Emerging Roles in the Future of Accounting
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Emerging Roles in the Future of Accounting


Accounting has evolved along with human development and because the concept of the subject of accounting was directly created from the most basic principles of conservatism, it is not difficult to see why accounting style at one time had a direct relationship with age.

As humans have progressed from primitive times to modern interdependence, life has evolved from subsistence as hunter-gatherers to the knowledge-driven concept of the global world ‘effectiveness turns to greatness’ and throughout this evolution, self-counting with the abacus has evolved. through accounting. management to financial accounting and now managerial accounting; which focuses on decision making.

The US Financial Accounting Standards Board (FASB) which generally standardizes and strengthens the globally adopted Generally Accepted Accounting Principles (GAAP) took a significant step in 2012 to work closely with the International Accounting Standards Board (IASB) in a manner referred to as ‘ International Convergence’.

This convergence is expected to be able to gradually align GAAP and IFRS to become one and the same in an effort to streamline company/company reporting into a globally uniform process.

1.1 Problem Statement

There is no absolute certainty about what will happen to the Accounting Profession in the future. However, it seems that the future age which will surely be one of scientific progress, will move mankind from greatness to something more valuable for that time. Spiritualism, Environmentalism and Developmentalism could be key factors in the future.

This paper is to find out whether Accounting itself will become more than a reality that provides an accurate solution to financial problems where the human ability to reasonably value natural capital will give rise to significant assets on the balance sheet in contrast to the industrial age when even humans themselves. considered as labor and not considered as important as the machine it operates.


This paper is approached from the point of view of content analysis – both conceptual and relational. Content analysis is “a research technique for the objective, systematic, and quantitative description of the actual content of communication” – (Berelson, 52).

Conceptual analysis is only to test the existence of a problem, i.e. whether there is a stronger presence of positive or negative words used with respect to a particular argument while relational analysis builds on conceptual analysis by examining the relationships between concepts. Like any other type of inquiry, the initial choice with regard to what is being studied determines the likelihood of this particular paper.

2.1 Evolution of Accounting Theory

According to investopedia.com, Accounting Theory in the light of its evolution can be defined as a review of both the historical foundations of accounting practice as well as the way in which accounting practice is verified and added to the study and application of financial principles. Accounting as a discipline is believed to have existed since the 15th century.

Since then, the business and economy has continued to grow rapidly. Accounting theory has to adapt to new ways of doing business, new technological standards and gaps found in reporting mechanisms hence, it is a subject that is constantly evolving.

As professional accounting organizations help companies interpret and use accounting standards, the Accounting Standards Board also helps continue to create more efficient practical applications of accounting theory.

Accounting is the foundation of efficient and effective business management and intelligent managerial decision making, without which business and commerce around the world would operate blindly and fatally. Therefore, it is important to relate how he has developed with his future role.

2.2 Origin of Accounting

Luca Pacioli wrote the book Mathematics in 1494 (ehow) which consists of chapters on business mathematics. Since this book is considered the first official book on accounting, Luca Pacioli has several times been considered the ‘father of accounting’. In his Maths book, Pacioli explains that a successful trader needs 3 things: sufficient cash or credit; an accounting system that can tell him how he is doing; and good bookkeeping to operate it.

Pacioli’s theory is still valid today, including journals and ledgers and is believed to have popularized the use of double-entry accounting which has been around since the late 1300s.

2.2.1 The First Change in Accounting

During the depression of 1772, the Accounting profession went beyond bookkeeping to cost accounting. Theories and ideas are transformed into methods for determining whether a business is operating efficiently or using excess labor and resources.

The new theory of cost accounting allows trained bookkeepers or accountants to use stored books to extract financial statements to demonstrate the efficiency that the data represent. This new idea led to business continuity during the depression; businesses that would otherwise fail without smart management decision making informed by cost accounting breakthroughs.

2.2.2 American Revolution/British Court Influence

The end of the American Revolution saw the first United States (US) government accounting system created in 1789 and established to account for and manage the US treasury. Double entry practice and theory is adopted. British courts ruled that they needed professional accountants to produce financial information in relation to court cases.

Chartered accounting bodies/concepts were introduced in the UK (and in the US in particular, Certified Public Accountants – CPAs). In 1887, the first standardized examinations appeared with Frank Broaker becoming the first CPA in the US.

2.3 Modern Cost Accounting

It was first founded by the General Motors (GM) Company in 1923 and developed methods that helped cut costs and streamline operations and it has remained relevant for more than 50 years. New accounting techniques developed include return on investment, return on equity and GM’s flexible/adjustable budget concept.

2.4 Accounting Concepts and Conventions

It was established in the US between 1936 and 1938 by the Committee on Accounting Procedures (CAP) thereby standardizing Accounting practices for all companies across the US. In 1953, Generally Accepted Accounting Principles (GAAP) were updated to new standards, the CAP became the Accounting Principles Board (APB) in 1959 and then in 1973, the APB (after experiencing poor management) was replaced by the Financial Accounting Standards Board (FASB). ). with greater power and opinion for his professional demeanor.

2.5 International Financial Reporting Standards

The FASB issued nearly 200 statements between 1973 and 2009 thus establishing the basis of the Accounting Standards in use today and now making the most recent steps to harmonize all GAAP accounting principles with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB).

It is widely believed that the development of the accounting profession in any country and around the world is the combined effort of accounting theorists and accounting practitioners. Thus, the accounting framework is a harmony of efforts in which professional accounting bodies usually lead the way towards regulation and standardization of accounting-related issues.

2.6 Nigerian Scenario

In Nigeria, the case is no different from the one already discussed. Most of the country’s accounting standards (concepts and conventions) were inherited from the British colonial rulers.

And since the world has indeed become a large global village with a global accounting body overseeing and ensuring that all member countries follow the current Generally Accepted Accounting Principles, Nigeria has also been involved in making some of the most recent and well-known public and private sector reforms.

these include the approval by the Federal Government in July 2010 to adopt International Public Sector Accounting Standards (IPSAS) for the public sector and International Financial Reporting Standards (IFRS) for the private sector as a conscious effort to ensure a uniform reporting chart. system across the country by both the public and private sectors.

2.7 International Convergence of Accounting Standards

This concept is a goal as well as a path taken to achieve that goal. The FASB believes that the ultimate goal of convergence is a set of high-quality international accounting standards that companies around the world will use for domestic and cross-border financial reporting. To this end, a conscious effort is being made by the FASB and the IASB to jointly eliminate the distinction between ‘GAAP’ and ‘IFRS’.

One such conscious effort was made on April 5, 2012 when an updated report was submitted to the Plenary Financial Stability Board on Accounting Convergence. The increasing demand for global capital markets is driven by investors’ desire for high quality financial information that can be compared internationally because of its usefulness which is expected to provide fast decision making and subsequently accurate solutions to problem solving.

The IASB was established April 1, 2001 as the successor to the International Accounting Standards Committee (IASC) and on March 1, 2001 the IASB, which is an independent accounting standard setter based in London, England, took responsibility for Accounting Standardization. The IASB is responsible for issuing many accounting standards and statements known as International Financial Reporting Standards (IFRS).


To provide an overview of this paper, 2 (two) illustrations are used to present (interpret) the findings. Illustration.1 Tracing the Evolution of Accounting; principles, roles, concepts, professionalism, standardization and internationalization. Illustration.2 on the one hand connects the evolution of Accounting with the evolution of Humans and on the other hand broadens the reader’s understanding of the subject matter.

Readers (users) of this paper easily find past-present-future views on the Role of Accounting and ultimately aim to postulate what the future of Accounting will look like (or should be). Self Accounting is not a terminology found in the Accounting literature but is used here to describe the primitive Accounting system maintained by traders long before double-entry.

Self Accounting, thus, is the past of Accounting when the Accounting role only had a record of Income and Expense, showing Liabilities and not necessarily showing Assets and profits as distinguished from a trader’s personal or personal income/wealth. Assets may sometimes have been recorded as an expense.

This can be assumed because most businesses operated (and still operate) as sole proprietorships. Current Accounting roles include; management, financial reporting and managerial decision making. All three provide a relationship like what Accounting is today.

The management aspect is so called because the wealthy merchants in Europe and America at that time trained their slaves to provide bookkeeping services. So the merchants themselves don’t have to do those tasks. Financial Accounting was developed to provide financial reporting standards, especially for users of the report, especially for the business concerned.

Managerial Accounting evolved to provide records that will assist the decision-making process of managers and business owners. Generally all three accounting roles today help stakeholders to make good judgments about their relationship with the business.

These stakeholders may or may not have the right to receive the report under discussion. Stakeholders include; creditors and the government (only entitled to receive financial statements); shareholders, investors and management (using financial reports and managerial reports);

employees and the management team (which are users of all reports: bookkeeping, financial reports, and managerial reports);

and competitors, resident communities and customers – who do not have the right to receive such reports but can take financial reports (annual reports) to aid their decisions with respect to any business of interest to them.

Having accurate records (reports) supports good decision making but sometimes poor interpretation and assessment of reports and their recorded results can lead to poor decision making. These three roles of accounting have now become the foundation on which to standardize accounting principles and procedures that have developed to date.

The Emergence of (Future) Accounting Roles must then be anticipated with keen readiness for what may happen. Illustration.2 will do justice to this concept.

Illustration.1- The Evolution of Accounting in the US (1300 – 2014)

Stewardship (before 1300)

-Slaves are trained to make basic bookkeeping

Double Entry (1300)

-Introduction to the principle of Double Entry

Bookkeeping improved (1494)

-Financial Reporting begins

Cost Accounting (1772)

-Managerial Accounting for Decision Making begins

Double Entry (1789)

-The principle of Conservatism is fully adopted

Professionalism (1850)

-Concept/Agent for hire introduced

AICPA formed in the United States (1887)

-Provide operational standards and guidelines

-Certification process begins

Qualifying Exam (1897)

-First standardized exam introduced

Cost Accounting Overhauled (1923)

-Modern cost accounting method developed by General Motors Company and remains relevant after 1973

Concepts and Conventions (1936)

-Conservatism evolves into other concepts and conventions

-US Committee on Accounting Procedure (CAP) establishes standard accounting practices

Evolving CAP (1953)

-New GAAP standards are fully established

CAP develops further (1959)

-CAP becomes APB (Council of Accounting Principles)

APB develops (1973)

-Due to poor management and inability of Accounting theory as desired, APB was replaced by FASB

FASB founded (1973)

-The Financial Accounting Standards Board replaced the APB and made more than 200 statements in 2009

-The foundations of accounting standards around the world are being strengthened

Influence from England (2001)

-IASB was established as an independent ‘International Accounting Standard Setter’ based in London, UK

– The IASB took over from the IASC on March 1, 2001

FASB and International Convergence (2012-2014)

-GAAP (founded by FASB) is being considered for merger into IFRS (founded by IASB)

3.1 The Reality of Accounting versus the Future Role of Accounting?

What is Reality Accounting and what should Reality Accounting cover? Wikipedia.com defines reality as the totality of all things, structures (actual and conceptual), events (past or present) and phenomena both observable or not. Reality is thus seen as a term that links ideology with a worldview or part of it (conceptual framework). Reality Accounting is close to ‘Fair Value Accounting’, which is the basis and theory of accounting.

And it seems to be turning into the Future Role of Accounting. In Financial Accounting, it is easy to see that accounting reflects corporate and economic realities as they are, although it is common sense to know that accounting cannot adequately reflect reality especially in light of the technical limitations of double entry bookkeeping and Fair Value Accounting.

As part of the changes that came from Reality Accounting, a new concept of ‘Natural Capital’ emerged. At the Rio+20 Summit on Sustainable Development organized by the United Nations Conference for Sustainable Development (UNCSD) which took place in Brazil on 20-22 June 2012. At the Conference a Natural Capital declaration was made so that Natural capital is now understood as consisting of all natural assets.

The earth (soil, air, water, flora and fauna) and the ecosystem services that result from them, that make human life possible. It is estimated that natural capital ecosystem goods and services are worth trillions of US dollars per year and are food, fiber, water, health, energy, climate security and other essential services for everyone.

3.2 Natural Capital Concept

Neither services, nor the stock of Natural Capital that provides them, are not undervalued in comparison to social and financial capital even though they are fundamental to all that exists. The day-to-day use of Natural Capital remains undetected in our financial system.

Therefore, it is necessary to use Natural Capital in a sustainable manner. All stakeholders, including the private sector and government, must begin to appreciate and consider the use of Natural Capital and recognize the true costs of economic growth and sustaining human well-being now and in the future.

3.3 Natural Capital Framework

Natural Capital although treated as a free good but should be seen as part of the global wealth pool where governments must act now and wisely to create a framework that will regulate, reward or tax the private sector for its use. A reliable policy framework that can report on the value, use, and depletion of natural capital should be the goal of any government that wants to get a head start on this new accounting phenomenon.

A deeper economic influence is exerted on accounting under Reality Accounting because all that is perceived to be real is only really real in its consequences and not in its physicality.

Therefore, the value of Natural Capital, for example, will be the value determined after considering the various factors that give rise to the assessment. These factors include size, presence of mineral resources, location, other natural resources, presence of plant and animal life, etc.

Illustration.2- The Emerging Role of Accounting (Future)


Primitive age………..Hunter – gatherer…………………………. .Self- accountancy
(Independence)……(Subsistence life)……………………………(Abacus )

Colonial Age…………Colonialization…………………………. …. Stewardship Accounting
(Depends on age) ….. (Being efficient) …………………………. .. ………. ……….. (Bookkeeping)

Modern Era………….Technology Driven by Industrialization…….Financial Accounting
(Independence)…….(Being effective)…………………………………………. ….. …………. ….. (Financial statements)

Modern Era…………..Technology Driven by Knowledge………….Management Accounting
(Interdependence)…(From effectiveness to greatness)…………(Decision making)
Future Era……Technology driven by progress……Reality Accounting?
(Efficiency ………………Environment?…………………………… …(Not as a tool for making decisions
based on ………………Developmentalism?…………………………… . .make but provide
Interdependence……Spirituality?………………………………………………………. …………………….accurate solution for
……………………………(From greatness to what?)………. .. … ………Financial Problem)


As humans seek a higher level in the modern world full of scientific discoveries and research, Accountants must reflect on what role the emerging professions of their profession have.

From simply providing information about business well-being to financial reporting as a corporate responsibility and now managerial decision-making approaches to future forecasting, what will happen in the future for accounting or how accounting is expected to remain professional and relevant in the future i.e. is likely to be shaped by environmental and development challenges around the world.

Since accurate records and reports have supported good decision making although sometimes poor interpretation and judgment of recorded reports and results have led to poor decision making, it is the role of accounting today, which has formed the basis for standardization of accounting principles and principles. procedures have evolved now face real change.

Under the purview of Reality Accounting, it is clear that concepts such as International Convergence, Natural Capital, Environment, Developmentalism, and Fair Value Accounting will soon define the path for the future of accounting.

This paper is to stimulate academic arguments for or against the subject matter in order to bring accountants to awareness of the subconscious changes that are already taking place. It is therefore recommended that experienced researchers should come up with further ideas, summaries and reviews that can propel a clear path to the future of accounting.


This paper concludes that Accounting Reality is close to ‘Fair Value Accounting’, which is the basis and theory of accounting which seems to be turning into the Future Role of Accounting.

It also uncovers the nature and concept of natural capital in relation to the Natural Capital framework and finally proposes that International Convergence, Natural Capital, Environment, Developmentalism and Fair Value Accounting are concepts that will soon shape the path for the future of accounting.

This paper calls for academic arguments for or against the topic and recommends that experienced researchers should come up with further ideas, summaries, and reviews that can promote a clear path to the future of accounting.