The Emerging Role (Future) Of Accounting
aws accounts buy has evolved as human beings have evolved and as the concepts of the accounting subject are directly coined out from its most fundamental principle of conservatism, it is not difficult to see why the style of accounting at every point in time has a direct link with the age. As man has developed from a primitive age to a modern interdependence age, living has advanced from being subsistent as a hunter-gatherer to a knowledge driven globalised world concept of ‘effectiveness turning to greatness’ and all along with this evolution, self accounting with the abacus has developed through stewardship accounting to financial accounting and now managerial accounting; which has a focus on decision making.
The Financial Accounting Standards Board (FASB) of the US which generally standardised and strengthened the globally adopted Generally Accepted Accounting Principles (GAAP) took significant strides in the year 2012 to come together with the International Accounting Standards Board (IASB) in a manner termed as ‘International Convergence’. Such a convergence is expected to gradually harmonise the GAAPs and the IFRS until they become one and the same in a bid to stream line corporate/company reports into a uniform process globally.
1.1 Statement of the Problem
There is no absolute certainty as to what the future holds for the Accounting Profession. It thus seems however, that the future age which definitely would be one of scientific advancement, would move man from greatness to something worthier for the time. Spiritualism, Environmentalism and Developmentalism could be key factors in the future age. This paper is to find out if Accounting itself would be more of a reality providing accurate solutions to financial problems where man’s ability to value natural capital fairly would give rise to a significant asset on the balance sheet in contrast to the industrial age when even man himself was regarded as labour and not being considered as important as the machines he operated.
2. LITERATURE REVIEW
This paper was approached from a content analysis view point – both conceptual and relational. A content analysis is “a research technique for the objective, systematic, and quantitative description of manifest content of communications” – (Berelson, 52). The conceptual analysis was simply to examine the presence of the problem, i.e. whether there is a stronger presence of positive or negative words used with respect to the specific argument while the relational analysis built on the conceptual analysis by examining the relationships among concepts. As with other sorts of inquiry, initial choices with regard to what is being studied determined the possibility of this particular paper.
2.1 Evolution of Accounting Theory
According to investopedia.com, Accounting Theory in the light of its evolution can be defined as the review of both historical foundations of accounting practice as well as the way in which accounting practices are verified and added to the study and application of financial principles. Accounting as a discipline is believed to have existed since the 15th Century. From that time to now businesses and economies have continued to evolve greatly. Accounting theory must adapt to new ways of doing business, new technological standards and gaps that are discovered in reporting mechanisms hence, it is a continuously evolving subject. As professional accounting organisations help companies interpret and use accounting standards, so do the Accounting Standards Board help continually create more efficient practical applications of accounting theory. Accounting is the foundation of efficient and effective business management and intelligent managerial decision making, without which businesses and trade world-wide would operate blindly and fatally. It is therefore necessary to link how it has evolved to its future role.
2.2 The Origin of Accounting
Luca Pacioli wrote a Maths book in 1494 (ehow) that consisted of a chapter on the mathematics of business. As this book is thought to be first official book on accounting, Luca Pacioli has severally been regarded as ‘the father of accounting’. In his Maths book, Pacioli explained that the successful merchant needed 3 things: sufficient cash or credit; an accounting system that can tell him how he is doing; and a good book keeper to operate it. Pacioli’s theory still holds today, it included both journals and ledgers and it is believed to have popularised the use of the double entry accounting that had been in place since the late 1300s.