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English 135 Research Paper
Pamela Jurkowski
Professor: Erickson-Bragg
English 135
15 Feb 2006
A World Without Accountants
The infamous gangster Al Capone was sent to prison because of a pencil. The person wielding the pencil was Frank Wilson a member of the IRS Special Intelligence Unit working with Elliot Ness. In order to take down the crime boss he implemented a new tax law enacted in 1927. Wilson’s profession was the almighty accountant. Mr. Wilson’s function is what is known today as a forensic accountant. A forensic accountant uses accounting and auditing to expose and reveal assets that are hidden to interpret fraudulent business practices as well as reporting these findings in court. There services are needed by several institutions such as, the FBI, IRS, the insurance industry and legal firms to name a few. Because greed is such a motivating factor, and human nature is to succeed no matter the consequences, the business world is open to fraudulent practices every day. Often functioning accountants follow the greenback. The Sarbanes-Oxley Act of 2002 requires all public companies to submit an annual assessment of the internal financial controls to the SEC. Yet there will always be the businessman that finds a place to hide the information from his or her accountant. Now with the baby boomers reaching retirement age, the FBI tracking down drug smugglers, movie stars and the like needing financial advice or cyber security ensuring a company will be safe from hackers accounting remains embedded in the fabric of business as it has for centuries.
As far back as 5000BC the accountant has been guiding industry through the flow of transactions necessary to complete a sale and collect the profits. Accounting is recognized as existing as a craft some 10,000 years ago in what is know as Iran, although numbers wouldn’t be invented for another 5,000 years. This system of accounting came about because merchants could not trust the boatman to keep an honest count when they sent their goods to be shipped. They used clay balls to represent an item being shipped and verify the count when it reached its destination. This function is used in modern accounting today and is called protection of assets or a bill of lading. The Pharaohs used single-entry data for taxes, assets, and wages paid. The Renaissance brought into use the double entry system set used by the renowned mathematician Luca Pacioli commonly referred to as the Father of Accounting because of his documentation of the system in his writings Summa de Arithmetica, Geometria, Proportioni. (White) The business world is the foundation of our economy; buying and selling stocks, manufactured goods, and services to keep the country running. The accountant is the glue that keeps these businesses together. The language of business is accounting, to convey information that is relevant to the business community you must communicate with the techniques and specific words unique within the world of accounting. This language has commonalities with; newspapers report stories in print, accounting reports business in financial statements. In the english language we must follow rules so in the language of accounting painstakingly or face criminal penalties for twisting numbers. (Riahi-Belkaoui ,2)
Number-crunchers know how to make the numbers work in ways that fabricate the facts to make a company look successful even when they not. An unscrupulous businessman could do without the assistance of an accountant by simply using a computer program and entering in figures to benefit the company. Then the owner could justify the reasons why his books don’t balance, whether to his partners or the IRS. Then they would wish that he had an ethical accountant to fall back on for the correct figures. The accountant has the skills to advise a business on its everyday capacity with ethics. Bill Gerdes Professor at The University of Alabama explains in his article “Founding Fathers Were Among First Auditors”, that he found written by Dr. William Samson, Roddy-Garner Professor of Accounting in the Culverhouse College of Commerce and Business Administration and former president of The Academy of Accounting Historians, the founding of our country has strong ties to the accounting profession. It states that the Pilgrims had no bookkeeper to follow the capital sent with the settlers, when a business manager was sent to attest operations he returned to England borrowed money on behalf of the Pilgrims and spent the money on gifts, travel and the pubs in London. (Gerdes) Enron being the standard to which all accounting scandals will be compared. They started with a natural-gas pipeline company, and evolved into a trading firm embroiled in the electricity business as well (Fox 1). The company hired graduates with an MBA and groomed them to become market analyst and traders where they learned how to structure commercial deals. The cut throat tactics by these apprentices vying for a position within Enron caused them to resort to stealing each others trades for an upward boost within the hierarchy of the company. (Fox) With the mistrust, disinformation, and misinformation from these shady practices one wonders if the accountant can ever be trusted. With a plethora of scandals in the forefront and jail bound entrepreneurs in the news today, there are endless reasons to fear the accountant. This is why even if it only takes simple tracking of numbers by the accountant in relationship of the day-to-day function of the business; they are a necessary appendage in the economic world. Although money making is constrained only by legal restrictions a reputation-impacting matter is kept in check by the accountant reporting the facts. As they catapult industry into profitability. Accountants solidify the running of a business by keeping records, analyzing net worth, and providing statistics to keep companies informed of their options for success.
Works Cited
Fox, Loren. Enron: The Rise and Fall (Hoboken, NJ: Wiley, 2003) null01, Questia, 3 Feb. 2006
Gerdes, Bill. “Founding Fathers Were Among First Auditors.” University of Alabama Research Magazine .5 Feb 2006.
Riahi-Belkaoui, Ahmed. The Cultural Shaping of Accounting (Westport, CT: Quorum Books, 1995) iii, Questia, 5 Feb. 2006
White, Malcolm E. CPA, MA. Columbia College Online Accounting Tutorial. “Short History of Accounting”. 2005. 7 Feb 2005 < http://middlecity.com/d2l/ch01.shtml>
Fox, Loren 'Enron: The Rise and Fall'
Gerdes 'Founding Fathers Were Among First Auditors'
Riahi-Belkaoui, Ahmed 'The Cultural Shaping of Accounting'
White, Malcom E. 'Short History of Accounting'
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Copyright © 2006 Pamela Jurkowski. All Rights Reserved