The accounting profession is not only an integral aspect of the society but it also plays a critical role in the nation and the corporate sector. As a result, this profession is expected to serve or contribute towards the public interest. The ability of the accounting profession to contribute towards the public interest is determined in the context of its standard setting process and legislation. In this case, the public interest is described as the net benefits developed for, and practically used on behalf of, every society with regards to any decision, action, or policy ("A Definition of Public Interest," 2012). The term public is basically inclusive of each society through identification of broad groups and how they are affected by the accountancy profession. On the other hand, interests are considered as benefits that should be accomplished from the responsibilities of this profession and the identification of related costs. While the benefits and costs are not usually economic in nature, their implications affect different levels of and groups in the society.
The Accounting Profession:
Generally, the accounting profession is widely recognized as an important facet of the society that has been socially constructed and socially constructing. This implies that the profession not only influences the society but is also influenced by the society. Since accounting has developed as a socially constructed profession that is practiced by individuals for individuals, the field is regarded as an art instead of science. The accounting profession in contrast to other fields has developed as a skill with little rules and theoretical knowledge to govern its objective and practice. During its initial years, the accounting field has served as a steward through which it's an expansion of the owner's individual memory. Given the significant changes in business practices and the whole society, the accounting profession no longer plays its traditional stewardship role. These changes that have led to the development of the accounting field include the growth of business practices and the emergence of new segments in the society.
The accounting field is in fact a profession because the societal changes have enabled the field to deal with the complex transactions that have become a common facet of the society. The growth of the profession has also been characterized by the development of traditional and modern accounting techniques that are used to deal with transactions carried out in the society. As a profession, the accounting field in fact plays a significant role in the growth of the society by making some important contributions. The growth of the field to a profession is evident in the fact that accounting is significant to both individuals and businesses.
Contribution toward the Public Interest:
As previously mentioned, the public is inclusive of every societal group while interest can be defined as benefits that are realized from the responsibilities of the field and its related costs. Therefore, the public interest can be referred to as the net benefits originating from and practically used on behalf of all society with regards to any action, policy or decision ("A Definition of Public Interest," 2012). The definition of public interest can be readily applied to the accounting profession with regards to its role in the society and responsibilities to the public. In this case, the public includes a wider scope of society through which individuals and groups share a marketplace for goods and services. Moreover, the public incorporates all individuals seeking sustainable living standards and environmental quality for both the current and future generations. From a wider perspective, interests are all valuable things to individuals and the society such as rights and entitlements.
In addition to being an integral aspect of society, the accounting profession is expected to contribute towards the public interest through its role in the corporate sector and State (Kaidonis, 2008, p.1). This is primarily because the profession plays a critical role in the development of society through its contributions and significance to individuals and businesses. Generally, many professions can be regarded as fields that serve the public interest such as doctors who defend public health and teachers who instill moral values in students. In each of these common fields, a professional works to develop or protect a public good or service that incorporates a wider benefit and enhances the welfare of large populations. When considering whether the accounting profession contributes to the public interest, the main issue under evaluation is what public good or service do accountant develop or protect.
From the surface, the accounting profession seems to serve private interests since accountants mainly focus on dealing with a narrow set of activities i.e. recording and arranging the presentation of financial figures (Thomadakis, n.d.). Therefore, what accountants produce is a clear issue of private interest because those who run or own businesses use the generated accounting figures to evaluate their successes or failures. In addition, accountants seem to focus on many services that are privately offered, privately contracted, and privately compensated. This implies that accountants seem to be servants of private interests par excellence whose work is used to accomplish private objectives.
However, there is a deeper component of public benefit in the activities of accountants, which makes the accounting profession to contribute towards the public interest. This contribution can mainly be understood through differentiating the profession from the concept of financial discipline. In this case, the accounting field is a continuation of self-sustaining initiatives and the elimination of others, which is a major contribution to the general growth in an economy. The accounting profession contributes toward the public interest by promoting the accuracy and comparability of financial accounts, which is one of the foundations of an economic system that is geared towards growth and economic prosperity. While conducting financial accounting of a single entity is an issue of private interest, carrying such activities with accuracy to an extent that business can compete with each other and compare the outcomes of competition is an issue of public interest. Therefore, the ability to ensure that all accountants maintain high quality standards when carrying out their activities creates extra value in the public interest (Thomadakis, n.d.).
The other major way with which the accounting profession contributes to the public interest is through its significant contributions to the society. This profession contributes to the development of society and the public interest through maximizing financial utility and maintaining a free-market liberal economic system (McPhail & Walters, 2009, p.64). This contribution is critical to the public interest because it helps in the establishment of resource priorities for a large population. Furthermore, accounting is the basis for the entire resource allocation process that would be almost impossible without it since individuals would experience numerous difficulties in using the existing free markets to establish resource priorities.
The accounting field contributes towards the public interest by promoting the realization of certain interests of society, many of which are economic in nature and associated with effective management of resources. Some of these interests include enhanced economic certainty in the marketplace and the entire financial infrastructure, meaningful financial and non-financial reporting, and transparent and efficient financial and non-financial information. The other interests include sound performance management and corporate governance in the private and public sector and increased efficiency.
While the accounting profession is widely considered as a private profession with private rights, it contributes towards the public interest because it also has some public responsibilities. As a result, the accounting field has traditionally been subjected to substantial regulation in order to ensure that it meets its private and public responsibilities. Notably, the regulation of the accounting profession has evolved significantly though the regulation history is relatively younger than the history of the field (Perry, 1985, p.293). Generally, the regulation of the accounting field serves two major functions i.e. establishing standards for the profession and…