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Accounting & Accountability
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Description: Accounting and Accountability
I entered into University of Sheffield after my Polytechnic education. With weak accounting grades since my Secondary School education, I still chose to study Accounting and Financial Management in University of Sheffield as I wanted to be exposed to a different teaching method from the British Lecturers. The reason for my weak accounting grades was due to the dislike of how tedious the preparation of financial statements were and having to memorise the principles word for word as Singapore teachers love exact answers from their students. In order to score well throughout my Singapore education, I constantly follow the method of practicing and memorising of past year examination papers on preparation of financial statements to get the “feel” of what and how the teachers will test.
This learning does not benefit me as I do not understand the rationale behind the preparation and the accounting implications. I did not question myself on the underlying rationale as I progress my education route to Polytechnic, and my learning route continue to be the same with other Singaporean Lecturers. The learning from Singapore teachers and lecturers was about doing and observing what the teachers in class has taught me through an “inductive” teaching, then producing of similar answers in the examination. This surface learning approach of Marton & Saljo (1976) has not made me to reflect on the purpose in learning as I have been memorising facts, procedures routinely with the intention to reproduce the teaching and accepting the ideas being taught passively.
In my year 2 semester 2 education in University of Sheffield, I finally started my first accounting module which was MGT238. With a hope that the British teaching and marking will be different from Singapore but it turned out to be disappointing. It was again numerous practice of different sets of “10-years series” examination questions on preparation of full set of financial statements and memorising word for word for theory questions, had made me pulled through the exam.
This learning style adopts stage one and two of Kolb’s (1984) learning cycle, “concrete experience” and “active experimentation”. I was taught and had to practice the teaching through numerous practice of examination questions, that had developed me into Fleming (2001) VARK system where I would described myself as a “kinaesthetic learner”. In my entire education route I adopted a learning style through practical classes and hands-on activities.
This continues to affect my learning for accounting to be uninteresting for me and I was not enthusiastic on my next accounting module MGT3940 as the impact of my past learning experience had left a dull, repetitive and unpleasant experience. In addition, the same lecturer for MGT238 will be teaching MGT3940. This means he will be adopting the same style of teaching. I dreaded for the day to happen and it did.
MGT3940 was slightly different, but there were still preparation of full set of financial statements. The difference was in the build-up of consolidation in the full set of financial statements, understanding the importance of IASB standards and ensuring that accounts are disclosed according to IASB standards. This was an extension of knowledge but the learning style was similar to MGT238. It was another torture for me to undergo the same repetitive and monotonous process which made me imagine how my career will be if I were to work as an Accountant, having to do the repetitive work that I learn without understanding the rationale behind it. On a side note, MGT3940 has allowed me to grasp accounting with a functionalism perspective (Burrell & Morgan, 1979), as I was engaged into the pragmatic world in the consolidation of financial statements and the accounting standards that organizations have to comply during my practice of past years examination paper.
The conclusion of MGT238 and MGT3940 learning style has its bright and dull side. The bright side is that I still retain the format and presentation of the full set of financial statements in my brain. If anyone were to hand me a set of accounts to consolidate and balance it, I am able to do it without any difficulty. That is the only confidence and satisfaction I get when I managed to balance the financial statements. However, I did not question or reflect on those two modules. The dull side is that it is repetitive, I did not feel any sense of satisfaction learning as it was more on application of formats and following the standards. I agree that it provides guidance, but it felt like “a blind man leading a blind man” as I do not understand why standards are created in this way and whenever I asked the lecturer why his answer will be “because the standards said so” or “it is common-sensed”. I just accept what the lecturer taught me. If anyone were to question me about the rationale behind the preparation, I would not know how and what to answer them.
The theories and concepts introduced in MGT390 has helped me to associate the rationale behind all the preparations of financial statements and the accounting standards that were taught in MGT238 and MGT3940. In addition, MGT390 questioned me on the factors that can influence organization in preparing and adopting different accounting practices such as a person’s cultural background can influence an individual to adopt either a positive or normative theory, depending on individuals’ view. With many connection of theories in MGT390, there are still some unsolved debates like adopting which accounting framework is correct? Those unsolved mystery relating to MGT238 and MGT3940 slowly fall into place after each lecture of MGT390.
Many would agree that MGT390 is a tough module, I am not an exception. I have been struggling to understand this module as it requires deep learning, through vigorous and critical interaction with content, and relating ideas to previous knowledge and experience. Deep learning approach (Marton & Saljo, 1976) is hard to incorporate as I had spent eight years of adopting surface learning approach. Hence, it needs time and effort to change my learning approach.
During the first part of MGT390 about an interview with Gripple’s boss, Hugh Facey (Saunders, 2013) had positively surprised me with his interpretive view. The company barred accountants from all key company decisions, and bonuses are banned too. I always thought that accountant plays an important decision-making role in the organizations as they are the ones that does the budgets and ensure that the employees will follow accordingly. It was my first time hearing accountants being barred from company decisions. In Hugh Facey viewpoint, he sees them as compliance with statutory activities. If accountants were to run the business, it will be based on historic record.
Some may critic that Hugh Facey decision is mad but after reading articles on his succession and the reason to implementing his practice, I think he did a great job. As a student learning about accounting and knowing that accountants play high importance in the decision-making of an organization, but without realising that it restricts other departments from striving. With budgets being placed as gauged, it expects management to work towards it. Bonus package might also be based on management performance to motivate managers. Hence, there will be a higher probability for management to adopt earnings management tactics like impression management, creative accounting and big bath; to managed earnings, beat analyst forecasts and inflate revenue (Perols & Lougee, 2011). Additionally, this “practices” will portray the company in a positive light that is align to the managements’ self-interest while compromising on public interest. With the theories taught, it connect the dots in the rationale behind accounting scandal like Enron and Maxwell Communications Corporation.
That leads to the implementation of stricter regulation. I always thought that the creation of ethics and regulation was based on positive reasoning as they are based on explanation and prediction that try to make sense of what is currently happening (Henderson, Pierson and Harris, 2004). Therefore, they are created to guide organization to comply with the standards. However on day four of MGT390, I learned that not all are created through positive research, for example, Sarbanes Oxley Act of 2002. Sarbanes Oxley Act of 2002 was released after a number of major corporate and accounting scandals like Enron and Worldcom, had collapse due to self-interest. The bill was enacted to enhanced standards for all U.S. public company boards, management and public accounting firms. This was a normative approach that suggest radical changes to the current regulatory practices for a stricter financial governance law. As positive theory fails to reflect public-interest, therefore to resolve this approach, in this pragmatic society adoption of both inductive and deductive approach, and normative theory is necessary to strengthen public-interest and ensure that accounting information is relevant for decision-making.
Learning about how the Singapore Accountancy Commission (SAC) wants to transform Singapore into the hub of Integrated Reporting (IR) in South East Asia. This has got me prepared of what lays ahead in the future if I were to enter into the accounting industry. In order to encourage organization to go beyond performance reporting to include reporting of value creation strategies and processes, SAC led an example by being the first to publish their own Integrated Report 2014 and followed by Development Bank of Singapore (DBS). I feel that future reporting will be much tougher to analyse as there will be more subjectivity and investor needs talks and seminars conducted by SAC to get used with IR.
During one of MGT390 lessons, there was practical analysis case-study based on DBS financial reporting. The class gets to identify whether there is any “Profit Smoothing” in their financial statements. This hands-on analysis was a fun teaching method which I enjoyed. Not only do I get to learn to analyse the key figures of a bank’s financial statement from a professional but also get to present the financial statements as I was one of the three students to be selected. In addition, I managed to put my personal analytical skills that I learned from my participation in investment club into analysing the statements. This interactive style of teaching not only adopts Kolb’s (1984) “active experimentation” but also adopts an “abstract conceptualisation” learning style which I did not experience in MGT238 and MGT3940. I get to hone my analytical skills and find problem solving issues to be easier to grasp, as it gets me thinking and reflecting on the solution.
In summary, MGT390 was more than memorisation techniques based on repetition or just another writing of formats, but it was widening of my accounting perspective in the adoption of accounting standards and formats. Additionally, I can to see another dimension of accounting ethics and regulation. With real life examples being introduced, I am able to connect what I learn in MGT390 to MGT238 and MGT3940. I am more confident in my future accounting career, as Singapore is in the midst of transforming from traditional reporting to IR as IR was introduced in an engaging style.
My future involvement with IR through the knowledge that I acquired from MGT390 has prepared me to pay close attention to the possibility that it may be part of an “impression management” act as the report would consist of narration and non-financial indicators. I would also question the reliability of information provided in the integrated report through a professional scepticism attitude due to the subjectivity involved in the report. Additionally, The Business Times (2014, p22) argued that IR is broader in scope than traditional reporting like value creation metrics such as customer loyalty which have yet to be reflected in financial performance of traditional reporting. Therefore, more adaptability, alertness and professional scepticism attitude is needed to be applied when analysing IR. With IR increasing interest from investors, hopefully companies will ensure that their company’s strategy, execution and long-term viability will be an advantage to the public interest.
Andrew Saunders (Friday, 25 January 2013) Is Hugh Facey Britain's best boss?, Available at: http://bit.ly/1IOCXNS (Accessed: 1st April 2015).
Burrell, Gibson, and Gareth Morgan. Sociological Paradigms and Organisational Analysis: Element of the Sociology of Corporate Life. Vol. 14. Heinemann, 1979.
Fleming, N.D. (2001). VARK: a guide to learning styles. Retrieved September 8, 2004, from http://www.vark-learn.com/english/index.asp.
Henderson, M.S., Pierson, G., and Harris, K., "Financial Accounting Theory", Pearson, French's Forest, NSW, 2004.
Ho Yew Kee, Mikkel Larsen and Tan Boon Seng (2014) 'Should S'pore firms adopt Integrated Reporting', The Business Times, 13th March, p. 22.
Kolb, D.A. (1984) 'Experiential learning: experience as the source of learning and development', Englewood Cliffs, NJ: Prentice Hall, pp. 21-38
Marton, F and Saljo, R.(1976) On qualitative differences in learning - 1:outcome and process, British Journal of Educational Psychology, 46, 4-11.
Perols, J.L., & Lougee, B.A. (2011). The relations between earnings management and financial statements fraud, Advances in Accounting, incorporating Advances in International Accounting, 27, 39-53.
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