The mathematically focused career of accounting is generally seen as a vital function in modern society, with various types of accountants providing services in nearly any situation or organization wherein financial transactions may be taking place.
This wide spread nature of accounting and its subsequent professionals have caused members of the population to question whether such an important branch of business may have its own innate disadvantages.
Unfortunately, accounting does in fact present several disadvantages, regardless of the capacity in which the accountant may be acting. These disadvantageous characteristics are generally found to be shared between all forms of accounting, owing to the nature of which they are performed and the particular form of output usually produced by accountants.
What Kind of Disadvantages are Involved in Accounting?
The baseline found in nearly every disadvantage of utilizing accounting is usually related to specifics pertaining to the function and interpretation of information, such as the relative inaccuracy of utilizing money as a form of measurement.
This can be most often seen in such accountancy related implements like financial statements and asset analysis wherein financial information found inside can become inaccurate and outdated as further time passes since the disclosure of said implements.
In the most grievous of instances, this inaccurate and outdated information could even have been manipulated intentionally so as to create the appearance of a different financial situation or history than what is reflected in reality.
Though relatively uncommon owing to the serious ramifications involved in doing so, accountants may intentionally manipulate or modify the financial information of an entity or individual so as to accrue some sort of benefit to the client or the accountant themselves, which in itself is also another disadvantage of accounting.
There are even cases where this sort of informational misinterpretation or alteration may occur without any sort of malicious intent.
Most likely caused by simple human error or a software malfunction, these errors in the most basic function of accounting are among the primary disadvantages to the usage of accounting and its related systems.
What Situations are Not Suitable for the Hiring of Accountants?
While it is a veritable truth that the process of accounting is absolutely vital to the function of any financial entity or even the economy as a whole, there are certain situations wherein hiring an accountant to perform their proprietary duties is either unnecessary or even harmful to the client and their finances.
These situations may come in the form of individuals with little knowledge of accounting and its certifications choosing to hire accountants that have not been properly trained and certified by a regulatory body.
Though these uncertified accountants are not legally licensed to perform the same duties as their certified counterparts, some may still act in an advisory and basic capacity.
This does not necessarily mean that uncertified accountants and individuals in similar lines of work are not capable of acting in a suitably effective manner, but instead that it is important to ensure the quality of work in cases where an accountant unrecognized by a regulatory organization is meant to be hired.
Other situations where it is best to hire a different sort of professional instead of an accountant is in the type of duties required by the client, with more basic financial actions such as individual financial advice and basic book keeping being best left to other non-accountant financial professionals.
All sorts of accountants are likely already qualified and sufficiently trained enough to perform these duties, but it may be far more cost effective for the client to instead hire these other non-accountant individuals so as to also prevent wasting the time of said accountant.
The Informational Interpretation Disadvantage
As previously touched upon in earlier sections of this article, the primary disadvantage to the utilization of accounting in financial manners is that of information and its relative inaccuracy in the wrong circumstances.
At a basic level, accounting utilizes the concept of money as a numerical value or otherwise as a unit of measurement. This, in turn, may cause significant confusion and misinterpretation, especially in cases where large volumes of money are being moved through a multitude of transactions.
This grows all the more disadvantageous when such things as inflation, multiple international currencies, non-liquid assets and credit are brought into play, not only being rather difficult to understand for individuals without significant education in finance but also by the very nature of how these factors are reported.
Certain factors and services occasionally brought under the purview of an accountant may be difficult to quantify using monetary value as a unit of measurement, adding further to the informational misinterpretation external parties may find when inspecting financial statements and invoices prepared by accountants.
All these minute details can, over the course of an accountant’s work, lead to misunderstandings and inaccuracies appearing in otherwise perfect business negotiations or other sorts of financial matters wherein informational exchange is of importance.
Accounting and Human Error
Though not exactly reserved solely to the functions and work of accounting, human error is among one of the most common disadvantages to contracting or hiring accountants.
Generally, the concept of human error is an occurrence of which was not intended by the accountant, expected by the accountant or even foreseen by the accountant, all of which may be significantly detrimental to the relationship between the client and the accountant, eroding trust and potentially costing both parties.
Many safeguards are utilized in the field of accountancy so as to reduce the chance of human errors from occurring, though they are far from perfect, and as such human errors may still slip through despite these safeguards being followed.
Other instances where human error may act as a disadvantage in the field of accountancy is in the vein of communication, with accountants occasionally acting as financial liaisons between two financial entities or individuals.
While social skills are highly variable between any individual, the incidence of miscommunication and unprofessional conduct occurring during the course of this particular branch of accountancy is still somewhat possible.
This may lead to a breakdown in communications between the two parties, or even a dissolution of entire contracts and deals.
Informational Inaccuracy in Accountancy
Somewhat related to human error and informational misinterpretation, informational inaccuracy in the field of accounting can be incredibly detrimental to the function of a financial organization or even to the individual accountant themselves.
Considering the fact that even in point of sale machine based book keeping systems there is some margin of error and estimation occurring, it should be no surprise that accountancy itself often operates within the constraints of a certain level of estimation.
This, in turn, leads to incremental informational inaccuracy in accounting related information such as financial statements and asset appraisals, wherein minute values and similarly small but significant pieces of information may not be entirely reflective of the reality.
Informational inaccuracy may be combated through the use of systems generally found to be more precise than simple human error checking and informational interpretation, though these systems may be costly or otherwise take a certain amount of time to utilize, depending on the type of system used.
By addition, the combination of human error as well as informational misinterpretation being applied to said information can have a compounding effect with the otherwise relatively small level of inaccuracy found in the sort of estimations used in accounting.
Thus, once again, it is found that information and its subsequent utilization is the primary disadvantage involved in the act of accountancy.
The Relative Value of Money and its Subsequent Inaccuracy
Mentioned somewhat in the previous sections of this article, the relative value of money and its poor effectiveness as a unit of measurement can be a significantly destabilizing factor in the field of accountancy.
This is due to a variety of factors relating to money itself, such as the fact that inflation is not often reflected on hard copies of financial statements, eventually becoming more and more inaccurate as further time passes since its printing.
Additional situations where this sort of informational expression inaccuracy may be encountered is in the case of conversion between multiple different international currencies, as relative conversion rates, a rapidly changing international trade market as well as the constantly changing nature of a country’s currency can all directly affect the function of accounting information.
Even in extremely specific cases where the relative value of a currency is found to no longer apply may cause malfunctions or misunderstandings in accounting systems of any type, necessitating further communication and work for the connected accountant.
Financial Fraud, Embezzlement and Similar Unethical Practices
Though the most unlikely owing to the fact that punishments for financial crimes can be quite severe, another major disadvantage to the usage of accountants as employees or contract workers is the fact that a rare few may choose to act in unethical or otherwise unscrupulous ways.
Whether performed for the benefit of the client or for the offending accountant themselves, financial crimes and similar white collar crimes relating to the field of accounting can present a major risk to any sort of financial transaction, especially relating to that of tax filing and returns.
Many safeguards against the abuse of power are put in place so as to constrain the risk of legally recognized accountants vested with the ability to perform tasks otherwise not possible for other individuals.
While likely to never occur, accountants found committing these white collar financial crimes may inadvertently drag their respective clients down with them, whether through costly legal proceedings, direct implication in their illegal activities or simply a loss of reputation in both parties, of which may be disastrous for certain types of corporate entities.
References
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