The Essence of Leadership: Inspiring Change in a Dynamic World

 

Over the past ten years, considerable research attention has been devoted to identifying, analyzing, contradicting, advocating, and critiquing the changing roles of accountants. Over the past ten years, we have seen accountants take on additional tasks such as strategy formulation, systems development, organizational redesign and much more. In the 21st century, we have seen accountants devoting much less of their time to routine financial analysis, transaction processing, auditing and statutory reporting. Accountants' roles in the business environment are business oriented.  These changes created a crisis for accountants as the credibility of the profession was called into question. 

In this article we look at the traditional roles of accountants and compare them with the roles of the modern accounting profession. I will discuss some of the ethical issues that bind these roles and express my opinion on these differences. This discussion leads to the main point of this article - the importance of accountants in today's business environment and the demands for new roles of accountants. Moreover, I will also discuss the different sources and types of information available to accountants and the quality that this information should have. Information, an increasingly important asset for all business organizations, requires accountants to meet these new demands for their expertise.

Role of Accountants

Accountants face a dilemma as they face two different roles at once. First, they are considered watchdogs of upper management and they are also considered assistants to management. However, the second role seems to have increased in importance in recent years and accounting systems are seen as an impetus for organizational improvement. 

Specifically, the traditional roles of accountants include: auditing, management accounting and tax accounting. These roles are the primary functions for which accountants are trained in undergraduate education. On the other hand, additional or modern roles of accountants are financial planning, business analysis and strategy, technology planning and consulting. In these roles, accountants perform more specific tasks. These are generally assumed in actual practice; So skills are acquired in actual practice.

audit. This is, in theory, the primary and most important role of an independent accountant. As an auditor, the accountant's duties are to check the estimate of the organization in accordance with the formulas used consistently every year.   However, the importance of auditing as a business process has recently declined. In a survey of academics, practitioners and students, accountants rated audit preparation only moderately in terms of the importance of this task. 

Management Accounting. This is the role of internal accountants, who usually act as controllers or internal auditors. An internal accountant's job is to give a more accurate picture of the company's financial position and respect the truth of the report. 

Tax accounting. This is the role of a bookkeeper or tax preparer. The bookkeeper's duties include: Determining and estimating tax liabilities of clients, whether personal or corporate. 

Financial planning. This is an emerging role for accountants. Demand for this new role comes from their knowledge and expertise in tax laws and financial investment markets.  Additional tasks under this role include: performing due diligence, organizing shareholder meetings, overseeing cash management and handling payroll. 

Business planning and strategy. This is the role of accountants, converting raw financial numbers into usable business information. Project accounting and knowledge management are also additional functions under this new role for accountants. In this role, accountants guide managers and business owners to improve productivity and maximize profitability. 

Technology planning. Along with the automation of various business processes, accountants are also involved in the development and implementation of new information systems. Now, owners and managers rely on accountants to select the most appropriate technology solutions for financial and business management. 

Counseling. Accountants become consultants in financial management, revenue distribution, accounting and auditing. 

Key drivers of role change

It is clear from the literature that the roles of accounting have changed in recent years and these changes are expected to continue. The role of accounting shifted from providing information to facilitating broader information. In particular, this role shift made accountants take on a much broader range of management duties, from bookkeeping, data analysis, and tax preparation.   This meant that the roles of accountants shifted to business oriented or entrepreneurial roles. This shift is brought about by the following main drivers: changes in business market conditions, re-design organization, new management philosophies, more complex business processes, system development, innovation in management techniques and human resource development. 

Because of these key drivers, changes in accountants' roles will continue for at least another ten years. No longer constrained by numbers and formulas, accountants can feel free and rely on their creative and strategic side.

The challenge for accountants

Accountants will always be important to today's business enterprises. While others argue that changing the direction of the accountant is a blow to the credibility of the profession, I believe this is a challenge accountants should rise to. Business-oriented or entrepreneurial roles for accountants demand additional skills in these areas. To achieve credibility "again", as others say the profession has lost, accountants must master these additional areas to be considered experts in this field. Hence, this makes them not only professionals but also experts in these new fields.

A call for accounting education research to pay more attention to these additional areas will give accountants more insight into how these areas are firmly connected to traditional accounting practices. This is a call to the academy to train aspiring accountants to be flexible and well-rounded to meet the demands they expect in real practice. This calls for students to be open-minded and willing to accept these changing roles not as an insult but as a challenge and opportunity to become more relevant in today's business environment. Ultimately, this is a call for certified and practicing accountants to step away from numbers and formulas and be willing to use their creative minds to do more analysis and strategy – and more opportunities where accountants can prove they can meet the demands of today's business environment. at them; without sacrificing the core ethics of the traditional accountancy profession. Accountants must adhere to traditional ethics and values. It is the roles, skills and practices that will change and reorient.

Sources and quality of accounting information

Moreover, to satisfy the current demands for accountants, information is also needed. Now, information is an essential resource for the survival of all contemporary business organizations. It has become the primary and most important resource for achieving business intelligence and competitive advantage. In this section, I discuss the sources of information needed by accountants and the quality of this information.

In everyday business, various types and quantities of information flow to decision makers and users to meet internal organizational needs. Sources of information for the accountant can come from any element of the information flow system within an organization. These include top management sources, middle management sources, operational management sources and operational personnel sources. This information flow is an exchange of performance information, day-to-day operational information and budget information and advice. 

Furthermore, to be useful, accounting information must have each of the following attributes at a minimum:

understanding Accounting information should be comprehensive and comprehensible to users with reasonable knowledge of business and economic activities and economic information. This attribute acts as a link between the decision makers and the accounting information at hand.

Utility of the decision. Decision usefulness is a qualitative characteristic necessary to judge the quality of accounting information. This depends on the availability of information and the ability of the user to process the information for use in decision making.

Applicability. Accounting information should also be relevant to help the user of information analyze past and present results and predict the outcome of future events based on previous expectations. To be relevant, information must have predictive and feedback value and timeliness.

Reliability. Account information will also be useful if it is reliable. This means that the information must be free of error and bias; Hence faithful presentation of what is intended to be presented.

Verification. Accounting information should also be verified to ensure compliance with the chosen method without error or bias. Verification is useful in reducing measurement bias because the same method can be used to repeat measurements to reduce intentional and unintentional errors.

Comparison and consistency. Finally, accounting information should be compared because the information is more useful when compared with information from other companies. This allows accountants to identify and explain similarities and differences between two or more economic factors.