Why Accounting is highly subjective

Why Accounting is highly subjective Many scholars and theorists have supported the concept of subjectivity in accounting and have also used this concept has an argument against academics that have a different perspective to this concept ¸ who considers accounting to be objective. Morgan argued that accounting/accountants are constructors of reality, subjective (Morgan, 1988, pg. 477) and they produce and represent situations in financial statements with some degree of subjectivity and one-sided ways. This perspective or ideology was further supported by Ruth Hines, a source to the improvement of accounting theory, who used the notion of reality construction to justify her view. She believed that in communicating reality, we construct it (Hines, 1988, pg. 251). Hence, accounting is socially constructed, which means it is concocted by people, individuals or societies at large. However these were views that positivists, David Solomons and Rob Bryer did not support. Bryer used Marxs theory of labour process to argue that objective accounting lies at the core of capitalist control of modern business enterprises (Bryer, 2006, pg. 42). In addition, Solomons had a more radical view by suggesting that accountants should be like journalists (Solomons, 1991, pg. 287). He explains that accountants should be reporting the news as it happens, not build it to be the reality or full picture of an event; but do we know what reality is?, how and when do we know what the true and fair view of an event is without having an historical background?, can we rely on it?. These are views that will also be explored during the course of this evaluation. First of all, what is accounting? The American Accounting Association defines accounting as the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by users of the information (Porter Norton, 2009, pg. 11). The history of modern accounting dates back to 1494, when Luca Pacioli wrote a book on double entry bookkeeping. During the years that followed, accounting and the accounting profession lacked theoretical knowledge backing them up'(Kyriacou 2010, lecture3, slide8) to decrease ambiguity. Therefore, due to the financial scandals in the 1920s that lead to the great depression at that period, GAAP (Generally Accepted Accounting Principles) was formed in the in the late 1930s to control and regulate the accounting. Years after GAAP was formed, SSAP2 was formed in 1971 to serve as a directional tool for accounting and the accounting profession with the combination of various concepts and conventions: Going, accruals, prud ence and consistency, realisation, objectivity, materiality, money measurement, entity and duality. However after the ASB review, SSAP2 reduced them to four which formed C.A.P.G (Going, accruals, consistency and prudence). SSAP2 also established more policies on stock, depreciation, assets etc. Despite SSAP2s effort to give meaning to accounting traditions, accounting was still done based on the duality concept because accountants did not know why accounting was practised the way it was. As a result, the notion of a conceptual framework was introduced by the FASB (Federal Accounting Standards Board), to put together various ideas that arose years after the emergence of SSAP2, to give accounting a better understanding. In other words, conceptual framework is basically a big accounting encyclopaedia, where you will find rules, theories, terms and principles that have been drawn together as the years go by, to shape the accounting profession and offer some sought of meaning to accounti ng, as a whole. These Ideas include The Corporate Report 1975, true and fair view, SSAP2, accounting concepts, 1991 Statements of Principle, etc. (Mathews Perera, 1996, 23-30). From history, it is evident that accounting has been shaped by different ideas, images and views over the years by countries, scholars and the society at large. Ideas such as the True and Fair view; which is a fundamental part in accounting and all issued accounts, the suggestion of six additional statements in the Corporate Report 1975 and also the debate between UK and USA on whether it is possible to obtain a conceptual framework, or put theories on events that has already happened hence conceptual framework, which was the suggestion from the UK by professor Macvae. However, these ideas only provide us with diverse standpoints of accounting practices as a whole. Even so, it is palpable that accounting is socially constructed and subjective just like an artist is obliged to produce a partial view of the reality he or she w ishes to represent (Morgan, 1988, pg. 477). All these views, debates and ideologies were all constructed by people for people i.e. accounting bodies to accountants, hence socially constructed. For example, financial statements are constructed by a financial accountant based on his or her view of a company, to an audience that are external. However, the views of such accountant might not be the full picture of the company financial position. As a result of the untrue representation of the financial statements, the outcome becomes highly subjective and relatively a biased observation of reality because accountants arbitrarily combine and define, and add, and subtract things in a different way to the everyday way (Hines, 1988 pg. 254) While positivists such has Solomons suggests that the conception of neutrality ,impartiality, should be fundamental to accounting and that accountants should be unbiased and reporting reality as they see it, it begs the question whether reality can be verified or proved? And as users, should we depend on it without knowing why it is done in such way? That is the reason why unanswered questions like the above make phenomenologists like tinker disagree with the ideas of positivism approach to accounting. They believe that people i.e. accountants are not entirely independent about their opinions and how they view reality as a whole. In addition, Hines said that in communicating reality, we construct it (Hines, 1988, pg.257) and give meaning to it. Consequently, Reality to accountants or in accounting is interpreted differently to non accountants. This is like the relationship between a farmer and a chicken. Reality to a farmer is to kill the chicken for Christmas celebration but for the chicken reality is growing up in the farm and laying eggs. This example therefore shows that reality is interpreted in different ways but due to the fact that accountants are a group with power in the society like the farmer, their construct and make their reality legitimate which we then have to believe and absorb into our own general conception, because they basically shouted the loudest. However, in my opinion, I think reality is out there but because we are limited to following the views and opinions posed in accounting, we wont be able to find reality but instead wait until something bad has happened in the accounting profession just like the financial crisis and failures that took place in big organizations like Lehman Brothers (Swedberg, 2010, 71-114), and question objectivity in accounting. This brings us back to the farmer and chicken illustration. Since the chicken is used to doing the same thing; wakeup, eat, walk around, lay eggs and sleep everyday during the year, such chicken would not know what reality is because the chicken is used to the same way of living but when Christmas comes the chicken gets killed. Then, questions will be asked whether the way the chicken has been living since the beginning of the year is reality or being killed during Christmas? Enough of my chicken illustration and back to my evaluation. In addition financial failures in big organizations have made non-accountants more aware of the significant impact of accounting in their lives and the roles they play to shape accounting. Subsequently, due to the problems in the accounting profession, there have been theoretical frameworks created to provide solutions and discipline in the profession. So what is theory? Theory can be defined as a set of interrelated constructs, definitions and propositions that present a systematic view of a phenomenawith the purpose of explaining and predicting the phenomena (Kerlinger, 1964, p.11). However, since accounting is a practice based profession unlike science, we can argue that applying theory based system into accounting could be problematic even subjective. This is because acquiring knowledge needed to form theories, comes from different sources, such as; introspecting, ones perception, memory, faith, intuition etc. All of which are all subjective sources. To be able to acquire knowledge, the process of induction is used. The process starts from observation, which is the inductive approach to develop a law or theory. Once the law has been passed, it would then go through the deductive approach were it would be tested. However there have been debates about how theories are generated. Furthermore, some scholars suggested that it is through the inductive approach and others say it is through the deductive approach but because fundamental accounting theories such as fair value and depreciation have all been developed through the inductive reasoning process, it is safe to say that these theories are very subjective. Reason being, not all situations, events or circumstances observed are objective; instead they are prejudiced and give an inaccurate picture of what the observer sees. This therefore reiterates Hiness perception that when we communicate reality, we create it (Hines, 1988, p.g 251). Over the years, the observable fact of ambiguity and uncertainty in accounting concepts has been the topic of debate between accounting researchers. Apart from the notion of reality construction and accounting theory formation, these debates have been centred around the back bone of financial statements: the true and fair view concept. Firstly, what is the meaning of true and fair? , what is the definition of the true and fair view concept in accounting? Websters Reference Library (2010) defines true as conforming with fact; correct, accurate; perfectly in tune (Webster, 2010, pg. (349)). Fair is defined in the concise Oxford Thesaurus (2002) as fair-minded, just, impartial, unbiased, unprejudiced, and honest (Kirkpatrick, 2002, pg. (273)). However, the concept of true and fair view in the accounting profession is releasing all appropriate materials that are consistent with the acceptable accounting principles. However, non-accountants construe the meaning of true and fair to be 100% truth and correct, so whenever statements are signed off with the famous sentence: this statements has been produced with a true and fair view, users of financial statements immediately believe that the accounts produced is the 100% reflection of the companies financial state which has been produced truthfully and correctly. Regretfully, this assumption is not always right because not all companies report their financial state truthfully and correctly which was the case of Enron, were the company had leveraged some it if debts constantly and did not reflect it on their balance sheet before and after it was signed off by the companys auditor, Anderson, under the accounting rules and principles (Thakur, kalra karkun, 2002, pg. 1-5). Therefore this shows that the true and fair view concept was used as a safety net and a pepper spray to blind the users from knowing the full-picture and also used as an excuse for non-compliance. For that reason, I think the vagueness and high subjectiv ity level involved in the true and fair view concept makes it difficult to have a definitive explanation when the accounting definition is unclear even to the professionals themselves, who make sure they avoid explaining the meaning. It is therefore based on ones perspective/interpretation of what true and fair view is thus making accounting very subjective as suggested by Tinker. He said it is impossible to represent financial events without any form of subjectivity in it and ignoring some facts because financial statements are produced based on the accountants opinion or due to influences from different factors (Tinker, 1991, pg. 297-298), for example the Lehman Brothers collapse. In conclusion, even though accounting is regarded or said to be objective and as much as accountants perceive themselves to be positivists, it is evident the profession as a whole is not as objective as we would hope. Furthermore, this evaluation has used various notions to give an explanation the issue of subjectivity in accounting. Firstly, the formulation of the conceptual framework plays a huge part in shaping accounting either through theories or debates, all of which provided accountants with the rules they have to follow. Nonetheless, it is evident that the framework is socially-constructed because it was developed by people for other people i.e. by accountants to the external users. Additionally, the notion of reality construction shows that accounting is subjective because accountants make their reality known by giving it meaning based on their opinion and, everyone else has to follow these common conception. We can also see that knowledge gathering is important when making or formulating accounting theories. It however becomes problematic because the sources used to acquire knowledge during the inductive reasoning approach could sometimes be biased and prejudiced and as phenomenologists suggested, we are part of what is being observed. Whats more, the true and fair view concept in accounting is highly fundamental to published accounts. However, inability to give the concept a definition within the accounting profession and in company law makes it harder to understand even to the professionals themselves. This therefore makes it highly subjective because we as users are left to give the concept a meaning based on our judgement.

Environmental Movement Essay

Environmentalists advocate the sustainable management of resources and stewardship of the environment through changes in public policy and individual behavior. In its recognition of humanity as a participant in (not enemy of) ecosystems, the movement is centered on ecology, health, and human rights. The environmental movement is represented by a range of organizations, from the large to grassroots. Due to its large membership, varying and strong beliefs, and occasionally speculative nature, the environmental movement is not always united in its goals. At its broadest, the movement includes private citizens, professionals, religious devotees, politicians, and extremists. History of the movement The roots of the modern environmental movement can be traced to attempts in 19th-century Europe and North America to expose the costs of environmental negligence, notably disease, as well as widespread air and water pollution, but only after the Second World War did a wider awareness begin to emerge. The US environmental movement emerged in the late nineteenth and early twentieth century, with two key strands: preservationist such as John Muir wanted land and nature set aside for its own sake, while conservationists such as Gifford Pinchot wanted to manage natural resources for human use. Among the early protectionists that stood out as leaders in the movement were Henry David Thoreau, John Muir and George Perkins Marsh. Thoreau was concerned about the wildlife in Massachusetts; he wrote Walden; or, Life in the Woods as he studied the wildlife from a cabin. John Muir founded the Sierra Club, one of the largest conservation organizations in the United States. Marsh was influential with regards to the need for resource conservation. Muir was instrumental in the creation of Yosemite national park in 1890. Muir was also personally involved in the creation of Sequoia , Mount Rainier , Petrified Forest and Grand Canyon national parks. Muir deservedly is often called the â€Å"Father of Our National Park System. â€Å" During the 1950s, 1960s, and 1970s, several events illustrated the magnitude of environmental damage caused by humans. In 1954, the 23 man crew of the  Japanese fishing vessel Lucky Dragon 5 was exposed to radioactive fallout from a hydrogen bomb test at Bikini Atoll. The publication of the book Silent Spring (1962) by Rachel Carson drew attention to the impact of chemicals on the natural environment. In 1967, the oil tanker Torrey Canyon went aground off the southwest coast of England, and in 1969 oil spilled from an offshore well in California’s Santa Barbara Channel. In 1971, the conclusion of a law suit in Japan drew international attention to the effects of decades of mercury poisoning on the people of Minamata. At the same time, emerging scientific research drew new attention to existing and hypothetical threats to the environment and humanity. Among them were Paul R. Ehrlich, whose book The Population Bomb (1968) revived concerns about the impact of exponential population growth. Biologist Barry Commoner generated a debate about growth, affluence and â€Å"flawed technology. † Additionally, an association of scientists and political leaders known as the Club of Rome published their report The Limits to Growth in 1972, and drew attention to the growing pressure on natural resources from human activities. Meanwhile, technological accomplishments such as nuclear proliferation and photos of the Earth from outer space provided both new insights and new reasons for concern over Earth’s seemingly small and unique place in the universe. In 1972, the United Nations Conference on the Human Environment was held in Stockholm, and for the first time united the representatives of multiple governments in discussion relating to the state of the global environment. This conference led directly to the creation of government environmental agencies and the UN Environment Program. The United States also passed new legislation such as the Clean Water Act, the Clean Air Act, the Endangered Species Act, and the National Environmental Policy Act- the foundations for current environmental standards. By the mid-1970s anti-nuclear activism had moved beyond local protests and politics to gain a wider appeal and influence. Although it lacked a single co-ordinating organization the anti-nuclear movement’s efforts gained a great deal of attention. In the aftermath of the Three Mile Island accident in 1979, many mass demonstrations took place. The largest one was held in New York City in September 1979 and involved 200,000 people; speeches were given by Jane Fonda and Ralph Nader. Since the 1970s, public awareness, environmental sciences, ecology, and technology have advanced to include modern focus points like ozone depletion, global climate change, acid rain, and the potentially harmful genetically modified organisms . Scope of the movement Before flue-gas desulfurization was installed, the air-polluting emissions from this power plant in New Mexico contained excessive amounts of sulfur dioxide. Environmental science is the study of the interactions among the physical, chemical and biological components of the environment. * Ecology, or ecological science, is the scientific study of the distribution and abundance of living organisms and how these properties are affected by interactions between the organisms and their environment. Modern environmentalism Today, the sciences of ecology and environmental science, rather than any aesthetic goals, provide the basis of unity to most serious environmentalists. As more information is gathered in scientific fields, more scientific issues like biodiversity, as opposed to mere aesthetics, are a concern. Conservation biology is a rapidly developing field. Environmentalism now has proponents in business: new ventures such as those to reuse and recycle consumer electronics and other technical equipment are gaining popularity. Computer liquidators are just one example. In recent years, the environmental movement has increasingly focused on global warming as a top issue. As concerns about climate change moved more into the mainstream, from the connections drawn between global warming and Hurricane Katrina to Al Gore’s film An Inconvenient Truth, many environmental groups refocused their efforts. In the United States, 2007 witnessed the largest grassroots environmental demonstration in years, Step It Up 2007, with rallies in over 1,400 communities and all 50 states for real global warming solutions. Many religious organizations and individual churches now have programs and activities dedicated to environmental issues. The religious movement is often supported by interpretation of scriptures. Most major religious groups are represented including Jewish, Islamic, Anglican, Orthodox, Evangelical, Christian and Catholic. Radical environmentalism Radical environmentalism emerged out of an ecocentrism-based frustration with the co-option of mainstream environmentalism. The radical environmental movement aspires to what scholar Christopher Manes calls â€Å"a new kind of environmental activism: iconoclastic, uncompromising, discontented with traditional conservation policy, at time illegal †¦ Radical environmentalism presupposes a need to reconsider Western ideas of religion and philosophy (including capitalism, patriarchy[10] and globalization)[11] sometimes through â€Å"resacralising† and reconnecting with nature. [10] Greenpeace represents an organisation with a radical approach, but has contributed in serious ways towards understanding of critical issues, and has a science-oriented core with radicalism as a means to mediaexposure. Groups like Earth First! take a much more radical posture. Criticisms A study reported in The Guardian concluded that â€Å"people who believe they have the greenest lifestyles can be seen as some of the main culprits behind global warming. † The researchers found that individuals who were more environmentally conscious were more likely to take long-distance overseas flights, and that the resulting carbon emissions outweighed the savings from green lifestyles at home.

Unbiased Report Exposes the Unanswered Questions on Sat Essay Samples 2017

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Comparison of Three Isomers of Butanol - 1448 Words

Comparison of Three Isomers of Butanol SCH 4UI Abstract The Hydroxyl group on alcohols relates to their reactivity. This concept was explored by answering the question â€Å"Does each alcohol undergo halogenation and controlled oxidation?† . Using three isomers of butanol; the primary 1-butanol, the secondary 2-butanol and the tertiary 2-methyl-2-propanol, also referred to as T-butanol, two experiments were performed to test the capabilities of the alcohols. When mixed with hydrochloric acid in a glass test tube, the primary alcohol and secondary alcohols were expected to halogenate, however the secondary and tertiary ended up doing so. This may have been because of the orientation of the Hydroxyl group when butanol is in a different†¦show more content†¦Three test tubes were placed in a test tube rack.. 2. Using a clean eye dropper, 2 drops of 1-butanol were placed in the first tube, 2 drops of 2-butanol were placed in the second tube, and 2 drops of T-butanol were placed in the third tube. 3. Under a fume hood, drops of concentrated HCl(aq) were added to each test tube. 4. Each mixture was shaken gently and subsequently returned to the test tube rack. 5. The tubes were observed for approximately a minute, noting any evidence of cloudiness. 6. The mixtures were then correctly disposed of, and steps 1. and 2. were repeated. 7. To each fresh tube of alcohol, 2 mL of 0.01 mol/L KMnO4 was added, and step 4. was repeated. 8. The Tubes were observed for a final 5 minutes, noting any color changes in the solutions. Observations and Results Table 1.1 – Structural Diagrams of Isomers of Butanol. |2-butanol |1-butanol |2-methyl-2-propanol | | | | OH | |OH | || | ||Show MoreRelatedComparison of Three Isomers of Butanol Essay1281 Words   |  6 Pages1 Comparison of Three Isomers of Butanol Introduction: An alcohols reactivity is determined based on the attachment of their hydroxyl functional group. The location of this hydroxyl functional group will impact the molecular structure of the alcohol, making it either primary (1 ° ), secondary (2 ° ), or tertiary (3 ° ). If the OH is bonded to only one other carbon, it is a primary alcohol (eg. 1-butanol); if bonded to two other carbons, it is a secondary alcohol (eg. 2-butanol); ifRead MoreEfficiency Of Alcohols Based On Chain Length And Branch Chains1674 Words   |  7 Pagesdetermine which alcohol is most energy efficient, including comparing the energy difference between straight-chain alcohols and their isomers. Due to the fact that the structure of the branch-chained isomer makes the molecule more compact and decreases its surface area, this reduces the intermolecular forces and therefore boiling point. It is hypothesised that isomers will require less energy to break the compound than straight-chain molecules and that as the number of carbon atoms increase in a straight-chainRead MoreChemistry And Biochemical Engineering : The Fields Of Synthetic Biology And Chemical Engineering1270 Words   |  6 Pagescom plex products that are difficult to synthesize chemically. In fact, the workhorses of biology- enzymes- enable high specificity in biochemical transformations (for example, to isomerize small molecules, or to act on a specific isomer preferentially over a different isomer) that has not yet been possible via chemistry alone. Thus, applying the synthetic biology toolbox to harness the amazing diversity and capability of protein-based catalysts for accelerating metabolic engineering efforts is of greatRead MoreMelting Point and Boiling Point of Organic Compounds3218 Words   |  13 Pagesmelting point apparatus was used for the first part of the experiment, while the micro method for boiling point determination was performed for the second. Both the melting and boiling point of compounds are affected by intermolecular forces. The three kinds of intermolecular forces that can operate on covalent molecules listed by increasing strength are van der Waals forces, dipole-dipole attraction s, and hydrogen bonds. Also, purity and isomerism also affect melting point and branching for boiling