Culture is defined as the characteristic behavior and attitude of people belonging to a given social group. Occupational culture is therefore the sum total of the knowledge and behavioral patterns of individuals within the same profession, shown by their traditions, morals and beliefs. (Epstein 24) states that culture is the programming of the mind which
separates the members of one group or society from those of another.
The accounting practice, for instance has various cultures that are distinct from other occupation’s practices. For example the professionalism aspect; the profession has a strict set of guidelines that are often backed up by the federal law system. This is incorporated into the accounting education where accountants are made to understand the professionalism aspect as they deal with the finances of companies. The accounting practice has international standards known as Generally Accepted Accounting Principles set by the International Accounting Standards Board, and which have to be adhered to by all accountants.
Due diligence is also expected from accountants, where they thoroughly look into situations to ensure they do not have negative impacts on the organizational stakeholders. For example, in tax accounting, accountants should ensure minimum tax liabilities on employers and clients without defrauding the tax authorities.
Another key aspect of the accounting profession culture is its ethics. There are various instances in the practice where opportunities to commit fraud arise, for example, when accountants steal money from companies’ accounts into their own personal accounts. “General principles and beliefs guide intermediate and long-term goals” (Reece 92). Accounting has a set of principles that set out how an accountant is expected to behave ethically, failure to which their practicing license is revoked. However, the accountant is expected to rise to the occasion and avoid any dubious behavior such as theft and fraud. They are required to give full disclosure in their reporting, without any manipulation of figures to give a false desirable outlook for the company contrary to the reality.
Accounting also has a culture of continuity in that it is continually evolving. With the new laws being passed, increased globalization of world finance and new technologies such as the e-commerce, the accounting profession tends to adapt to these changing trends by coming up with new principles guiding the profession and putting in place more stringent measures. An accountant is thus required to keep up with new developments to be able to offer better services by reading business articles, going to industrial seminars and workshops and reading new books on accounting and finance.
Another key notable feature of accounting is the uniform use of practices rather than varying practices in approaching similar situations. This should aid in increasing comparability between entities since they use similar accounting standards in their reporting. With uniformity, transactions are handled in a similar manner worldwide regardless of the location by use of harmonized financial reporting standards.
Also key to the accounting profession is the confidentiality-transparency aspect. This is a key aspect in analyzing the integrity of the profession and states that an accountant shall keep all information obtained in the practice confidential except where they are legally required to produce such information in cases involving fraud or any other legal duties (Gillis 46). The relationship between an accountant and a client is fiduciary and thus private as the information shared therein is not generally available publicly. The accountant is required prevent unauthorized access to such information as the accountant is expected to act in the client’s best interests. This involves ensuring that the accountant’s subordinates respect the confidentiality of the information and no illegal use is made of the information.
Auditing is another key aspect in accounting. This is the official, independent and systematic review of an organization’s books to obtain audit evidence. Audits are carried out to check on compliance with set out accounting standards. An audit may be used to weed out bad accounting practices by pointing them out in the audit report, thus the auditors are required to be keen. The auditing carried out may either be internal or external. Internal auditing is used to help organizations improve their governance processes and effectiveness. External audits are carried out periodically by external certified accountants to determine the accuracy of accounting records and whether the GAAP principles are being adhered to.
Accounting practices may also vary in various countries as it is also influenced by the country’s culture. Accounting is a form of communication where relevant information about business entities is communicated to the users for decision-making purposes. This information is communicated through financial statements. (Gillis 34) argues that the extent to which this information is presented is different among various countries. Since a country’s culture influences its social values, it also has a great impact on its accounting practices.
A country’s culture also influences development of its financial systems. For example in Gray’s model, he classifies the cultural areas into four with the first being according to the country’s attitude towards the set regulations which is the uniformity versus flexibility and the professionalism versus statutory control. He then classifies according to disclosure and measurement practices and categorizes into conservatism versus optimism and secrecy versus transparency. Areas such as Mexico and Colombia have high rate of conservatism and secrecy while Anglo cultural areas had low rank secrecy and conservatism in their system.
Different countries also have different economic, social and political climates thus the business relations in these areas are different. As such, business relations in these countries differ, therefore accounting standards differ in each of the countries as they are developed differently according to the way these relationships develop in each culture.
- Reece, B. “Effective Human Relations: Interpersonal and Organizational Applications”. Boston: Cengage Learning, 2013. Print
- Epstein, J. “Advances in Management Accounting”. Bingley: Emerald Group Publishing, 2012. Print
- Gillis, P. “The Big Four and the Development of the Accounting Profession in China”. Bingley: Emerald Group Publishing, 2014. Print