In pursuit of a foundational accountancy philosophy

 

Die strewe na 'n grondliggende filosofie vir rekenmeesterskap

 

 

P. Buys

School of Accounting Sciences, Potchefstroom Campus, North-West University, Potchefstroom. E-mail: Pieter.Buys@nwu.ac.za

 

 

---

ABSTRACT

Recent accounting history is characterised by many developments, including several high-profile corporate failures, such as Enron, Parmalat and even Saambou, as well as major developments in financial reporting standards, such as the broad-based acceptance of international financial reporting standards and the convergence efforts between the UK-based International Accounting Standards Board and the US-based Financial Accounting Standards Board. As a result, long-accepted accounting assumptions are being challenged in favour of new principles and practices. Furthermore, in academic circles the scientific foundation of accounting is being questioned. At many universities, limited education is taking place in the underlying theory and philosophy of accounting in favour of teaching prospective accountants how to pass difficult professional exams.
Seen against this backdrop, a reconsideration of the objectives and purpose of accountancy may be overdue. This article attempts to illuminate the intrinsic assumptions and objectives of accountancy, seen in the light of modern-day accounting issues and developments.

Key concepts: accountancy; accounting philosophy; accounting theory; financial reporting

---

OPSOMMING

Onlangse rekeningkunde geskiedenis word gekenmerk deur baie ontwikkelings, insluitend verskeie hoë-profiel korporatiewe mislukkings, soos Enron, Parmalat en selfs Saambou, asook belangrike ontwikkelings in finansiële verslagdoening, soos die wydverspreide aanvaarding van internasionale finansiële verslagdoeningstandaarde en die samesmeltingspogings tussen die VK-gebaseerde Internasionale Rekeningkundige Standaarde Raad en die VSA-gebaseerde Finansiële Rekeningkundige Standaarde Raad. As gevolg hiervan, word aanvaarde rekeningkundige aannames lank reeds bevraagteken ten gunste van nuwe beginsels en praktyke. Verderword die wetenskaplike grondslae van rekeningkunde in akademiese kringe bevraagteken. By baie universiteite vind beperkte opvoeding in die grondliggende teorie en filosofie van rekeningkunde plaas, ten gunste van pogings om voornemende rekenmeesters te leer hoe om moeilike professionele eksamens te slaag.
Gesien teen hierdie agtergrond, is die heroorweging van die doelwitte en doelstellings van rekeningkunde waarskynlik alreeds nodig. Hierdie artikel poog om lig te werp op die intrinsieke aannames en doelwitte van rekenmeesterskap, in die lig van moderne rekeningkundige probleme en ontwikkelings.

Kernbegrippe: finansiële verslagdoening; rekeningkundige filosofie; rekeningkundige teorie; rekenmeesterskap

---

 

 

Full text available only in PDF format.

 

 

List of references

AICPA see AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS        [ Links ]

AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. 2003. Code of professional conduct http://ftp.aicpa.org/csc/cpcaf/ethics/ethics.doc#I1013 Date of access: 15 Apr. 2008.         [ Links ]

ANDREWS, K.R. 2003. Ethics in practice. (In Harvard business review on corporate ethics. Boston: Harvard Business School Press. p. 67-83.         [ Links ])

BLACKBURN, S. 1994. The Oxford Dictionary of Philosophy. Oxford: Oxford University Press.         [ Links ]

BUSSE VON COLBE, W.B. 1996. Accounting and the business economics tradition in Germany. The European accounting review, 5(3):413-434.         [ Links ]

CAMBRIDGE DICTIONARY OF PHILOSOPHY. 2005. 2nd ed. Cambridge: Cambridge University Press        [ Links ]

CANADIAN INSTITUTE OF CHARTERED ACCOUNTANTS. 2005. Comparison of Canadian GAAP and IFRS. http://www.cica.ca/multimedia/Download_Library/Standards/Accounting/English/e_IFRS.pdf Date of access: 25 Apr. 2008.         [ Links ]

CANADIAN INSTITUTE OF CHARTERED ACCOUNTANTS. 2007. The UFE candidates competency map: understanding the professional competencies evaluated by the UFE. http://www.cica.ca/download.cfm?ci_id=40906&la_id=1&re_id=0 Date of access: 15 Apr. 2008.         [ Links ]

CHRISTENSEN, J. & FRIMOR, H. 2007. Fair value, accounting aggregation and multiple sources of information. (In Antle, R., Gjestal, F. & Liang, P.J., ed. Essays in accounting theory in honour of Joel S. Demski. Springer: Science and Business Media. p. 35-51.         [ Links ])

CICA see CANADIAN INSTITUTE OF CHARTERED ACCOUNTANTS        [ Links ]

CIMA DICTIONARY OF FINANCE AND ACCOUNTING. 2003. London: Bloomsbury.         [ Links ]

CLUSKEY, G.R., EHLEN, C.R. & RIVERS, R. 2007. Accounting theory: missing in action. Management accounting quarterly, 8(2):24-31.         [ Links ]

DAMANT, D. 2006. Discussion of international financial reporting standards (IFRS): pros and cons for investors. Accounting and business research, international policy forum, 29-30.         [ Links ]

DEMSKI, J.S. 2007. Is accounting an academic discipline? Accounting horizons, 21(2):153-157.         [ Links ]

EPSTEIN, B.J., NACH, R. & BRAGG, S.M. 2005. GAAP 2006: interpretation and application of generally accepted accounting principles. New Jersey: Wiley.         [ Links ]

EVERINGHAM, G.K., KLEYNHANS, J.A.E. & POSTHUMUS, L.C. 2007. Principles of GAAP. Cape Town: Juta.         [ Links ]

FASB see FINANCIAL ACCOUNTING STANDARDS BOARD        [ Links ]

FELLINGHAM, J.C. 2007. Is accounting an academic discipline? Accounting horizons, 21(2):159-163.         [ Links ]

FELTHAM, G.A. 2007. Joel S. Demski: a leader in accounting scholarship. (In Antle, R., Gjestal, F. & Liang, P.J., ed. Essays in accounting theory in honour of Joel S. Demski. Springer: Science and Business Media. p. 1-32.         [ Links ])

FINANCIAL ACCOUNTING STANDARDS BOARD. 2006. Statements of Financial Accounting Standards No. 1XX: The hierarchy of generally accepted accounting principles. http://www.fasb.org/project/gaap_near-final.pdf Date of access: 14 May 2008.         [ Links ]

GARDNER, J. 1989. Grendel. New York: Vintage.         [ Links ]

GELLERMAN, S.W. 2003. Why "good" managers make bad ethical choices. (In Harvard business review on corporate ethics. Boston: Harvard Business School Press. p. 49-66.         [ Links ])

GRAHAM, B. & MEREDITH, S.B. 1937. The interpretation of financial statements. New York: Harper.         [ Links ]

HUSBAND, G.R. 1954. Rationalization in the accounting measurement of income. The accounting review, 29(1):3-14.         [ Links ]

ICAA see INSTITUTE OF CHARTERED ACCOUNTANTS IN AUSTRALIA        [ Links ]

ICAEW see INSTITUTE OF CHARTERED ACCOUNTANTS OF ENGLAND AND WALES        [ Links ]

IFRS see INTERNATIONAL FINANCIAL REPORTING STANDARDS        [ Links ]

IMA see INSTITUTE OF MANAGEMENT ACCOUNTANTS        [ Links ]

INSTITUTE OF CHARTERED ACCOUNTANTS IN AUSTRALIA. 2008. GAAP consulting: complex, international and ever-changing GAAP and GAAS -your risks. http://www.gaap.com.au/html/gaap_consulting.html Date of access: 14 May 2008.         [ Links ]

INSTITUTE OF CHARTERED ACCOUNTANTS OF ENGLAND AND WALES. 2006. Members handbook: section 3, code of ethics. http://www.icaew.com/index.cfm?route=143703 Date of access: 15 Apr. 2008.         [ Links ]

INSTITUTE OF CHARTERED ACCOUNTANTS OF ENGLAND AND WALES. 2008. A-Z of abbreviations: G-L. http://www.icaew.com/index.cfm?route=155642#g Date of access: 14 May 2008.         [ Links ]

INSTITUTE OF MANAGEMENT ACCOUNTANTS. 2008. Statement of ethical professional practice. http://www.imanet.org/aboutethics_statement.asp Date of access: 15 Apr. 2008.         [ Links ]

INTERNATIONAL FINANCIAL REPORTING STANDARDS. 2006. International Financial Reporting Standards (IFRSs^®) London: IASCF Publications Department.         [ Links ]

JENSEN, M.C. 2002. Value maximization, stakeholder theory and the corporate objective function. Business ethics quarterly, 12(2):235-256.         [ Links ]

LOTRIET, R.A. 2007. Die antitese tussen witboordjiemisdaad en sake-etiek. Koers, 72(3):423-444.         [ Links ]

MATTESSICH, R. 2003. Accounting research and researchers of the nineteenth century and the beginning of the twentieth century: an international survey of authors, ideas and publications. Accounting, business and financial history, 125-170.         [ Links ]

NASH, L.L. 2003. Ethics without the sermon. (In Harvard business review on corporate ethics. Boston: Harvard Business School Press. p. 19-48.         [ Links ])

O'REGAN, D. 2004. Auditor's dictionary: terms, concepts, processes and regulations. New Jersey: Wiley.         [ Links ]

OXFORD ENGLISH DICTIONARY. 2004. Oxford: Oxford University Press.         [ Links ]

PERRY, J. & NÖLKE, A. 2006. The political economy of international accounting standards. Review of international political economy, 13(4):599-586.         [ Links ]

REIS, R.F. & STOCKEN, P.C. 2007. Strategic consequences of historical cost and fair value measurements. Contemporary accounting research, 24(2):557-584.         [ Links ]

RIAHI-BELKAOUI, A. 2000. Accounting theory. 4th ed. London: Thomson Learning.         [ Links ]

ROSSOUW, G.J. 2002. Business ethics and corporate governance in the second King report: farsighted or futile. Koers, 67(4):405-419.         [ Links ]

SAICA see SOUTH AFRICAN INSTITUTE OF CHARTERED ACCOUNTANTS        [ Links ]

SANGSTER, A., STONER, G.N. & McCARTHY, P. 2008. The market for Luca Pacioli's Summa Arithmetica. Accounting historians journal, 35(1):111-134.         [ Links ]

SCHROEDER, R.G., CLARK, M.W. & CATHEY, J.M. 2005. Financial accounting theory and analysis. 8th ed. New Jersey: Wiley.         [ Links ]

SHILLAM, P.L. 2008. Focus on the customer. Strategic finance: 23, April.         [ Links ]

SOUTH AFRICAN INSTITUTE OF CHARTERED ACCOUNTANTS. 2006. Code of professional conduct. https://www.saica.co.za/documents/Code_of_ProfessionalConduct_2006.pdf Date of access: 15 Apr. 2008.         [ Links ]

SOWDEN-SERVICE, C.L. 2006. Gripping GAAP (2007 ed.): your guide to international financial reporting standards. Durban: LexisNexis.         [ Links ]

SUNDEM, G.L. 2007. A note on the information perspective and the conceptual framework. (In Antle, R., Gjestal, F. & Liang, P.J., ed. Essays in accounting theory in honour of Joel S. Demski. Springer: Science and Business Media. p. 285-292.         [ Links ])

VAN CAUWENBERGE, P. & DE BEELDE, I. 2007. On the IASB comprehensive income project: an analysis of the the case for dual income display. Abacus, 43(1):1-26.         [ Links ]

WEBSTER'S DICTIONARY AND THESAURUS. 2006. New Lanark: Geddes & Grosset.         [ Links ]

WILD, J.J. 2008. Financial accounting: information for decisions. Boston: McGraw-Hill Irwin.         [ Links ]

WOLK, H.I., FRANCIS, J.R. & TEARNEY, M.G. 1992. Accounting theory: a conceptual and institutional approach. 3rd ed. Cincinnati: South-Western Publishing.         [ Links ]

ZEFF, S.A. 1986. Big eight firms and the accounting literature: the falloff in advocacy writing. Journal of accounting, auditing and finance, 1(2):131-154.         [ Links ]