Financial Accounting Work Organization

Financial Accounting Work Organization

Contents

TOC o “1-3” h z u Introduction PAGEREF _Toc377250929 h 1Financial Accounting Work Organization PAGEREF _Toc377250930 h 1Problems Faced by Financial Accounting Workers PAGEREF _Toc377250931 h 3Benefits of Financial Accounting PAGEREF _Toc377250932 h 5Financial Accounting Shift with Time PAGEREF _Toc377250933 h 6Conclusion PAGEREF _Toc377250934 h 8Work Cited PAGEREF _Toc377250935 h 8

IntroductionThere has been a shift in the economy of developed countries. Traditionally, manufacturing companies controlled the fortunes of the economy. This is changing, and currently, the service sector is the most promising sector. This change has led to changes in various job specifications, which the deskilling theory predicted. Financial accounting has been changing, and currently many accountants work for service-based companies rather than manufacturing industries. Financial accounting is a profession of high organization dynamics. Various individuals in the sector perform different mandates. They face a number of challenges during the execution of their mandate, but there are advantages associated with the job (Krahn, Hughes, and Lowe 82). In addition to the obvious challenges, the changing dynamics of accounting promises to be a challenge to accountants. Future accountants will be working for internet companies, and their job description will expand (Krahn, Hughes, and Lowe 126). This conforms to the deskilling theory proposed by Harry Braverman. That is future accountants have a likelihood of requiring lesser training, but broader understanding of various aspects that were not traditionally accounting specifications.

Financial Accounting Work OrganizationFinancial accounting profession has an organization that is rather complicated given the number of people involved in the process. According to studies, accountants indicate higher levels of stress than their counterparts in other professions. More than 20% of the workers in a given service company work under the finances department (Lowe 102). Research indicates that the organization of a given job defines the sociological dynamics defining the same. Some of the individuals that are part of the financial accounting include the accountant, chief accountant, and the financial controller. All the officers have varied mandate within an organization. However, they represent a unit with an organization whose main objective is ensuring that their employer does account for the finances within an organization. This does not only prevent litigation from stakeholders, but also protects the company from financial mismanagement that might lead to bankruptcy.

An accountant may or may not have an assistant. Studies indicate that more than half of the works accountants engage in are entirely ensuring minimal errors. In addition, they have the mandate of sorting all documents within the company premises depending of the name of the account or its number. In accordance, an accountant must have an experience or expertise in the field of bookkeeping to execute the mandate effectively. In case of an assistant, their mandate is posting and verifying transactions to ledgers, journals, and other records. However, if there is no assistant then such specifications are the mandate of the accountant. It is appropriate to mention that the work specification of an accountant affects the quality of their life.

Both the assistant accountant and the accountant are subordinates in the office of the chief accountant. The consequence of this is that they have better living standards that their accounting counterparts. Data indicates that chief accountants represent less than 1% of the employees in a service company. However, the mandate of the chief accountant is different from those of the subordinates (Lowe 88). Chief accountant manages the accounting functions in the organization. It is the mandate of the chief accountant to prepare statistical data and reports that details on financial results. In addition, maintenance and establishment of accounting practices to ensure that the data and information that is necessary for operation of business is reliable and accurate. However, it is also possible for a chief accountant to specialize in one of the accounting functions. These functions include includes accounts payable or accounts receivable.

Management of account is essential in financial management. To this effect, companies in most cases employ a management accountant execute this mandate. This is the climax of the accounting profession. The aim of many accountants is attaining this position. However, statistics indicates that only lesser that 5% of accountants end up occupying such a position (Suillivan 71). Their mandate is planning and conducting studies and research that will be helpful in the improvement of financial and operational effectiveness of the financial department. The financial controller has the mandate of assisting and supporting accounting manager. However, the financial controller focuses on directing the cost and budget, accounting procedures, and financial analysis. In accordance in the instance that a company does not have an accounting manager, financial controller executes the mandate.

Problems Faced by Financial Accounting WorkersWorkers in the financial department of any organization face myriad of challenges. Despite the desire by many individuals to engage in the profession, many realize that they lack the capability of handling the pressure. The first challenge is that of perception. Research indicates that many accountants learnt accounting based on industrial and manufacturing companies. However, the trend is changing, and currently many businesses are service based organizations. This has the meaning that there is the challenge of applying industrial knowledge to service based industries (Suillivan 51). An example of a challenge is the fact that in the industry making sales has the meaning that the earning process concludes. On the other hand, in service-based industries sales means that it is the beginning of earnings.

The other issue is dealing with numbers. Accounting employees are under immense pressure of perfecting their mathematical prowess (Giddens 76). This is because accounting requires that there be perfection and no room for any errors. In some cases, individuals from various departments may choose to inflate revenue for selfish gain purposes. Workers in the financial accounting have the mandate of detecting such malpractices and reporting them. Such malpractices will improve the position of the company in the stock exchange in the short term, but bankruptcy in the long run. This has the meaning that employees of the financial accounting will in most cases suffer higher levels of stress as compared to their counterparts in other departments. This is the reason that despite the high pay that they receive accounting in most cases lowers the health of workers.

The other challenge that financial accounting workers face during the execution of their mandate is the availability of numerous accounting and auditing methods. This leads to the confusing and arguments with the department on the appropriate methods that will suit their organization. In accordance to this, medical center financial accountants may face the challenge of accounting for the long term patients. These challenges emanate from the fact that there is the lack of appropriate standardization body in the accounting field. In accordance, individuals in the service industry working as financial accountants have the problem of workplace confusion, which emanate from the sensitivity of their job specification.

Maybe financial accounting department that faces a myriad of challenges is that of auditing. This is because of the latest development in the field. Workers of this department have to work hard to ensure that clients do no lose confidence in them. The general public is beginning to question the importance of accounting and auditing given the obvious credibility issues. This means that, currently, financial accountants that are working as auditors are working in a department that is facing credibility issues (Giddens 61). Many auditing firms such as Price WaterhouseCoopers are working to regain trust. This has the meaning that workers in such organizations are working under immense pressure of delivering without errors in an age have large sizes of information.

Benefits of Financial AccountingFinancial accounting has a number of benefits that workers enjoy. Financial accounting workers receive relatively higher salaries than their counterparts in other departments. This means that accountants and other individuals working in the department are financially sound and can meet their daily needs easily. According to studies, financial accounting is the most lucrative profession that an individual can venture into in the developed world. This is because of incidences of high salaries associated with the profession. However, the salaries depend on the job specification of an individual within the financial accounting department.

The other benefit that financial accountants have is that of a variety of jobs. Completion of the accounting degree means that there are various job opportunities. In accordance even after securing a job in a given organization, they still have an opportunity of joining another profession that is also lucrative. They can be accountants for businesses that deal with products or services or choose to be a public accountant working for large accounting firms. On the other hand, they may choose to work as auditors. This provides the opportunity of preventing fraud in a company or investigating companies suspected of malpractices.

In addition to high salaries and variety of jobs, accountants are the most likely candidates for promotions. Research indicates that organizations require that their managers have accounting capabilities. This has the meaning that efficient and credible accountants are in most cases the suitable candidates to fill managerial positions (Giddens 90). In fact, accountants may rise to the position of chief executive officer within an organization regardless of the products and services that the organization offers. This has the meaning that financial accounting profession does not only promise higher salaries and a variety of jobs, but it also promises leadership.

Job security is the other advantage that financial accounting workers enjoy. According to surveys, workers from the financial and accounting sector express increased confidence in the security of their jobs. Financial accounting is the profession that has the least concerns about the outcome of the economy. Regardless of the outcomes of the economy workers from this field feel secure about their jobs. In the last global economic crises, financial accounting profession recorded the least number of layoffs, benefit reduction, and pay cuts. This implies that financial accountants have immunity in issues concerning job security.

Financial Accounting Shift with TimeLabor requirements will change with time. This conforms to the deskilling theory. Traditionally, accounting in most cases comprised of the normal bookkeeping without the current maintenance of financial records and auditing. The future of accounting promises to change dynamics in the financial accounting labor force (Edgell 24). Professional, financial accountants will have to perform extra duties apart the traditional financial, auditing, and accounting mandates. This is because of the elimination of manual work with the advent of computer programs that can execute such mandates. Currently, accountants in the financial sector are already expanding their job description. According to research, this expansion of duties will extend to other service sectors. The dynamics of working as an accountant will experience a significant overhaul. According to the deskilling theory, elimination of manual and technical labor has the meaning that there will be interchangeability of labor.

Despite the fact that there will be changes in the service sector, accountants in other segments of the economy will have to change their specifications. Large companies will lead the rest in expanding the duties of accountants. This will lead to a decrease in the number of accountants as defined by the deskilling theory. The shift is from the traditional accounting duties to nontraditional accounting functions. Nontraditional accounting functions include mandates revolving around information technology and strategic planning projects. On average, 36% of accountants do not perform the traditional mandates as their job specification. Studies indicate that this number will increase dramatically with time (Krahn, Hughes, and Lowe 91). This change in job description will accompany a decrease. The reasons for these increases will be the requirement by the chief accounting officer that accountants have experience in nontraditional accounting practices.

Financial accounting was, initially, dominant in the manufacturing industry, and their role was ceremonial. This is because many companies employed them so that they can keep the tax man away from the organization. With time, the profession has grown with time especially in the service sector because of the growth of technology. It has become a serious profession such that there are organizations that exclusively deal with accounting and auditing. Currently, the growth has been in the internet that has led to a growth e-commerce. This has the meaning that the future accountants might work for internet companies, as opposed to the financial sector.

There is an obvious observation that the changes occurring in the accounting sector conform to those described by the deskilling theory. Studies indicate that in future there will be a significant reduction in the number of accountants and their mandate will grow to encompass non-accounting specifications (Krahn, Hughes, and Lowe 50). This is because of the technological advancement in the field of accounting. There will be lesser need of engaging in manual work. Deskilling theory predicts that this will happen by stating that in future craftwork and manual work will be deskilled. In accordance, the shift in the accounting sector conforms to the predictions made by the deskilling and Marxist theories.

ConclusionCurrently, financial accounting is a profession that is impacting on the lives of many individuals within the field. Initially, salaries obtained from the sector attracted many, but the responsibilities associated challenged many individuals. Accountants continue to face a number of challenges as the industry moves towards capitalism. Despite the challenges, statistics indicate that accountants are comfortable with their jobs relative to other profession. This is an indication that it has some benefits. The future of the accounting profession promises more than just better salaries. Accountants will have to work in other sectors with rising labor interchangeability and their numbers will decrease significantly. This indicates that these changes conform to the predictions of the deskilling theory.

Work CitedKrahn, Hughes, and Lowe, Graham. Work, Industry, and the Canadian Society. California: Cengage Learning, 2010.

Giddens, Anthony. Social Theory and Modern Sociology. Stanford: Stanford University Press, 1987.

Edgell, Stephen. The Sociology of Work: Continuity and the Change in the Paid and Unpaid Work. New York: Pine Forge Press, 2006.

Lowe, Graham. The Quality of Work: a People- Centered Agenda. Oxford: Oxford University Press, 2000.

Suillivan, Teresa. The social Organization of Work. California: Cengage Learning, 2008.