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Is management accounting theory breaking free from the shackles of neo-classical economics?
A South African perspective


Introduction
Several authors, including Kelly and Pratt (1992); Hopper and Powell (1985); Neimark and Tinker (1986); and Scapens (1994), are of the opinion that management accounting is based on neo-classical economics. They regard its unrealistic assumptions as being inappropriate and explain the alleged irrelevance of management accounting (Johnson and Kaplan 1987) by means of reference to the fact that its development has for many decades been dominated by neo-classical economics. However, the aforementioned studies make no distinction between management accounting theory and management accounting education.
This paper distinguishes between theory and education and suggests that although the views of the above authors might be valid regarding management accounting education in South Africa, management accounting theory is moving away from neo-classical economics.
The aim of this investigation is therefore to assess the extent to which management accounting theory has been influenced by neo-classical economics and to compare the extent of that influence to the influence on management accounting education, with a particular focus on education in South Africa. This paper firstly identifies the main characteristics and limiting assumptions of neo-classical economics for the purpose of the analysis. It then proceeds to review various approaches to management accounting theory in order to ascertain the extent to which these approaches are influenced by or are based on neo-classical economic theory. In order to make the review of the management accounting theory manageable, the perspectives are classified in terms of the framework proposed by Puxty (1993).
The possible reasons for the difference in the extent to which management accounting theory and management accounting education are...