The Changing Role Of Accountants In The

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The Changing Role Of Accountants In The 21st Century. Essay, Research Paper

A number of reports by academicians and practitioners all over the world have called significant change in the accounting methods and research and their relevance in the 21st century. Many believe that the accounting model is outdated with little relevance to the changes taken place in the wider world. Both the academicians and practitioners agree that if accounting is to serve a useful role in the changing environment, accounting education and accounting research should become more broader, dynamic and not constraint by a single approach. Despite these facts, the academicians and practitioners both stated that the accounting methods taught and practiced have changed significantly.

The history of accounts does not begin from the colonial era of the British Empire neither does it begin in the fourteenth century Italy, accounts came from the Mesopotamian region in the 3500 B.C. Five thousand years before the appearance of double-entry, the Assyrian, Chaldaean-Babylonian and Summerain civilizations were flourishing in the Mesopotamian Valley, producing some of the oldest known records of commerce (ACAUS, 1999). As business prospered and industries developed, cities of Babylon and Ninerah became the center for commerce and the language of business and politics. Mesopotamia had more than one bank with a standard measurement in gold and silver. And in some transactions allowing some credit. The accountants in the Mesopotamian times had similar but more extensive duties than the accountants of today. Apart from writing up transactions, he ensured that the agreement complied with detailed code requirements for commercial transactions (ACAUS, 1999). The scribes would record the transaction on specially prepared clay not because clay was available in surplus but because paper also known as papyrus was very expensive and scarce.

Between the years 2000 ?256 B.C. ancient Egypt, China, Greece and Rome followed a similar accounting methods compared to the Mesopotamian. The use of paper was more than clay tablets as detailed records were made easily on paper. In these early ages, accountants had to be honest and accurate, because irregularities disclosed by audits were punishable by fines, mutilation or even death. Household expenses played an important role in ancient Rome as citizens were required to submit regular statements of assets and liabilities, used in the basis of taxation, and were recorded in an adversary or daybook and monthly posting to a cashbook known as codex accepti et expensi. Although such records were important ancient Egyptians, Chinese, Greek and Romans accounting never progressed beyond simple list making in its thousands of years of existence (ACAUS, 1999).

Thousands of years after the fall of the Roman Empire, publication of Pacioli?s Summa is widely viewed as the period of accounting stagnation and medieval practices outside Italy were often ignored (ACAUS, 1999). Medieval bookkeeping was localized and midpoint around specific institutions. The central task of accounting during this era was a means for the government or property owner to monitor those in the lower portions of the socioeconomic ?pyramid? (ACAUS, 1999). The oldest surviving accounting record in English, dated from 1130 through 1830 A.D., is the Pipe Roll or ?Great Roll of the Exchequer.? After the Industrial Revolution the demand for accounts and accountants was rapidly increasing. A vital characteristic in this process was the establishment of professional organizations in 1853.

Historically, business relied on accountants to prepare financial information for internal and external decision-making and to assist in the fulfillment of tax-preparing requirements (Albrecht & Sack, 2001). As the business climate became more complex, demanding and rapidly changing than ever before, this affected the role of accountants making it increasingly adapting in response to this. The most significant factor that waves the business environment was the technological change, globalization and the opening markets of both international and national boundaries.

Clearly, the ongoing technological revolution has dramatically altered the environment of the business, government and individual enterprise. The process of globalization and the opening of international markets are providing immense opportunities and challenges to business and its advisories (Hoiberg, 1999). The importance of national boundaries has been diminished with globalization in the factor shaping of the organizations. To maintain organizations competitiveness it attempts to meet the international economy standards by the trends of globalization.

These modifications occurring within the business are influencing on the accountancy profession. Yet in many of these new market areas accountants face strong competition from those outside profession (Hoiberg, 2000). Managerial, investment and decision-making information is provided by accounts. When the information technology of accounting was paper, pencil and abacus, the technological foundation of accounts was journals, ledgers and double-entry bookkeeping (Alles, Kogan & Vasahelyi, 2000). After information technology had progressed to computers and networks, accounting shifted to database management and enterprise resource planning. Although the silicon technology may reach to its physical limits within the next decade, its very likely that computing power will continue to grow.

Critics of accounting education charge that its programs and curricula have failed to remain relevant to students and employers (Albrecht & Sack, 2001). It is also believed that the accounting field is experiencing dramatic decreases in students enrollment. This is so because the number and quality of students planning to do a major in accounting is decreasing rapidly because of the view that an accounts degree is less valuable than other business degrees?. A recent study also proved that accounts professors and professional accountants, if given the opportunity, would not major in accounts again as they believe that the current accounts is out dated and in need of noteworthy variations. This indicates a serious problem at the profession?s most vulnerable point, the quality of its professional (Albrecht & Sack, 2001).

These conclusions have drastically altered the old accounting model, which assumed that information is costly. Today, anyone equipped with the appropriate software can be an ?accountant? and produce financial information. Researchers believe there will be fewer accountants in the future. The use of information technology and intellectual capital is expected to increase in the future (Allott, 2000). As the information is the currency of the accountancy profession and as companies become more forward-looking the old financial statements are becoming less relevant.

From the viewpoint of accountants, an important feature of new service is to try and identify opportunities to exercise the skills and knowledge. Even though there have been numerous endeavor to improve the existing accounting practice, many researchers have provided attempts but none have been successful in the acceptance phase regardless of the changing methodological loom.

In conclusion, many academicians and politicians believe that if accounting fails, the practice of accounting will not be far behind (Albrecht & Sack, 2001). There will simply not be enough applicants to keep it alive. Management accountants will have to make significant changes to the way they operate within the organization or risk losing relevance (Allott, 2000). Despite these facts, the role of accounts and accountants has changed significantly, some academicians say management accounting has not changed in the last 60 years; others say it has, hugely. Who?s Right? (Allottt, 2000)

Reference List:

Albrecht, W. S. & Sack, R. J. (Mar 2001). The perilous future of accounting education. The CPA Journal: New York. Vol. 71, No. 3, Pgs 16-23

Alles, M., Kogan, A. & Vasarhelyi, M.A. (Nov 2000). Accounting in 2015. The CPA Journal: New York. Vol. 70, No. 11, Pgs 14-20

Allott, A. (Jul/Aug 2000). Management accounting change. Management Accounting: London. Vol. 78, No. 7, Pgs 54-55

Association of Chartered Accountants in the U.S. (1999). Accounts: A vital history. New York

Carnegie, G. D. & Potter, B. N. (Nov 2000). Accounting history in Australia: A survey of published works 1975-1999. Australian Economic History Review. Vol. 40, No. 3

Gaffikin, M. (1993). Principles of accounting, 3rd ed. Harcourt Brace & Co.: Australia. Pgs 435-453

Hoiberg, P. (Dec 1999/Jan 2000). Accounting in the new millennium. Pacific Accounting Review: Palmerston North. Vol. 11, No. 2, Pgs 131-136

Slocum, E. L. & Sriram, R. S. (June 2001). Accounting history: A survey of academic interest in the U.S. The Accounting Historians Journal: Georgia State University. Vol. 28, No. 1, Pgs 111-130

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