Accountancy is not a profession - Essay Example

?Accountancy is not a profession Although the status of accountancy as a profession was started to be challenged around the start of the 20th century, yet for the most part, accountants in the 20th century were organized into a kind of profession that was self-governing. In the period between 1933 and 1934, there occurred tremendous growth in the financial markets and their structure and level of organization improved considerably. That growth can be attributed to the audited financial data’s reliability to a considerable extent (Antle and Suner, 2007). However, over the last decade, a wave of scandals has shaken the structure of accountancy as a profession. The debate surrounding the professional status of accountancy can be traced back to the early 20th century. The supreme court of one of the states in the early 20th century referred to accountancy as a “business” that did not benefited the public like the “profession of law”, and further said that the laws of accountancy “have been passed in the interest of those engaged in the business and for their protection and advantage rather than in the interest of the public welfare” (Turnburee, 1946, p. 47). Profession has been defined as “a calling, occupation, or vocation distinguished from a trade or handicraft” (Webster cited in Turnburee, 1946, p. 47). On the other hand, accountancy has been defined as “the art as well as the science of recording, classifying, summarizing of business transactions in terms of money within an accounting or financial year, with the help of principles and techniques” (Banerjee, 2010, p. 4). Accounting has also been defined as a language of business commonly known in both the developing and the developed countries (Weber, 2013). There is lack of legal protection for the title of “accountant” as there is for the word “solicitor”. As an accountant, anyone can establish a business, though there are limitations in the nature of work that the accountants are allowed to do legally (Dodge, 1997, p. 9). For instance, an accountant without the requisite qualifications are not legally permitted to conduct a limited company’s audit. In the last few decades, accountants have generally gone too far in search of standards. Since professionalism comes with certain standards, accountant developed organizations with the sole function of writing standards since it was a legal liability. Formation of such organizations has increased the demand of clarification of the rules. When the accountants get any pressure from the management or are sued, they tend to approach the rule-making organizations and express their concern over lack of clarification of rules in particular cases. Rules are always secondary to professional judgment. “In the big picture, this shift in emphasis from judgment to rules has damaged their professionalism. No profession can rely on rules as the main basis for its work” (Sunder cited in Antle and Sunder, 2007). The professional status of accountancy has also been challenged by many accountants. For example, the accountant David Logan at the IRIS World Event arranged at Twickenham warned the fellows that accountancy is increasingly becoming a trade rather than a profession; “I used to have seven audits, but I could do 95% of my business without being registered. We’re competing with anybody who can set up as a bookkeeper. If someone is made redundant and sets up on their own, you can’t compete with that” (Logan cited in Stokdyk, 2012). The recent changes made to the audit exemption criteria have made things even worse as the firms have started to do the works of accountancy without an accountant. These days, many large companies do such works as filing the accounts and bookkeeping without the help of accountants and still no objections are raised by the government (Stokdyk, 2012). Although the government provides business with the relaxation of red tape, yet the accountants are facing restrictions from various avenues for making income. Another accountant Paul Scholes encouraged the accountants to continue their practice as a business rather than a profession in these words, “My view is that you shouldn’t feel bad about running the practice as a business. We should not feel that as a profession we are elevated above other businesses. I don’t see any difference” (Scholes cited in Stokdyk, 2012). Critical accounting originates in the critical disciplines’ history that challenge the dominant social view’s hegemony (Tilling and Tilt, 2002, p. 2). Marx places economy at the center of the sociological theories. According to Marx, society is the combined form of a social superstructure with an economic base. The very economic base determines the rest of the social structures that include but are not limited to politics, religion, and ideology. The earliest development of the economic and social theories of Marx is found in The German Ideology in which, Marx has criticized the Hegelian philosophy. Marx considers the history dependent upon human existence, that have their subsistence means and whose way of life is determined by the resulting means of production (Marx, 1998, p. 37). Economy resulting from this means of production leads to the formation of property and the division of labor (Sackrey and Schneider, n.d.). Marx proposes that the political and social structures have been obtained from the economic productive means (Marx, 1998, p. 43). The means of production also determines consciousness which makes the ideology derived from consciousness a component of the superstructure of the society. The society’s economic base that includes the labor’s division determines this social superstructure. Weber inverts the economic determinism of Marx by considering religious ideology influential upon the economic social structure. Weber’s theory considers religion the base and economy as the superstructure. Therefore, the sociology of religion best explains the economic forces. Weber says, “Man does not 'by nature' wish to earn more and more money, but simply to live as he is accustomed to live and to earn as much as is necessary for that purpose. Wherever modern capitalism has begun its work of increasing the productivity of human labor by increasing its intensity, it has encountered the immensely stubborn resistance of this leading trait of pre-capitalistic labor” (Weber, 1930, p. 61). Weber does not consider the economically conditioned power as power in essence. He says that “Man does not strive for power only to enrich himself economically. Power, including economic power, may be valued for its own sake” (Weber, 1968, p. 926). One fact commonly witnessed in the works of most of the old and renowned philosophers, theorists, and economists is their comparison of the practices of accounting to the practices of business, of which some are interpreted as capitalist (Chiapello, 2005, p. 263). Concluding, on one hand, the status of accountancy as a profession has become weaker and weaker over the passage of time; on the other hand, accountancy as a trade or a business has flourished. Many economists and accountants mutually consent that accountancy as a business has matured. This can be attributed to various factors that include but are not limited to lack of proper regulation, and role of economy in the business, trade, and the society as a whole. Accountants have lately started to pay more emphasis on the clarification of rules than their professional judgment to identify the correct course of action in a particular situation, which in turn has sapped their professionalism. Marx considers economy as the base of the superstructure of society whereas Weber considers religion as the base and economy as the superstructure. Contemporary theorists are trying to modernize the Marxist framework so that it a viable model maintains wherein capitalism can be thought about. References: Antle, R, and Sunder, S 2007, What happened to the accounting profession? Yale Insights, [Online] Available at http://qn.som.yale.edu/content/what-happened-accounting-profession [accessed: 16 February 2013]. Banerjee, BK 2010, Financial Accounting: Concepts, Analyses, Methods And Uses, 1st ed., New Delhi: PHI Learning Private Limited. Chiapello, E 2005, Accounting and the birth of the notion of capitalism, Critical Perspectives on Accounting, Vol. 18, pp. 263–296. Dodge, R 1997, Foundations of Business Accounting, 2nd ed., International Thomson Publishing. Marx, K 1988, The Communist Manifesto, ed. Frederic L. Bender. NY, NY: W.W. Norton & Co. Sackrey, C, and Schneider, G n.d., The Marxist System, [Online] Available at http://www.facstaff.bucknell.edu/gschnedr/marxweb.htm [accessed: 16 February 2013]. Stokdyk, J 2012, Accountancy becoming a trade, not a profession, Accounting Web, [Online] Available at http://www.accountingweb.co.uk/article/accountancy-becoming-trade-not-profession/532393 [accessed: 16 February 2013]. Tilling, M, and Tilt, C 2002, Alas poor Critical Accounting, we knew him, Karl, [Online] Available at http://www.flinders.edu.au/sabs/business-files/research/papers/2002/02-03.pdf [accessed: 16 February 2013]. 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