Keeping Honest People Honest: Why Accountants Matter

There is a story told of a man who sets out to build a thunderous tower, one that will stand the test of time. He toils and travails for much of his time, exerting and expending much of his energy. As he works, he lets dreams of fortune outmuscle ideas of reason. You see, when he set forth to build, he never accounted for what he would need to finish the work. As such the building was never finished and the man went bankrupt. His lack of preparation was his downfall. Unfortunately, many people today display similar lack of foresight when choosing to work in the field of accounting. Numbers they can crunch, but

communicate they cannot. In modern accounting you must be able to speak benevolently about many subjects in order to effectively lead a company.

                  Development of Accounting

 To understand your purpose as an accountant today it is very important to understand why accountants were needed in the first place. To help illustrate this we will consider the case of ancient Babylonia. Due to the rise of their civilization, they didn’t need as many people farming, thus they could specialize in trade. As such there were more merchants selling more and more items. These early corporations grew too big for a single merchant to handle all the business, so that merchant would hire an agent to sell his merchandise. This agent had a lot of power; he was the one responsible for selling these items. He could sell an item, then pocket most of the cash, and give only a small part to the merchant while telling him that the small portion is all it was sold for. This highlights an issue that hadn’t needed to be considered until that point, how does the merchant get the agent to do things in the best interest of the company and not the best interest of the agent himself? There would need to be someone to come up with rules for how exchanges happen, what is and is not allowed to happen. Thus accounting was born. Some of the leaders of ancient Babylonia met and discussed how to solve this issue. One of the things that they came up with was a law stating that someone who purchased something from an agent needed to write the price down, seal it, and give it to the agent. The agent would then need to deliver that, still sealed, to the merchant. If the price did not match the money then it was clear that the agent had taken some for himself. It is in this spirit that many accountants today approach their job, namely that of figuring out ways to get workers to do what is best for the company, and not just the worker themselves.

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 Communication in Modern Accounting

Now that you understand a central purpose to accounting, it is important to understand how rhetoric will play a role in helping in achieving that purpose. Accountants are known for their ability to work with numbers. This is an essential aspect of accountants, but they must also be able to work well with words. Working inside a company, it is your primary responsibility to improve the bottom line. This is done through not only the technical side of things (i.e. deciding what type of depreciation to use) but also through talking to people to get information on how to improve the company (such as talking with the workers to see how they spend their time so you can better estimate the various costs). This is one place where it is very important to be able to establish your credibility. This is because the workers will more actively follow counsel given by someone who has a good reputation. When you have come up with new ways to guide the workers, it is imperative that you persuade them that it is what is best. Since they are employees they will be forced to follow the rule if they still want to be employed, but an unhappy worker is not a productive one. So it is imperative to get them onboard.

            In order to understand how to build your credibility, consider this fictional interaction between Jim, a lead accountant for the company, and Ray, a worker there:

Jim: “Hello Ray, I’m here to tell you about a new practice we wanted to try out.”

Ray: “Another one? You guys sure are down here a lot.”

Jim: “Haha that we are. Last time we were here you talked about how hard it is to get recognized for doing outstanding work. I’m here to tell you that we have come up with a way to better track how much each person can produce and I’ve convinced the chief officers to hand out a few nice bonuses to those who do the best.”

Ray: “Really? Tell me more!”

Jim: “Well we are going to use google glass for you guys. That way it will be able to track on an individual level how much time is spent on each activity and therefore determine who can take home the bonuses! Even better, those who are falling behind because they don’t quite have the same experience will be able to catch up because they can look up information about the production right there on their glasses. It’s perfect for everyone.”

Ray: “Sounds great! I’ll tell the rest of the workers!”

Through benevolence others can feel like this

This interaction highlights the two key points that Aristotle defined as necessary for credibility: benevolence and knowledge. Knowledge of many different things is necessary to be able to communicate as one having authority. As Francis Bacon once said “reading maketh a full man.” Reading, in this sense, is learning. Learning makes us a full person, full of wisdom ready to be applied to the situation at hand. In this example Ray had an idea of what the workers wanted and also what the company wanted, and he came up with a great idea, one that he would not have had without his knowledge of google glass.  But knowledge is only half of it. Benevolence is just as necessary because through it the message enters the heart. Once taken to heart then the message giver has much more sway within the mind listener. What if Jim had gone straight into that meeting and said “we know what is best for you, take these glasses and wear them all the time so we can keep an eye on you”? The response would not have been as welcoming. Thus both knowledge and benevolence are essential.

            There is another aspect to accounting related in this story, that of keeping the workers doing that which is in the best interest of the company. With the workers being on camera, they will want to do their absolute best to get the bonus, as such they will not slack, they will not steal, and they will do everything they can to not be outdone by the next worker. Thus the company gets what it wants, more productive workers and less chance for them to steal. All made possible because the accountant approached the workers with credibility they could trust.

                Conclusion

            In today’s accounting world, the more knowledge you have on diverse subjects, the better you will be able to help your company. Long gone are the days of mere bean counters, here to stay are the times of rhetorical reasoners.

           

Works Cited

Chatfield, Michael. A History Of Accounting Thought. Hinsdale: The Dryden Press, 1974. Print.

Parker, R. H., and B. S. Yamey. Accounting History: Some British Contributions. Oxford: Clarendon, 1994. Print.

Stocks, Kevin. Personal Interview. 3 December 2014