Absence of consensus on the debate about whether accounting is an art, science or technical process was the focus of this paper. It was gathered that every profession including accounting develops a body of theory consisting of principles, assumptions and standards. Just as a doctor follows certain standard in treating a patient’s illness, an accountant follows certain standard in reporting financial information. Most interestingly, therefore, the building block of accounting has remained its theories, principles, equations, ethics and internationally acceptable standards. These have made accounting a noble profession of international repute. Whatever one’s pursuits or occupation, the need for financial information is inescapable. One cannot earn a living, spend money, buy on credit invest and manage investment, or pay taxes without receiving, using or dispensing financial information. Accounting is so central and touching in human life and business environment. It is rather a financial science.
TABLE OF CONTENTS
Table of Contents i
CHAPTER ONE: Introduction 1-2
CHAPTER TWO: Literature Review 3
Brief Introduction 3
The Meaning of Accounting 4
Science (In Brief) 5
Accounting and Science 6
The issue of the yet undecided place of accounting in the field of academics and in the professional realm has remained a matter of serious concern to many financial scholars and others alike. Precisely, there have been debates by these scholars on the place of accounting as a profession and as a discipline.
Three schools of thought are said to have stood out clearly. One argued that accounting is a science, another one says it is an art, while the third posited that accounting is a mere technical process. Each school of thought tries to place accounting according to its own understanding and perspective.
What remains yet unresolved is whether accounting is truly a science, art or a technical process. Although the writer was not privileged to have many literatures on this various schools of through, a good understand of accounting as a discipline and a profession will normally give back ups to these three schools of thought.
Thus those who argued that accounting is a science may have looked at science as the study of the structure and behaviour of living and non-living things including business finance through observation and experiment. While accounting is concerned with the study of the financial structure and conduct of a business as an entity, non profit oriented organizations, government and even individuals financial aspect of living. A financial expert argued that every profession develops a body of theory consisting of principles, assumptions, and standards. Accounting is no exception. Just as a doctor follows certain standards in treating a patient’s illness, an accountant, follows certain standard in giving financial report.
Again those who believe that accounting is an art argued that accounting was a creative invention by Luca Pacioli, an Italian mathematician. Accordingly, accounting requires more imagination and creative ability that can be learnt through practice in contrast with scientific practical skills and technique that demands more careful study and formal training. Here they beat their chest, after all account is often described as a mere statement of dealings expressed in words and figures. And book-keeping which is an indispensable procedure rule in accounting is also described as an art of recording financial transaction of a business in such a manner that the financial position of the business could be readily ascertained at any point in time. These definitions seem to support the idea that accounting is an art.
Yet another school of thought described accounting as a technical process. This group of scholars see accounting as involving arts and science. This according them is because accounting requires imagination and creative ability as well scientific skills and good knowledge of its technical steps.
There is confusion and tension among students and others alike as to the proper place of accounting as a field of study and as a profession. With these subtle arguments, the student cannot but get involved in the concerted effort to investigate the place of accounting in this professional age.
Based on accounts of events in accounting, I want to ally myself with the first school of thought, that accounting is a science.
1.1 BRIEF INTRODUCTION
In the ancient days, an element of financial record keeping was first observed at the replacement of the barter system with the alternative though primitive system of exchange. Economic historical accounts showed that the ancient marks, dots and strokes on the walls and stones reflecting on the economic and financial ventures and dates by the ancient people represent accounting at that stage. Unuoka, the father of Okonkwo who was also a well known debt in Things Fall Apart, made strokes on the wall to reflect the debts.
Be that as it may, the first accounting record in printed form and developed in a systematic format was attributed to the work of Luca, Pacioli, an Italian renaissance mathematician in 1494. However, Pacioli merely described a system to ensure that financial information was recorded efficiently and accurately.
With the advent of the industrial age in the nineteenth century and later, the emergence of large corporations a separation of the owners from the managers of business took place. As a result the need to report the financial status of the enterprise became more important, to ensure that managers acted in accord with owners’ wishes. Also, with the growing economic awareness and development, transactions between businesses become more complex, making necessary improved approaches for reporting financial information.
Accordingly, conferences, seminars and workshops have been held world wilds to create awareness on the need for proper financial information. Also legislations have been made by various countries to regulate economic and financial behaviour and also to regulate accounting and auditing practices. Again, associations have been formed such as ICAN, CAMA, IAS, SAS, SAS, FRS etc in Nigeria, working to ensure standard ethical practices in accounting and auditing and financial management in general.
Over the years a value of literature have accumulated in business finance, financial management, cost accounting, financial accounting, auditing and lately financial information management etc.
What follows therefore is a select review of related literatures on the meaning of accounting and its position as a profession and as a discipline. The rest of this paper will focus on accounting as a science.
1.2 THE MEANING OF ACCOUNTING
The English dictionary described account as a written statement of money paid or owned for goods or services. Uche C. C. (2002) defined account as any document or device whereby a record is kept of flows of value measured in monetary terms. Yet another definition simply says that account is a statement of dealings expressed in words and figures. Come what may, the point here is that account in business terms means detailed records of money spent and received.
However, it should be noted that accounting itself according to Uche is the process of recording, analyzing, classifying, summarizing communicating and interpreting financial information so as to maximum the value of the information produced. This process at a glance reflects in aggregate, and in detail, all transactions involving the receipts, transfer and dispositions of an entity’s finds and property. Leonard C. U. (2010) saw accounting as a term, which refers to the numerous record keeping activities carried out as a result of business transaction. He went further to say that accounting deals with the collection and recording of business facts and figures and is an information system reporting to a wide variety of individuals and interested parties.
According to U. C. Chukwu, 2004, accounting is considered to be a tool of management, providing vital information concerning the future of a business entity. As far back as 1982 Frank Wood, observed that accounting is concerned with the use to which book keeping records are put, their analysis and interpretation.
Several other authors have descried accounting in similar ways. 1953, Littleton observed that the central purpose of accounting is to make possible the periodic matching of costs and revenue. This concept is perhaps the nucleus of accounting theory and a benchmark that affords a fixed point of reference accounting discussions. Again A. I. P. C. A. in 1961 described accounting as the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are in part at least, of a financial character, and interpreting the result thereof. Yet A. A. A. in 1966 argued that accounting is the process of identifying measuring and communicating economic information to permit informed judgments and decision by the users of the information.
From the preceding discussion these fact are clear about accounting:-
1. Accounting involves a system of record-keeping.
2. It is an information system based on finance.
3. Its information system is guiding in nature and as such it can, predict propose and formulate ideas in order to guild well.
4. It investigates in order to make a report.
5. It observes, and make assumption in order to predict.
But does these follow scientific procedures to qualify accounting as a science. Then what is science all about.
1.3 SCIENCE (IN BRIEF)
The English dictionary defined science as the study of the structure and behaviour of the physical and natural world and society, especially through observation and experiment. In their book titled, science for man, P. N. Okeke and O. E. Ekpe, (2005) described science as an organized body of knowledge that has been gathered through many years of careful observation, experiment, reasoning critically tested, systematically applied and brought under general principles. They further argued that science is a discipline that is anchored on the pursuit of wisdom and knowledge in the ability to question the nature of being and the critical investigation of cause-effect connections.
The inference here is that science involves a calmness of temper laced with raw courage reasoning and objectivity which would enable the investigator to enunciate principles underlying the particular department of knowledge under scrutiny. These findings, principles and philosophical underpinnings are believed to be rooted in laws susceptible to universal applications.
Awachie (2001) defined science as a subject that is concerned with the material universe seeking to discover facts about it and to fit those facts into conceptual schemes, called theories or laws, that will clarify the relations among them. Science must therefore begin with observation of objects or events in the physical universe. Awachie affirmed that such objects or events may occur naturally or they may be products of planned experiments. The important point here is that they must be observed either directly or indirectly, Awachie concluded.
Here comes the question, what is the position of according in view of the preceding discussions and circumstance.
1.4 ACCOUNTING AND SCIENCE
To fully understand the relationship between accounting and science, we need to look at the methodology of accounting. Again we need to look at the relationship between modern accounting and management.
It is patient to note that the mere record making methodology otherwise known as book keeping which projects accounting as an art is gradually been over taken by challenging development in the business sector. Frank Wood observed that accounting extends far beyond the actual making of records. According to him, a good knowledge of accounting will help the accountant to be able to survey the transaction of business and gain greater insight into the way that business is transacted and the methods by which business decisions are taken. An accountant looks beyond the record-making phase to ascertain the relationship between the financial result and the events which have created them. Frank Wood concluded that it is the work of the accountant to study the various alternatives open to his firm and use accounting experience to aid the management to select the best plan of action for the firm.
The inference here, is that accountant just as scientists employ survey methods, collect data, analyze the data and make some assumptions and formulate hypotheses and also test such hypotheses before advising management on the best line of action.
Cletus wrote extensively on this. He observed that accounting has undergone rapid transition and transformation processes. He affirmed that accounting is indeed a dynamic subject and discipline. The environment of accounting has undergone substantial changes within the past centaury to such a dimension that what is been regarded as accounting hundred years ago many not be regarded as such in this twenty first century. Cletus also observed that changes in accounting were accentuated by developmental changes in related discipline, such as quantitative analysis, behavioural and managerial sciences as well as information technology.
Cletus concluded that today, accounting is moving away from its traditional procedural base that focused on record keeping. It is nowadays focusing on the role of accounting that exposes and emphasizes more of its social significance, dimension and importance.
It is very clear that the managerial function of accounting is more significant than its social role. If management is a social science, then accounting plays a leading role.
Accounting as a subject and discipline started with the procedural rules of record-making known as book keeping. Accounting is dynamic and was fast influenced by development in business sector and related discipline including behavioural and managerial sciences as well as information technology services. Accordingly, the role of accounting equally shifted from mere record keeping to providing useful technical aids to every management decision.
This analysis is a prove to the fact that accounting as a field of knowledge seeks to systematically understand in monetary terms why and how people work together to accomplish objectives and to make these cooperative system more useful to mankind. To this effect accounting as a discipline has qualified as a science. It has since met the requirement for a field of knowledge and science with available evidences.
i. It has been studied for quite long time, systematically.
ii. It has been organized into a series of theories
iii. Principles and workable equations have also been formulated.
iv. Accounting management theories were being tested against experience.
v. Accountants are able to guide managers by telling them what to do in a particular situation and at the same time enabling them to predict the consequences of their actions.
Finally, accounting is a social science because it studies business financial behaviour as a guide to every management step. It is therefore, more science oriented then management itself.
U. C. Chuwku, (2004), Financial Accounting, Principles and Practice (New Concept Publishing, Abakaliki).
P. N. Okere and O. E Ekpe, (2005), Science for Man (Rojoint Communications Services Ltd, Enugu).
Uguru L. C. (2010), Cost and Management Accounting I (Catholic Communications Link, Abakaliki).
Cletus Ikechukwu Anyigbo, (2000), Basic Financial Accounting (Hugotez Publications, Enugu)
U. C. Chukwu (2002), Accounting and Finance Terminologies, (Bills Points and Publishers, Amawbia)
B. Olailanokarimu (1997), Business Management (Rafty Abosede Ventures, Isonyin- Ijebu)
Frank Wood and J. O. Omuya (1982), Business Accounting I., (Longman Group Limited, UK).
Oxford, Advanced Learners, English Dictionary.