misleading Investors About Securities Containing Toxic Mortgages. http://www.justice.gov/opa/pr/2013/November/13-ag-1237.html [4] Massey, D.W. and Van Hise, J. (2009) Walking the Walk: Integrating Lessons from Multiple Perspectives in the Development of an Accounting Ethics Course. Issues in Accounting Education, 24, 481-510.
http://dx.doi.org/10.2308/iace.2009.24.4.481 [5] Pava, M.L. (2010) Teaching Accounting Ethics: A Thought Experiment. Working Paper. Sy Syms School of Business, Yeshiva University, New York. [6] Lakoff, G. and Johnson, M. (1980) Metaphors We Live By. University of Chicago, Chicago. [7] Watts, R.L. and Zimmerman. J.L. (1986) Positive Accounting Theory. Prentice Hall, Inc., Englewood Cliffs. [8] Tinker, A., Merino, B. and Neimark, M.D. (1982) The Normative Origins of Positive Theories: Ideology and Accounting Thought. Accounting Organizations and Society, 7, 167-200. http://dx.doi.org/10.1016/0361-3682(82)90019-8 [9] Lev, B. (1992) An Information Disclosure Strategy. California Management Review, 34, 9-30.
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http://www.nybooks.com/articles [16] Nussbaum, M. (2010) Not for Profit: Why Democracy Needs the Humanities. Princeton University Press, Princeton. [17] Young, J.J. and Annisette, M. (2009) Cultivating Imagination: Ethics, Education and Literature. Critical Perspectives on Accounting, 20, 93-109. http://dx.doi.org/10.1016/j.cpa.2007.03.003 [18] Moberg, D.J. and Seabright, M.A. (2000) The Development of Moral Imagination. Business Ethics Quarterly, 10, 845-884. http://dx.doi.org/10.2307/3857836 [19] Tinker, A. (2004) The Enlightenment and Its Discontents Antinomies of Christianity, Islam and the Calculative Sciences. Accounting Auditing & Accountability Journal, 17, 442-475.
http://dx.doi.org/10.1108/09513570410545812 [20] Kieso, D.E., Weygandt, J.J. and Warfield, T.D. (2013) Intermediate Accounting. 15th Edition, John Wiley & Sons, Inc., Hoboken. [21] FASB (2010) Statement of Financial Accounting Concepts No. 10. http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175822892635&blobheader=application/pdf [22] Federal Reserve, Board of Governors (2006) Testimony of Ben S. Bernanke on Financial Literacy before the Commit- tee on Banking, Housing, and Urban Affairs of the United States Senate.
http://www.federalreserve.gov/newsevents/testimony/bernanke20060523a.htm [23] Murtuza, A. (2004) Teaching Non-Business Majors How to Decipher Accounting Discourse. Working Paper, Seton Hall University, South Orange. [24] Lussardi, A. (2011) Americans’ Financial Capability. Working Paper, National Bureau of Economic Research. [25] FASB (2008) Statement of Financial Accounting Concepts No. 2. http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175820900526&blobheader=application%2Fpdf [26] Nussbaum, M. (1996) Poetic Justice: The Literary Imagination and Public Life. Beacon Press, Boston. [27] Harris, R. (1997) Evaluating Internet Research Sources. Virtual Salt. http://www.virtualsalt.com/evalu8it.htm [28] CPA Finder. History of Accounting. http://www.cpafinder.com/accounting/history-accounting.html [29] Pope Benedict XVI (2008) Meeting with Catholic Educators. Washington DC.
http://www.vatican.va/holy_father/benedict_xvi/speeches/2008/april/documents/hf_ben-xvi_spe_20080417_cath-univ-washington_en.html [30] Scutti, S. (2014) Why Are Vaccination Rates So Low? Medical Daily. http://www.medicaldaily.com/why-are-vaccination-rates-so-low-30000-adults-die-each-year-vaccine-preventable-illnesses-268698 [31] Unicef. Goal: Reduce Child Mortality. http://www.unicef.org/mdg/childmortality.html [32] The Holy Bible, New International Version, 2011. [33] Alford, H.J. and Naughton, M.J. (2001) Managing As If Faith Mattered. University of Notre Dame Press, North Bend.
[1] Pope John Paul II. (1991) “Centesimus Annus” on the Hundreth Anniversary of Rerum Novarum. http://www.vatican.va/holy_father/john_paul_ii/encyclicals/documents/hf_jp-ii_enc_01051991_centesimus-annus_en.html [2] Henry, T.F. (2010) Does Equity Compensation Induce Executives to Maximize Firm Value or Their Own Personal Wealth? Advances in Public Interest Accounting, 15, 111-139. http://dx.doi.org/10.1108/S1041-7060(2010)0000015008 [3] US Department of Justice (2013) Justice Department, Federal and State Partners Secure Record $13 Billion Global Settlement with JPMorgan for Misleading Investors About Securities Containing Toxic Mortgages. http://www.justice.gov/opa/pr/2013/November/13-ag-1237.html [4] Massey, D.W. and Van Hise, J. (2009) Walking the Walk: Integrating Lessons from Multiple Perspectives in the Development of an Accounting Ethics Course. Issues in Accounting Education, 24, 481-510.
http://dx.doi.org/10.2308/iace.2009.24.4.481 [5] Pava, M.L. (2010) Teaching Accounting Ethics: A Thought Experiment. Working Paper. Sy Syms School of Business, Yeshiva University, New York. [6] Lakoff, G. and Johnson, M. (1980) Metaphors We Live By. University of Chicago, Chicago. [7] Watts, R.L. and Zimmerman. J.L. (1986) Positive Accounting Theory. Prentice Hall, Inc., Englewood Cliffs. [8] Tinker, A., Merino, B. and Neimark, M.D. (1982) The Normative Origins of Positive Theories: Ideology and Accounting Thought. Accounting Organizations and Society, 7, 167-200. http://dx.doi.org/10.1016/0361-3682(82)90019-8 [9] Lev, B. (1992) An Information Disclosure Strategy. California Management Review, 34, 9-30.
http://dx.doi.org/10.2307/41166701 [10] (1984) United States v. Arthur Young & Co. et al., US Supreme Court, No. 82-687. [11] Sen, A.K. (1977) Rational Fools: A Critique of the Behavioral Foundations of Economic Theory. Philosophy and Public Affairs, 6, 317-344. [12] Buchholz, R.A. and Rosenthal, S.B. (2005) Toward a Contemporary Conceptual Framework for Stakeholder Theory. Journal of Business Ethics, 58, 137-148. http://dx.doi.org/10.1007/s10551-005-1393-8 [13] Ghoshal, S. (2005) Bad Management Theories are Destroying Good Management Practices. Academy of Management Learning & Education, 4, 75-91. http://dx.doi.org/10.5465/AMLE.2005.16132558 [14] Walker, D.M. (2010) Comeback America: Turning the Country Around and Restoring Fiscal Responsibility. Random House, New York. [15] Volcker, P. (2010) The Time We Have Is Growing Short. The New York Review of Books.
http://www.nybooks.com/articles [16] Nussbaum, M. (2010) Not for Profit: Why Democracy Needs the Humanities. Princeton University Press, Princeton. [17] Young, J.J. and Annisette, M. (2009) Cultivating Imagination: Ethics, Education and Literature. Critical Perspectives on Accounting, 20, 93-109. http://dx.doi.org/10.1016/j.cpa.2007.03.003 [18] Moberg, D.J. and Seabright, M.A. (2000) The Development of Moral Imagination. Business Ethics Quarterly, 10, 845-884. http://dx.doi.org/10.2307/3857836 [19] Tinker, A. (2004) The Enlightenment and Its Discontents Antinomies of Christianity, Islam and the Calculative Sciences. Accounting Auditing & Accountability Journal, 17, 442-475.
http://dx.doi.org/10.1108/09513570410545812 [20] Kieso, D.E., Weygandt, J.J. and Warfield, T.D. (2013) Intermediate Accounting. 15th Edition, John Wiley & Sons, Inc., Hoboken. [21] FASB (2010) Statement of Financial Accounting Concepts No. 10. http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175822892635&blobheader=application/pdf [22] Federal Reserve, Board of Governors (2006) Testimony of Ben S. Bernanke on Financial Literacy before the Commit- tee on Banking, Housing, and Urban Affairs of the United States Senate.
http://www.federalreserve.gov/newsevents/testimony/bernanke20060523a.htm [23] Murtuza, A. (2004) Teaching Non-Business Majors How to Decipher Accounting Discourse. Working Paper, Seton Hall University, South Orange. [24] Lussardi, A. (2011) Americans’ Financial Capability. Working Paper, National Bureau of Economic Research. [25] FASB (2008) Statement of Financial Accounting Concepts No. 2. http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175820900526&blobheader=application%2Fpdf [26] Nussbaum, M. (1996) Poetic Justice: The Literary Imagination and Public Life. Beacon Press, Boston. [27] Harris, R. (1997) Evaluating Internet Research Sources. Virtual Salt. http://www.virtualsalt.com/evalu8it.htm [28] CPA Finder. History of Accounting. http://www.cpafinder.com/accounting/history-accounting.html [29] Pope Benedict XVI (2008) Meeting with Catholic Educators. Washington DC.
http://www.vatican.va/holy_father/benedict_xvi/speeches/2008/april/documents/hf_ben-xvi_spe_20080417_cath-univ-washington_en.html [30] Scutti, S. (2014) Why Are Vaccination Rates So Low? Medical Daily. http://www.medicaldaily.com/why-are-vaccination-rates-so-low-30000-adults-die-each-year-vaccine-preventable-illnesses-268698 [31] Unicef. Goal: Reduce Child Mortality. http://www.unicef.org/mdg/childmortality.html [32] The Holy Bible, New International Version, 2011. [33] Alford, H.J. and Naughton, M.J. (2001) Managing As If Faith Mattered. University of Notre Dame Press, North Bend.