What about the “accountability” part of the accounting process? Why do we need that and how do we enforce it? Businesses need to be held accountable for the methods they use to run a business because the potential for greed, theft, and dishonesty exist in every business. You have only to read the current events section of the newspaper to realize how rampant corporate abuse is in business today. There are specialized areas of accounting, that when correctly enforced, eliminate the possibility for fraud. Auditing and income taxation, when used correctly, force business to account for all business income, transactions, and transfers, and then to pay their fair share of the tax burden. The catch here is that the principles must be correctly enforced.
Accounting is the conscious of the business world. When handled with care and with respect, it performs as expected. When abuse occurs, and the system is circumvented or overridden because of dishonesty and greed, it doesn’t work correctly. Accounting is much like all other systems in place, they are only as good as the people using them.
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