Functions of accounting and accounting regulation: alternative perspectives based on Marxian economics

This paper discusses “What is accounting” to address the essential nature of accounting. Accounting seems to involve two focal points. The two focal points consist of accounting measurement, which ranges from bookkeeping to valuation systems, and the institution of accounting, which includes the legal framework and the accounting regulation process. In order to develop the accounting discipline as a social science, we should integrate theoretically the two focal points by solving fundamental problems such as the function and object of accounting. This paper focused on the two essential function of accounting according to Marx's argument indicated in his Capital.. One is the function of recognition and control of the economic process and the other is the function of mediating the metamorphosis of economic value. This mediating function of accounting has never been pointed out in any previous research. It is very important function for analyzing actual accounting activities and investigating various problems of contemporary accounting systems. It can explain the genesis of the institution of accounting and the ideological function of institutionalized accounting. In this context, this paper sketches a synopsis of accounting regulation relating to the economic process. The accounting regulation can be divided into two types, namely, micro-accounting regulation and macro-accounting regulation. Macro-accounting regulation is now giving way to what might be called global macro-accounting regulation. We should internationally develop alternative theories and strategies to constrain the violent manifestations of global capitalism.