The Role of Accounting in Society - Essay Example

HЕ RОLЕ ОF АССОUNTING IN SОСIЕTY Student’s Name Institutional Affiliation Date ТHЕ RОLЕ ОF АССОUNTING IN SОСIЕTY Introduction Accounting plays a major role in the modern society, for men and women with big ambitions like aiming top positions in business fields, industries, government and management they will require to have accounting knowledge. Every businessman must have accounting knowledge even if it means basics only from the person operating a small shop to the leader of the government. It is vital in every field on our society, even if it means using pen and ink to keep records or using advanced machines and computers one must possess accounting knowledge to be able to deal with these records (Richmond 2007 p.131). Large businesses and small ones must acquire people with accounting knowledge to be able to operate their businesses with ease and having a good record of how the business is running. The components of accounting ones grouped together will involve collecting, analyzing and then information will be communicated in order to understand accounting and the societal role it plays we need to look at it from a social perspective. Accounting is a crucial part of a business in that it portrays the progress of a business after computing figures showing predictions in future and in some cases applied in gambling (Sonja Gallhofer et al, 2005) Every place of business you go you will find people filling in ledgers, receipts, invoices among other books, these among many others consist of accounting books. Taxation also depends on accounting where businesses will have to produce their financial documents audited for tax computations. Accounting is a fast growing field where supply of accountants is less than the demand, countries are expanding their economies, new companies are being opened together with new businesses and in all these they must acquire people with great expertise on accounting, where they can be able to collect analyze and compute this information so as to advise the management on the progress of the business whether they are using manual or technological ways to do these computations (Richmond 200.p.131). Some businesses run branches all over the world or in certain countries where in every brand there will need to be an accountant to handle the field, those rising to senior positions in these companies mostly will have accounting knowledge since accountants are equipped with better knowledge of running businesses and management methods. Private accountants and public accountants serve various functions in an organization or business, government institutions, those that are nonprofit making such as churches, schools among others will be required to hire public accountants. For accountants to provide their accounting services these institutions are subjected to a fee as the case applies to doctors lawyers and other professionals. Bigger firms will hire accountants who are professional as part of the staff and will pay them salary but they can also work as public accountants, tax services and these public accountants also mainly do auditing (Timothy, 2007p.151). In any organization whether single business, partnership, company or nonprofit making organization handling of financial records is mainly done by private accountants. Industrial accountants are hired by manufacturing companies, a government will also require accountants since it has state owned corporations and they have branches countrywide. Both private and public accountants in their work will tend to specialize in a specific field or a specific service in accounting as prescribed by the company or institution (Elliott, G., Fourali, C., & Issler, 2010)They will specialize in a certain employment field such as transport, public utilities or a specific manufacturing branch. Apart from private and public accountants, business organizations hire some other general types of accountants who include; teaching accountants, internal accountant, government accountant, cost accountant, control accountant and managerial accountant. The business organization will hire an accountant depending on the function he will be serving. Well organized management is crucial to any business organization. A manager can be selected from a group of accountants and trained to become a managerial accountant, he will be required to learn the company and all its aspects products, equipments, people and plants. Skills of administration and responsibility of management is what should be known when handling issues. Records of financial information and data is required and a person to do this job is needed, after the data is collected and recorded a person to interpret the operational results is also required so as to make plan and recommendations which will result in actions. The company’s operation records are kept by the controller and he is the one responsible, he is not only entitled to deal with finance (Gallhofer et al.2005 p.5). Hiring a certified accountant who is well qualified to deal with finance matters is the best consideration every business organization should have. Business organizations will go for professionals to work in the accounts department. Some of the businesses will hire accountants because they are not experts in accounts field. Some accountants will do the individually for various clients. Preparation of tax is a common service that is required by businesses and individuals where some of the accountants will demand to be paid hourly where others monthly or per contract (Anthony Stuart Burchell eta l, 2006). Payroll preparation is also another field where professional accountants are required. Conveniently, large businesses will have to operate smoothly and ensure all their employees are paid on time and hence will seek the services of these accountants. The accountants will often produce quality work and with great convenience. Due to technology and emergence of big business organizations, big companies and even the small ones have adopted the advanced ways of dealing with accounting problems, Programmes have been developed by information technology experts partnering with accountants to make accounting work much easier. QuickBooks, sage financial controller, pastel accounting, peach tree are among software that has been developed to create ease in accounting (Carmichael 2003 p.7-9). Though technology provides fast means of generating accounting reports, it will require people with accounting professionalism to deal with accounting matters. When a business organization is able to acquire these software and hire professionals it can be guaranteed of better results which will be produced in time. Internet also provides online accounting services where firms will provide accounting services online to their clients. These professionals may work from a centralized location or mar branch out to offer services to their clients across the globe, communications between the accountants and the clients will be handled through electronic mediums and work will be done in accordance to the client’s specific needs Chapman, C. S., Hopwood, A. G., & Shields, M. D. (2009), Companies or organizations which specialize in business accounting will provide the best professionals to deal with your accounting needs. Some professionals will have specialization in a certain finance field, to make sure you hire the right person to deal with your company’s financial matters ensure you have come up with a plan and reasons for hiring such a professional. For example if its tax matters you will need a tax expert and where you require payroll assistance you need to get an expert in this field (Kyriacou 2007 p. 4). Communication is a crucial element in any business organization so that it functions effectively, different segments or groups whether political social economic and organizational groups will require accounting in their day to day operations in order to measure their growth and development, accountant will assist largely in the various ways such as making decisions which are informed so as to enable organizations to make well use of the scarce resources and make future predictions about the business or the activity they are dealing with. Information based on accounting can be potentially influential to the society as it affects everybody as illustrated in (Philip 2002 P. 50) This is where after the accounts were computed and losses were realized it justified that the only option remaining was to close the coal pits which led to an impact on jobs to those who were employed there electricity prices and taxation. Accounting has socially been constructed as it is being used by people from all walks of life, due to its non theoretical nature unlike other professions it has proven more of an art than a science, people have relied on accounting information to make serious and bold decisions due to this characteristic. Traditionally, Accounting has evolved due to developments in nature of businesses where both the society and practices applied in business have changed where complex business transactions will be involved. This will imply that traditional methods of accounting will not apply in some instances where there emerge new business sectors globally, leasing is a good example if a business emergence where if accountants are applying old principles of accounting they will not have the knowledge of how to account for the transactions related to it (Thukaram 2007 p.11). Due to these changes adapted as new developments emerge there develop loopholes such as duplications and manipulation leading to accounting investing much money and due to the nature of accounting being an art and not a science. Accounting faces critics from the society as it fails to be more adaptable and responsive so in order to implement the theory it has taken a number of initiatives to restore the position it had in accounting principles so that accountants can apply certain laid rules and guidelines when faced with certain circumstances (Charmichael 2003 p.2). A business has different stakeholders in which their interests must be taken into account who include customers, suppliers, shareholders among others, this automatically brings together the business organization and the society and will greatly help it to reduce financial risks and to make final decisions which are sound. Today’s accounting tries to deal with different aspects related to the society such as environmental and social accounting to deal with various aspects affecting the society. Environmental friendliness must be taken into account by any business and the society holds these organizations responsible for any economic activities they undertake. Environmental accounting will be required when an organization faces pressure from the society due to increased pollution which may be caused by mass production and hence will be required to minimize pollution (Reckers 2006 P. 87). Different countries apply different accounting practices due to emerging conflicts which may be either stakeholders of a government, shareholders of these organizations and management of these business organizations. The business will apply those principles that best balances the interests of these parties and those that will generate the desired results. Accounting helps society directly and also indirectly as we are going to see in the following points; accounting it that part of art of education that will promote intelligence in the society, effective use of resources can be achieved where one can be able to determine his income and expenses and come up with the net profit he is getting. Accounting is a major source of employment to the society where it equips someone with knowledge of business and new professions, it also helps people to be confident in what they are doing, accounting teaching, accountants themselves publishers writers and auditors are all employed due to accounting expertise ( Steven 2013p.158).Accounting also provides good management in handling of money and corporate finance which is achieved by proper records; big organizations never take chances so they have to know their assets and liabilities on daily basis. Accounting creates wise people which promote comfort and peace among the society. According to Mook (2007. p.92), accounting is the major part every organization must embrace in order to excel, lack of accounting knowledge in a business will create a situation where the management does not even know the direction of the business not only the actions needed to be taken to improve its development. Since accounting is one of the best careers in the world, accountants should operate with due diligence in handling financial matters and help businesses in planning their future. An accountant should apply his training, education and experience to the society to enable its development, they should portray expertise in fields relating to finance, taxation and cost accounting, budgetary policies together with economic policies. Accountants should ensure proper maintenance of books of accounts which will assist in proper decision making and control of the organization. Ensuring all financial documents reflects true and fair view of the financial position of the business, tax services should be handled with care to ensure good relations with the government and other authorities and the accountant should be able to provide consultancy services where he is required to do so by the management. Conclusion In conclusion, business field is not only the field where accounting is important, in day to-day lives of the society it also plays a major role, people everyday apply accounting skills and make decisions which are finance related in their investment options, where one requires to apply a loan from a bank one will have to apply accounting to compute the interest rates so as to know the pay off rate. Some of the legal matters in forensic accounts can only be solved by combining audit skills together with investigative skills to make recommendations and to minimize future risks. accounting significance is not only seen on the corporate field by creating jobs but also applies in our daily lives, accountants should ensure proper records are kept for the business organization and deal with matters falling in the field of finance such as profits, payment of taxes and losses. Bibliography Anthony Stuart Burchell, Hopwood, Colin Clubb, Nahapiet and John Hughes Janine, (2006) Accounting, Organizations and Society P. 5-27 London. Carmichael, ‎Paul H. Rosenfield. (2003) Accountants' Handbook. Financial Accounting and General Topics.Canada. Chapman, C. S., Hopwood, A. G., & Shields, M. D. (2009). Handbooks of Management Accounting Research 3-Volume Set. Burlington, Elsevier. Elliott, G., Fourali, C., & Issler, S. (2010). Education and social change: connecting local and global perspectives. London, Continuum. Laurie Mook, Jack and Betty Jane Richmond (2007). Social accounting for nonprofits and cooperatives Quarter Second Edition.Sigel Press London. P.92-131 Ontario. Sonja Gallhofer and Professor Jim Hasla (2005). Accounting for Society. Some Critical Interventions p.5. London Sale T. J. &Timothy (2008): Advances in International Accounting. Sage Publications. Volume 20 p.151 Read More