Pressure on Accountants from Management - Research Paper Example

PRESSURE ON ACCOUNTANTS FROM MANAGEMENT Pressure on accountants from management Accountants play a very important role in the success of business organizations. Failure of an account to undertake their responsibilities diligently might in fact lead to the failure of the whole business organization. This implies that the accounting career has allot of responsibilities that comes with it. As a result of being relied upon accounting is one of the most attractive careers currently available globally. Apart from being a marketable career accounting is also a highly paying career. Accountants are always highly compensated for their services whenever they offer their services to business organizations. However, the thing is that having a career in accounting does not only come with advantages. The career also has some challenges. One of the most common challenges faced by accountants in their careers is the challenge of coping with pressure from organizations’ management to create balance sheets and financial statements that can cope with the current high rate of competition in various industries and anger for success. This paper aims at discussing pressure from management as a challenge commonly faced by accountants. Being an accountant, there are always many ethical issues that are always surrounding everything that you do. Many business managers are usually willing to do anything so that they might emerge as successful. As a result, there are always some stress and pressure that is placed on accountings when it comes to their responsibilities of creation of financial statements and balance sheets. Accountants are always expected to give a true and clear report on an organization’s profit, liabilities and assets. It is always a challenge in making sure that that record on a company’s profit, assets, and liabilities even in situations that the true records might not be very good in terms of the success of the business organization (Woolf & Hindson, 2013). The situation is always further amplified if the mangers involved insist that the records should be altered so that they can serve the interests of the business organization. In such a situation an accountant will find themselves having the dilemma to choose between following the ethical standards expected of them as accountants and altering the records in order to please their employers. If they choose to alter the records they might end up losing their credibility if in any case it is realized that they had involved in unethical conducts. On the other side if they decide to go against the will of the managers and deal with the right record they might risk losing the contract that they have with that particular business organization. What is clear that when an accountant uses altered record the company involved might experience short-term prosperity, but the long term effects of such involvements might not be desirable, especially when such practices are discovered by the Securities and Exchange Commission discovers the fraud (Chorafas, 2008). Legal actions might be taken against the company and the accountant that was involved in the preparation of the balance sheets and financial statements. Another thing that can result in pressure to an accountant in their career is the fact that they are always expected to act as whistle blowers in organizations that they work for. Whenever accountant realizes that there are violations of accounting policies they are always expected to reports the same to the Financial Accounting Standards Board. This should take place regardless of whether some members of the management team are involved or not. The result of an accountant reporting the occurrence of accounting irregularities to Financial Accounting Standards Board might be devastating to a business organization. This means that such an action will not go well with the member of the management, especially those who were involved in such scandals (Kieso, Weygandt & Warfield, 2012). Sometimes accountants might find themselves having to fight the pressure of concealing such information by members of the management team who happened to be involved in the accounting irregularity scandal. Even those not involved in the accounting irregularities might pressure for the concealing of such practices with the fear that it might ruin the organization’s reputation. On the other hand there are ethical implications that an accountant can face in case they come across accounting irregularities and fail to report them to the Financial Accounting Standards Board. If in any case it is realized that an accountant is involved in such irregularity it is obvious that their reliability would be questionable henceforth. Involving yourself with accounting irregularities will not only affect your credibility but also the credibility of the accounting firm that work for. As a result a person might end up losing many other job opportunities that they could have had as a result of bad reputation associated with the involvement in accounting irregularities. It is not a surprise that they can even lose some of the contracts that they already had with other business organization in case the information about them being involved in accounting irregularities go viral (Needles, Powers & Crosson, 2011). Greed is something that accountants come across frequently in their line of work. Greed usually comes in many forms, especially when there is money involved. It is true that whenever there is involvement of money in anything many people usually find themselves having the dilemma of choosing between choosing their ethical standards and their personal desires. Working under a management which is particularly greedy might make it even worse for people who are not strong enough to choose their ethical standards over their personal desires. Working under such management can at times be very stressing and pressuring especially considering the fact that it will be hard to continue working with them if you do not give in to their greed (Neu & Graham, 2004). However, one thing is that numbers never lie will definitely be realized by someone someday. At that point an accountant will be the most suspected persons, even if he only had to do it under threats. The best way to do this will be to make sure that you as an accountant to stick to the ethical standards expected of you for the sake of keeping your good reputation. The unfortunate thing about dealing with corrupt and greedy management is that even if an accountant chooses to stick to the ethical standards expected of them, they can always pull strings and make it look like the accountant is the culprit. Whenever there is an accounting misappropriation or irregularities accountants are always the first people to be put in the spotlight. This might particularly be very destructive to an accountant career and reputation if such allegations get to the public (Srinivasan, 2005). Even if the names of such accounts might be eventually cleared, it will be hard for them to regain the confidence of both their former clients and potential clients. In some cases accountants might get themselves in situations where they are approached by members of management of the organizations that they work for with pleads that the accountant do some omission of some entries from the balance sheets and financial figures that their development. To many people, omission might not seem like a big breach in the accounting ethical standards and expectations. Finding yourself in such a situation as an account will prove to be very tempting. Some might even argue that there is no direct manipulation of the figure that is involved. However, the fact is that by omitting some figure from financial record the final outcome will be affected (Foster & Bolt-Lee, 2002). The fact that the final outcome will be affected is a clear indication that omission is just as big as the other breaches of ethical standards in accounting careers. In such a situation, an accountant should make sure that they are safe by just handling omission just like the other ethical breaches. When it comes to ethics, there are never major or minor breaches. Even a breach that is considered to be minor can be very punishing to an accountant and their career. However, faced with such a situation they will still face the dilemma of being loyal to the company’s management of sticking to their ethical standards. Being an accountant it is always expected that one works hand in hand with whichever individual are responsible for the management of specific business organizations. Sometimes it becomes challenging working with a manager who is no particularly willing to cooperate with the accountant in the process of making the balance sheets and other financial records. This implies that it will be particularly hard for there to be any meaningful result from such involvements. However, even if the outcome might be meaningful it might take an accountant a little bit longer to have to complete dealing with the financial records. When an accounting is working for a specific organization an accountant can come across a number of irregularities. The irregularities can come in the form or inflation of an organization’s income or alteration of some figures. Sometimes they can even be approached by a company’s official being asked to alter some figure so that they can show higher profits. This might be of benefit to the business organization, but only for a short period of time. Some people might think that by changing these figures they can end up having an increasing in their market share. However, the truth is that such influences are always short lived and results are always catastrophic in the long run. As an accountant, you have the responsibilities of advising such officials against such involvement (Hopwood, Unerman & Fries, 2010). The problems always come when the officials involved are not willing to heed to the advices you offer to them as a skilled and qualified accountant. When offering accounting services to a certain business organization, it is important for there to be proper communication between the accounting department and the overall management. For there to be proper communication between the two sides there need to be willingness from both sides to make sure that there is a proper communication process between them. However, the problem here comes in a situation where the management sides are not willing to institute a proper communication between them and the accounting department. There are a number of reasons as to why some managers can opt to withhold some information that might be very important to the financial records and balance sheets making process (Carmichael & Graham, 2012). The most common reason is that they might be having something that they hiding and know that if they give the information their secret might be realized. Another problem that an accountant can have that can have relating to an organization’s management relates to revenue issues. It is always a challenge when it comes to determining things that can be categorized as revenues when dealing with an organizations account record. The problem might even become more complicated if there are any taxes involved. Many companies have specialized in altering their records so that they can evade taxes. The challenge always presents itself when an accountant realizes that an organization has been evading taxes. An accountant can also be approached by an official so that they can be involved in the tax evasion process. As an account this will be highly unethical. However, if they decide to be involved, they will be seen as heroes in the organizations that they work for (Oate, Mitschow, Schinski & Colson, 2003). At such moments, they usually find the dilemma of choosing between remaining ethical and cooperating with the organizations’ management. It is clearly evident that there are many challenges that are involved in the accounting career. As seen in this paper, it is not always an easy thing dealing with the management officials the organizations that an accountant happens to work with. The management has to be willing to make the work of accountants easy. Accountants are always among the first people to realize that there some financial foul play in an organization. The thing is that accountants should stick to their ethical standards and expectations regardless of the situation that they are facing. By maintaining high ethical standards an accountant can be able to have a hard time dealing with unethical managers, but eventually will be able to keep their reputation intact. References Carmichael, D. R., & Graham, L. (2012). Accountants Handbook, Financial Accounting and General Topics. Hoboken: John Wiley & Sons. Chorafas, D. N. (2008). Risk accounting and risk management for accountants. Amsterdam: Elsevier/CIMA Pub. Coate, C. J., Mitschow, M. C., Schinski, M. D., & Colson, R. H. (2003). What students think of CPAs: Is the stereotype alive and well. CPA Journal, 73(8), 52-55. Foster, S., & Bolt-Lee, C. (2002). New competencies for accounting students. The CPA Journal, 72(1), 68-71. Hopwood, A. G., Unerman, J., & Fries, J. (2010). Accounting for sustainability: Practical insights. London: Earthscan. Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2012). Intermediate accounting. Hoboken, NJ: Wiley. Needles, B. E., Powers, M., & Crosson, S. V. (2011). Principles of accounting. Mason, Ohio: Cengage Learning. Neu, D., & Graham, C. (2004). Accounting and the holocausts of modernity. Accounting, Auditing & Accountability Journal, 17(4), 578-603. Srinivasan, S. (2005). Consequences of financial reporting failure for outside directors: Evidence from accounting restatements and audit committee members. Journal of Accounting Research, 43(2), 291-334. Woolf, E., & Hindson, M. (2013). Audit and accountancy pitfalls: A casebook for practising accountants, lawyers and insurers. Hoboken, N.J: Wiley. Read More