Does accounting reflect or construct the business reality?: Empirical evidence from Hungarian accounting professionals

Abstract

This study examines how Hungarian accounting professionals interpret the role of financial statements in practice, whether they primarily view them as objective information tools that faithfully reflect economic events, or as professional practices that actively shape business reality through regulation and professional judgment. The empirical analysis is based on questionnaire data collected in July 2025 from members of two Hungarian accounting professional organizations, yielding 491 valid responses. Using non-parametric statistical methods, the study tests three hypotheses. The “equally correct but different” representation of economic events under IFRS and Hungarian accounting regulation (H1) and the perceived potential for deliberate distortion through valuation practices (H2) are examined using one-sample Wilcoxon signed-rank tests, while the social constructionist interpretation of accounting (H3) is explored through correlation analysis and principal component analysis (PCA). The results confirm H1 and H2, the majority of respondents accept the context-dependent relativity of accounting representations and clearly recognize the possibility of consciously shaping financial statements through valuation decisions. The items capturing the constructionist dimension show significant positive correlations, and PCA reveals a single, coherent factor. Overall, the findings indicate that Hungarian accounting professionals simultaneously embrace the normative “true and fair view” paradigm and a reflexive, social constructionist understanding of accounting.