Subjectivity in Accounting

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iWarwick Business School, University of Warwick
IB2300 Accounting in Context
Part 2 – Reflective Assignment
20th December 2011
Word Count: 945

“An auditor is a man who watches the battle from the safety of the hills and then comes down to bayonet the wounded.” - Irving R. Kaufman
The past nine weeks have been intense and interesting. The entire module work has broadened my view of accounting tremendously and forced me to critically evaluate. It has had an impact of a 180 degree change in view. In the first piece of this reflective, I mentioned that accounting is subjective and does not consider a number of factors but the last few weeks have opened doors to deepen my thoughts . I believe that it is not possible to answer the question with a yes or a no, however it does show the true profit and does reflect the activity in the organisation, depending on the ethics of the compiler. There are many issues and criticisms with accounting that have arisen in the past few decades. My line if thought grew from what principles were, who made them and how were they influenced? The realisation principle is when the good is sold or disposed. „In the case of a cheque; is it when it is received or when honoured?‟ (Hines, 1988). The problems that are further raised are very well put forward by Yankelovich (1972) – “The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can‟t be easily measured or give it an arbitrary quantitative value. Thi s is artificial and misleading. The third step is to presume that what can‟t be measured easily isn‟t really important. This is blindness. The fourth step is to say that what can‟t be easily measured doesn‟t really exist. This is suicide. ” However, it would be highly incorrect to disregard the idea revolving around the objectivity of accounting as mentioned in Wagner‟s study. My viewpoint on this subject stemmed from the ideas of Hines. “Accounting paints...
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