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The Importance of Communication in Accounting. Todays accountant, especially within the managerial accounting realm, must clearly communicate their ideas and financial data to others within the company many of whom are non-accountants and/or non-finan

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Introduction

The Importance of Communication in Accounting "(Accounting) is the language of business. A lot of people think it's just numbers, but it's really a lot more than that. There are a lot of areas outside of numbers that need to be looked at, processes and procedures, what the tone of the company is. Accounting will take you in just about any direction in a company." ~ Wade Becker, CPA, Beard, Miller Co. (Burger, 2008) Businesses are changing and with them so are the beliefs about job descriptions and the related skills needed to perform these jobs. Information Technology (IT) professionals, once left alone to "just make the computers work" are now moving into cross-functional and higher level management positions which require them to translate "tech speak" into terms and descriptions that members from all departments in an organization can understand. The stereotypical role of the accountant characterized as merely an introverted "numbers person" must be replaced with the understanding that today's accounting professionals are required to possess and use interpersonal and communication skills to help with the decision making processes across all functional areas of the accounting discipline and business. Today's accountant, especially within the managerial accounting realm, must clearly communicate their ideas and financial data to others within the company many of whom are non-accountants and/or non-financial people in ways that are tactful and effective. Management accountants are now required to be "The Great Communicators." (Siegel, 2000) The1999 Practice Analysis of Management Accountancy study undertaken by the Institute of Management Accountants (IMA) (Segal, Sorensen et. al., 1999) sought to determine the ways that accountancy roles were changing. Additionally, the study put forth suggestions for accounting educators, corporations and professional associations and on how to provide the necessary education to prepare accountants whose clients and/or firms are calling on them both as business partners and increasingly involving them in high-level business decisions. More than 50% of study respondents reported being members of cross-functional teams at the time these researchers conducted the study. ...read more.

Middle

(Abbot Labs) (Segal, Sorenson, 1999) Therefore, Ethics is another topic that accounting curriculum must address. The cost accounting textbook, "Cost Management: Strategies for Business Decisions," introduces ethical issues throughout the book. For instance, when discussing the topic of product costing, the book brings to light the problem of intentionally overproducing inventory to improve the "bottom line." The book also discusses the use of the cost flow model as an internal control and stresses the need to avoid unethical accounting practices in activities such as job and project costing. (Hilton, Maher, Selto, pp. 69-98) "Practitioners must be able to present and defend their views through formal and informal, written and oral, presentation. They must be able to do so at a peer level with business executives. Practitioners must be able to listen effectively to gain information and understand opposing points of view. They will also need the ability to locate, obtain and organize information from both human and electronic sources. (American Accounting Association, Appendix B, 1986) This passage underscores the importance of perception as a communication skill as well. A study published in 2003, in the British Accounting Review, found that there was a wide variance in perception accuracy, which they called the "perception gap," between management and managerial accountants. While some managerial accountants were clear in their awareness of what information management needed and expected from them since management felt that managerial accountants were providing them with the necessary information; however, in other instances, there were noticeable discrepancies in perception. This often occurred because of the managerial accountant's failure to understand the differences in the needs of management from different functional business units: the communication of financial information to and from production management would be different from those of a sales manager. However, management responses also indicated that the communication failure was a failure to present financial information in a timely and more flexible manner. ...read more.

Conclusion

This will further enable communication between international users of financial information as well the companies that seek to publish financial information. (Waldt, 2004) As such, there is a need for accounting courses to incorporate XBRL education into the curricula. A 2006 study, which surveyed Accounting Information Systems (AIS) faculty, found that while 90% of faculty disagreed with the statement "Coverage of XML/XBRL is not necessary," 26% of these schools were not exposing their students to XBRL. In fact, students at these schools were not familiar with, nor had they been exposed to the topic at all. Most respondents reported that the most effective way to teach XBRL is with hands-on tutorials. This method of learning will require universities to provide information systems facilities to students. Another challenge is the current lack of instructional material on the topic of XBRL. The survey concluded that overall, accounting curriculum is not including this topic as often as its perceived importance. Exhibit 5 helps to clarify what XBRL is and what it is not and Exhibit 6 illustrates the taxonomies of XBRL as they relate to the flow of financial information across various jurisdictions. (Deshmukh, Karim, Romine and Rutledge, 2006.) Exhibit 5 Exhibit 6 The role of the accountancy professional is rapidly changing, and the curricula taught the universities must keep up-especially when it comes to incorporating oral, written, presentational, non-verbal and perceptual communication skills into their programs. The nature of these changes taking place, in part by the globalization of business and the increased use of Information Systems, calls for the realization of the need to possess these skills on the part of entering accounting students first. Additionally, a more experiential hands-on approach to teaching these skills and the ever more important interdisciplinary communication skills, as they apply to the use of Accounting Information Systems, must become a more frequently used pedagogy within our learning institutions. We believe that in this way, accounting students will be more suitably prepared to enter the workforce to take on the roles and fulfill the business needs of the ever-changing accounting profession. ...read more.

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