Essays in accounting theory: a capstone. (Book Reviews).

CARL THOMAS DEVINE, Essays in Accounting Theory: A Capstone, Harvey Hendrickson, ed. (New York, NY: Garland Publishing, Inc., 1999, 328 pp.).

For some people of my (baby-boom) generation, the blurred mimeograph copies of Carl Devine's essays (later published as AAA Studies in Accounting

Research No. 22) were what made us take seriously accounting as a worthwhile scholarly pursuit. There is a certain subversive quality to Devine's essays that comes largely from the remarkable erudition of the man who wrote them, standing in rather stark contrast to the lack of erudition of the people practicing what he wrote about. Like many others, I consider myself extremely fortunate to have had the opportunity to sit in Carl Devine's living room and listen to him range comfortably across many fields--art, music, literature, philosophy, physics, mathematics, biology--and relate what we learn from these disparate fields to what we accountants do. The present volume of essays will give those not so fortunate as me the opportunity to eavesdrop on those conversations and experience the intellectual exhilaration they engendered. Rereading the present volume of essays in preparation for this review was a very personal experience; some of the books Devine cites in the essays are now in my possession, tilled with his scribbles along the margins. They are emblematic of Devine's generosity in helping others on their own personal journeys with accounting theory.

In an earlier, unedited version of this book given to me by Carl Devine, the dedication reads, in part, "These odds and ends may be of some interest." Indeed they are. This book contains 13 essays (two of which are in two parts). Rather than a capstone, as the title contends, they are a continuation of the work of one of our most thoughtful and imaginative scholars. The essays in this volume, like their predecessors, are an excursion through the mind of a quintessentially American intellectual who devoted his considerable scholarly talents to the seemingly mundane and unproblematic field of accounting. This volume of essays is a valuable read as a demonstration of how a genuinely scholarly mind works. Certainly every student of accounting bound over to the confines of methodology will find liberating Devine's imagination and playfulness with ideas most regard as foreign to accounting.

Among Devine's varied characterizations of himself was that he was "a bit of a grasshopper." That will be evident both between and within these essays. They jump around a bit and often contain extensive digressions before they return to their putative theme. If one prefers their accounting reading to arrive at an "interpretation of the results" by unswerving adherence to the stations of the cross--theory, hypothesis, model, data gathering--then one will be a bit discomfited by these essays. If there is a common theme to the essays, then it is probably that of addressing important developments in contemporary accounting scholarship. The two most notable are the Friedmanesque brand of positivism that tends to prevail in the U.S. academy and the "alternative" literature that gives more acknowledgement to the rhetorical turn in recent years in both the social and natural sciences. It may be that the motivation for many of the essays came from conversations and debates he had with Ed Arrington, another intellectual vagabond made welcome in the Devine home. In the essays, Devine confronts the present theory debates in the academy through an understanding of their history and his own painstakingly developed beliefs about the most fruitful ways to understand accounting.

In the first essay, titled "Accounting Theory: A Personal Journey," Devine elaborates upon his general philosophy of accounting; it is a frank disclosure of his foundation beliefs. He uses this essay to reiterate his commitments to subjectivism, pragmatism, behavioral science, ethics, and the significance of language to an understanding of human behavior. In this essay Devine remarks:

   It is still my stubborn belief that much of accounting cannot yet be
   supported by the endless statistical tables and Greek-letter operations
   favored by some editors of current journals. I remain genuinely
   disappointed with the continuing lack of attention to human interpretation
   and the necessity for value assessments and judgements. Meanwhile, for
   empiricists and their positivistic brothers the current journalistic
   Zeitgeist is favorable and the planetary orbits are in proper conjunction.
   (p. 16)

Indeed the remaining essays provide justifications for that stubborn belief and arguments as to why we might come to share his disappointment.

The second essay is a discussion of hermeneutics and deconstruction and what hermeneutists and deconstructionists have to contribute to our understanding of accounting. Particular attention is paid to the inescapable choice of a host group, i.e., for which groups does accounting produce its texts and has it paid careful enough attention to that choice? As Devine notes:

   My own discomfort with the accounting profession is more moderate but no
   less shrill. A system that neglects all values not related to scarcity is
   badly in need of help from both humanists and religious leaders. The
   judgement that only financial equity holders can become acceptable host
   groups is monstrous. Unbridled concern with the accountant's "bottom line"
   is simply obscene. (p. 42)

There follows some brilliant stuff about the reconsideration of what "equity" means and also "asset," which anticipates the current anxiety over the disconnect between market value and book value for many "technology" firms because of intangible assets not recognized.

Essay three is one of the two-part essays, the first part of which is generally supportive commentary on the arguments presented by Arrington and Francis in "Letting the Chat Out of the Bag: Deconstruction, Privilege and Accounting Research" (Accounting, Organizations and Society 1989, 1/2, 1-28). The second part contains a discussion of the literature of the absurd and its relationship to the problem of allocations, EMH, and other debates in accounting. It would be a great reading assignment for a theory class to help the student blow the dust off their brains.

The second two-part essay is number four. In Devine's words, "The objective of this essay is to demonstrate that adherence to a strict factual framework is not only undesirable but is next to impossible." The first part is a general consideration of positivism; the second part addresses the accounting positivists. Much of the critiques of positivism as a philosophy of accounting science tend to take on a rather strident tone. This is not just one more reiteration of the obvious. It is a balanced critique of positivism and the accounting positivists in that he gives their due by discussing the possible useful extensions of the principal-agent model in accounting.

Essays five, six, and seven are all concerned with "belief." In essay five, Devine provides his thoughts on the general problem of fixation of belief, which relates to the questions of evidence and methods of persuasion. He discusses the importance of discourse and correspondence and coherence theories about "truth." The essay also contains a brief exegesis on pragmatism with particular attention to Charles Pierce and William James.

Essay six is devoted to "accounting belief" and the role of authorities in establishing a basis for belief. This essay provides an excellent synopsis of the contributions of many of accounting's early theorists, e.g., J. M. Clark, William Vatter, William Paton, Edwards and Bell, etc. Devine also provides an excellent discussion of coherence and correspondence theories of "truth" in accounting and how they seem to apply to the work of the various early theorists. For graduate students who have little knowledge of the historical debates in accounting, which still persist in different epistemological guises, this essay is an excellent little history lesson, a lesson Devine believed was useful. He expressed disdain for those who do not understand from whence come ideas. In his words, "[i]nterestingly, this concern with recency has been adopted by many current research scholars who more or less disregard the history of ideas, quote only recent references, and throw away all journals of the previous decade" (p. 132).

Essay seven is concerned with auditing as a system of belief. The essay discusses auditors' three serious problem areas: (1) that of being at times advocates and at other times "independent" (a condition Devine thought was not possible); (2) that of auditors' ability to give opinions on managerial representations without themselves being values experts: and (3) that of setting guidelines for giving judgments on other people's representations about their intentions and expectations. This essay is particularly insightful given the current assertions about the dramatically expanded realm of "auditor" expertise.

The eighth essay is a brief discursion on the potential value of sociological models to accounting. Given the nature of accounting, it is somewhat surprising that sociology has remained relatively untapped in the U.S. as a field for analogs for accountants. This is especially true given how analogizing from economics and, to a lesser extent, cognitive psychology has been the predominant means of scholarly innovation in accounting over the last two or three decades. This essay provides encouragement to any accounting scholar who might like to venture into less traveled social science territory.

The next three essays are related in that they are concerned with the history of accounting "paradigms" and methodologies. Essay nine is devoted to the Kuhnian characterization about change in scientific fields and a look at some of the "paradigms" in accounting that died, e.g., D. R. Scott's institutionalist approach, Vatter's fund theory, and the price-level controversy. He also provides his assessments of capital market theory and principal-agent theory as paradigms. Essay ten is devoted to income theory with particular emphasis on the contributions of Irving Fisher. Essay 11 revisits some of the accounting leaders from the past and the "paradigms" they represented. A portion of this essay is devoted to a discussion of a problem that is a recurring theme in much of Devine's thinking, that of selecting a host. Poignantly, he concludes by observing that it is unfortunate that embezzlers, money launderers, narcotic tradesmen, and the:

   Ivan Boeskys of high finance usually have more than adequate resources and
   often know which pressure centers are subject to influence. They create
   their own symphony of squeaks, but it is not obvious that a service
   profession should listen to them. Mastering the strategies of market
   finance may create canny and effective operators, but it is doubtful that
   such skills will contribute to an effective service profession, (p, 261)

The penultimate essay, number 12, is a bit whimsical, as he reminisces about accounting personalities he knew over his 50 or so years in the academy. These are historically valuable, and it is fortunate that Devine put these to paper so that they become a permanent part of the archive of accounting history. Devine has a delightfully candid way of writing about these people. For example, about H. A. Finney, he says, "My personal experiences with H. A. Finney were limited and usually accompanied with generous portions of Johnny Walker, and as a result these observations may be of minor interest" (p. 283).

The final essay begins with discussion of the outmoded doctrine of "cost attachment" and its historical origins. This segues into a discussion of social costs and then into socially necessary costs and then into a digression on Marxism and the New Left before, in grasshopper fashion, returning to the theme of analogizing accounting to the practice of science.

Carl Devine passed away in 1998 and, sadly, Harvey Hendrickson, who painstakingly edited these essays for publication, passed away even while I was preparing this review. This volume of essays is a testament to two men who each decided that, in Devine's words, "Being a bookworm is an honorable way to spend one's life." As a history of ideas, as constructive critique of theory past and present, as a source of insight and understanding of contemporary accounting, and as exemplar of genuine scholarship, I highly recommend this book.

PAUL F. WILLIAMS
Professor

North Carolina State University