A CRITICAL PERSPECTIVE ANALYSIS OF INDONESIAN ACCOUNTING THOUGHT: SOME PRELIMINARY THOUGHTS ON THE SEARCH FOR BETTER UNDERSTANDING OF ACCOUNTING IN PRACTICE

IN PRACTICE

Eko Ganis Sukoharsono

Department of Accounting - Brawijaya University

Introduction : A general Overview T h e p r o f e s s i o n a l b a s i s o f a c c o u n t a n c y k n o w l e d g e a n d p r a c t i c e in I n d o n e s i a h a s r e c e n tly b e e n s u b j e c t to s e r i o u s a n a ly s e s . T h e r e h a s b e e n t r a d i t i o n a l c o n c e r n a b o u t th e in d e p e n d e n c e o f a c c o u n t a n c y a n d a u d i t i n g p r a c tic e . T h is c o n c e r n h a s b e e n b r o u g h t to p u b lic a t t e n t i o n b y th e d e b a t e s a b o u t w h e t h e r a c c o u n t a n c y is n o t a s c i e n c e , a c c o u n t i n g r e g u l a t i o n s a n d s t a n d a r d - s e t t i n g , a n d c o r p o r a t e f i n a n c i a l s c a n d a l s . F o r e x a m p le , S u d ib y o [ 1 9 8 6 ] , a t S E A T U c o n f e r e n c e 1 9 8 6 , q u e s t i o n s t h a t in th e b a s i c te r m o f

a c c o u n t i n g a n d a c c o u n t i n g in p r a c t i c e , a c c o u n t i n g is n e i t h e r a n a r t, n o r a s c i e n c e b u t a s

a t e c h n o l o g y . S i m i l a r l y , M u l y a d i [ 1 9 8 6 ] a ls o c r itic iz e s t h a t m o s t o f a c c o u n t i n g c o n tr o l s y s te m s c r e a t e d b y h i m s e l f h a v e s o m e d if f ic u ltie s to b e a p p l i e d in th e “ r e a l ” c li e n t s i tu a tio n . R e c e n tly , in 1 9 9 0 th e r e w e r e s e v e r a l I n d o n e s ia n p r i v a t e b a n k s a d f in a n c ia l

c o m p a n i e s c o l l a p s e d ( s e e K u s u m a h [ 1 9 9 0 , p . 7 4 - 7 5 ] . P u b li c o p i n i o n s a c c u s e th a t

a c c o u n t i n g p r o f e s s i o n s h o u l d b e r e s p o n s i b l e in th is c a s e .

B a s e d o n t h e q u e s t i o n s a n d c r i t i c i s m a b o v e , th e a u t h o r is a w a r e o f h o w li ttle w e k n o w a b o u t th e a c t u a l f u n c t i o n i n g o f a c c o u n tin g . T h is v ie w is s u r p r i s i n g , b e c a u s e a n u m b e r o f r e s e a r c h a n d p u b l i c a t i o n s a d d r e s s e d to a c c o u n t i n g p r a c t i c e s d o m i n a t e s o u r

a c a d e m i c r e a d i n g s . Y e t, it s h o u l d b e n o te d th a t “ d o w e k n o w e n o u g h a b o u t a c c o u n t i n g in p r a c t i c e ? ” . T h e a n s w e r is a r g u e d t h a t litt le is u n d e r s t o o d a b o u t a c c o u n t i n g in p r a c ti c e

e i t h e r a c c o u n t i n g ’s s o c ia l r o o t s o r th e i n te r c o n n e c tio n a n d i n t e r r e l a t i o n s h i p b e t w e e n th e s o c ia l a n d t e c h n i c a l a s p e c t s .

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70 A Critica Perspective A nay is is o f Indonesian Accounting T h o u g h t: Some Preliminary Thoughts on The Search fo r Better Understanding O f Accounting in Practice

T h e r e is a g r o w i n g n u m b e r o f a c c o u n t i n g r e s e a r c h e r q u e s t i o n i n g c o n v e n t i o n a l accounting. Not only Indonesian accounting researchers, but American, Australian,

C a n a d i a n , N e w Z e a l a n d i a n , a n d U K a c c o u n t i n g r e s e a r c h e r a ls o c r i t i c i z e c o n v e n t i o n a l

a c c o u n t i n g . Q u e s t i o n s h a v e b e e n r a is e d a n d c r i t i c i s m s h a v e b e e n w r i t t e n t h r o u g h m a n y p u b l i s h e d j o u r n a l s ( e .g , c o o p e r [ 1 9 8 3 ], T o m k i n s a n d G r o v e s [ 1 9 8 3 ] , a n d D il la r d [ 1 9 9 1 ] ) . T h e s e c r i t i c i s m w e r e p r i m a r i l y a d d r e s s e d t o s e r i o u s d e f i c i e n c i e s in th e th e o r e t i c a l a n d m e t h o d o l o g i c a l b a s e s o f a c c o u n t i n g a n d t o a s s o c i a t e d m i s c o n c e p t i o n s in practice. As pointed out by Hopper

el al [1987, p.438], there are currently two sorts of

knowledge, as represented in m a i n s t r e a m t e x t b o o k s a n d a r t i c l e s in l e a d i n g j o u r n a l s . T h e f ir s t a t t a c k s e v e r e l y q u e s t i o n s its t h e o r e t i c a l a n d m e t h o d o l o g i c a l b a s e s o f a c c o u n t i n g . T h e s e c o n d o n e is t h a t

attack to conventional

a c c o u n t i n g in I n d o n e s i a n a c c o u n t i n g . T h e t h i r d p u r p o s e is t h a t t h e a u t h o r w o u l d lik e to provide some preliminary thoughts on the future understanding of Indonesian

a c c o u n t i n g in p r a c t i c e s u n d e r t h e r o o t o f t h e c r i t i c a l p e r s p e c t i v e .

Philosophical Assumptions Accounting and Its Relation to

Sociological Perspective

C e n t r a l to t h i s p a p e r is th e i d e a t h a t e v e r y c o n d u c t i n g a c c o u n t i n g r e s e a r c h s t u d y f i r s tly h a s to c o n s i d e r f o u r i n t e r c o n n e c t i n g a t t r i b u t e s o f a s s u m p t i o n s . T h e s e a r e o n t o l o g y , e p i s t e m o l o g y , h u m a n n a t u r e , a n d m e t h o d o l o g y . U n d e r s t a n d i n g o f a ll th e s e

a t t r i b u t e s a r e b a s e d o n t h e a s s u m p t i o n s t h a t a ll s o c i a l s c i e n t i s t s ( i n c l u d i n g a c c o u n t i n g ) s h o u l d a p p r o a c h t h e i r r e s e a r c h s u b j e c t a n d o b j e c t i n to t h e n a t u r e o f th e s o c i a l w o r l d a n d t h e w a y in w h i c h t h e y ( s u b j e c t a n d o b j e c t ) m a y b e i n v e s t i g a t e d

(see, Burrel and Morgan

[ 1 9 7 9 ] ) . T h e f i r s t a s s u m p t i o n is

ontology. This refers to the assumption which concern

t h e e s s e n c e o f th e p h e n o m e n a u n d e r i n v e s t i g a t i o n . T h e s e a r e t w o e x t r e m e a p p r o a c h e s : ( 1 ) th e o n e e x t r e m e r e a l i t y is “ s u b j e c t i v e ” a p p r o a c h t h a t is r e g a r d e d a s h a v i n g a n

e m p i r i c a l , c o n c r e t e e x i s t e n c e o f a w o r l d e x t e r n a l t o , a n d i n d e p e n d e n t f r o m th e c o g n itio n o f a n y i n d i v i d u a l , ( 2 ) th e o t h e r e x t r e m e r e a l i t y is “ s u b j e c t i v e ” a p p r o a c h t h a t p o s i t s th e

c o n c r e t e e x i s t e n c e o f a s o c i a l w o r l d a s a p r o d u c t o f i n d i v i d u a l c o n s c i o u s n e s s . S e c o n d ly ,

e p i s t e m o l o g y r e f e r s to t h e n a t u r e o f k n o w l e d g e - a b o u t h o w o n e m i g h t b e g in to understand the research questions under investigation. The theory of knowledge [ e p i s t e m o l o g y ] , o n th e o n e h a n d , c a n b e a c q u i r e d t h r o u g h o b s e r v a t i o n a n d is c o n s t r u c t e d

b y a p o s i t i v i s t ( o r , p h y s i c a l ) s c i e n c e - “ o b j e c t i v e in n a t u r e , t h e o t h e r e x t r e m e a p p r o a c h is b e l i e v e d t h a t k n o w l e d g e c o m e s f r o m e x p e r i e n c e a n d i n s i g h t o f a n a c t i v e p a r t i c i p a n t in th e r e f e r s to th e a s s u m p t i o n is b e l i e v e d t h a t h u m a n b e h a v i o r a r e d i c t a t e d a n d d e t e r m i n e d by their external environment. Fourthly, m ethodology r e f e r s t o t h e w a y in w h i c h a

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The International Journal o f Accounting and Business Society 71

r e s e a r c h p r o c e s s c a n b e c a r r i e d o u t to in v e s t i g a t e a n o b t a i n “ k n o w l e d g e ” a b o u t

a c c o u n t i n g a n d its r e l a t i o n to s o c i a l r e a lity . A s s t a t e d b y B u r r e l a n d M o r g a n [ 1 9 7 9 ] , tw o r e l a t e d e x t r e m e a s s u m p t i o n s c a n b e a r g u e d : ( 1 ) i f t h e s o c i a l w o r l d is r e g a r d e d a s th e s a m e a s s c i e n c e b y t r a d i t i o n a l “ n a tu r a l s c i e n t i s t ” t h a t v i e w a s b e i n g “ h a r d ” , “ r e a l ” , a n d

e x t e r n a l to t h e i n d i v i d u a l , th e n m e t h o d s f r o m th e n a t u r a l s c i e n c e s d o m i n a t e th e r e s e a r c h p r o c e s s e s in l o c a t i n g , e x p l a i n i n g , a n d p r e d i c t i n g th e s o c i a l p h e n o m e n a . In th is r e g a r d , s t a t i s t i c a l t e c h n i q u e s a r e b a s i c a l l y a n d v e r y o f t e n u s e d to t e s t r e s e a r c h q u e s t i o n s a n d

h y p o t h e s e s , a n d t o a n a l y z e d a t a c o l l e c t e d b y s t a n d a r d r e s e a r c h i n s t r u m e n t o f n a tu r a l sciences, such as the use of questionnaire and quantitative techniques for data analysis.

C o n v e r s e l y , ( 2 ) i f t h e s o c i a l w o r l d is r e g a r d e d a s th e c r e a t i o n o f s u b j e c t i v e e x p e r i e n c e of individuals, then research methods are focused on exploration of pure subjectivity of

a c ti v e p a r t i c i p a n t s in t h e p h e n o m e n a u n d e r in v e s tig a tio n . As

briefly discussed

v ie w s that different

a s s u m p t i o n s a b o u t o n t o l o g y a n d h u m a n n a t u r e in th e s o c i a l w o r ld h a v e d i f f e r e n t w a y s

f o r t h i n k i n g a b o u t th e k in d o f e p i s t e m o l o g y a n d m e t h o d o l o g i c a l a s s u m p t i o n s t h a t maybe appropriate for underlying and continuing research process. Before deciding w h i c h a s s u m p t i o n s a r e a p p r o p r i a t e f o r u n d e r l y i n g t h e d i s c u s s i o n o f th is p a p e r ( a n d

further research process). Table 1 provides a trans typology from objective to subjective approach that can be used for understanding such philosophical assumptions.

Table 1

NETWORK OF BASIC ASSUMPTIONS CHARACTERIZING THE SUBJECTIVE-OBJECTIVE DEBATE WITHIN SOCIAL SCIENCE

O bjective Subjectivist Approach

A S SU M P T IO N S

Approaches to <- ------

es to

S o cia l Science

Social

S cience

R eality as R eality as a R eality as Reality as a R eality Reality as

ONTOLOGY

projection o f a realm o f

human social contextual as a construction sym bolic field o f concrete a concrete

imagination

discourse

inform ation process structure

HUMAN Man as pure spirit

Man as an

inform ation Man as Man as a being

constructor, the actor the sym bol

Man as a social Man as an

NATURE

sym bol creator

user

processor

adaptor responder

To study To To obtain

To

construct E PISTEM O LO G Y

phenom enological how to social patterns o f To map system s a insight, revelation

T o understand

understand

change positivist scicnce SO M E

reality is created

sym bolic

contexts process,

discourses

Language game,

Cybernetic Organism M achine M ET A PH O R S

FAVOURED Transcendental

accom plishm ent, Theater,

Exploration o f

Sym bolic

Contextual

analysis o f Historical

Lab experimen

METHODS

pure subjectivity

Herm eneutic

analysis

G estalten analysis t surveys

S o u r c e : A d a p t e d f r o m M o r g a n a n d S m i r c i c h [ 1 9 8 0 , p .4 9 2 ]

1. W estern Sociological Perspectives

r e l a t e d to t h e p r e v i o u s d is c u s s i o n s in t h is p a p e r , th e r e a r e s e v e r a l w e s te r n sociological

of “Burrel

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72 A Critica Perspective Anayisis o f Indonesian Accounting T h o u g h t: Som e Preliminary Thoughts on The Search fo r Better Understanding O f Accounting in Practice

f u n c t i o n a l i s t , i n t e r p r e t i v e , r a d i c a l h u m a n i s t , a n d r a d i c a l s t r u c t u r a l i s t , a r e s o c ia l s y s t e m t h e o r y , p l u r a l i s m , i n t e r a c t i o n i s t , l a b o u r p r o c e s s p e r s p e c t i v e , c r i t i c a l th e o ry ', foucouldian

modern, Postmodern p e r s p e c t i v e , a n d m a n y o t h e r w e s te r n p e r s p e c t i v e . H o w e v e r , I o r d e r to s i m p l i f y p r e s e n t a t i o n a m d m a k e th is p a p e r o f m a n a g e a b l e le n g th . 1 s h a l l r e s t r i c t m y a t t e n t i o n to f o c u s f o u r w e s t e r n s o c i o l o g i c a l p e r s p e c t i v e . T h e y a r e t h e i n t e r a c t i o n i s t perspective, Foucouldian perspective, critical theory, and Postmodern perspective.

of th e German

i d e a l i s t t r a d i t i o n o f s o c i a l t h o u g h t b a s e d o n t h e w o r k o f K a n t ( 1 7 2 4 - 1 8 0 4 ) . H is c e n tr a l

i d e a is c o n c e r n e d w ith t h e u n d e r s t a n d i n g o f s o c i a l w o r l d a s a n e m e r g e n t s o c ia l p r o c e s s w h i c h is c r e a t e d b y t h e i n t e r a c t i o n o f in d i v i d u a l s . In a c c o u n t i n g r e s e a r c h , t h e i n t e r a c t i o n i s t p e r s p e c t i v e h a s b e e n a d a p t e d s in c e t h e 1 9 7 0 s b y e m p l o y i n g b e h a v i o r a l p e r s p e c t i v e in to a c c o u n t i n g ( c f ., T o m k i n s a n d Groves [1983]). However, the clearest advocacy of this perspective as an alternative of

a c c o u n t i n g r e s e a r c h m e t h o d o l o g y to f u n c t i o n a l i s t / m a i n s t r e a m a c c o u n t i n g r e s e a r c h 3) w a s f o u n d b y C o l v i l l e [ 1 9 8 1 ] . C o l v i l l e a r g u e d t h a t c o n d u c t i n g r e s e a r c h in “ b e h a v i o r a l ”

a c c o u n t i n g m i g h t b e u s e f u l i f i n t e r a c t i o n i s t p e r s p e c t i v e is u s e d a s a b a s is o f methodological research. Similarly, even there are weakness and limitations ( see M o r g a n [ 1 9 8 3 ] , a n d W i l m o t t [ 1 9 8 3 ] , T o m k i n s a n d G r o v e s [ 1 9 8 3 ] s t a t e d t h a t it is

i m p o r t a n t f o r a c c o u n t i n g r e s e a r c h e r s to m o v e a w a y f r o m f u n c t i o n a l i s t t o i n t e r a c t i o n i s t p e r s p e c t i v e in o r d e r to g e t b e t t e r u n d e r s t a n d i n g o f a c c o u n t i n g r o l e s in th e s o c ia l activities.

Subsequent to the studies of Colville [1981] and Tomkins and Groves [1983], there are several accounting researchers who concern

i n t e r a c t i o n i s t ’s m e t h o d o l o g i c a l v i e w s in u n d e r s t a n d i n g t h e n a t u r e o f a c c o u n t i n g in s o c i e t y . T h e y a r e Rosenberg, et al [1982], Covaleski and Dirsmith [1983, 1986, 1990], Tomkins and Colville [1984], Preston [1986], Kaplan [1983, 1984, 1986], Chua [1986b], Macintosh and Scapens [1989]. {this sub-section needs fu rth er deeper analyses)

w ith t h e

b. Foulcouldian Perspective

Michel Foucult,

a french

“genealogical

historical” philosopher, is

a c k n o w l e d g e a s o n e o f g r e a t i n t e l l e c t u a l s o f t h e P o s t - W o r l d W a r II ( c f ., H o p p e r a n d M a c i n t o s h [ 1 9 9 0 ] ) . C e n t r a l o f h is id e a is c o n c e r n e d w ith th e t a s k o f p r o d u c i n g s o c ia l

a n a l y s e s w h i c h a r e p e r m e a t e d b y p h i l o s o p h i c a l in s ig h t. I p a r t i c u l a r , h is m a j o r c o n c e r n is r e l a t e d to tw o e p i s t e m o l o g i c a l te c h n i q u e s :

Archaeology and Genealogy> , In a n a l y z i n g

s o c i a l p h e n o m e n a . T h e s e t e c h n i q u e s h a s b e e n u s e d a s a b a s i s o f h is s e r i e s p u b l i c a t i o n o f

c r i t i q u e s o f s o c i a l p h e n o m e n a i n c l u d i n g m e n t a l i l l n e s s , s e x u a l i t y , t h e h u m a n s c ie n c e ,

a s y l u m s a n d p r i s o n s ( F o u c u l t [ 1 9 7 2 , 1 9 7 7 ]) . In s o r t , A r c h a e o l o g i c a l a n a l y s i s is f o c u s e d o n t h e c o m p l e x o f r a t i o n a l d is c o u r s e s in a n a l y z i n g a s o c i a l p h e n o m e n a u n d e r investigation. Hopwood [1987], “ The Archaeology o f Accounting S ystem s”,

h a s g iv e n u s s o m e u s e f u l i n s i g h t o f f o u c u l t ’s w o r k to e x a m i n e a c c o u n t i n g p h e n o m e n a

a ls o Loft [1986], Arrington and Francis [1989], and Hopper and Macintosh [1990]).

(see

G e n e a l o g i c a l a n a l y s i s c o n c e r n s w ith “ k n o w l e d g e ” a n d “ p o w e r ” t o d e m o n s t r a t e t h a t

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h i s t o r y is t w o p r o c e s s e s o f “ d e s c e n t ” ( H e r k u n f t ) a n d “ e m e r g e n t ” ( E n s t s t e h u n g ) t h a t is n o t l i n e a r ( c f ., L a s t [ 1 9 9 0 ] ) . “ k n o w l e d g e ” a r e i n t e r c o n n e c t e d . A c c o r d i n g to h im , “ k n o w l e d g e ” is n o t o n l y c o n s i d e r e d a s th e e x e r c is e o f “ p o w e r ” , b u t a l s o “ p o w e r ” i t s e l f can operate systems which produce “knowledge”.

In t h e a c c o u n t i n g c o n te x t, e a r ly a c c o u n t i n g r e s e a r c h e r s w h o b r o u g h t F o u c u l t ’s id e a in e l a b o r a t i n g t h e d e v e l o p m e n t a n d c h a n g e o f a c c o u n t i n g k n o w l e d g e w e r e

B u r c h e l l , e t a l [ 1 9 8 0 ] . T h e y p a r t i c u l a r l y p r e f e r F o u c u l t ’s i d e a to o b s e r v e t h e r e l a t i o n s h i p between the institutional setting of accounting and the development of accounting k n o w l e d g e . F iv e y e a r s l a te r , B u r c h e ll a n h is c o l l e a g u e s [ 1 9 8 5 ] u s e d a g e n e a l o g i c a l

e x a m p l e , t h e y f o u n d t h a t in th e c o n t e x t o f a g e n c y t h e o r i s t s , f i n a n c i a l s t a t e m e n t s a r e v i e w e d a s e c o n o m i c g o o d s f o r w h i c h t h e r e e x is t a c e r t a i n d e m a n d a n d th e p r o d u c t i o n o f w h i c h th e r e e x i s t s a c e r t a i n d e m a n d a n d th e p r o d u c t i o n o f w h i c h e n t a i l s c e r t a i n c o s ts (see also Burchell, et al [1985]).

a ls o th e d e t a i l a n a l y s i s f r o m H o s k in a n d Macve [1991]).

a r e n a in te r m s o f “ v a l u e - f r e e ” a n a l y s i s

(see

a. T h e y a r e a im e d a t p r o d u c i n g e n l i g h t e n m e n t in th e a g e n ts w h o t o l d th e m , i.e. , a t e n a b l i n g t h o s e a g e n t s to d e te r m in e w h a t t h e i r t r u e in te r e s t a r e ;

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74 A Critica Perspective Anayisis o f Indonesian Accounting T h o u g h t: Som e Preliminary Thoughts on The Search fo r Better Understanding O f Accounting in Practice

b. T h e y a r e i n h e r e n t l y e m a n c i p a t o r y , i.e ., t h e y f r e e a g e n t s fr o m

a k in d o f c o e r c i o n w h ic h is a t le a s t p a r t l y s e l f - i m p o s e d , fr o m self-frustration of conscious human actions.

2. C r i t i c a l t h e o r i e s h a v e c o g n i t i v e c o n t e n t , i.e ., t h e y a r e f o r m s o f knowledge .

3. C r i t i c a l t h e o r i e s d i f f e r e p i s t e m o l o g i c a l l y in e s s e n t i a l w a y s f r o m t h e o r i e s in th e n a t u r a l s c i e n c e . T h e o r i e s in n a t u r a l s c i e n c e a r e ‘o b j e c t i f y i n g ; ’ c r i t i c a l th e o r i e s a r e ‘r e f l e c t i v e . ’

A m o n g s t th e c r i t i c a l t h e o r i s t ( H o r k e i m e r , G a d a m e r , A r d o n o , B e n j a m i n , M a r c u s e , a n d H a b e r m a s ) , th e m o s t p r o m i n e n t o f th e n e w g e n e r a t i o n is J u r g e n H a b e r m a s - ( c f ., H e ld [ 1 9 8 0 ] , P u s e y [ 1 9 8 7 ] , W h ite [ 1 9 8 9 ] , L y y n t i n e n a n d K l e i n [ 1 9 8 5 ] a n d Laughlin [1987], For example, Laughlin [1987] and Lyytinen and Klein [1985] pointed out that Habermas’ thought has the great potential methodology approach for

i n v e s t i g a t i n g s o c i a l p h e n o m e n a m o r e w i d e l y .5) S i m i l a r l y , P u x t y [ 1 9 8 7 ] a r g u e d t h a t

H a b e r m a s w o r o f f e r e d a c o m p r e h e n s i v e n e w s o c ia l t h e o r y t h a t e n g a g e s w ith t h e c o n t r o l theoretical paradigm of modem science.

H a b e r m a s c r i t i c a l t h e o r y p r i m a r i l y f o c u s e s o n a c h i e v i n g s u c c e s s o f a c t i o n s in s o c ia l i n t e r a c t i o n s , h e c a l l e d th e a c t i o n a s c o m m u n i c a t i v e a c t i o n . T h i s t a k e s p l a c e th r o u g h la n g u a g e in a c h i e v i n g m u tu a l u n d e r s t a n d i n g o f r e a l i t y w i t h i n e v e r y d a y life . In

a c c o u n t i n g f i e l d , u n d e r s t a n d i n g , w h a t H a b e r m a s s a y s a b o u t “ l a n g u a g e ” , h a s b e e n w e ll elabourated by Laughlin [1987] and Lord [1991], According to Laughlin [1987],

H a b e r m a s l a n g u a g e a n d c o m m u n i c a t i v e a c t i o n a r e “ e l e m e n t w h i c h is v i t a l in a l l o w i n g u n d e r s t a n d i n g t o o c c u r a n d n o n - v i o l e n t c h a n g e t o h a p p e n ” . T h i s e l e m e n t is b u i l t u p o n v e r y b a s i c r a t i o n a l s k i l l w h i c h m a r k s o u t o u r u n i q u e n e s s a s h u m a n b e in g . F o r

H a b e r m a s , l a n g u a g e p r o v i d e s a k e y a s a m e d i u m f o r c o o r d i n a t i n g a c t i o n th a t, a c c o r d i n g to W h i t e [ 1 9 8 8 , p .3 6 ] , c a n p r o d u c e s u b s e q u e n t p a t t e r n s o f i n t e r a c t i o n in e v e r y d a y life .

E m p l o y i n g a c r i t i c a l p e r s p e c t i v e in a c c o u n t i n g r e s e a r c h h a s b e e n u s e d s in c e th e

e a r ly 1 9 8 0 s ( e .g ., L a u g h l i n , e t a l 1 9 8 2 , L a u g h l i n a n d P u x t y [ 1 9 8 3 , 1 9 8 4 ] , B y t h e tim e , Laughlin and Puxty [1984] argued that under a critical perspective, they believed that th e p r o c e s s o f e x p o s i n g w o r l d v i e w , s t r u c t u r e s o f s o c i a l r e l a t i o n s a n d o t h e r u n d e r l y i n g

f a c to r s o f a c c o u n t i n g r e g u l a t i o n c a n b e a c h i e v e d . T h e y a l s o a d d e d t h a t t h e p r o b l e m s o f accounting regulation can be clarified and resolved using rational discourse of Habermas critical perspective. Subsequently, Laughlin, Puxty, and Macintosh extended

c o n s t r u c t i o n a n d r e c o n s t r u c t i o n o f a n i d e o l o g y o f a n i n f e r i o r r o le f o r w o m e n in th e computer workplace. Although, these accounting researchers has stated the usefulness of Habermas m e t h o d o l o g i c a l a p p r o a c h in to a c c o u n t i n g r e s e a r c h a r e n a , t h e r e a r e a n u m b e r o f

d i f f i c u l t i e s e v i d e n t w h i c h m i g h t c o u n t e r th is c r i t i c a l p e r s p e c t i v e ( c f ., P u s e y [ 1 9 8 7 ] a n d R o s l e n d e r [ 1 9 9 0 ] ) . R c s l e n d e r [ 1 9 9 0 ] c r i t i c i z e d H a b e r m a s c r i t i c a l t h e o r y in t e r m s o f th e p o l i t i c a l le g a c y , t h e l a n g u a g e o f t e x t s , a n d t h e m i c r o - l e v e l v a l i d i t y o f c r i t i c a l t h e o r y w a s

b a s e d o n a M a r x i s t m o d e o f a n a l y s i s t h a t f o c u s e s th e s o c i a l i s t r e v o l u t i o n c o m m i t m e n t o f w o r k i n g c la s s in u n d e r s t a n d i n g th e t o t a l i t y o f m o d e r n c a p i t a l i s m . S e c o n d l y , th e

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l a n g u a g e o f o r i g i n a l t e x t s o f H a b e r m a s c r i t i c a l t h e o r y h a s b e e n w r i t t e n o r i g i n a l l y in

G e r m a n y c o n t e x t u a l c u l t u r e . T h u s , it ta k e s tim e a n d p a t i e n c e in u n d e r s t a n d i n g w h a t

H a b e r m a s e x a c t l y a r g u e d a n d t h o u g h t a b o u t c r i t i c a l t h e o r y . T h i r d l y , w h a t a r e th e m i c r o le v e l v a l i d i t y a n d j u s t i f i c a t i o n e m p l o y i n g c r itic a l t h e o r y in o u r m e t h o d o l o g i c a l r e s e a r c h

a p p r o a c h ? L a u g h l i n h i m s e l f r e c o g n i z e d .'.i s q u e s t i o n ( see

a l s o L a u g h lin [ 1 9 8 7 ] ) .

A n o t h e r c r i t i c i s m to H a b e r m a s c r i t i c a l t h e o r y c o m e s f r o m a n e w " n e o ­

c o n s e r v a t i v e ” s c h o o l o f F r e n c h t h e o r e t i c i a n s . T h e y in c l u d e B a u d r i l l a r d , L y o t a r d , K r o k e r , A n d C o o k , J a m e s o n ( c f ., A s le y [ 1 9 9 0 ] ) . T h e i r c e n t r a l c r i t i c i s m s a r e in t e r m s o f Habermas social action : “communicative action and communicative rationality”. They

a r g u e d t h a t H a b e r m a s r a t i o n a l p o t e n t i a l o f th e p u b l i c s p h e r e , o f id e a l s p e e c h , o f r a t i o n a l

d i s c o u r s e t h a t h e a r t i c u l a t e d “ f r e e o f f o r c e ” is p r o b a b l y o n ly ill u s iv e , o r m a y b e n e v e r achieved.

d. P o s t m o d e r n i s t P e r s p e c t i v e 6)

If we believe the French theoreticians such as Baudrillard, Lyotard, Kroker,

C o o k , a n d J a m e s o n , w e a r e n o w in a t y p i c a l p o s t - e r a ( p o s t m o d e r n ) . T h e s e t h e o r i s t s o f p o s t m o d e r n i s m e s s e n t i a l l y a r e c o n c e r n e d w ith th e d e s t a b i l i z a t i o n o f c l a s s i c a l l y m o d e m s i g n i f i e r a n d t h e o v e r a l l d e s t r u c t i o n o f s y m b o l i c o r d e r s ( c f ., J e n s e n [ 1 9 8 6 ] , S m a r t [ 1 9 9 0 ] ) . In t h i s c o n t e x t , a m o n g s t t h e s e F r e n c h t h e o r i s t s l a b e l e d a n e w “ n e o ­

c o n s e r v a t i v e ” s c h o o l o f t h o u g h t , p e r h a p s th e m o s t i m p o r t a n t c o n t e m p o r a r y t h e o r i s t is

B a u l l i a r d a n d L y o t a r d w h o c h a l l e n g e b o th t o t r a d i t i o n a l a n d c r i t i c a l t h e o r y ( c f ., A s h l e y [1990] and Turner [1990]). According to Kellner [1988], Baudrillard describes a s i m u l a t i o n s a n d s i m u l a c r a t h a t c r e a t e in t u r n n e w f o r m s o f s o c ie ty , c u l t u r e , e x p e r i e n c e , and subjectivity, while Lyotard describes a “postmodern condition” that marks the end o f th e g r a n d h o p e s o f m o d e r n i t y a n d th e i m p o s s i b i l i t y o f c o n t i n u i n g w i t h t h e t o t a l i z i n g s o c i a l t h e o r i e s a n d r e v o l u t i o n a r y p o l i t i c s o f t h e p a s t.

In s o m e w h a t s i m i l a r t o c r i t i c a l th e o r y , p o s t m o d e r n p e r s p e c t i v e a l s o u s e s “ l a n g u a g e g a m e s ” to a n a l y z e th e v a r i o u s a c t i v i t i e s w ith in e v e r y d a y li f e u n d e r

i n v e s t i g a t i o n . D i f f e r e n t l y , l a n g u a g e g a m e o f p o s t m o d e r n c o m e s f o r m W i t t g e n s t e i n , 7) w h e r e a s l a n g u a g e s g a m e o f c r itic a l t h e o r y w a s d e r i v e d f r o m n e o - k a n t i a n v a lu e p h i l o s o p h y . A l a n g u a g e g a m e a p p r o a c h in th e s p i r i t i f W i t t g e n s t e i n w o u l d a s s e t th e existence of a variety of linguistic practices and the absence of any overarching metalanguange. For postmodernist perspective of Baudrillard and Lyotard, adopting a l a n g u a g e a p p r o a c h to k n o w l e d g e is a k e y f o c u s in i m p l e m e n t i n g o u r o w n r u le s , s t r u c t u r e a n d c h a n g e s w i t h i n r e a lity . I n d e e d , l a n g u a g e g a m e s fo r L y o t a r d a r e t h e “ s o c ia l

b o n d ” w h ic h h o ld s s o c i e t y t o g e t h e r . H e c h a r a c t e r i z e d s o c ia l in t e r a c t i o n p r i m a r i l y in te r m s o f m a k i n g a m o v e in g a m e , p l a y i n g a r o le a n d t a k i n g a p a r t in v a r i o u s d i s c r e t e la n g u a g e g a m e .

In s o fa r, t h e r e is a little c o n c e r n o f a c c o u n t i n g r e s e a r c h e r s a d a p t i n g th e p o s t m o d e r n i s t p e r s p e c t i v e in to a c c o u n t i n g r e s e a r c h a r e n a . E v e n th e r e is a n u m b e r o f

d e b a t e a n d q u e s t i o n s c o n c e r n i n g th e e x i s t e n c e o f th is p e r s p e c t i v e , t h i s c h a l l e n g e s to

a c c o u n t i n g r e s e a r c h e r s to e x p l i c a t e w h e t h e r t h i s p e r s p e c t i v e c a n p r o v i d e s a n a l t e r n a t i v e to th e f u n c t i o n a l i s t . It m i g h t b e a r g u e d t h a t it is im p o r t a n t to u n d e r s t a n d th e g r o w i n g t h o u g h t o f th e P o s t m o d e r n i s t p e r s p e c t i v e in o r d e r to g iv e u s a n a d d i t i o n a l c h o i c e to th e

functionalist perspective.

2.______ Indonesian Sociological Perspective IPANCASILAI :A briefly preliminary insight

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76 A Critica Perspective Anayisis o f Indonesian Accounting T hought: Some Preliminary Thoughts on The Search fo r Better Understanding O f Accounting in Practice

It is i m p o s s i b l e to u n d e r s t a n d th e d e v e l o p m e n t o f I n d o n e s i a n a n d I n d o n e s i a n t o d a y w i t h o u t a n a p p r e c i a t i o n o f th e r o le o f P a n c a s i l a in m o l d i n g th e n a t i o n ’s s p i r i t a n d o u t l o o k o n lif e a n d its p r o f o u n d s i g n i f i c a n c e a s a p h i l o s o p h i c a l g u i d e to s o c i a l a n d government

critical th e o r y , and p o s t m o d e r n i s t p e r s p e c t i v e , P a n c a s i l a is S a n s k r i t l a n g u a g e t h a t m e a n s f iv e p r i n c i p l e s ( P a n c a = F iv e , S ila

actions and

I n d o n e s i a n ’s e v e r y d a y life . T h e f iv e p r i n c i p l e s a r e a m i x t u r e o f m o r a l i t y , e m a n c i p a t i o n , n a t i o n a l i s m ,

B e lie f In The One Supreme God. T h i s f o r e m o s t p r i n c i p l e , e m b o d i e d in th e I n d o n e s i a n s o c i a l r e a l i t y a n d th e c o n s t i t u t i o n , is t h e b a s i c f o u n d a t i o n o f a ll p h i l o s o p h i c a l li f e o f I n d o n e s i a n s . ( 2 )

d e m o c r a c y , a n d s o c i a l j u s t i c e f o r a ll I n d o n e s i a n s . T h e y a r e ( 1 )

B e lie f in emancipation amongst human beings around the world. This affirms respect

f o r a ll p e o p l e s h a v i n g r a t i o n a l k n o w l e d g e in p a r t i c i p a t i n g , f o r e x a m p l e w o r l d - p e a c e , s o c i a l j u s t i c e , in o u r e v e r y d a y lif e . T h e “ e m a n c i p a t o r y ” i n t e r e s t is th e v e h i c l e in increasing social rationality, justice and morality within our reality. (3)

B e lie f I nationalism. T h i s p r o c l a i m s th e n a t i o n a l is a l i b e r a t i n g m o v e m e n t a s o p p o s e d to im p e r i a l i s m a n d c o l o n i a l i s m . ( 4 )

B e lie f in democracy. T h i s is b a s e d o n d e m o c r a c y is th e

n a t u r a l c o n d i t i o n o f i n d i v i d u a l , a l t h o u g h it is m o d i f i e d to f it p a r t i c u l a r s o c i a l c o n d i t i o n s . P a n c a s i l a d e m o c r a c y is b a s e d o n t w o a n c i e n t I n d o n e s i a n c o n c e p t s : G o t o n g - r o y o n g ( o r m u tu a l a s s i s t a n c e ) a n d M u s y a v v a r a h ( o r c o m m u n i c a t i v e a c t i o n ) . ( 5 )

B e lie f in social justice. W i t h s o c i a l j u s t i c e , i n d i v i d u a l s l i n k s o c i a l p r o p e n s i t y . B e l i e f in s o c i a l j u s t i c e , is

a ls o b e l i e f in t h e s o c i a l , e c o n o m i c , a n d p o l i t i c a l a s p o w e r t h r o u g h i n d i v i d u a l s w o r k t o g e t h e r , b y m u t u a l a s s i s t a n c e a n d c o m m u n i c a t i v e a c t i o n , in o r d e r to g e t o p t i m a l r e s u l t s

in a n y e f f o r t .

B a s e d o n t h e b r i e f d i s c u s s i o n a b o v e , it c a n b e a r g u e d t h a t t h e f iv e p h i l o s o p h i c a l p r i n c i p l e s o f P a n c a s i l a p r o v i d e a w e a l t h o f i n s i g h t o n i d e o lo g y , consciousness, human emancipation, communicative actions and social justice within o u r e v e r y d a y lif e . H o w e v e r , t h e r e is a m a j o r c e n t r a l q u e s t i o n c o n c e r n i n g t h i s p e r s p e c t i v e i n t o a c c o u n t i n g r e s e a r c h m e t h o d o l o g y . T h i s q u e s t i o n is “ c a n b e b r i n g a P a n c a s i l a p h i l o s o p h i c a l p e r s p e c t i v e a s a n a l t e r n a t i v e o f a c c o u n t i n g ’s m e t h o d o l o g i c a l r e s e a r c h a p p r o a c h ? ” T h e a n s w e r o f th is q u e s t i o n is t h a t it is a b ig t a s k o f a c c o u n t i n g researchers (especially Indonesian accounting researchers) to grab out the Pancasila root in to c o n c e p t u a l a n d t h e o r e t i c a l u n d e r s t a n d i n g o f a c c o u n t i n g .

T o d a t e p e r h a p s th e b e s t e x a m p l e o f th e u s e o f P a n c a s i l a p e r s p e c t i v e in th e

c o n t e x t o f e c o n o m i c s is P r o f . M u b y a r t o [ 1 9 8 7 ] , In p a r t i c u l a r , h e d e v e l o p e d a c o n c e p t u a l s y s te m o f I n d o n e s i a n e c o n o m y b a s e d o n P a n c a s i l a p e r s p e c t i v e . H o w e v e r , h e d id n o t s p e c i f y t h e P a n c a s i l a p e r s p e c t i v e in to a m e t h o d o l o g i c a l b a s i s o f r e s e a r c h in e c o n o m i c s . T h is r e tu r n u s ( e s p e c i a l l y I n d o n e s i a n s o c ia l s c i e n t i s t s in c l u d i n g a c c o u n t i n g r e s e a r c h e r s ) to e x p l i c a t e in d e t a i l a n d j u s t i f y w h a t, h o w a r e th e r e q u i r e m e n t s o f th e P a n c a s i l a p e r s p e c t i v e to b e a n a l t e r n a t i v e o f a c c o u n t i n g ’s m e t h o d o l o g i c a l r e s e a r c h a p p r o a c h a n d why?

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3^______ Some Preliminary Insight O f A Critical Perspective : An Alternative Of Accounting Research Methodology

F r o m .th e p r e c e d i n g d i s c u s s i o n , t h e r e a r e th e p r i n c i p a l s o c i o l o g i c a l p e r s p e c t i v e (Western and Indonesian sociological perspectives) on offer, their attractions and their

d r a w b a c k s , s t r e n g t h s a n d w e a k n e s s . F ir s tly , in g e n e r a l t h e i n t e r a c t i o n i s t p e r s p e c t i v e s t r e s s e s th e c o n s t a n t u n c e r t a i n t y c o n f r o n t i n g i n d i v i d u a l s w ith t h e u n d e r s t a n d i n g o f s o c i a l w o r l d a s a n e m e r g e n t s o c i a l p r o c e s s w h i c h is c r e a t e d b y t h e i n t e r a c t i o n o f individuals. Through language, they negotiate an understanding shared by others. Thus,

a s r e f l e c t e d in a c c o u n t i n g c o n t e x t , it c a n b e s a id t h a t a c c o u n t i n g m a y b e r e g a r d e d a s a “ c o m m o n l a n g u a g e ” f o r th e d i s c u s s i o n a n d r e s o l u t i o n o f c o n t e n t i o u s i s s u e s ( C o o p e r , e t al [1981]). Secondly, Foucouldian perspective stresses on a “historical building” I m a n a g i n g m o d e r n c i v i l i z a t i o n , th r o u g h a m e t h o d o l o g y w h i c h h e w a s h e a v i l y r e lia n t o n tw o e p i s t e m o l o g i c a l t e c h n i q u e s :

archaeology and genealogy. Thirdly, Habermas

c r i t i c a l t h e o r y p r i m a r i l y f o c u s e s o n “ h i s t o r i c a l l y g r o u n d e d s o c i a l t h o r y o f th e w a y s o c i e t i e s a n d t h e i n s t i t u t i o n s w h i c h m a k e th e m u p , h a v e e m e r g e d a n d c a n b e understood”

through language and communicative

be enlightened, empowered and

A s h a s b e e n d i s c u s s e d p r e v i o u s l y r e g a r d i n g th e principal sociological

F i r s t l y , H a b e r m a s c r i t i c a l p e r s p e c t i v e p r o v i d e s d y n a m i c a l l y l i n k i n g t h e o r y to p r a c tic e . As stated by Laughlin [1987], for Habermas, “Theory must always have some sort of effect on practical “real world” phenomena”. Secondly, Habermas critical theory sees

h u m a n b e i n g s a s h a v i n g i n n e r p o t e n t i a l i t i e s in d e v e l o p i n g a n d c h a n g i n g s o c i a l r e a lity .

A n d o b j e c t s c a n b e i d e n t i f i e d a n d u n d e r s t o o d t h r o u g h i n t e r c o n n e c t i o n b e tw e e n

c r i t i q u e s , h i s t o r i c a l d e v e l o p m e n t a n d c h a n g e s . T h i r d l y , H a b e r m a s c r i t i c a l th e o r y is

c o n c e r n e d w i t h l a n g u a g e a n d c o m m u n i c a t i v e a c t i o n w h i c h a r e v ita l e l e m e n t in understanding social reality.

A s e c o n d j u s t i f i c a t i o n in f a v o u r o f th is p e r s p e c t i v e is l a r g e l y a r e f l e c t i o n o f th e

i n t e r e s t o f th e a u t h o r . N e v e r t h e l e s s , th e r e a r e f a c to r s i n v o l v e d . F i r s t l y , a c c o u n t i n g is a p a r t o f s o c i a l t h e o r y is q u i t e u s e f u l r a t h e r th a n “ n a t u r a l s c i e n c e s ” w h i c h p h i l o s o p h i c a l l y separates between object being researched and researchers. Secondly, since accounting is f r e q u e n t l y g i v e n a la r g e r e in in p r o v i d i n g a n d m a k i n g d e c i s i o n s to w o r k s i tu a tio n s , it is l i k e l y t h a t t h e s o c i a l l y c o n t e x t u a l a n a l y s i s o f a c c o u n t i n g is n e e d e d r a t h e r t h a n p u r e ly

t e c h n i c a l o n e . T h u s , a d a p t i n g H a b e r m a s c r itic a l t h e o r y , b e c a u s e t h i s c a n b e e x p e c te d to

e x p l a i n m o r e o f t h e v a r i a n c e o f a c c o u n t i n g in s o c i a l c o n t e x t t h a n p u r e l y te c h n ic a l demands, can be used properly as a basis for alternative of accounting researchers as an alternative of accounting research methodology, such as Laughlin [1983, 1984, 1987,

1988], Macintosh [1988], Broadbent, et al [1991a, b], for analyzing the political process

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78 A Critica Perspective Anayisis o f Indonesian Accounting T h o u g h t: Some Preliminary Thoughts on The Search fo r Better Understanding . O f Accounting in Practice

Historical Background of Indonesian Accountancy:

Colonialism’s Legacy

L______Towards a History of Accounting Before Indonesia Independence Over the years, Indonesia has been colonized by the Spanish, the Portuguese, th e B r itis h , t h e D u t c h , a n d th e J a p a n e s e . A m o n g s t t h e m , t h e l o n g e s t c o l o n i s t w a s t h a t b y th e d o m i n a n c e o f t h e D u t c h c o l o n i z a t i o n , t h e y u s e d p o l i t i c a l a n d e c o n o m i c p o w e r to s ta r v e I n d o n e s i a n in a n y e f f o r t ( e .g ., e d u c a t i o n , p o l i t i c , e c o n o m y , a n d c u l t u r e ) . T h e y

a big problem and ha grave political and economic activities of Indonesians. As

I n d o n e s ia n s f o r d o i n g t h e i r b u s i n e s s w i t h c h e a p c o m p e n s a t i o n . T h e p o w e r o f l a b o u r h a s n o i n n e r p o t e n t i a l i t i e s in m a k i n g d e c i s i o n s . T h e y v i e w e d c a p i t a l a s h a v i n g a c e n tr a l o f their business activities.

Vol. 13, No. I/ Agustus 2005 © Center fo r Indonesian Accounting and M anagem ent Research Postgraduate Program, Brawijaya University

The International Journal o f Accounting and Business Society'

2.______ A f t e r t h e I n d o n e s i a n I n d e p e n d e n c e

g o v e r n m e n t to c h a n g e t h o s e o f th e D u t c h ’s le g a c y . F o r e x a m p l e , a la r g e n u m b e r o f v a c a n c i e s w e r e o p e n e d t o I n d o n e s i a n . F o r e i g n i n v e s t o r w e r e i n v i t e d to i n v e s t in m a n y areas of industries.

a .) T h e E c o n o m i c C o n d i t i o n u n ti l 1 9 6 8 T h e I n d o n e s i a n e c o n o m y a f t e r th e i n d e p e n d e n c e w a s m a r k e d

by political turmoil and uncertainty.

1 9 6 8 h a d o n l y a b o u t 2 p e r c e n t p e r a n n u m , i n f l a t i o n p e a k e d in 1 9 6 6 , w h e n it r o s e drastically 635 percent. In t h e c o n t e x t o f a c c o u n t i n g , d u r i n g a t th e t i m e r e c o r d s y s t e m s o f f i n a n c i a l w e r e n o t w i d e l y p r a c t i c e d a n d a p p l i c a b l e to v e r y f e w c o m p a n i e s , m a i n l y t h o s e li s t e d a s foreign corporations. The systems of accounting, such as governmental accounting and

a c c o u n t i n g r e g u l a t i o n s s t i l l a d o p t e d t h e le g a c y o f t h e D u t c h p o l i c i e s . F o r e x a m p l e , th e

I n d o n e s i a n C o m m e r c i a l C o d e w a s b a s e d o n th e 1 8 3 8 C o m m e r c i a l c o d e w a s b a s e d o n t h e 1 8 3 8 C o m m e r c i a l c o d e o f t h e N e t h e r l a n d s w ith s o m e m i n o r a m e n d m e n t s ( B r i s t o n , 1991). This snow that the commercial systems, at the time, are out of date regulation. S i m i l a r l y , t h e a c c o u n t i n g r e g u l a t i o n is w i t h o u t e x c e p t i o n . T h e o n l y c h a n g e s in th e

a c c o u n t i n g c o n t e x t a r e in t h e s y s t e m s o f a c c o u n t i n g e d u c a t i o n ( s e e B r i s t o n , e t a l, 1 9 9 0

b .) The Economic Condition under Soeharto T h e r e w a s p o l i t i c a l a n d e c o n o m i c i n s t a b i l i t y u n d e r S o e k a r n o e r a ( t h e f ir s t

I n d o n e s i a n p r e s i d e n t 1 9 4 5 - 1 9 6 6 ) . T h is s i t u a t i o n w a s u s e d f o r th e c o m m u n i s t s to l a u n c h C o u p d ’e ta t, in S e p t 3 0 , 1 9 6 5 . th e m i l i t a r y le d b y G e n e r a l S o e h a r t o s u c c e e d e d to

d e f e a t th e c o m m u n i s t s e f f o r t . T h is le d G e n e r a l S o e h a r t o e l e c t e d a s th e s e c o n d Indonesian president by Indonesians and constitutional powers. It w a s a f t e r S o e h a r t o c a m e to p o w e r t h a t a c o n s c i o u s e n d e a v o r w a s m a d e to

d i r e c t l y p r i v a t e f o r e i g n i n v e s t m e n t in a ll s e c t o r s e x c e p t d e f e n c e i n d u s t r i e s a n d p u b lic u ti l i t i e s . T h i s le a d s to th e g r o w t h o f th e I n d o n e s i a n e c o n o m y . D u r i n g t h e 1 9 7 0 s , th e Indonesian economy grew at almost 8 percent per annum.

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80 A Critica Perspective Anayisis o f Indonesian Accounting T h o u g h t: Some Preliminary Thoughts on The Search fo r Better Understanding O f Accounting in Practice