Critical Perspectives on Accounting (1996) 7 , 409 – 435

RECONSIDERING THE ‘‘SOCIAL’’ IN POSITIVE ACCOUNTING THEORY: THE CASE OF SITE RESTORATION COSTS
DEAN NEU
AND

CYNTHIA SIMMONS

University of Calgary
This paper seeks to challenge the hegemony of positive accounting theory explanations of managerial behaviour. We argue that the decontextualized perspective of positive accounting theory is limiting and that changing the perspective offers a more complete explanation of behaviour. Starting from the notion of social relations developed by Marx, we reinterpret positive theory variables as proxies for a subset of the social relations in which managers are embedded. From this perspective, a more inclusive explanation of behaviour can be obtained by considering the entire web of social relations that influence behaviour. To demonstrate the ‘‘cash value’’ of a social relations perspective, accounting for site restoration costs is used as an illustration. The results are consistent with a broad social relations perspective. ÷ 1996 Academic Press Limited

Introduction
‘‘[I]t is clear there is a relation between firm’s accounting choice and other firm variables, such as leverage and size and the signs of the relations are mostly consistent across studies. Positive accounting research guided the search for empirical regularities and provided explanations for them. To date, there are no systematic alternative sets of explanations for those regularities articulated and tested in the literature’’ (Watts and Zimmerman, 1990, p. 132).

In the accounting literature, explanations of managerial behaviour have relied heavily on positive theory (Watts and Zimmerman, 1978, 1986, 1990). With few exceptions, the discourse of positive theory has exercised a hegemony over other potential explanations. As the quote above indicates, positive theory—though it provides a selective