HOW STRONG IS THE ACCOUNTANT’S POWER?
Ans.
Accountants have the potential to be influential people. The following are some of the reasons:
According to Hines, accountants can choose which items or occurrences should be recorded by the
accounting system, which has an impact on the level of accountability managers have.
From an accounting standpoint, a company’s support is frequently linked to its performance. As a result,
if an accountant applies specific methods that result in a profit being recorded, this may have a favorable
impact on a corporation compared to a situation where a loss is declared.
Many contracts rely on the outcome of the accounting process (for example, management bonus schemes
and debt contracts). Such contracts have significant cash-flow implications for employees both inside and
outside the organization, and the accounting methods used can have a direct impact on cash-flows.
If the accountant employs accounting practices that result in a reported loss, this claimed loss could be
used to justify layoffs, support for community-based programs, and other measures.
People require information, according to Gray (1992), in order to make informed decisions and have the
“power” to effect change. The accountant is frequently involved in deciding how much information should
be made available to the organization’s stakeholders.
Profitable organizations are frequently regarded as ‘good’ organizations deserving of support. They are
thought to be legitimate, so an accountant can use accounting to make a company appear respectable,
attracting community support.