Thursday, October 17, 2019

Accounting does not communicate reality, it constructs reality Essay

Accounting does not communicate reality, it constructs reality - Essay Example Accounting is a language of business through which the information is passed to the users of the financial statement. The users then can on the basis of those information can their own decision and plan of action. Thus it can be defined that accounting is not merely a method of keeping records but a method for taking decision on the basis of the information that is provided by accounting (Bion, 1968). An effective medium of communication is required by the entity handling its employees, clients, suppliers. Accounting is considered as an intrinsic an important element of the entity. Accounting helps the business entity in preparation of budget, reporting and also in recording of income that is required by the managers as well as others. There are different users of accounting which can be mainly classified as the external users that includes investors, taxing authorities, customers and creditors and the internal users that includes the management and the employees (Drury, 2008). Accounting mainly communicates variety of information to various parties that are interested in the information supplied by accounting with the help of different mode of communication such as by publishing of annual report, internet, social report and applying various mediums such as by adding pictures, charts, narratives, graphs. The accounting communication is considered as an important aspect as it provides a clear picture to the various things. Accounting communication is verbal as well as non verbal. Accounting communication is required for management accounting. The art of communication applied in management accounting is mainly backed by the need and demand. There are mainly two different ways of communicating financial information is Business Intelligence and costing data (Keele Management School, 2012). Accounting same as that of advertisement can be perceived as mythological and as a metalanguage in which the signs are used to explain the mythical meaning. Accounting

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