The issue at hand is to determine whether the discipline of accounting can be classified as a science, or not. In order for me to form an opinion on the above stated matter, I would have to take a closer look at, firstly the term accounting, and secondly the concept of science. Many well weathered researchers have looked at concepts relating to my topic in recent history. I will take into consideration their thoughts and findings in an attempt to come to my own conclusion.
The word science comes from the Latin word "scientia," meaning knowledge. How do we define science? According to Webster's New Collegiate Dictionary, the definition of science is "knowledge attained through study or practice." What does that really mean? Science refers to a system of acquiring knowledge. This system uses observation and experimentation to describe and explain natural phenomena. The term science also refers to the organized body of knowledge people have gained using that system. Less formally, the word science often describes any systematic field of study or the knowledge gained from it. What is the purpose of science? Perhaps the most general description is that the purpose of science is to produce useful models of reality.
Get your grade
or your money back
using our Essay Writing Service!
Science as defined above is sometimes called pure science to differentiate it from applied science, which is the application of research to human needs. Fields of science are commonly classified along two major lines:
Â Â Â - Natural sciences: The study of the natural world, and
Â Â Â - Social sciences: The systematic study of human behaviour and society.
In modern times, the term science is often treated as synonymous with 'natural and physical science', and therefore restricted to those branches of study that relate to the phenomena of the material universe and their laws. As time progressed it became more common to refer to natural philosophy as "natural science". Over the course of the 19th century, the word "science" became increasingly associated with the disciplined study of the natural world including physics, chemistry, geology and biology. This sometimes left the study of human thought and society in a technical predicament, which was resolved by classifying these areas of academic study as social science. Similarly, several other major areas of disciplined study and knowledge exist today under the general term of "science", such as formal science and applied science.
According to the book Investerwords, Accounting can be defined as the systematic recording, reporting, and analysis of financial transactions of a business. The person in charge of accounting is known as an accountant, and this individual is typically required to follow a set of rules and regulations, such as the International Financial Reporting Standards (IFRS). Accounting allows a company to analyze the financial performance of the business, and look at statistics such as net profit.
Accounting is defined by the American Institute of Certified Public Accountants (AICPA) as "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof."
Accounting is thousands of years old; the earliest accounting records date back more than 7,000 years. Early accounts served mainly to assist the memory of the business person and the audience for the account was the proprietor or record keeper alone. Cruder forms of accounting were inadequate for the problems created by a business entity involving multiple investors, so double-entry bookkeeping first emerged in northern Italy in the 14th century, where trading ventures began to require more capital than a single individual was able to invest. The development of joint stock companies created wider audiences for accounts, as investors without firsthand knowledge of their operations relied on accounts to provide the requisite information. This development resulted in a split of accounting systems for internal (i.e. management accounting) and external (i.e. financial accounting) purposes, and subsequently also in accounting and disclosure regulations and a growing need for independent attestation of external accounts by auditors.
Today, accounting is called "the language of business" because it is the vehicle for reporting financial information about a business entity to many different groups of people. Accounting that concentrates on reporting to people inside the business entity is called management accounting and is used to provide information to employees, managers, owner-managers and auditors. Management accounting is concerned primarily with providing a basis for making management or operating decisions. Accounting that provides information to people outside the business entity is called financial accounting and provides information to present and potential shareholders, creditors such as banks or vendors, financial analysts, economists, and government agencies. Because these users have different needs, the presentation of financial accounts is very structured and subject to many more rules than management accounting. The body of rules that governs financial accounting is called International Financial Reporting Standards (IFRS).
Always on Time
Marked to Standard
What does other researchers say on the topic:
Over many years philosophers have been debating on what the criteria of science should be in hopes that this criteria could be used for at least two purposes: first, to distinguish science from common sense knowledge (without claiming that the two are radically disjunctive. In some cases they may differ only in degree, not in kind); second, to distinguish that which is scientific from that which is non-scientific or unscientific. Many philosophers have proposed different criteria.
One of these philosophers is Herbert Feigl. In the book Introductory Readings in the Philosophy of Science by Klemke, Hollinger and Klein (1980), Feigl's 5 criteria, which can be found throughout his writings and lectures, is discussed and listed as follows:
Intersubjective testability. This refers to the possibility of being, in principle, capable of corroboration or "check-up" by anyone; hence, private intuition must be excluded.
Reliability. This refers to that which, when put to a test, turns out to be true, or at least to be that which we can most reasonably believe to be true. Testing is not enough. Feigl wants theories which, when tested, are found to be true.
Definiteness and precision. This refers to the removal of vagueness and ambiguity. We seek, for example, concepts which are definite and delimited. We are often helped here by measurement.
Coherence or systematic character. This refers to the organizational aspect of a theory. A set of disconnected statements is not as fruitful as one which has systematic character. It also refers to the removal of, or being free from, contradictoriness.
Comprehensiveness or scope. This refers to our effort to attain a continual increase in the completeness of our knowledge and also to our seeking theories which have the maximum explanatory power. For example, to account for things which other theories do not account for.
Michael Power has written extensively on the topic of accounting as a science. In his book From science of accounts to financial accountability of science he writes that for many years financial accounting discourse had been concerned with the nature of economic measurement, in particular income recognition and asset valuation. He also states that as academic accounting established itself, it was perhaps inevitable that these questions should acquire an epistemological flavour. In his book, Power also refers to another philosopher, Paul Miranti. Miranti explores the idea of "scientific accountancy" in the early years of the American accounting profession. These early reflections represent attempts to lift accounting and audit practices beyond the status of craft knowledge and to connect them with relatively established forms of scientific thinking. According to later theorists such as Ray Chambers and Robert Sterling accounting practice suffered and continues to suffer from the pervasive subjectivity of its calculative operations. In their view, accounting practice could become more scientific only by concerning itself with the objective economic measurement of the independent phenomena.
Ray Chambers had a lifelong ambition to convert accounting into a pure science. Unfortunately he became so absorbed with this ideology that he failed to see accounting as an applied science, one that will never be able to measure up to standards known from the pure and rigorous sciences.
Lastly, I want to refer to the early writings of Earl Saliers. In 1941 he wrote in The Accounting Review that accounting and economics are generally considered to be social sciences. This indicates to me that the specific topic has been debated and written about for many decades.
After taking into account everything that I have read, I have to form the opinion that accounting definitely classifies as a form of science. When applying the discipline of accounting to Feigl's criteria it definitely meets the requirements. The accounting practice is very reliable. It is a systematic application of certain principles which can be applied numerously with exactly the same outcome, making the discipline very definite and precise. Accounting also requires a strong basis of knowledge which is another indication that it is in line with the definition of a science.
In my opinion however, it is very hard to classify all aspects of accounting as a pure science. My final conclusion therefore has to be that accounting can be regarded as an applied science, where knowledge and systems are combined and applied in order to form a discipline which forms the core of all business dealings and record keeping transactions.
This Essay is
a Student's Work
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Examples of our work