Accounting – the many aspects to this integrated discipline

Category: Accounting

The assessment of whether accounting is a science cannot be made unless one has a clear understanding of what constitutes accounting, including the many aspects to this complex and integrated discipline. It would also be vital to have an in depth understanding of the different views philosophers and academics have in respect to what is regarded to be a science.

The understanding of both these complex fields would then be used to determine if accounting would constitute a science, by a detailed analyses and comparison of the two integrated fields of study.

What is accounting?

The question of whether accounting is a science represents the epistemological nature of accounting as a discipline, rather than the applied practice of accounting. Therefore we need to understand the origin of the changes from the epistemological nature of accounting to the applied practise on the spectrum of academic evolution of accounting from the basis of accounting, being double-entry bookkeeping right up to the professionalization of the accounting discipline as used by accountants.

Double-entry bookkeeping is based on a mathematical equation known as the Accounting equation that implies that Equity will always equal Assets less Liabilities. Should a single-sided entry be accounted for, the equation would be distorted and unusable. In my opinion double-entry bookkeeping is the most basic and fundamental element of accounting as a discipline, and forms the foundation that all set reporting frameworks is based on.

The spectrum also includes a general framework of accounting, detailing the different elements of the financial statements and the underlying considerations to be applied when accounting for transactions and compiling financial statements. The financial statements would represent on an overall basis the cumulative effect of the transactions that would have the equity equal the assets less the liabilities of an entity. The application of this framework is necessary in order for the accounting equation to be accurate and thus an inseparable part of double-entry bookkeeping.

On the other end of this vast integrated and complex spectrum is modern accounting that contains a significant portion of interpretation as well as an undeniably significant element of professional advisory services. This would also include the interpretation, application and advisory on specific accounting reporting frameworks and standards. This would all form part of the professionalization of the accounting discipline as explained by Michael Power in Accounting and Science - Natural inquiry and commercial reason (1994).

One of the most common globally used financial reporting frameworks would be the IFRS (International Financial Reporting Standards) in conjunction with the IAS (International accounting Standards), which would be a set of standards for the application of transactions to derive at the financial statements of an entity. These standards are set and derived, based on an international due process. These standards are accepted and authorised by the IASB (International Accounting Standards Board) and are subjected to change from time to time.

What is science?

One cannot assess what a science is, without reference to the conclusion of what constitutes a science as researched by Sir Karl Popper. The conclusion reached by Sir Karl Popper, is that the criterion of the scientific status of a theory is its falsifiability, or refutability, or testability.

His conclusion was based on the following:

Confirmations and verifications of any theory are easy to find.

Confirmations should count only if they are the result of risky predictions.

Every "good" scientific theory is a prohibition: it forbids certain things to happen.

A theory which is not refutable by any conceivable event is non-scientific.

Every genuine test of a theory is an attempt to falsify it, or to refute it. Testability is falsifiability.

Confirming evidence should not count except when it is a result of a genuine test of the theory, and this means that it can be presented as a serious but unsuccessful attempt to falsify the theory.

Some genuinely testable theories, when found to be false, are still upheld by their admirers.

As set out in the Introductory Readings in the Philosophy of Sciences, E Klemke, Hollinger and Klein (1980), Feigl is of the opinion that any discipline or theory is scientific if the following 5 criteria are met:

Intersubjective testability - referring to the corroboration by an independent person.

Reliability when subjected to intersubjective testing at any stage.

Definiteness and precision and therefore excluding any ambiguity and vagueness.

Coherence and systematic nature excluding any contradictoriness.

Comprehensiveness as the corroborative evidence of testing continuously increases the completeness of the knowledge of the discipline or theory.

I am of the opinion that both the views and criteria as set by Popper and Feigl are relevant and need to be assessed in determining whether a theory or discipline is in essence a science or not.


The question of whether accountancy is a science is a complex question and need to be assessed in its smaller identifiable theories, rather than assessing accounting as a single discipline. This however would be a difficult task as identifying the different theories on the spectrum of evolution cannot easily be done. Therefore I will assess the discipline of accounting as at the beginning of this spectrum, being double-entry bookkeeping including the general framework; and modern accounting, including IFRS as at the current location of this discipline on the spectrum of evolution.

Double-entry bookkeeping and modern accounting need to be critically assessed in terms of the criteria set by both Popper and Feigl.


Falsifiability, refutability and testability

Double-entry accounting and the general accounting framework therewith associated, is based on a mathematical equation as previously mentioned. The accounting equation can therefore be tested and attempts made to refute and falsify this theory. However the mere fact that this theory is based on a mathematical equation, eliminates the possibility that the general framework's elements and the double-entry bookkeeping thereof can be refuted and falsified.

The complex theory and discipline of modern accounting will also need to be assessed by means of testing. The testing would however deliver a vast array of results, as the different elements of modern accounting are subjected to various conflicting opinions and interpretations of admirers of the different theories. These opinions would be influenced by the global opinion of the IASB and thus the applicable IFRS. As an advisor, the Accountant would also be influenced by his or her own believe and interpretation of the standards, although in the broader view of the IASB and the IFRS applying accountants, this interpretation might be distorted. Therefore modern accounting is filled with opinions, and can easily be challenged and refuted by different opinions. This is also evident in the fact that the opinions of even the highest standard setting body, the IASB, change from time to time. A standard in terms of IFRS that would be applicable today could be revoked in two years time and then the applicable opinion of the IASB as at that time would be required to be applied.


Intersubjective testability

Intersubjective testability would require an objective test to be performed on double-entry bookkeeping. The result of such a test would be exactly the same, if performed for the second and third time by different objective assessors as the accounting equation can only operate in one way. There is no room for different interpretations or opinions as mathematically the equation needs to be accurate in order for the equation to work.

Intersubjective testability would however be a problem for modern accounting as modern accounting is influenced by opinion and interpretation. An objective test performed could deliver yet again a vast array of results.


For the criterion of reliability, the underlying assumptions of each theory need to be realised when subjected to intersubjective testing. This would in fact be the case when double-entry bookkeeping is objectively tested, as the equity of an entity, would equal the assets less the liabilities.

The underlying assumptions of modern accounting are endless as modern accounting is greatly influenced by opinion and interpretation. Each objective test would need to be focussed on a different set of underlying assumptions in order to prove the realisation thereof. This also reinforces the fact that intersubjective testing performed on the theories of modern accounting would not derive at a single answer, should multiple objective tests be performed.

Definiteness and precision

Definiteness and precision is evident in the application of the general accounting framework in terms of the double-entry bookkeeping theory as the different elements of the financial statements need to be precisely applied in strict accordance with the framework in order for the accounting equation to work. The IASB realised this and by setting different standards compiled as the IFRS, it was ever increasingly difficult to enforce the definite and precise application of the IFRS. The magnitude of these standards and the complexity thereof made it more common for accountants to interpret the standards based on their own beliefs, thus compromising on the definiteness and precision of the theory.

Coherence and systematic nature

The organizational aspect of the theory of double-entry bookkeeping is that of a set of elements and the application of these elements of the financial statements that is free from contradictories. These elements will have a positive or negative effect on the equity by either increases or decreases in assets and liabilities. The IFRS has set objectives and goals to facilitate a transaction in such a way, which would have a different effect on the financial statements than would have been the case if only the general accounting framework was applied. This application would then be a contradiction, however slightly it deviates from the general framework. This has the effect of contradictories within the discipline of modern accounting as both IFRS and the general accounting framework would form part of this discipline.


The general accounting framework and the application thereof in double-entry bookkeeping takes into account all possible transactions within the elements of the financial statements. This would also be the case with IFRS, as IFRS includes the framework. Therefore any transactions not covered by specific standards in IFRS would be covered by the general accounting framework, until the discipline of modern accounting evolves to gain an understanding or set a standard for these specific transactions and phenomenon. This would also be the case with the business advisory side of modern accounting, as personal opinion and interpretation would be the basis for the explanation of the theory rather than the fundamental basis of the accounting framework. As businesses evolve, the theory of modern accounting would also evolve and the necessity of understanding the theory would put pressure on gaining knowledge of the discipline of modern accounting.


When researching the applicability of accounting as a science, it is imperative to take into consideration the research done by Michael Power as he is known for his in depth research of this topic. In his book From Science of accounts to Financial accountability of Science he states that as academic accounting established itself it was inevitable that this question should acquire an epistemological flavour. In his book, Power also refers to another philosopher, Paul Miranti. Miranti explored the idea of scientific accountancy in the early years of the American profession. These early reflections represent attempts to lift accounting and audit practice beyond the status of craft knowledge and to connect them with relatively established forms of scientific thinking. Power mentions that according to later theorists such as Ray Chambers and Robert Sterling accounting practices suffered and continues to suffer from the pervasive subjectivity of its calculative operations. This confirms the fact that modern accounting is subjected to opinion and interpretation.


If I take into account the different theories that make up accounting and compare it to the different philosophies on what constitutes a science, it is clear that the fundamental basis of accounting being double-entry accounting as well as the general accounting framework would constitute a science. Modern accountancy as defined by Power would, if based on the above analysis not constitute a science. It would however need a further in depth analysis, to define the exact point in the spectrum of academic evolution of accounting, where this discipline would no more be regarded as a science.