What Is The Importance Of Philosophy In Accountancy?


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James Kent answered
Philosophy is important in the world of Accountancy, because Accountancy is defined as, "the occupation of maintaining and auditing records and preparing financial reports for a business." One would assume that anyone preparing these records and reports for a business would do so honestly and ethically.

Ethics and morals are two of the basic principles of philosophy, and this in itself makes philosophy important. Ethics determine whether a person is honest enough to concentrate on what is right and what is wrong. It would be a reasonable expectation that the person/persons preparing the accounts for a business would do so honestly so as to satisfy any investors or stakeholders in the business.

The two main reports in accountancy are the Profit and Loss Account and the Balance Sheet. These two documents are important to a company, as they can illustrate what the financial situation is to the investors or stakeholders of the company. The Profit and Loss Account quite simply shows what the business has made or lost during a particular period; and the Balance Sheet shows the worth of a business, by including not just the cash the business holds in bank accounts, but also the value of any assets the business holds, for example, vehicles or equipment.

The other reason these reports are important to those involved in the business is that they assist in making sure that the business is profitable, and if it is not, then those who have the ability to do so can invest further into the business if they feel that this is the logical course of action at that time.

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