Last Updated 10 Aug 2020

Post structuralism and Accounting

Category Accounting
Essay type Research
Words 644 (2 pages)
Views 322

There are many issues when it comes to ethics and business. In some cases it is quite difficult to understand and in the case of psotstructuralism, this is quite true. Poststructuralism is a sociological thrum relating to ethical values that can easily be used to the wrong end in determining what is ethical and what is not in accounting. It really started out as the depiction of "rage against humanism and the enlightenment of legacy" in the 1960's (Robert's 2005). This paper will discuss how this mindset and the theories of Foucault apply to accounting.

According to the Foucault theory, power is in the numbers, in the knowledge. There is a legacy of the human that is most important with the individual at the center of the universe.  In the use of a theory like this one, it is easy to manipulate the rules. For example, if my ethical responsibility is to my numbers and myself then that responsibility also belongs to the stockholders as without them I am no longer paid. My boss becomes very important in the ethical meaning of things.

Let's take the Enron case as an example. There were many very complex accounting issues that dominated the value of Enron. Sometimes the accounting rules changed (power of the numbers) and there were different opinions in the company as to which rules should be applied. When this happens, the rules applied are going to be those that are the most beneficial to the accountant and the company.

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The rules governing Goodwill were used a lot. In this case one must determine the difference between what is paid for a company and what it is worth. The stockholders want the figure for what it is worth to be much higher than what is paid and that is one of the things that kept stock money pouring in.  Of course, this case is much more complicated than this but it illustrates the point that numbers can be manipulated and it can feel like it  is an ethically sound thing to do (Ferrell, Fraedrich, and Ferrell, 2008).

The ethics of shareholder value can be difficult for everyone. What exactly does that mean? Do Corporations have ethical and social responsibilities or are their responsibilities to the shareholder? Poststructuralism and Foucault point directly to the power and ethics of shareholder value.

In the recent past shareholder value was king and Foucault would agree. This was all part of a large scale stock market speculation and the "new economy". Creation of shareholder value brought about a changing age of corporate governance which guaranteed prosperity in the  present economy (Aglietta ; Reberioux, 2005).

Some had doubts that the numbers were what they were but the transformations were great and overbidding at the stock market was not expected as part of the stimulus for shareholder value. When Enron failed it was noted that shareholder value was a matter of accounting. Most of the shareholder value for this company and for many others had been created through the accounting system and many of the people involved just could not understand how all of this had been ethically wrong, except that they had failed.

In conclusion shareholder value and the accounting of it cannot be the only ethical consideration for a corporation. There is still the moral side of the issue. Man is not the center of the Universe put a part of it and shareholder value that is created is not ethically or fiscally sound. Accounting rules are meant to be what they are and not flexible according to the situation. However, as noted before, there is power in the numbers and only an ethical standard can prevent the misuse of them.

References

Aglietta, M., and Reberioux A. (2005). Corporate Governance Adrift. Edward Elgar: Mass.

Ferrell O, Fraedrich J, and Ferrell L. (2008). Business Ethics. Houghton Mifflin Company:        Boston.

Roberts, J. (2005). Advances in public interest accounting. Vol. 11. Lehman: Boston.

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Post structuralism and Accounting. (2018, Mar 27). Retrieved from https://phdessay.com/post-structuralism-and-accounting/

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