Informational Report

Cole Grossman

The Role of Writing in Accounting

University of Iowa

The Role of Writing in Accounting

            Accountants are normally thought of as number crunchers and the people who fill out your taxes.  Although many people rely on accountants to do these types of things, something that plays a much larger role in accounting than people realize is writing.  Writing is the foundation of much of the business world, and it plays a significant role in the field of accounting.  I interviewed Jen Tigges, who currently works as an Assistant Financial Controller at Principal Financial Group and is a Certified Public Accountant.  Jen stated that, “Fifty percent of my time is probably spent writing in some fashion” (J. Tigges, personal communication, September 2, 2015).  Half of the day spent writing seems like a lot of time devoted to one thing, but accountants do various types of writing in their day to day work.  Accountants use writing, in both academic and non-academic settings to explain and evaluate certain accounting principles that may not be known by other people in the field of accounting or in a different area of business.

Non-Academic Writing

            Non-academic writing plays a very significant role in the field of accounting.  These non-academic writing cover a wide range of audiences.  The audiences typically written to by accountants are others in the business arena who are not accountants, as well as writing to accountants.  Along with the various types of audiences accountants tailor to, they must also be comfortable writing in various forms, such as memos or emails.    

When writing to their coworkers who are in other fields of business accountants must take complex principles and simplify them so their coworkers are able to understand what they are doing.  Tigges agreed with this statement and expanded upon it by saying, “A lot of my writing needs to be read and understood by individuals who speak English as a secondary language” (J. Tigges, personal communication, September 2, 2015).  With today’s global market, communication can be one of the most difficult aspects of business.  Writing in such a way that enables international business people to comprehend what was written is a significant advantage in all business fields, especially accounting.  While accountants have to write to people in other business areas, they must also communicate with others who are accountants.

 Accountants also write to other accountants in a non-academic setting.  The Financial Accounting Standards Board (FASB) is a website specifically used by accountants.  The FASB outlines and explains different accounting principles and rules that accountants are required to use in today’s business world.  The FASB states, “Each final Accounting Standards Update has an effective date when companies and nonpublic not for profit organizations are required to implement it” (“FASB Standards,” 2015).  The FASB ensures that everything in the accounting world stays regulated based on the standards that it comes out with.  Accountants also collaborate with each other in writing.  Many of the forms that accountants fill out have to be reviewed by a few people so they can determine the accuracy of these documents.  In addition, these forms may have to be presented to an auditor, who determines the validity of these documents.  Accountants communicate with a variety of audiences, which makes it important to use the correct type of communication with these people. 

Writing to these different types of audiences comes in different forms.  Tigges declared that, “Memos and emails are probably the most common form of writing that I use on a daily basis” (J. Tigges, personal communication, September 2, 2015).  Memos and emails are both example of non-academic writing.  Therefore, when Tigges stated that memos and emails are the most common form of writing that she does, it means that accountants generally are writing in a non-academic context.  One example of a memo is an accountant analyzing a certain change being made to the basic accounting principles.  In this memo Susan Eldridge, a CPA, stated the following regarding the proposed change, “I believe that the change from the use of the cumulative effect method to retrospective application for all changes in accounting principles will result in excess cost” (Eldridge, 2004).  This quote displays why she thought this specific change was unnecessary to be included with the basic accounting principles.  Although this is only one type of memo, the majority of memos that accountants would be writing would pertain to analyzing how a specific practice could help or hurt the company’s ability to make money.  Memos and emails are certainly an important part of the type of communication that accountants use, but they also communicate in other ways as well.

Another way in which accountants use non-academic writing is in the various forms that they are required to fill out through the government.  Tigges mentioned that the 10-Q and the 10-K are the two reports that she has to file to the SEC.  The SEC states this in regards to the 10-K, “The annual report on Form 10-K provides a comprehensive overview of the company's business and financial condition and includes audited financial statements” (“Form 10-K,” 2009).  This quote demonstrates the importance of this form.  Many accountants must work on this form together in order to make sure the form is done correctly.  Although this is only one example of a form an accountant might have to fill out there are various other forms that are important for accountants to understand.  Overall, non-academic writing is very important in the field of accounting, but there is also a lot of academic writing in this field.

Academic Writing

Non-academic writing is much more prevalent in the field of accounting.  However, there are many example of academic writing in this field.  In academic writing accountants are writing to others in their field.  What they write about differs, however.  Many academic writings focus on what a specific accounting principle might do, or the affect that an accounting method might have on the economy.

The audience in an academic setting is much more limited than the audience of writing in a non-academic setting.  Clearly, the main audience of these academic writings are other accountants, however the audience can be expanded a little more than that.  Anyone with involvement in business could be considered the audience for these articles.  Accounting relates to so many different fields and can therefore be use to critically examine different aspects in the business world.

Academic writing in the accounting field can be very important because of the implications it can have in the business world. One example is an article titled “Macroeconomics Consequences of Accounting: The Effect of Accounting Conservatism on Macroeconomic Indicators and the Money Supply.”  This article analyzes the way in which this specific accounting practice of having more verification for gains than losses and how this process as a whole affects the entire economic climate.  Michael Crawley, the author of this article, concludes that this simple practice can affect such things as social welfare.  This displays the importance that accounting can have on everyone associated with the business world.  Academic writings in accounting also have much narrower focuses.

Another primary use for academic writing in accounting is analyzing the different types of forms and practices that are used in the accounting world.  In a different article titled “Changes in Value Relevance of Accounting Information upon IFRS Adoption.”  In this article, the authors analyze the affect that implements international reporting standards has on the economic climate in a foreign country.  The importance of this article is that the adoption of these standards can be largely dependent on studies such as this one.  This is only one example of the analysis of certain accounting practices, but there are many other articles related to these ideas. 

Academic writing in accounting also analyzes other accountants and the way in which accountants can improve.  In an article titled “Has the Quality of an Accounting Education Declined?” Paul Madsen examines how accountants stack up compared to other majors and to business majors in general.  He found that across all majors, accountants are generally improving, but across business majors, accountants were declining in specific skills valuable to businesses.  This is important because it could change the way in which accounting is taught or the standards for which becoming an accountant is required.

Conclusion

The way in which writing in accounting is used is vast.  Writing in accounting can cover a wide range of audiences.  Also, accountants must be able to write in many different forms, such as memos, email, and various reports.  Writing in accounting can also influence many things in business and specifically in accounting.  Generally, accounting is not viewed as a writing intensive field, but there are many ways in which an accountant must be able to write effectively.

References

Chalmers, K., Clinch, G., & Godfrey, J. (2011). Changes in Value Relevance of Accounting Information upon IFRS Adoption: Evidence from Australia. Australian Journal of Management, 36(2), 151-173. 

Crawley, M. (2015). Macroeconomic Consequences of Accounting: The Effect of Accounting Conservatism on Macroeconomic Indicators and the Money Supply. The Accounting Review, 90(3), 987-1011.

Eldridge, S. (2004, April 12). Memorandum. Retrieved September 13, 2015. 

FASB, Financial Accounting Standards Board. (2015). Retrieved September 7, 2015.

Form 10-K. (2009, June 26). Retrieved September 13, 2015. 

Madsen, P. (2015). Has the Quality of Accounting Education Declined? The Accounting Review, 90(3), 1115-1147.

Tigges, J. (2015, September 2). Writing in Accounting [E-mail interview].