Norm appears to be in a quandary about whether he should become an accountant at this point. Even though he has taken all the courses required and graduated with his accounting degree, he feels like he no longer fits into this field. He expresses his concerns to his friend, Sam, who takes into consideration that Norm has worked really hard to get to this point in his life and does not see why he wants to throw it all away. Sam questions Norm’s thinking about this matter.
Norm is confused about the current state of business management in some companies and firms. He reads notes from several newspapers and magazines to Sam to illustrate his point. One such notation is in the case of fraud. He posits that accountants should be responsible for preventing fraudulent activity and promote “credibility and balance” to their process. It seems, however, that from what Norm can see, accountants are merely facilitating behavior or “closing the barn after the horse has escaped”. Norm believes that the actions and processes of an accountant should be preventative and proactive instead of being ready and reactive.
When accountants become less proactive and more reactive, the outcome of each main solution is a temporary fix for the company and its clients, but long term problems. The long term problems that result from quick fixes are not always easy to solve. As in the first example, due to “rising interest rates and fixed lending rates” a negative cash flow was the end result for the S&L company. Part of the news clipping that Norm read to Sam states, “The net worth of many S&Ls fell, and regulators decided to change some accounting practices to make it appear that the S&Ls were still above the minimum capital requirements mandated to protect depositors’ funds.” This deception within the S&L’s accounting practices caused no small amount of problems for both the company and for the clients, the depositors, whose funds they were supposed to be protecting. Further, the negative cash flow came at a time when the value of the real estate market had decreased significantly and thus, many people find themselves out in the cold.
The likely impact of each main solution to fixing this problem would be for the accountant to do what is in the best interest of the success of the company in keeping with ethical generally accepted accounting principles [GAAP]. This should begin with being honest which will at times mean changing a company’s way of dealing with finances in order to improve long term outcomes. For example, in the healthcare sector, when it comes to reducing smoking or banning smoking altogether, accountants can help agencies see the need to promote such bans in order to help save money and even time spent in substance abuse and addiction centers. The Medicare program alone could save $1 trillion dollars if such issues are addressed.
Norm is looking for honest and ethical accountants who strive to obey the law, keep confidential information within the proper channels, encourage autonomy for others, keep their promises, and aim to do good and no harm to the people they serve. A message to Norm would be for him to strive to be this kind of accountant. That is one good and beneficial thing about new graduates coming out of college – they can see problems in the world as Norm sees here in the accounting industry and work to develop solutions to those problems. This could one primary reason or motivating factor for Norm to stay in the field of accounting. He could make an honest difference by becoming a powerful force in the industry and ethically force changes over time in business and healthcare sectors.