ABSTRACT
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
Abstract ii
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
Conclusion 8
References 9
CHAPTER ONE
INTRODUCTION
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.
CHAPTER TWO
LITERATURE
REVIEW
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.
CONCLUSION
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.
REFERENCES
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.