Accounting is often referred to as the language of business. It is a special-purpose tool for communication about the financial statements and the performance of a company. This can happen through written, natural language by selecting words from a standard vocabulary combining them in meaningful ways. These words are then organised into financial reports according to relatively flexible rules of presentation.
Accounting dates back to 1494 when Luca Pacioli published a book called Summa de Arithmetic. It Around the 15th century, accounting records were found amongst ruins of ancient Babylon, Assyria and Sumeria. It is suggested that people relied on accounting methods to record the growth of crops and herds. During the Roman Empire, accounting was quantified and listed as a public expenditure which included grants of land and religious offerings. Money to army veterans was also given.
Current Issues affecting Accounting as a language
The decline of the U.S dollar is a perfect example of an issue that affects accounting as a language. The objective of accounting theory is to provide a basis for the prediction and to explain accounting behaviour and its events. This theory assumes that a stable monetary unit is present. Further decline in the purchasing power of the dollar has affected all realities and its associated languages. Events like this play a vital role as to whether a new language of bookkeeping needs to be implemented.
Accounting language must develop theories which are rational. There may be instances where a procedure does not appear to be reasonable. An example of this can be seen with the determination of joint product and by-product costs. The reason why this raises doubts is because it is difficult to allocate costs in a way that accurate costs can be obtained. In addition to accounting language theories being rational is its usefulness. Theories and conclusions are constantly being tested to measure the usefulness of the research...
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