ABSTRACT
The objective of this chapter is to demonstrate how pragmatic constructivism (PC) can enhance our understanding of accounting in the public sector and strengthen its role, with particular reference to the issue of ambiguity. The usefulness of PC in supporting the understanding of accounting stands on its epistemological assumptions that establish a base to evaluate the validity of existing performance measurement systems in avoiding ambiguity. Traditional management accounting theories often seem to be concerned with only one or two dimensions of human life. For example, positivistic management and accounting research focus on facts, principal-agency theory on logic-possibility and radical social constructivism on communication and language (Nørreklit et al. 2006) In mainstream management accounting research, the values of everybody within an organisation are assumed to be the same, and the role of communication is neglected. By contrast, PC recognises that management accounting provides valid results in practice only if it incorporates all four aspects of the world of human life. In this chapter, we refer to accounting in broad terms as a “collection of practices such as budgeting and product costing, whose systematic use supports the achievement of some goals” (Chenhall 2003, 129).
