Philosophy of accounting

The issues which arise include the difficulty of establishing a true and fair value of an enterprise and its assets; the moral basis of disclosure and discretion; the standards and laws required to satisfy the political needs of investors, employees and other stakeholders.

According to the IASB project, conceptual framework, it states the role of financial report as 'The primary users need information about the resources of the entity not only to assess an entity's prospects for future net cash inflows but also how effectively and efficiently management has discharged their responsibilities to use the entity's existing resources'[4] Such great significance is put on the role of accounting in business industry yet the issue of trust has always been the fundamental problem.

[9] Science is defined as the knowledge acquired through observation and experimentation which is critically tested, systematised and brought under general principles.

'This approach focuses on measuring and disclosing business in effectiveness is judged based on how well such disclosure and communication are concluded.

The word technical is in relation to accounting work as applying techniques of knowledge construction that are generally and mostly factual.

Max Weber adopts the term rationalisation to illustrate the gradual increase in what he calls rationality in societies.

[13] Weber defines economic rationalisation as'The extent of quantitative calculation or accounting which is technically possible and which is actually applied.

Although technocratism encourage a mechanical, quantitative, and factual way of thinking, this can lead to an elimination of all grey area which can have detrimental effect on firms’ financial/managerial decisions.

Unlike technocrats, pragmatic accountants are rather liberal and accept various possible means when a controversy can be resolved.

Niklas Luhmann states that‘The individualism of risk-calculating merchants, learning from experience, attentive to news, making decisions on the basis of a well-judged mix of trust and distrust…’[16]This discussion extends to the technocratic project of making things quantifiable by calculating and evaluating the possibilities of probable consequences.

'They have the responsibility to ensure that their duties are performed in conformity with the ethical values of honesty, integrity, objectivity, due care, confidentiality, and the commitment to the public interest before one’s own.

This right enforces a moral obligation on the accountants to produce legitimate and objective/true financial statements.

These contractual relationships mean that employers and clients have a legal right to expect professional and competent service from the accountants.