Contemporary Issues in Accounting
The facts, ideas and opinions presented in this paper are arranged in the following format to promote cohesiveness, comprehension, and clarity.
Common Issues in Accounting
Contemporary Issues in Accounting
The field of accounting is mainly the aspect of journalizing, classifying and reporting of the transactions and economic events in the business operation in the realization of the benefits gained and the expenses given and taken in each event. As such, the accounting principle realize the said factors based on the factor of the values parted with and values receive thus, determining their significant effects on the condition and economic value of the business organization. To realize better this aspect, several ethical grounds must be considered and applied to gain an unbiased and transparent accounting journalism and reporting outcome.
The field of accounting realize best its purpose and significance in the business operation if properly implemented in the organizational structure such as considering all of the events occurred, properly classifying and journalizing these transactions, and reporting the results based on the moral and ethical standards. Upon this process that the field of accounting becomes an effective and efficient means for the analysis of the business condition and in monitoring all of the relevant transactions and events accumulated upon the cyclical business operation.
However, inspite of the ideal nature and value of the accounting field in the business nature, there are still several critical issues that must be considered in the application and integration of the said field in the economic stand of the business. These critical issues often manifest in the cultural, social, and political realm of the accounting procedure thus, affecting their moral standards and integrity in the business nature. In the present, these critical issues and biases are product of the human influence or factor in the implementation of the procedure. Indeed, as influence by the human field and their personal perspective regarding the actual implementation of the accounting aspect in the society, certain cultural, social, and political biases are manifesting contradicting the neutral and ideal nature of the accounting principle.
Issue in Accounting
In the present, accounting is applied in various fields, which are generally classified into two, namely personal and business finance. However, in both of these aspects, certain issues become biased and unethical deviating from the neutral and ideal characteristics of the accounting process. These contemporary issues generally manifest in the aspects of cultural, social, and political nature of the accounting principle.
The primary culture of the accounting field is to report and analyze accurately the financial details and other relevant factors in the business transactions. As such, the person involved in this application must accurately analyze each transaction and events and their corresponding relevance and effect to the economic nature of the business organization. In the nature of accuracy, this involves declaring the right financial value of each transaction thus, arriving at the proper financial report to reflect such activities.
In this aspect, certain contemporary issues rise in the ideal culture of the accounting cycle particularly on the perception of the people involved towards the principles of accuracy and transparency in the accounting field. Take for example the issue in declaring one’s annual income for the purpose of the computation of his or her due tax payables. Often, some business individuals and professionals compromise this concern for the purpose of gaining financial advantage on their part such as minimizing their tax due through inaccurately declaring their income transactions. Professionals who are who are known to self-declare their income are the most to commit this unethical practice and they are commonly supported by their respective accountants. With the verse knowledge of their accountants in the financial accounting aspects, they are able to bypass certain procedures or ethical principles and commit certain levels of fraud for their financial advantage. As such, they compromise the accurate and transparent culture of the accounting principles wherein they use accounting not for the purpose of the economic analysis but to accumulate certain advantages and benefits on their part.
Another significant issue in the present application of the accounting field is about the social nature of the application of the field. In the preset, different individuals are involved in the accounting aspect however; this population is generally classified into two dominant groups mainly based on gender. This gender factor itself has their own relevance to the social concern of the accounting aspect as they also significantly affect the actual application of the field. Indeed, the gender disparity issue in the society is still present and is involved in the actual practice of accounting giving likely bias characteristics to the said nature.
In the aspect of social structure, the gender issue plays a significant role causing contradictions and conflicts between the two involved parties. This is similarly present in the actual practice of the accounting field as the individuals participating in this economic concern likewise bear the same perception. As incurred, certain biases rises in the practice of accounting related to the gender disparity issue such as the social perception that males are more financially effective than women. As influence by this factor, opinions and perspective towards the actual practice of the different gender groups towards the bias or unequal as inclined to the social view enticed respectively to each gender groups. Among the common manifestations of this bias concept is the unequal payment for male and female accountants, disparity regarding the professional view towards their outcome, and gender preferences towards the employment in this aspect.
Politics is a dominant aspect in the society and almost all fields relative to the structural system is influenced by it. In accounting, certain political systems are also present which are mostly informally embedded in the organizational structural of the company. This political system certain biases and disparity in the accounting field as its application is significantly attributed to the organizational structure of the company affecting the views of the people towards the credibility and substance of each output. Often, the substance of the claim of each financial report is weight ideally wherein it has undergo the proper procedure and system thus that result is accurate and credible. However, as the political system manifest to be a significant factor in the views and perception of the each individual, the analysis towards the claims of each report is likewise affected. On an actual example, consider the case of two accountants wherein one committed a fiscal fraud and concealed it ingeniously however, the other accountant has able to track down the trail and discover the fraud. Ideally, the claims of the second accountant would manifest more substance to the scenario as it is more vital. However, because of the differences in the respective positions of the two individuals in the organization wherein the first has a higher rank, views towards the credibility of the claims and the individual behind it becomes affected by their position thus producing bias opinion and generalization on the case. Through using the political power enticed to the higher position of the first accountant, he is likely able to change the tide of the situation towards him and discredit his counterpart for the purpose of strengthening his credibility in the group. As such, the ideal principle of accounting relating to report transparency and truthfulness becomes compromised due to the influence of the political system in the organization’s structure thus, resulting to possibilities of discrepancies and leakages in the accounting aspect of the company.
The general accounting cycle is mainly design to implement an objective, transparent, critical, and accurate analysis of the financial transactions and events I the business operation for the purpose of attaining effective financial management. This is to monitor critically the relevant changes and their subsequent effects to the condition of the business organization enabling the concerned management to decide upon the most appropriate and suitable approach towards the advantage and development of the group.
However, in the actual application of the accounting aspect, certain biases and disparity rises mainly due to the human factor on the scenario. As the field is mainly dependent upon the application of the people, their personal opinions and perspective indeed have a significant influence upon the characteristics and nature of the field. Certain opinions and personal perspective in different concerns namely social, cultural, political, and others have a significant influence on the actual application of the society. These influences in turn, causes deviation from the ethical and ideal nature of the accounting practice resulting to several bias issues in the actual concern. Issues such as gender inequality in social concern, credibility fallacies in political concern, and fraud and inaccuracy in the cultural concern are among the common contemporary issues caused by the human factor in the actual accounting application. As such, the moral and ideal integrity of the accounting field is not being questioned by this certain biases and disparity which the author of the personally believe to be in need of critical attention from the contemporary society. Indeed, these bias and unethical issues in the present application of the accounting practice must be effectively addressed to preserve the ideal nature and relevance of the accounting aspect to the present socio-economic concern.