Hines (1991, p. 313) stresses a view that ‘financial accounting practices are implicated in the construction
and reproduction of the social world’. What does Hines mean by this statement? Do you agree or disagree
with her, and why?
Ans.
Hines opposes the idea that accounting accounts for the performance of an entity is an honest and
objective representation. Then ,rather than to objectively capture a snapshot of an underlying reality,
accounting actually create a reality. She believes that accountants are in fact responsible to determine
what elements should be recognized in the accounting process and that should be ignored. While
accountants determine and record phenomenon, the actual phenomenon becomes a reality. If the
accountant omits specific issues (e.g. the vast majority of accountants ignore and external environmental
impacts caused by a company), these are not marked and thus seemingly unrelated. Practice accountants
determine the issues for which the company will be responsible – related issues. If the manager does not
want to be responsible for aspects of an organization’s operations, perhaps the best strategy is not to
document information on these aspects. If information about these aspects is not recorded and then
reported, so maybe no one will look at it specific aspects to have any relevance and which managers will
not have joint responsibility. Some also believe that the accounting numbers themselves can create
consequence. If a company chooses to use a particular accounting method, then leads to a substantial
loss, which can then cause panic and the rush of investors, even though the company may have can get
out of trouble. Used different methods, perhaps paint a brighter picture, perhaps without such a negative
reaction. The accounting figures themselves, based on many assumptions, lead to the results are indeed
very real for investors, customers, employees and is different. If accountants use performance metrics
other than profit (such as such as community contribution or local staff) then a stakeholder Reaction may
vary.