Accounting is a subject that is relevant to business enterprises, especially operating, financial accounting, and managerial accounting information. There are many ways to define the work engaged in by the accountants. However, in this accounting course, we only focus on 2 famous professors who have 2 different definitions of the accounting career: Peter Atrill and Gareth Morgan.
These 2 doctors gave dissimilar knowledge about accounting but it is still useful to accountants or decision makers. This essay will explain these 2 definitions of both Morgan and Atrill, and a critical discussion that supports my opinion about the better description of the work of accountants.
Firstly, Morgan proves that accountants are constructors of reality. Through the definitions in “Accounting as a metaphorical enterprise”, “Accounting and the myth of objectivity”, and “Accounting as an interpretive art” (Accounting, Organizations and Society, 1988, p.490, 491,492), although accountants are confused by the process of reality construction, they still “grasp and articulate” complex realities into a fully-constituted entity. Moreover, accountants also have to catch and understand deeply the situations they are facing in a much more open-ended interpretive mode to broaden development as well as create intelligent or actionable insights.
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Gareth Morgan also expresses clearly about the role of accounting that: ““Accountants often see themselves as engaged in an objective, value-free, technical enterprise, representing reality “as is”. But in fact, they are subjective “constructors of reality”: presenting and representing the situations in limited and one-sided ways. They are not just technicians practising a technical craft. They are part of a much broader process of reality construction, producing partial and rather one-sided views of reality, exactly as an artist is obliged to produce a partial view of the reality he or she wished to represent” (Accounting, Organizations and Society, 1988, p.477).
Dr Morgan aims to demonstrate that accountants are not only technicians who serve in a technical craft enterprise as a tool. They do not only collect data and give it to users, but also study and analyze it. Accountants use the numerical figures to express their understanding about the measurement provided and find out what would be the best way in their collected information to release statement and their current situation. Therefore, they can control their operating business in right ways.
Secondly, according to Peter Atrill, the definition of the nature and role of accounting is quite different. Dr Atrill suggests that accounting is the process of identifying, measuring and communication information to permit informed judgements and decisions by users of the information (Accounting an introduction 4, p.2). Accounting provides useful information for decision-makers who need to plan or control the businesses. For example, accounting provides information about the business operation or the performance of the business to external parties such as investors, creditors, and tax authorities or relevant users like suppliers or investors to examine, estimate, value, and make a decision (Principles of Accounting, 2009).
It also can be easily seen that the main purpose of accounting is preparing financial reports on a regular basic to perform to show the problems that company is facing if it is bad or not. Then, the company can find out the best way for the performance in the business enterprise. Besides, accounting also focus on measuring the alternative element in operating process such as what was the position at the beginning and ending of the period and what happened during the period to help their users to make rational choices about the allocation of scare resources (Accounting an introduction 4, p.2).
Finally, in a simplified way, Peter Atrill suggests an easy way to define the role of accounting: “Accounting is the art of recording, summarizing, reporting, and analyzing financial transactions” (What is Accounting, 2006). It cannot be denied that accounting is very important and necessary for every organization to collect and analyze information to make right decisions, adopt, and control better the performance in their business. Notice that the accountants relate to Atrill’s principle can satisfy their customers easily but without considerations about the information given to user.
Meanwhile, according to Gareth Morgan, it is not simply only to record, summarize, report or analyze data and give it to users. Accountants need to be more sensitive and careful to the information collected. They have to ensure that what they are accounting for will be appropriate and clear. So that, the y can provide a critical understanding of the multiple meanings and range of possible actions with which they are faced, then can develop the knack of reading complex situations with various scenarios in mind, and of forging actions appropriate to the understandings obtained (Organizations and Society, 1988, p. 484).
Moreover, accountants relate to Morgan’s principle get their clear job to construct the reality. Accountants are not like practitioners working in a technical craft anymore. They do not only collect and analyze data like general, but they also have an influence integral to the operation of company or organisation, even they can bring the company significant benefits or advantages. However, every company considers the pros and cons in this definition; everything gets its 2 opposite sides. Accountants may have uncontrollable activities when they got more power in the company or organization by changing the entity. Because of the involvement of many financial transactions and the accountants have their own ways to record and interpret the numbers, data or information, so, the reality may be bent to hide whatever secret of that company from users.
Maybe they want to attract the investment from users although there is a bad situation that their company is incurring. And then, who get the highest risk are still users because they cannot know whether the information they received is accurate or not. In another case, there is an example about the decision to write the purchase of an asset off as an expense right away or capitalize and then depreciate it. Whichever decision is made changes the 'picture' represented by the books. I might choose to capitalize the asset, while another might choose to expense it. Hence, there are 2 possible different “pictures”. And that's just for one transaction. Over the years, two different accountants would generally have created quite different sets of books 'pictures' for the same set of financial transactions (Accounting definition-Gareth Morgan, 2009).
These 2 above examples referred 2 limitations in Morgan’s definition. However, the definition of Gareth Morgan is still more adequate than Atrill’s one because Morgan concentrate deeply not only on the accountants’ tasks but also on the reality and broader concept of the nature and role of accounting in companies. In addition, it also considers the tension that exits between “the world as viewed by the accountant”, and “the world in a wide sense” which help accountants easily characterize relations between accounting, organizations and society.
In conclusion, Peter Atrill and Gareth Morgan are popular with their definitions. Everyone has their own explanations and suggestions about the role of accounting. Overall, Although there are some dark sides in Morgan’s theory and Atrill defines with easier theory to understand, Morgan’s definition still have better description.
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