Accounting scandals and their severe consequences shed light on the ambiguity of accounting. This paper attempts to explore the philosophical roots of accounting in an attempt to remove, or at least mitigate, this ambiguity. The study employs Searle’s framework of the construction of social reality as an approach to achieve this aim. It is argued that the main problem of accounting is its failure to faithfully represent economic reality. The evaluation of recent developments in accounting suggests that although these attempts are a step towards reaching a better representation of economic reality, they are insufficient. A great deal of accounting ambiguity still exists, thus, future accounting scandals are likely. It is therefore suggested that a deeper understanding of the philosophical aspects of accounting should be taken into consideration by accounting standard setters.

 

Keywords: Accounting ambiguity, Searle’s construction of social reality, representational faithfulness, accounting standard setters.