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It is evident that, over the past 20 years, the stereotype of accounts has changed dramatically. Factors such as; more women entering the accounting profession, advances in technology, and also globalisation have all played their parts in changing the stereotype of accountants for the better. More women entering the workforce has led to increased job competition and social evolution that has changed the typical personality and behavioral attributes of accountants.
Advances in technology have brought about greater efficiency, accuracy, accountability, and performance in the accounting profession, and has also led to greater access to accounting.
Globilisation has also given rise to a significant change in the role and duties of accountants over the last three decades, with the stereotype shifting from just a local business to multinational accounting firms. This paper will discuss how the stereotype of accountants has changed and how this has affected the profession over the past 20 years.
One of the major contributing factors to the change in stereotype of accountants is the increasing number of women entering the workforce and the profession over the past 20 years. The stereotypical accountant historically has been viewed typically as a male who is precise, methodical, conservative and of boring joyless character. (Friedman et al, 2001; Jeacle, 2008). In the last 20 years, several factors have helped change this stereotype of an accountant. One significant factor is the increase of women entering the accounting profession.
By the late 1980’s women accounted for about 50% of all new employees entering the accounting profession, however of that 50% only 2% of these females were reaching the senior management or partner roles in any of the big 6 accounting firms (Maupin, 1993).
The large increase of women into the workforce and specifically the accounting profession in the last 20 years, inspired researchers to find out what, if any, effects this has had on the accountant stereotype that has existed for the last 50 years.
Research was carried out to determine the effect the increase of women have had on the accounting profession and why senior management and partnership roles were held disproportionately to that of which they are entering the profession (Maupin, 1993). Research conducted by Raffield & Coglitore (Unknown) showed that different personality traits and behavioural patterns were significant in the influence they had on the advancement in the accounting industry.
They conducted a survey on male and female accountants to examine the different personality traits and behavioural patterns that the respondents believed to be the most important in allowing them to advance in the profession(Maupin, 1993; Raffield et al, Unknown). The results showed that males and females had very different views on which traits were significant in advancing their career. Males ranked 5 masculine traits and 2 feminine traits as being significant, where women rated 3 masculine and 8 feminine in being significant (Raffield et al, unknown).
Although males mainly ranked masculine traits as the most important traits the results show that feminine traits are beginning to have an influence in the industry. This shows that the stereotype that existed years ago has significantly changed. Although slowly, the accounting profession is starting to benefit from its changed stereotype, with a stereotype now that is one of more diverse personality and behaviour it will attract many new and creative people.
Another significant factor that is changing the accounting profession is that with the increase of both males and females, competition for employment is greater than in recent times which have helped increase the standard of professional accountants (Flegm, 1996). This has led to accountants changing the way the work, previously accountants were reclusive, quiet and passive males but with the increase of women into the accounting profession this has changed and accountants are now expected to be more socially inclined, adventurous and outgoing (Jeacle, 2008).
Changes and advances to technology is another factor that has had a considerable impact on the stereotype of accountants. “The impact of technology will become a severe problem for us if we do not deal with it before it deals with us,” said by Ronnie Rudd, who is the chair of National Association of State Boards of Accountancy form 1995 to 1996. The business climate has changed over the past 20 years, which has led to the critical issue that the accounting profession must be regulated and must also change.
In the nineties, most accountants used pencils to create paper spread sheets and ledgers, and several accountants shared a few adding machines and a mechanical calculator (Schnur, 2008). Now every accountant has their own computer, and enter and store their data electronically. The new technology can create file returns and reports via internet when possible, sending clients’ documents immediately, and any errors can by fixed by one quick keystroke (Schnur, 2008). It became much simpler for accountants to keep track of information on a minute-by-minute basis and completely eliminated most mistakes.
This has led to greater efficiency and accountability, and has changed the face of accounting considerably. Technology has changed accounting practice, and also brings about significant advantages (Anonymous, 2011). The advantages have led to the improved efficiency of accountants, continued growth in the accounting profession, and have also simplified the accounting practice. For example, the same tax return took accountants upwards of two hours just a few years ago, whereas now it only takes 15 minutes (Anonymous, 2011).
Technology has allowed the accounting profession to manage its increased workload and client base, whilst being aware of the challenges of rapid growth and employing technology to overcome those obstacles. Technology also led to a change outside the profession, where individuals can keep track of their own money through online banking, software programs to do their own taxes, and automatic bill paying (Schnur, 2008). However, the advances in technology can also bring about great risk.
The new technology brings various risks and challenges into accounting practice, such as accounting software being prey to sabotage and other forms of destructive action. In fact, more than 200 of the largest companies’ accounting environments are at significant risk in the event of a disaster. The new technology also creates security risk and privacy risk (Fox, 2009). Privacy risk can be defined as the risk that information will be compromised from internal and external threats. The major problem is the disclosure of he accounting information in new technology, for example, most companies use information technology outsourcing to cover demand for high upfront costs of equipment, network connectivity and personal reasons (Fox, 2009). By bringing in a third party the companies are increasing the risk of information safety and privacy, as it is uncertain whether that party can be fully trusted, and they are also taking on new risks associated with that party. Most security risks relate to the use of new technology for creative accounting (Fox, 2009).
Creative accounting refers to accounting practices that may follow the letter of the rules of standard accounting practices, but certainly deviate from the spirit of those rules. Some accountants are using the new technology to create premature revenue recognition, extended amortization periods and understated operating liabilities (Mulford, 2009). Fraud is still possible, but this has led to new areas of accounting work, such as forensic accounting. However, the new computer programs can help track any attempts to initiate fraud.
This area of accounting protection and investigation will continue to grow and evolve (Mulford, 2009). Another area that has led to a dramatic change in the stereotypes of accountants and the accounting profession is globalisation. Technological advances and deregulation have increased the ease of communication and made international accounting easier creating globalisation, which is continually making the business world smaller and more internationally cohesive. “Each day, it becomes harder for accountants everywhere to remain insulated from what goes on outside of their countries’ borders. (Khatibhave, 2011). Globalisation meant that outsourcing accounting internationally could in some cases be more effective; this shifted the stereotype of accountants from a local business to the existence of Multinational accounting firms. Although this did reduce the number of locally or nationally focused accountants they could never be completely replaced due to increased costs and general hands on nature of the accounting practice. In his key note speech the Tanzanian deputy minister of finance referred to globalisation’s effect on an accountant’s stereotype as a move from “office bean-counters”, as a result of their skills, experience and abilities, to becoming natural leaders in the board room. ” (Khatibhave, 2011). As they take charge of global audits for multinationals, they are becoming closer to mimicking a role of an advisor or entrepreneur rather than an office clerk. As the different countries accounting industries became more integrated it was clear that changes needed to be made and accounting standards were among the first aspects to be affected.
Before international trade, each country had its own standards of accounting and accounts from the area were only ever scrutinised under their standards thus making them comparable and relevant to each other. International companies however, are examined and compared under a number of different standards, making international investment difficult. Although the standards are similar in most respects these minute differences can alter the overall perception of a company’s financial position.
The introduction of these International Accounting Standards is moving accountants’ practices away from Generally Accepted Accounting Principle (GAAP). Globalisation has also distanced a company from its shareholders where internationally, they can be removed from the same economic, fiscal and legislative influences then the company itself. It has become the role of accountants to capture a picture of how the company has reacted and adapted to these external forces. Accountants have had to take on a lot more risk assessment, especially when auditing or assessing acquisitions and takeovers.
Although accounting is based in the international language of numbers, language has become a larger barrier for new aged accountants. There has been significant transformation in the role and duties of accountants over the last three decades (Albrecht & Sack, 2000), where globalisation has given birth to a more specified form of accounting. Not only are multinational countries hiring accountants who specialise in a country’s dialect, but also in their tax and financial systems.
It is evident that, numerous factors have led to a significant change in the stereotype of an accountant over the past 20 years. For the most part, changes such as; women entering the workforce, advances in technology, and globalisation have benefited the accounting profession and stereotype as a whole. Whilst there are elements of the above factors that have not benefited the accounting profession, such as, the advances in technology that have led to greater security and privacy risk, the benefits far outweigh the disadvantages brought about by the changes to the accounting profession.
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