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Financial Accounting Theories - Essay Example
Pages 9 (2259 words)
The perspective taken by those who follow the Political Economy Theory is one which questions the use and value of such disclosures in society. The Political Economy has been defined by Cunningham (2006), as "the social, political and economic framework within which human life takes place." (1) Political Economy Theory, therefore, focuses on the idea that social, economic and political issues all have a bearing on the other and one issue cannot be successfully evaluated with the incorporation of its effects on the other two issues…
..that are taken for granted in current accounting research".
Political Economy Theory (PET) is divisable into two broad streams of thinking. One being the Classical Political Economy Theory, the other, Bourgeois Political Economy Theory. For the purpose of this writing the Classical Approach will be the main focus. Classical Political Economy Theory follows the basic ideas of P.E.T, but goes further in its bid to highlight and scrutinise structural conflicts and inadequacies within society. The followers of the Classical approach are of the strong opinion that within society even in these modern and seemingly liberal times, a class divide is still very apparent. This theory is based around the works of such philosophers as Karl Marx and therefore opposes the very basis of the Capitalist system. In the writing of Howieson (2006) it is stated that "a Classical Political Economy places structural conflict, inequality and the role of the state at the heart of the analysis".
The Critical Perspective is a branch of the Classical Political Economy Theory. ...