Business organizations involve complex interactions of economic and social forces. We observe and analyze organizations using a combination of economics, ethics, sociology and systems theory.

What is Accounting?

Accounting is usually understood as a branch of Applied Economics -- making sense of the financial performance of the firm. Within business computing, accounting is usually studied as a typical example of a management information and control system.

As recent events have shown (Enron) accounting and auditing have important ethical implications.

Aside from this, it is useful to recognize the social power and influence of the accounting view of the world. In sociology, accounting refers to the language that people and groups use to justify their actions to themselves and others. Business accounting can be seen as a popular example of this, largely based on financial calculations and reports. Business accounting is therefore what some sociologists call a discursive practice, involving a special language as well as special techniques. It confers special power and influence over business affairs.

Accounting Lecture Notes

Further Observations

Once when I was in France, some British wartime Pathé newsreel clips were being played on the television. One item reported a serious warehouse fire in Hackney, East London. Perhaps other countries at war would have suppressed news of such a disaster, or would have falsely blamed the accident on enemy action. The British commentary merely took a schoolboy delight in numbers: how many fire engines, battling for how many hours, how many firemen overcome with smoke, 80 feet the flames. To quantify is to master, the accountant’s disease. The French TV programme showed Britain as a nation of accountants.

Accounting Quotes

  • “In the game of business …[accountants] aspired to be players, or at least umpires, but were relegated to the humble office of scorekeepers. Their revenge for this ignominy was to keep the score in such a way that neither the players nor the umpires could ascertain the state of the game.”
    R.G.A. Boland. Quoted in the Financial Times June 14, 2003.
  • “The black and white figures in a profit and loss account … might be discriminated even by a well-conditioned rat.”
    G. Vickers, The Art of Judgment (Chapman & Hall, 1965) Harper & Row ed, p 154

Accounting Questions

  • Accountants are often regarded as “mere bean counters”, and yet many accountants become successful business executives. Explain this phenomenon with reference to accounting as a discursive practice.

  • It is sometimes said that American business is run by lawyers, British business by accountants, and German business by engineers. If this were true, what consequences would you expect to follow from it?