Applied System Thinking

It can be argued that accounting is a fundamental aspect in the development of modern capitalist societies. A new paradigm of the system thinking in accounting is evolving and worthy of study; the influence of accounting leadership, communication and personal motivations in global organizations and institutional development and the rules which inadvertently facilitates the growth of capitalism. While accounting sets the governing rules and techniques used to monitor financial positions of organizations and institutions in meeting goals and performance appraisal, accounting also provides data used for budgeting, investing, and financing the growth of organizations. (Chapman, Cooper, & Miller, 2009)

Accounting leadership influence on organizations and institutions

Through the lens of global organizations and institutions, accounting influences growth based on performance measurements provided by accounting data that is reliable, relevant, and accurate. Management and leadership hold the ultimate accountability of the accuracy and fair reporting of their financial positions based on the laws of Sarbanes Oxley laws in the United States which were mandated in 2002. (https://www.sec.gov/rules/final/33-8238.htm). However, consideration should be given to the questions of power, control, and influence of leadership in fair and accurate accounting reporting based on a different paradigm; systems thinking globally.

How system thinking is applied

As an investigation of organizational transformation in accounting, this paper offers the criteria for when transformation is useful and postulates the systems thinking necessary for such change. The changes society has undergone in the last decade have been numerous; international religious warfare, terrorism, job outsourcing, globalization of business, and the internet have all made the nature and the ways business are conducted very different from that of prior generations. We now face problems with no clear solution, money cannot solve such problems and ignoring them is also not the solution. Prior solution attempts have proved unsuccessful and we look towards leadership in globalization of standard setting and governance rules for accountancy to provide solutions.

New thinking for accounting international standards.

In 2001, the International Accounting Standards Board (IASB) was formulated to better govern international issues in accountancy. This independent, private sector board operates as the International Financial Reporting Standards (IFRS). This new leadership thinking has not yet been fully adapted in the United States with several rules which differ from that of the U.S. For example, rules addressing revenue recognition and asset valuation have not yet been fully collaborated internationally. Based on such differences, how can educators better prepare future leaders and what are the scholastic mandates which should be taught? (Tokar, 2015).

Future leadership thinking.

Accountants are taught the specific rules governing the reporting of organizations financial positions. Such reporting has an important impact on organizational decisions, therefore thinking globally has a huge impact on the reporting processes. Deciding which standards should be taught and the thinking behind globalization proses problems and should not necessarily be solved in the classroom (Tokar, 2015). This new, globalized thinking brings with it other problems as well, formalized syllabi that sets the international standards that may not be adapted by all countries and by all higher education institutions.

References

Chapman, C., Cooper, D., & Miller, P. (2009-08-13). Accounting, Organizations, and Institutions: Essays in Honor of Anthony Hopwood. : Oxford University Press. Retrieved 28 Oct. 2015, retrieved from http://www.oxfordscholarship.com.contentproxy.phoenix.edu/view/10.1093/acprof:oso/9780199546350.001.0001/acprof-9780199546350-chapter-1.

Sarbanes-Oxley Law (2002). U.S. Securities and Exchange Commission. Retrieved 28 Oct. 2015, retrieved from

https://www.sec.gov/rules/final/33-8238.htm

Tokar, M. B., (2015). What Kind of Accounting Standards Should We Write? Conference on Accounting and Management Information Systems. Retrieved 28, Oct, 2015, retrieved from

http://www.ifrs.org/Alerts/Conference/Documents/2015/Romania-June-2015.pdf

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MOORE ACCOUNTING SERVICES, LLC

New Paradigm of System Thinking in Accounting

One size fits all reporting

An evaluation of accounting knowledge in higher education

Organizational Changes

The governing bodies of accounting

Historical perspective of accounting knowledge

Advancing the profession of accountancy

Shirley Ann Moore

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