Essay on Subjectivity in Accounting

1087 Words 5 Pages
iWarwick Business School, University of Warwick
IB2300 Accounting in Context
Part 2 – Reflective Assignment
20th December 2011
Word Count: 945

“An auditor is a man who watches the battle from the safety of the hills and then comes down to bayonet the wounded.” - Irving R. Kaufman
The past nine weeks have been intense and interesting. The entire module work has broadened my view of accounting tremendously and forced me to critically evaluate. It has had an impact of a 180 degree change in view. In the first piece of this reflective, I mentioned that accounting is subjective and does not consider a number of factors but the last few weeks have opened doors to deepen my thoughts . I believe that it is not possible to answer the
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For example, “banks using accounting loopholes to inflate profits and bolster bonuses” (The guardian, 2011).
They are in a position where they can choose to construct reality than communicate reality. The pictures painted by accountants are incomplete it can recognise only those things that can be measured in prices or exchanged for prices. Accounting is an important source of i nformation for critical decisions, whether it be strategical or tactical decisions, the incompleteness can be harmful. This ultimately helps us in constructing an organisational portrait. Coming back to the question on who and whether principles and accounting related rules are being influenced we went back to the source where “The IFRS has been working towards striving for their independence from the big companies that influence them at the current moment. Could it somehow lead to special access or a situation where companies could threaten to cut off funding because they don‟t like a particular standard?” Tom Seidenstein (Robert Bruce, 2011). Hence this further confirms George Stigler‟s point of „Regulation is the negotiation of private interests‟ and supports the capture theory. Another topic of concern is the fact that accounting rules and concepts constantly keep changing therefore leading to completely different
measure

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