Accountancy is not a profession - Essay Example

? Accountancy is not a profession Introduction Accounting or accountancy is the procedure that is used for conveying necessary business information to various users (Elliot and Elliot, 2004). This communication takes place mainly in the form of financial statements, which show the economic resources that are controlled by a firm’s management. Here the skill lies in choosing and conveying the information, which is relevant and reliable to the user. According to the American Institute of Certified Public Accountants (AICPA), accountancy can be defined as “the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof” (Accounting, Finance & Capital Budgeting, nd., 1). Early records show that accountancy was used primarily for maintaining business related data on behalf of businesspersons and the only account viewer were record keepers who maintained accounts. In the current context, accounting is referred to as “the language of business” (McGrath, 1921, 5) since it is a vehicle primarily used for publicizing financial data about a business firm to various interested people. There are different theories that try to elucidate the development of professionalism within accountancy and whether it can be taken as a profession or as a trade. As per the functionalist theory, a profession starts only when there are a group of people practicing specific techniques based on specially designed training. They are viewed as forming a group to mutually assure their skill and competence and maintain high standard In terms of professional practice and character (Carr-Saunders, 1928). In this context, the paper will examine whether accountancy is a profession or a part of the trade market primarily from a functionalist perspective. Discussion Accounting as a profession has been analysed from various perspectives and different settings. Various researches have used the functionalist, critical and interactionist perspectives to elucidate the development of professionalism within accountancy even though it had mainly trade market associations. The functionalist theories claim that the core of professionalization is based on any profession‘s capability to create professionals with a common set of skills and knowledge that would work towards serving the society selflessly. The interactionist perspectives on the other hand suggest that professions are interest-based groups that aim at persuading the society members to seek their advices/services for protecting and furthering their own interests. The critical perspective, which is modern in form, analyses the process of professionalization in the context of the dynamics that exists between the state and a profession and the professions’ aims at gaining a common social movement within the boundaries of power relations. As per this perspective, professions delineate and defend members’ interests by forming a kind of professional monopoly using exclusion and closure to stop non-members from starting professional practice (Sian, 2006). Willmott (1986) in his studies have shown that functionalist and interactionist theories were dominant prior to the 1970s, while the critical theories came into existence more currently. As per the functionalist paradigm, the specialized skill and knowledge of the members of a particular profession enables them to provide high-skill and honourable services to the society, while the interactionist theories consider professionalization as an outcome of symbolic interplay where various meanings are negotiated in order to give the professions a certain coveted image (Walker, 2004). These studies are mainly based on sociological theories suggested by Karl Marx and Max Weber that tend to analyse the process of professionalization within broader realms of power relations. While the interactionist perspectives subjects the process of professionalization process into a broader realms of power structures that include public, state, and other service users that assist or restrain the process of professionalization process (Willmott, 1986). From the critical perspective, owing to exclusion and closure, the process of professionalism involves a great deal of dynamics that takes into consideration state and other parts of the society (Uche, 2007). In the context of accountancy, functionalists tend to view it as a job that that is pursued mainly for others and not only for themselves, and mainly focus on the belief that accountancy professionals acquire societal recognition mainly because of the special set of skills and knowledge they possess and solidarity of the group members (Halmos, 1970). However, on closer examination it is has been seen that some of these functionalists have acknowledged the fact that skill acquisition may not be the only factor that determines the eligibility of members for any given profession, including accountancy (Uche, 2007). Therefore, we find that the functionalist’s perspective fails to explain in a comprehensive manner the reason behind the claim that accountancy is a profession. In interactionist theories, more attention is generally given to the process of professionalising accountancy, rather than focussing on the product. As per the interactionists’ claims, all professions, including accountancy, primarily aim at safeguarding the group’s interests that sometimes collide with the interests of the society at large (Bucher and Strauss, 1961). Some interactionists have contended that there is a lack of homogeneity within the different professions, and in this regards it has been suggested that relative homogeneity is more of an assumption within professions, which may not be entirely correct owing to the varying values, identities, and interests. These varying aspects tend to become patterned and co-related, where coalitions are formed even between opposing forces (Bucher and Strauss, 1961). However, interactionists’ theories show lack empirical evidence hence cannot be taken as a plausible explanation behind the claim that accountancy is a profession (Saks, 1983). Furthermore, while interactionists acknowledge involvement of politics within the process of professionalization, they fail to analyse the constitutional conditions under which the different professional groups would function successfully (Willmott, 1986). In order to have a better understanding of the process of professionalization, some experts used a critical approach based on neo-Weberian theories, where the Weberian principles of social exclusion and closure are applied to the development of professionalization. This theory of social exclusion and closure delineates a setting where a specific group aims at controlling market conditions that would benefit them (optimise rewards) and would delimit access to certain opportunities (socio-economic) only to the members, especially when faced with threat of potential or actual competition from outsiders (Uche, 2007). These neo-Weberian theorists tend to focus on the various restrictions (as for example entry level qualification rules, examinations, and apprenticeship) that professionalization groups create in order to erect social exclusion and closure. However, a closer observation reveals neo-Weberians also lack substantial empirical evidences to validate their claims. Therefore, their theories provide very little improvement over the theories offered by interactionists, hence failing to support the claim that accountancy is a profession (Uche, 2007). The constitutional conditions under which the process of professionalization takes place need analyses that are more stringent. Proponents of neo-Weberian school of thought also fail to take into consideration the question whether the role of professions within realms of society are sustainable empirically. From the above discourse, it can be suggested that the existing theories fail to derive whether accountancy is a profession. From a review of the definition of accountancy, it is clear that this process involves the communication of financial data to the users that may or may not be of any social benefit and may not involve the use of any specialised services. While developed countries often have clearly defined accountancy professionalization groups that practice social exclusion and closure, a majority of the developing nations lack strong professional accountancy bodies at local levels exercising professional monopoly. Thus, for majority of the developing nations, from an overall perspective, accountancy is not a profession and remains merely a part of the trade matter, dealing with interpretation and communication of business related monetary information. References Accounting, Finance & Capital Budgeting, nd., [Online] Available at http://www.hkiaat.org/images/uploads/articles/AAT_Paper_2_Finance.pdf [Accessed 31st January 2012] Bucher, R. & Strauss, A., 1961. Professions in process. The American Journal of Sociology, 66 (4), 325-334. Carr-Sanders, A., May 1928. Professions: their Organization and place in society. The Herbert Spencer lecture delivered at Oxford, Clarendon Press, Oxford. Elliot, B., & Elliot, J., 2004. Financial accounting and reporting. Prentice Hall, London. Halmos, P., 1970. The Personal Service Society. Constable and Co. Ltd, London. McGrath, T., 1921. Mine accounting and cost principles. McGraw-Hill Book Company, NY. Ramirez, C., 2001. 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