The different types of accounting present in the business industry of any country

According to the views presented by Romanus and Arowoshegbe, the profession of accounting plays an important role in the economic development of countries. There are various types of accounting that are conducted in the business industry of any country such as social accounting, government, accounting, taxation and business accounting. Each of these types of accounting has their own impacts and characteristics that can have substantial impact on overall economy (Romanus and Arowoshegbe, 2014). For example, taxation accounting done by individual people or government departments can affect the overall revenue generated by a country. Every business organization have limited amount of resources and financial resources can be considered as the most important resources as majority of operations are dependent on financial resources. With the help of accounting, management of the company can easily identify efficient and inefficient uses of such resources. Therefore effective accounting systems can help in making important decisions in relation to conservation of resources for a company.

Accounting education will also help a person to make ethical decisions in process of accounting for a business which is very essential requirement in current business environment as in past there has been various corporate accounting frauds. One of the biggest challenges that are faced by accounting education system is lack of educational institutes for accounting and professionals that can teach about the actual business conditions in which accounting has to be done (Thomas, 2012). The quality of education provided in the field of accounting is not up to date because an accountant should know about accounting standards prevailing in the domestic market as well as international market. Main responsibility of improving the quality of education in the field of accounting lies with the government of a country as such improvement will help in overall economic development.

Megan M. Burke and William R. Gandolfi have also presented their research in relation to limitations in accounting education in the United States. Their paper is focused on the limitations of accounting education towards requirements of small and medium-sized organizations. According to them, the accounting education system is focused on the requirement of large corporate organizations and they lack in providing information that is essential for accounting function to be performed in a small and medium-sized organization (Burke and Gandolfi¸ 2014). This is a very serious problem as it would result in misrepresentation of financial statements prepared by small and medium organizations. The use of financial statements remains same whether they are used in large organizations or small organizations. Majority of business decisions in small organizations are also taken on the basis of financial information provided by accounts of the company. Wrong estimation or misrepresentation of accounting information will result in the wrong decision-making process which is more dangerous for sustenance of small organization as compared to large organization.

Importance of accounting education in making efficient decisions

Any wrong decisions done by the Management of Small organization can lead to shutting down of business as they have the very limited amount of resources whether they are financial or operational. On the other hand limited amount of losses due to wrong decision making can be tolerated by a large organization as financial resources available with such companies are generally higher as compared to a smaller organization. Therefore there is a requirement of including curriculum in relation to accounting for business structures of sole proprietorship, partnership firms, limited liability partnership, etc. in accounting courses across the country (Apostolou et.al, 2013).

Theodore Tien Yiu Chen and Ping Kwan Fok have represented their views on accounting curriculum development and proposed by the Accounting Education Change Commission (AECC). American accounting association and some of the biggest accounting firms in 1989 formed an alliance to establish the Accounting Education Change Commission (AECC). The main purpose of establishing AECC was to change the accounting education system according to the needs and requirement of the business environment. There have been regular changes in this curriculum developed by AECC. All the curriculum developed has focused on theoretical aspects of accounting rather than a practical aspect of accounting (CHEN Tien Yiu and Fok, 2013). It is important for an accountant to understand the practical activities that are required to done in an actual business environment while conducting the function of accounting. In addition to that, these accounting curriculum does not focus on any ethical and professional requirement expected from an accountant.

Each and every accountant working for a particular organisation has access to highly confidential and critical information in relation to finances of the business. This type of information can be easily used by an accountant for their own personal gain. An accountant should be made aware of his or her ethical roles and responsibilities while discharging the function of an accountant. Ethical requirements are very essential for an auditor while checking the financial statements of the company as shareholders of the company has entrusted such person to give a true and fair opinion on financial statements of the company (Rebele and Pierre, 2015). 

Filiz Angay Kutluk, Adnan Donmez, Burcu Demirel Utku and Murat Erdogan have also presented their paper on expectations from accounting education system. According to their paper, with constant changes in science and technology, there is an essential requirement to change the education system also. This type of change in the education system is required for every field of education. They have conducted a primary research in which they have asked accounting professionals about the education provided to accounting graduates (Kutluk et.al, 2012). Majority of the accounting professional on which such research was conducted stated that newly graduated accounting professional does not have sufficient skill and knowledge to perform the function of accounting in the actual business environment. They have also explained that education provided to accounting professionals is not sufficient as per the requirements from a professional accountant in a business organization.

Lack of educational institutes for accounting and professionals that can teach about the actual business conditions

This clearly shows the lack of practical knowledge and skills provided to the accounting professionals. Today’s business environment is very complex and a business organisation faces various situations that can have a direct impact on financial accounting of the company. In such situations, it is essential that the accountant has practical knowledge of these business situations so that correct decision can be taken at that moment of time. Accounting educators that are providing education in relation to accounting functions to be discharged in a business organization have a very limited amount of knowledge of practical business environment (Zimmerman and Yahya-Zadeh, 2011). This is the main reason that results in the underdevelopment of skills and knowledge of a graduate accountant. It is a fact that theoretical knowledge is very important for formation of a base about accounting functions and Standards of auditing to be used but the importance of practical knowledge is ignored in the current education system. There is a requirement of collaborations between educators and professional accountants that are currently working in the practical business environment. This collaboration will help in providing both practical and theoretical knowledge in relation to accounting functions.

After analyzing all the 4 articles issued in relation to accounting education system, it can be said that there are some deficiencies that current accounting education system is facing. All the above research papers have indicated that current education system is lacking in the practical aspect of working in the business environment. Management of a company should provide proper training and enable new accountants to understand the practical aspects of business that are expected from an accountant (Garrison et.al, 2010).   

One of the limitations that can be analyzed after studying all the articles is that every article has specified its views about accounting education system in the particular country. Through these articles, only education system of particular part of the world can be analyzed but a general overview of accounting system can be depicted from these articles. In addition to that 3 out of 4 articles has based their opinion on the basis of secondary sources of data which are not that efficient as compared to primary sources of data. Irrespective of these limitations, it can be said that opinion formed in each of these research papers are showing true and fair representation of current accounting education system. 

References

Apostolou, B., Dorminey, J.W., Hassell, J.M. and Watson, S.F., 2013. Accounting education literature review (2010–2012). Journal of Accounting Education, 31(2), pp.107-161.

Burke, M.M. and Gandolfi, W.R., 2014. US Accounting Education: Misalignment with the Needs of Small and Medium Companies. American Journal of Business Education, 7(4), pp.339-348.

CHEN Tien Yiu, T. and Fok, P.K., 2013. Review of the initiatives of the accounting education change commission from the perspective of curriculum orientation.

Daff, L., De Lange, P. and Jackling, B., 2012. A comparison of generic skills and emotional intelligence in accounting education. Issues in Accounting Education, 27(3), pp.627-645.

Garrison, R.H., Noreen, E.W., Brewer, P.C. and McGowan, A., 2010. Managerial accounting. Issues in Accounting Education, 25(4), pp.792-793.

Holderness Jr, D.K., Myers, N.M., Summers, S.L. and Wood, D.A., 2013. Accounting education research: Ranking institutions and individual scholars. Issues in Accounting Education, 29(1), pp.87-115.

Kutluk, F.A., Donmez, A., Utku, B.D. and Erdogan, M., 2012. Expectation of accounting professionals from accounting education: An Antalya research. Procedia-Social and Behavioral Sciences, 62, pp.418-423.

Rebele, J.E. and Pierre, E.K.S., 2015. Stagnation in accounting education research. Journal of Accounting Education, 33(2), pp.128-137.

Romanus, O.O. and Arowoshegbe, A., 2014. The challenges of accounting education: the Nigerian experience. Accounting and Finance Research, 3(2), p.129.

Thomas, S., 2012. Ethics and accounting education. Issues in Accounting Education, 27(2), pp.399-418.

Zimmerman, J.L. and Yahya-Zadeh, M., 2011. Accounting for decision making and control. Issues in Accounting Education, 26(1), pp.258-259.