Strategic Perspectives in Management Accounting and Finance Essay

  • Length: 8 pages
  • Sources: 12
  • Subject: Business - Ethics
  • Type: Essay
  • Paper: #49188738

Excerpt from Essay :

Strategic Perspectives in Management Accounting and Finance

The main reason for differentiation in the accounting studies seemed to occur due to the functionalist perceptions in the expertise of social studies. According to Dellaportas and Davenport (2008) professions are being separated by occupation on the basis of the level of distinctiveness one occupation has from another; a model first designed by Greenwood in 1975.

Abercrombie et al. (1994, p. 335) in their study explained that such distinctiveness is surrounded by the concept which results in more beneficiary outcomes for the public than for an individual's professional interest in providing services. This simply means that it was an original human demand that gave birth to all professions. There's an equality on profession's social compulsion i.e. there is a balance between a professional's job and his obligation to serve the public. In this regard Carey (1965, p. 376) asserted that it was in light of this theory, it then becomes the responsibility of the employees of a profession to not only keep in mind their obligations to their work and it principles, but also keep in mind the impact that their individual's services have so that they are beneficiary to the public.

According to an in depth research of Bivins (1993, p. 118), Briloff (1986, p.1), Canning and O'Dwyer (2001, p.727), Mitchell et al. (1994, p.40) it is evaluated that public serving and interest shielding is the real origination of a profession. The main subject which sociologists utilize in differentiation of professions from other occupations is the demand of the public as according to the analysis of Friedson (1993, p.19) quoted in Dellaportas and Davenport (2008).

A natural agreement in between a single person's interests and society interests is been presumed as the functionalist concept of professionalization in this study, specifically for the profession of accounting. Many researchers have criticized the functionalist view due to the fact that this view allows the individual to have underlying and biased reasons that form the basis of his choice of a profession. Analysis of Bedrad's research (2001) showed that the interactionists philosophy concept, which is also called the conflict model, is basically a functional philosophy deigned to further the individual's personal interests.

Further analysis of the study by Lindblom and Ruland (1997) asserted that as a result of this concept, prestigious ranks gained in social and economical places have been specified or made inaccessible through controlling the access and criteria of educational standards. According to Frankel (1989, p. 110) it's tough luck for the public that professionals end up misusing their authorities as they tend to become more concentrated on their own personal interests rather than serving the public interest. Possibly the main reason for the origination of a profession is to render services to society. According to Bedard (2001, p. 430), Canning and O'Dwyer, (2001) & Parker (1994): private over public interests of a profession are the corrective structures and frameworks for any and all professions.

Concise discussion has been done in this paper relating to the sociology of accounting as well as highlighting the main idea of the social presence of the profession. Disturbing effects can be seen, when the public interest either in realism or perception, is pushed aside. Arthur Andersen's crash case is a wonderful example that is considered in the case of personal interests' protection. Andersen in 2002 was found guilty in a way to be a hindrance in providing the correct documentation relating to the crash of Enron. Even though this verdict of guiltiness was turned back in 2005 by the Supreme Court, it wasn't of any use because its reputation had been drowned and many of its customers left. Public was the enemy in realism for Andersen as opposed to the courts, as they lost the trust they had on a firm that built its global corporate image on integrity; even though the lost of trust was caused by the courts. Analysis of McMillan's study (2004) showed how frequently and heavily a profession is dependent on the perception of trust and how an accounting firm can lose its whole sole corporate image if the trust is tainted. According to Dellaportas and Davenport (2008) there's an argument on how improving public faith must revolve and originate around the consideration of public interest as well as its practical application as opposed to its assertion alone.

An analysis of the public interest in accounting

The public was unaware and doubtful about the meaning of the word accounting in the 1930's as well as what it incorporated. It has been compared to the construction of a huge building that is done without announcement to the public. Wilcox (1939, p.151) was the one who made this analogy. However, according to Montagna (1971, p.135) after nearly a half century, in the 1970's, accounting really had no direct relations or obligations with the public or society in general. Whereas Willmott (1990, p.315) analyzed in a later study that in the modern era, the impact of accounting is directly proportionate to servicing the public and has a vital role in the evaluation and instruction of methods or production or replacement.

Social enforcements, welfare and obligations have been pushed forward by accounting professions. These do re-enlighten the extent to which public service provisions can bring about fruitful results and benefits for the firm as asserted by Preston et al. (1995, p.518). A structured definition of public interest is not yet made where as total emphasis is on the enforcement of the profession of accounting being designed around the public interest and service. The concepts like 'normative', 'process', 'abolitionist' & 'co-sensualist' more clearly enlightened how accounting can influence the public interests and service sectors. Dellaportas and Davenport (2008) have posted the main three questions that are being reviewed in the paper. These questions are:

1. Who constitutes as being the public?

2. What activities can be incorporated as part of public interests?

3. What does serving the public interest really mean within the realm of accounting?

According to Abbott (1988) code of ethics is the main factor to acknowledge the stiff form of a profession's principles and approaches relating to public service codes and society in general. Analysis of Nau's research (1924) highlighted that these principles have been imposed on the accountants since 1924 when they were incorporated in the accounting code of ethics by the American Institute of Accountants. This meant that the servicing and protection of public rights was recognized as a duty of an accountant which if not completed could lead to the non-observance of accounting as a legitimate profession. In order to provide the most benefits to the public the accounting firms now adopt the established code of ethics and create a highly professional environment for their frequent evaluation. Dellaportas and Davenport (2008) assert that the responsibilities and structures of public interest cab be best served need to be defined in the code of ethics keeping in mind the jurisdiction laws and cultural aspects of the society that they are being implemented in.

The idea of "Social software of management accounting" is running in succession of the ideas presented above. The idea was first put forth by Professor Norman Macintosh. We use articles of his publication particularly those focused on the critical perspectives of Accounting and profit manipulation; on the basis of his critiques he was able to design and apply the structuration theory. In explaining the conventional ethical sides, he makes clear basic negations inside large, multinational corporations (MNC) and believes their impact is huge for management accounting and control system (Macs). The article published in 1995 by Professor Macintosh stands as the first solemn incursion into investigating the morality surrounded within and transmitted by Macs. He recently wrote a paper with Shearer and Riccaboni on same topic, in 2009. Macintosh (2002) states a criticism regarding the agonistic democracy as a social theory. He believed that this approach was not suitable for designing and implementing accounting practices in the modern era. Interestingly enough, the agonistic democracy as a social theory was first introduced in accounting literature by Macintosh.

A research program has been conducted to support the rational journey of Professor Macintosh. The main idea for the research program is to go through all the niche segments and gaps of the social science. The accounting and accountability issues are very well addressed in this theory. The work behavior of organizations is catered by various iterations into a poststructuralist critique. The conventional theories and methodologies are not well supported for it. The theories and various methods (see Daft and Macintosh, 1978, 1981, 1984; Macintosh and Daft, 1978, 1987) bring about an idea of the normal science and linguistic analysis (Hopper and Macintosh, 1993; Macintosh and Shearer, 2000; Macintosh et al., 2000, 2009); here, more of than then not, a focus is made on the production and invention of heteroglossic accounting (Macintosh, 2002; Macintosh and Baker, 2002; Shearer, 2002).

The work of Macintosh is considered to be one that gives a view on the critical analysis…

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