Various Skills of Accountants
- Length: 1571 words (4.5 double-spaced pages)
- Rating: Excellent
In the UK today, only 15% of the labour force are in manufacturing; this will go down to about 10% by the year 2010.
In Pakistan, approximately 15% to 25% accounting students are increasing every year. The number of professional commerce institutions has increased from 36 to 100 since 1992. (Source: Central bureau of education, Pakistan)
What does this means?
More and more people are directing towards non-manufacturing environments which makes them more conscious about social and environmental factors than those technical. The decline of manufacturing has been changing the skills and competencies that accountants need in the 21st century to satisfy the needs and requirements of stakeholders.
Result is the division of accountants into those who can coop up with changing world and those who can't i.e. entrepreneurs and number crunchers.
Because of the unawareness of the subject matter in general public, little use of available information technology by accountants and ignoring social & environmental factors to report with mere numbers, a common perception is developed that accountants are dull, conservative and preoccupied with numbers. Yet all is not lost. Change is afoot!
Do accountants have strength just in numbers?
Undoubtedly, accountants are more much more than number crunchers. Accountants are concerned about how the collected data should be used whereas number crunchers are busy thinking how data should be collected. If number crunching was what was required, then artificial intelligence of computers was sufficient; employers won't look for accountants who are Emotionally intelligent' Team worker' and a lot. In fact, accountants are key strategists who help both individuals and organisations to improve their financial practices and systems. They have an ability to anticipate the client's needs and position organisation's capabilities to the best advantage. Depending on their chosen area of specialisation, there is a wide range of duties that accountants perform. Accountants, for instance, help businesses with problems like:
Audit the business for compliance with legislation
How to start a business and when to expand
How much the business is worth
How to make the most out of the corporate wealth
Developing a tax & legal strategy
Managing insolvency, bankruptcy and receivership
Forensic accounting, an emerging branch of accountancy, has helped in investigating and detecting frauds but above all, using' numbers instead of crunching' had added to the decision making capability of modern accountants. Would that accountants are number crunchers, who would find the right numbers at right times to make use of, for the critics?
One who draws a map for others knows all the ways to destination, likewise an accountant who present reports to managers. "To get to the top in business, you need strength in numbers." (Motto: McCombs School of Business)
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What can an accountant offer to a business beyond number crunching?
A study conducted by Intuit Professional Accounting Solutions revealed that 80% of the small business owners polled in 2003 are "very satisfied" with their accountant's service, as compared to 68% last year whereas, 94% of accountants feel their clients are very satisfied which is contrary to the statement "accountants are number crunchers". Think for a moment about what is thought to be involved in an accountant's workday. Most people would think about numbers, debits, and credits. Now that the idea of the stereotype has been introduced, it is time to know what accountants really have to tackle. Accounting is more closely related to other fields than a person might think. Communication in the work place makes writing skills imperative. When it comes to ethics, it seems as if accountant is the hub that connects the business world together. Stress is laid on the skills that may help business owners and stakeholders by the way of business sustainability, entrepreneurship and strategic thinking. Despite of critics; accounting professionals have proved incredible in past years to put the superlative strategic answers to the questions like:
What to do?
How to do?
When to do?
But the future is only for them who have left number crunching behind and are object oriented, highly focused and grounding their feet in techniques like SWOT analysis, reverse engineering, Total Quality Management, etc. Some anecdotal evidence that will affect the future may be useful. Phillip Amen, CPA, controller and vice-president of General Electric, says that, generally speaking, for the last several years GE has not hired accountants for entry-level positions in the finance department and "we have no current plans to change that policy." GE is certainly not discriminating against accountants; it also avoids hiring MBAs and business majors for those jobs. Instead, he explains, the company searches for bright people who are adaptable--not those who are stuck in yesterday's business paradigm.
Why are accountants perceived to be number crunchers?
Because of the relaxation provided by the use of advanced technology in workplace, many accountants have stop thinking outside the box, and instead of making most out of the opportunity provided by technology they wish not to gain its familiarity and rather adapt a pessimistic approach, for this reason, a common perception is developed that accountants are boring number cruncher.
Where the employers look for accountants with computer literacy, it is highly observed that accountants find themselves more comfortable with manual records than electronic. Consequently, more effort and time is elapsed. The reason behind this seems to be quite out of sight, which is obviously lack of computer knowledge. A key solution to this problem is the introduction of the related & useful I.T. section in every paper attempted and most data appearing in the questions should be computer generated reports. This may enhance & test a student's knowledge of Electronic Data Processing in tax, audit assurance, costing techniques as well as routine book keeping & final accounts. Where services provided by technology had mobilised the functioning of legal govt. authorities, tax authorities, national identification authorities and many more, accountants should if possible also have power over developing desired accounting software rather than using off-the shelf packages. "Remember, true security is found by committing yourself to improving one aspect of your life each and every day." Consolidating Your Future with Thirty Golden Rules - GB91
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Secondly, the awareness of the subject matter among the general public is low but the fame is high. As discussed earlier, people are only able to think about debits & credits when it comes to accounting or many are even further unaware, for instance, in Pakistan itself, knowledge of accountancy when compared to that of medical or engineering is very low. Result is the perception, Grapes are sour.' Follows that most students coming to accountancy never intended to be an accountant but due to their failure to qualify for engineering or medical, they are accountants. This increases a material growth in the students, hence, number crunchers. Unfortunately, many accounting bodies today are still bordered with old economic techniques of controlling the demand i.e. student growth by adjusting prices i.e. fee. Though this relation holds but is blemish if applied on education system as quality is ignored. Solution to the problems like this one is very crucial. An introduction of a preliminary entrance test to admit on the base of pure merit system and toughen the exam passing criteria supported by reduction in exam fee may not only prove helpful to control student growth but also may retain excellence. Addition of some accounting techniques in mathematics to syllabi of secondary or higher secondary schooling may also work to spread awareness. Time to separate accountants from number crunchers is now.
Another reason for the conception of fake statements against accountants is that managers often try to veil their weakness by blaming accountants. Furthermore, lack of hiring and firing skills is witnessed in industry as most of the industry comprises of SMEs which are barely able to bear the cost of quality HRD services.
Finally an improvement in reporting standards is required. Muhammad Abdul Wajid, in his article to ACCA, defines that the purpose of the business is changing from maximizing share holders value to maximizing interests of stakeholders in business. This purpose can be achieved by transparent public reporting by the auditors and accountants of organizations. But, "The quality of corporate social reporting is poor and much of it is inadequate as a means of assessing the extent to which companies have acted in a socially responsible manner." Carol Adams & Ambika Zutshi; Australian accounting review vol. 14. The statement clearly indicates the failure of accountants in reporting with weighted factors for the stakeholders. The result is that stakeholders make investigations on their own instead of depending on the published reports, hence, dull and useless reports depicts conservative behaviour of accountants. The obvious solution to the problem is revising the study curriculum keeping in view the demands of sustainable, social and environmental reporting. ACCA along with WWF is working hard on sustainability reporting.
The thought that accountants only work with figures is starting to seem farther from the truth. Reality is anything but figures. As there is always some space to improve, Statements like Are accountants no more than number crunchers?' should be interpreted as opportunity by the professional bodies instead of threat, keeping in mind that critics are always ahead of, whether accountant, entrepreneur or even leader. Like, "Managers are party boys." Or "My son is now an entrepreneur. That's what you're called when you don't have a job." Ted Turner