...“Why society needs accountants” – Trust, the key of our economy Nowadays we live in a society which is more complex than ever. The improved information systems of the last decades made the world more integrated, intertwined and interdependent than before. Due to the high speed of information sharing, the perspective of the world can literally change in a day. Perhaps most illustrative for this is the financial capital market. Millions of profits are being made by traders, taking advantage of a split second of arbitrage. Bad news from China can affect the stock markets in the world for weeks. Misunderstood US mortgages could initiate of a global economic crisis of which is affecting our society still nowadays. But the question is: why are accountants needed in this complex society? What is the role of an accountant in our society ? First I will discuss the role of accounting in the current accounting and subsequently I will elaborate why an accountant is hardly needed in the future. Because our society nowadays is so fast and interdependent, ‘trustworthiness’ is a vital assets mar-ket participants require to function. For instance, when you buy your study book online, you pay an amount up front and you trust the bookstore to deliver the book in time. You probably pay with your bank account. A place where you, trust a large proportion of your wealth to. The bookstore accepts your electronic payment, relying on the fact that they can use it to make other payments or convert...
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...One of the main questions regarding accounting in public discussion are the purpose of accounting principles and their use for society. So why do we need accounts and why does the society rely on accounting since medieval times? Frankly spoken society needs accountants since they are necessary for businesses to grow and flourish. Accountants help to solve adverse selection and moral hazard issues resulting from imperfect information within the company and with external parties which could result in a lower profitability of the business operations and a lower efficiency in the capital accumulation cycle. So one can argue that accounting is the backbone of the business financial world. The major functions of accounting and their use for society can be divided into two broad categories, which will be discussed in the following paragraphs. The first accounting category, which is often referred to as financial accounting, is comprised of information that companies intend to make available to the general public to attract new capital investments and to support the business operations. Stockholders, creditors, customers, suppliers, and regulatory authorities need detailed information while dealing with a company. The business provides them with the required relevant information via annual reports and financial statements to reduce the information asymmetries which could result in worse creditor and stockholder relations and which could prevent individuals to invest in the company.Secondly...
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...reason of joining this profession. Some people will claim that when they were in high school, this was their best subject and they loved it and so they will need to major in it. I believe the best reason for majoring in accounting is because it has wide varieties of career path that one can major in. People should understand that this field is not all about debits and credits. It is more of a communicating language in the world of business and this is why many chief executive officers hold a degree in this field. In the day today life it is usually one of the most common undergraduate degree programs. The most important thing is to make certain that all of the people who are in this profession understand business and that is why many people who have ventured in accounting always have considerations for such posts. The most interesting part of this career choice is that most of the time the people who venture into it will always have the best job positions waiting for them because many people always have a notion that it is a difficult discipline. The employment opportunities are abounding for the graduates majoring in accounting. The government figures shows that at least 1.2 million of jobs are held by accountants every year. According to the Feldmann, 2009 and also the survey done by the Institute of Certified Public Accountants (AICPA, 2000) the graduates are...
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...Ethics Chapter Questions Chapter 1 1. Why have concerns over pollution become so important for management and Directors? Stakeholders increasingly expect that a company's activities respect their values and best interest. Companies are held accountable to stakeholders (i.e.: responsible for smog, polluted water, acid rain, and oil spills.) 2. Why are we more concerned now than our parents were about fair treatment of employees? Activist groups have increase spreading awareness, leisure time and disposable income increased allowing people to focus on other concerns beside livelihood. 3. What could professional accountants have done to prevent the development of the credibility gap and the expectations gap? They can focus on primary loyalty to the public’s best interest and practice principles of independence of judgment, objectivity and integrity. 4. Why might ethical corporate behavior lead to higher profitability? It’s more effective to focus on providing goods and services required by society efficiently, effectively, legally and ethically than to adopt the high-risk goal of making profit any way possible. 5. Why is it important for the clients of professional accountants to be ethical? An accountant is only as good as the information provided to him/her. We need reliable information to do our job appropriately and efficiently 6. How can corporations ensure that their employees behave ethically? Managers must be motivated...
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...Ethical Accountant? About eleven years ago, Enron, one of the world’s largest energy companies with 21,000 employees (Enron Corporation, 2012), collapsed. The whole nation was shocked as the investigation went on. “Ten years ago this week, the accounting firm Arthur Andersen sealed its fate when a few partners in its Houston office decided to shred documents related to the collapse of one of its clients, Enron” (Agnes, 2011). Found out that Enron scandal had close relationship with the fraud of the accounting firm Arthur Anderson, “another problem whose effects are becoming apparent today — moral hazard in the audit industry” (Agnes, 2011). Business and society take into serious consideration about ethics and integrity standard among today’s accounting firms and their accountants. Meanwhile, how to become an ethical accountant is drawing widespread concern. The first thing to figure out is why ethics are so important to every single accountant. To start with, accountant is actually a third party job working with clients and their private information. This information includes personal bank account number, social security number, and other information about their personal properties. Who would give all these sensitive data are to someone they don’t trust? Citizens will suffer if people who want to harm them get their private information. What’s worse, organization may face unfair competition due to the leak of company core data. Clients would like to trust the accountant who has...
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...Introduction The usefulness of accounting theory is evident at various levels within the accounting profession and society in general including, standard setters, accounting professionals and users of accounting information. This essay will address two key areas, firstly, a personal reflection on this course and why studying theory is essential for practicing accountants. The second part is a critical evaluation of the conceptual framework and why it is an essential part of accounting literature. Areas evaluated include the purpose and benefits of a conceptual framework, a brief history of it in Australia, principle based versus rules based standards and some criticisms of it are discussed. Personal reflection I must admit, when scrolling through the list of courses I have left to complete my degree Accounting Theory did not jump out as one I was eager to enrol in. This is in no small part due to my lack of appreciation of how knowledge of the development of theory can give context and power to understanding changes. Whereas before I was more about practice and ‘getting it done’, it has become apparent that theory generally is an intrinsic element in advancing our understanding of our environment, culminating in improvements in practice. It is not a means of simply explaining or predicting behaviour, nor is it there only to serve as a framework for further inquiry (although these are important benefits of theory). Theory has a much more significant and elegant role to...
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...SEMESTER 2 2011 CPA 118 ETHICS AND GOVERNANCE CPA - ETHNIC SEMESTER 2 2011 MODULE 1 ACCOUNTING AND SOCIETY 1.05 1.05 Part A: Ineraction with society Depictions of A/cting Depiction Defeating depictions defeat Fig 1.1 new bean counter How to become professional? 3 aspects 1.06 Recruiting the best Beard(1994),Smith and Briggs(1999) and Simnik and Felton(2006) Friedman& Lyne(2001);Albrecht and Sack(2000);Coate et al.(2003) Jeacle: colourful accountant linked to corporate collapses 1.07 Moral agency Biddle(2006) Value creation - key to maintain high standards Moral agent - refer to individual making moral judgement for others Moral agent theory based on concept " act appropriotely and professionally" 1.08 Technical functions and social impact Understanding A/cting A/cting defination - Macquarie Dictionary - Technical practice - bookkeeping Not Prefect def - AAA(American A/cting Association) -communication skill… 1.09 Social impact of A/cting + impact - based on historic A/cting info professional capabilities - technical knowledge,soft skill & experience 1.10 Social impact example - A/cting and the GFC "mark-to market" Lonergan (2009) - if A/cting causative factor in GFC 2008/2009 1.11 Q 1.1 Logergan 'standard setters'slow reaction only cause GFC ? NO How wisdom come out? - experience /knowledge Distinguishing feature - building relevant wisdom over time Parker et al. (1989) - induce other behaviour Miller(1994) - intrinsically and inredeemable social impact IMPACT Macro level:...
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...SEMESTER 2 2011 CPA 118 ETHICS AND GOVERNANCE MODULE 1 ACCOUNTING AND SOCIETY 1.05 1.05 Part A: Ineraction with society Depictions of A/cting Depiction=描述 Defeating depictions defeat =挫败 Fig 1.1 new bean counter How to become professional? 3 aspects 1.06 Recruiting the best Beard(1994),Smith and Briggs(1999) and Simnik and Felton(2006) Friedman& Lyne(2001);Albrecht and Sack(2000);Coate et al.(2003) Jeacle: colourful accountant linked to corporate collapses 1.07 Moral agency Biddle(2006) Value creation - key to maintain high standards Moral agent - refer to individual making moral judgement for others Moral agent theory based on concept " act appropriotely and professionally" 1.08 Technical functions and social impact Understanding A/cting A/cting defination - Macquarie Dictionary - Technical practice - bookkeeping Not Prefect def - AAA(American A/cting Association) -communication skill… 1.09 Social impact of A/cting + impact - based on historic A/cting info professional capabilities - technical knowledge,soft skill & experience 1.10 Social impact example - A/cting and the GFC "mark-to market" Lonergan (2009) - if A/cting causative factor in GFC 2008/2009 1.11 Q 1.1 Logergan 'standard setters'slow reaction only cause GFC ? NO How wisdom come out? - experience /knowledge Distinguishing feature - building relevant wisdom over time Parker et al. (1989) - induce other behaviour Miller(1994) - intrinsically and inredeemable social impact IMPACT Macro level: all types of business...
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...This essay will discuss the following main statement; the adoption of a proposed new look Code of Ethics, based on the international Federation Accountants’ code, will ensure that New Zealand Charted Accountants meet their ethical responsibilities. Within this essay an adverse position will be taken towards the previous statement. The international Federation of Accountants (IFAC) states that, professional standards and the code of ethics form important benchmarks that should be met by practicing accountants. Accountants should understand and apply them when conducting any type of work (Pickett 2005). The New Zealand Institute of Charted Accountants (NZICA) is a member of IFAC, as part of its member obligations NZICA has to apply the same standards as IFAC (nzica) . This is how the previous statement arises, due to IFAC recently going through a major revision of the code in the area of independence. (nzica) .This essay will appoint different issues and concerns about adopting a new code of ethics and how this change will actually affect the society. Such points are; personal moral judgment, ethical education being a factor of ethical responsibilities and unclear types of enforcement and points of the Code of Ethics. “Good ethics, whether at work or home, demands self-knowledge, Whereas some groups want to see ethics as a skill or a particular part of organizational transformation, practising good ethics ultimately comes down to you and how you make decisions.”(6). Moral judgment...
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...study. It will be noted that the first and second sections carry the bulk of the paper as the remaining sections will be referencing to the first two. Section 1 "Culture is the collective programming of the mind that distinguishes the members of one group or category of people from others ". (Hofsteed, 2011) It is always a collective phenomenon that can be connected to different collectives with each collective having a variety of individuals. If characteristics of individuals are imagined as varying according to some bell curve; the variation between cultures is the shift of the bell curve when one moves from one society to the other. The collective programming is an interesting term because as one belongs to the society, they are groomed and made to understand, consciously and unconsciously that what they are seeing and being taught is how issues in life need to be handled. It is only upon interacting with other cultures that the one dimensional worldview is realized. Based on the in-depth research done by Hosteed, all working cultures display one dominant trait or more. As we will describe later, the essence of culture is not what is visible on the surface. It is the shared ways groups of people understand and interpret the world. (Trompenaars & Turner , 1998) Hofstede has been...
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...The Role of Accounting on Business and Our Society Stephanie R. Phillips Professor Cedano Accounting 100 February 27, 2014 When most people think of accounting, they think taxes, but accounting is so much more than that. Accountants are responsible for maintaining the financial health of our businesses. They also practice with an ethical standard that protects the public from unfair and one sided business and government practices. So next time you take your box of unsorted receipts to your tax preparer be sure to thank them for what they do the rest of the year. The four financial statements in the accounting process are an income statement; owner’s equity statement; balance sheet; and statement of cash flow (Weygandt, Kimmel, & Keiso, 2013, p. 21). Each of these statements is vital to internal and external users in order to provide relevant financial data. An income statement lists revenues and expenses that result in the net loss or income of a company during a given time frame, usually at the end of the month and the end of an accounting cycle. The owner’s equity statement accounts for any change in equity, it also records all investments and drawings made by the owner. The balance sheet shows a company’s assets, liabilities, and owner’s equity. In essence, the balance sheet shows what a company has and what a company owes. The statement of cash flow accounts for any cash in, out, or invested during the designated time period. The statement of cash flow must account...
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...Chapter 1 THE PROBLEM AND ITS SETTING Background of the Study The business world changes in every tick of the clock. As a result, businesses tend to rise or fall and the stability of the business enterprise is always at stake. But, business sustainability depends on its financial performance and the people governing the business. And to measure whether companies are capable of handling potentially unexpected corporate risks, companies’ accounting transactions are reported through financial statements. These financial statements are the masterpieces of accountants who analyze the transactions and measure the financial stability of the company if they are sustainable enough to defray any business risks. However, in presenting these statements, some accountants may mislead owners or decision makers through financial mistatements which affect the business itself. Because of this accounting malpractice, it may cause to a major problem that will put CPAs into grave misconduct such as allegation of fraud and engangement in corporate accounting scandals. Accounting malpractice are affecting the businesses globally. It decays the economy of the country and slowly creeps into different industry until they are no longer outlive in the business world. In fact, the Report to the Nations on Occupational Fraud and Abuse in Asia-Pacific Region led by Wells (2010) found out that the Asia Pacific median has a loss that was significantly higher than the global median loss of $160...
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...This essay will discuss the following main statement; the adoption of a proposed new look Code of Ethics, based on the international Federation Accountants’ code, will ensure that New Zealand Charted Accountants meet their ethical responsibilities. Within this essay an adverse position will be taken towards the previous statement. The international Federation of Accountants (IFAC) states that, professional standards and the code of ethics form important benchmarks that should be met by practicing accountants. Accountants should understand and apply them when conducting any type of work (Pickett 2005). The New Zealand Institute of Charted Accountants (NZICA) is a member of IFAC, as part of its member obligations NZICA has to apply the same standards as IFAC (nzica) . This is how the previous statement arises, due to IFAC recently going through a major revision of the code in the area of independence. (nzica) .This essay will appoint different issues and concerns about adopting a new code of ethics and how this change will actually affect the society. Such points are; personal moral judgment, ethical education being a factor of ethical responsibilities and unclear types of enforcement and points of the Code of Ethics. “Good ethics, whether at work or home, demands self-knowledge, Whereas some groups want to see ethics as a skill or a particular part of organizational transformation, practising good ethics ultimately comes down to you and how you make decisions.”(6). Moral judgment...
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...Why accounting is important The significance of accounting has never been more needed than today in the market, with the economic crisis and the worlds market in decline. Maybe a lot of people are losing their jobs in many fields, accounting stays is staying strong. The reasons why this is happening is because accounting is a very important aspect in the economy and the society. If we ask an accountant, why we need accounting, he will say that is the only way to grow our business and flourish. It is the backbone of the business financial world. It was created for the development of trade and commerce during the medieval times. Italy was the first country that had made a record of accounting entrees, and it was published in 1494 by a Venetian Monk. Record keeping has been around as long as the trade and business industries. A fact which is interesting is that the principles upon which the first accounting practises were established, has changed very little in the many hundreds of years that accounting is been in use. The process of recording those transactions has evolved the past two hundred years. Thanks to the creation of computers, many of the bookkeeping transactions that are very important can be performed by data entry clerks, but the result is still the same: it gives the financial statement the businesses needs to make decisions about the current status or projected future health of the business. The accounting is divided into two categories: financial accounting...
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...While pursuing a career in the accounting field, it is almost vital to become a Certified Public Accountant to advance further. Not only do others respect and admire your Accounting education, “CPAs achieve a level of expertise and proficiency beyond that of a “standard” accountant-proudly earning them the designation of CPA” (NASBA). While preparing for the CPA exam, you further your accounting knowledge with extensive studying of vigorous material. In addition to prestige and respect, by becoming a CPA, you stand out to potential employers. Earning your CPA proves you have the commitment to your career and will help your career advancements as well as job security. CPAs have a variety of talents that many businesses look for. Many prospective employers are interested in individuals who have knowledge in Auditing, International Financial Reporting, and Tax Advisory Services, which are all topics that are tested on the CPA exam. The CPA exam tests on IFRS and GAAP which will help enhance your knowledge in international accounting. The U.S. is in motion to prepare to adopt IFRS and this extensive knowledge will help you prepare for growing globalization and a move towards IFRS. Holding the title of CPA, coupled with international accounting knowledge, almost guarantees a higher salary. According to the 2009 Robert Half Salary Guide, a CPA license can mean a different of 10% between them and their non-licensed peers (NASBA). Furthermore, there are many unique privileges and opportunities...
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