Final Paper Accounting Paradoxes

Abstract

Eugene Flegm, having been in the accounting field for a long time, has experienced a lot in the profession. Therefore he decided to write an article about the four accounting paradoxes that accountants face in their professional endeavors. Two of these paradoxes have a direct correlation with management and leadership. The first paradox is balancing technical skills and “soft” skills. The second paradox is the accountant’s education which deals with leadership and management. The accounting field is diverse and different in delivering its services, as its responsibility is towards the public and not the client. The third paradox discussed by Flegm cuts through the entire accounting field; the mystery is the accuracy of accounting and the applied bookkeeping hypothesis subjectivity. Another paradox mentioned by Flegm is a starting point of general societal practice about bookkeeping itself. This paper will defend Flegm’s paradox while acquiring different sources to encourage the contention.

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INTRODUCTION

Eugene Flegm identified the four paradoxes faced by accountants in the article “ACCOUNTING PARADOXES,” the first paradox discusses the trade-off between having employees with excellent technical skills and the need for those with “soft” skills. The second paradox highlighted by Flegm is that the auditee pays the auditor for the services rendered, compromising the auditor’s independence. The third paradox he likewise distinguished is the exactness of accounting and the subjectivity of the applied bookkeeping hypothesis. The final paradox, which is the fourth one, is regarding the education of accountants (Flegm, 2013).

To what extent can you defend (or refute) Flegm’s position on these critical accounting paradoxes?

In defending Flegm’s opinion regarding the accounting paradox, more discussion is provided in this article. In the first paradox, the connection between two notable personalities is presented between the introvert and the extrovert, who have technical skills and who have articulate skills. Despite many accountants having introverted personalities, employers seem to be looking for characters of an extrovert. As a leader, it is essential to have appropriate technical skills to train and supervise staff to correct any errors. It is also crucial to ensure clear communication of ideas to the employees. (Flegm, 2013).

For accounting and finance, a professional’s technical expertise is valuable. One needs to develop both “soft” and technical skills. One needs to stay updated on the trending accounting best practices and digital trends, such as cloud services and other technical skills required by the profession. One needs not overlook other essential skills when trying to remain relevant. One requires soft and technical skills to succeed (Half, 2017).

Extravert personality has one crucial skill: communication; strong leadership arises from good conversation, and a better understanding of the task is achieved when there is free and open communication between the superiors and the employees (Gerzon, 2006). Secondly, the education of accountants is the second paradox. Education is crucial in any field; in accounting, one needs a certain level of knowledge before qualifying as an accountant. It is not only the employee’s responsibility but also the employer’s to ensure that there must be proper education for the employees.

It is not about who can know the most information but who can pose the right questions. Accounting professionals need to have a suspicious character, this questioning belief needs to be instilled earlier in accounting students, and the accounting profession will result in a fact-based field rather than a knowledge-based field of study. Accounting is a very diverse and broad field, unlike medicine or law, and this profession is born public responsibility, unlike client responsibility (Flegm, 2013).

How has your position changed from the first time you read the article in Week 1?

The opinion regarding these paradoxes presented by Flegm’s article has changed from the first time in week one. Even though technical skills are essential, there must also be soft skills. Therefore, this supports Flegm further and changes the opinion of ensuring the technical capabilities of accounting employees and ensuring they equally possess both soft and technical skills.

Regarding the fourth paradox, education of accountants, to educate all the Brigham Young University accountants as a piece of the underlying examination group for the “150-hour program” supported by the AICPA has built up a five-year expert program containing six essential abilities which are trusted to meet the future needs of the accounting profession. This program is excellent and will accommodate all the critical areas of accounting education necessary for accounting professionals. As argued by Flegm (2013), one can practice accounting without a CPA designation; then again, a man doesn’t require higher education to work on bookkeeping; at any rate, at the accounting level, albeit today, learning of the PC would be fundamental. Nor is an expert confirmation to practice applied bookkeeping hypothesis required at its topmost level.

How are you and your current-day industry affected by these paradoxes noted in 2007?

Chris Baysden wrote an article published in the Journal of Accountancy describing the skill set needed for modern-day accountants. It mainly deals with those who have recently graduated from college. The article gives a nice little look into the future of accountants. Among the things changing in firms is how they train new employees. Firms likewise are actualizing training projects to enable new contracts to learn soft aptitudes, for example, how to work with and present to customers (Baysden, 2013)

This paradox about the trade-off between soft and technical skills severely challenges employment procedures. “Soft” skills will always take a back seat compared to technical skills, but this article shows that more and more effort is being put into enhancing these skills. Few audit supervisors and executives inside business think soft aptitude training is justified regardless of the cost, Fowler stated, noticing that he needed to pay for his exercises. The shocking incongruity of such a silly way to deal with soft aptitude training is that compelling interchanges can drive efficiencies and spare an entity’s cash (Hagel, 2013). Jack Hagel points out that in the past, businesses have taken for granted the softer skills and are now paying for them.

Also, another paradox affecting the current accounting professional industry is the paradox whereby the auditee will have to pay an auditor for the services rendered; there have been witnessed in many instances to compromise independence. The institutional relationship between auditor and company, namely that the company pays the auditor to audit the accounts, might be a source of ethical and actuarial compromise. With the financial self-interest of both auditor and company remaining focused on the need for a ‘clean’ audit, a genuine possibility remained that processes and relationships would substitute for independence. Rules would be met, but independence would be sacrificed. Alternative reforms aimed at creating a different institutional relationship, such as socializing the audit by pooling company resources and hence funding audits effectively independent of a financial conflict of interest, were not considered.

What are the current trends in these areas?

The connection between “soft skills” and technical skills looks into the future of education in the accounting field. The education system will change as people learn that “soft” skills are just as necessary as technical skills. The course load at Brigham Young University is just a start, and more and more universities and colleges around the globe will change. An article titled “CPA Horizons 2025: A Road Map for the Future” mentions plenty of items that they think will happen to accountants in the future. One main point is that “new CPAs must have a broad knowledge of business and soft skills and not simply focus on technical accounting” (Journal of Accountancy, 2013).

Project what a 2025 article might say.

While the article by Flegm was written in 2007, I do not believe that much will change. The points made in the description of the paradoxes still hold today. However, I do not see enough change to address these paradoxes. An article in 2015 would be somewhat similar to this, although it seems there is more and more education dealing with these “soft” skills.

The examination demonstrates that the profession from sole experts to medium and substantial firm individuals to individuals in business and industry to those in government and the scholarly world—has a beautiful future and should react rapidly and intensely to the rising ground on political, monetary, social, mechanical and administrative fronts. Bits of knowledge and directions identified with circumstances and difficulties for the profession rose. CPAs and the bookkeeping profession will form their future by utilizing these bits of education and leadership as a guide.

Other key findings of the 2025 article included:

CPAs overwhelmingly concurred that the profession’s main reason, “Understanding a changing and complex world,” stays essential today and for what’s to come.
The profession’s first qualities remained generously unaltered.
The profession’s fundamental skills developed to mirror the 21st century.
The administrations given by CPAs have turned out to be so changed and different that the idea of center administrations is no longer delegate of the calling.

What leverage might your (developing) leadership assets provide to address these topics? (consider MBTI and personality assessments, personal and professional hedgehog concepts, etc.

Leadership skills are essential for accountants. Every day, accountants are put into situations requiring leadership skills. Eugene Flegm shows through his four paradoxes how accountants are faced with problems. Chris Baysden wrote an article published in the Journal of Accountancy describing the skill set needed for modern-day accountants. It mainly deals with those who have recently graduated from college. The article gives a nice little look into the future of accountants. Among the things about changing in firms is how they train new employees. “Firms also are implementing training programs to help new hires learn soft skills such as how to work with, and present to, clients” (Baysden, 2013).

It is suggested that The Myers–Briggs Type Indicator (MBTI) in leadership is applied to address issues presented in this paper, particularly regarding the paradox of technical and soft skills. It is an introspective self-report questionnaire to indicate differing psychological preferences in how people perceive the world around them and make decisions. The MBTI was constructed by Katharine Cook Briggs and her daughter Isabel Briggs Myers.

The absolute intensity of identity type in leadership advancement originates from self-information. Experiencing an MBTI appraisal can help furnish leaders at all professional stages with knowledge of how they think, settle on choices, and cooperate with others. Influential leaders must have enough self-information to know when they have to modify their initiative style and practices for the benefit of the association. The MBTI is an apparatus that can help distinguish approaches from using their usual inclinations and recognize how to extend themselves to function outside their typical ranges of familiarity so they can lead all the more successfully.

The intensity of the MBTI is distinguishing general inclinations and benefiting from them; however, in the meantime, figuring out how to successfully use inverse inclinations when essential. The apparatus also considers leaders to perceive the contrasts between themselves and other people and to change their way of dealing with more noteworthy correspondence and noticeable impact with their groups and direct reports.

In addition to addressing these issues presented in the paper, personal and professional hedgehog concepts should be used as part of the leadership assets by the leader; from understanding what drives your business, what you’re great at, and where your passion lies, the Hedgehog Concept should be used to help keep everyone on your business focused and grounded. I also use the same principle to simplify my challenging and complex work life.

Let’s look at the questions from the three circles of the Hedgehog Concept and see how you can apply them to your retail business.

What can you be the best at?

Regarding the retail industry, everyone wants their products to be the best of their kind. The truth is that there’s a huge difference between wanting to be great at something and being great at it. Remember, you won’t offer things that appeal to everyone – perfectly fine. It’s about defining the areas that aren’t working well and have little success and understanding what makes your business thrive.

What drives your economic engine?

You have to determine the single denominator, such as profit or healthy cash flow, and pick the one thing that has the most sustainable impact on your economic engine. I’m not talking about quick profit or fast cash here. You need to identify the bread and butter of your business, make it as stable and sustainable as possible, and keep it that way in the long term to ensure you stay great.

What are you deeply passionate about?

Without passion, you will not last in the retail industry, nor will you make a great retail company. Ask yourself if you would still go to work where you are now if you had already earned all the money you need to live till your dying day. If you answered yes because you think of yourself as the luckiest person in the world to do what you do and believe you have something the best it could be (and higher than your competitors), then you have winning passion.

Hedgehog Concept

Once you’ve answered all three questions, you must focus on where your answers overlap. Two out of three isn’t enough. Perhaps you are passionate about your business, and your company is the best at what it does, but you aren’t making any money from what you sell. Maybe you make lots of money from delivering great products but feel your passion lies elsewhere. Either way, it’s not worth it (Khuon, 2014).

Other Relevant Post: Capital Market In a “perfect world.”

References

Half, Robert (2017) “Accountants Need Hard and Soft Skills for Success” retrieved from https://www.roberthalf.com/blog/salaries-and-skills/accountants-need-hard-and-soft- skills-for-success

KHUON, TONY (2014) “The Personal Hedgehog Concept 2.0: Discover What You’re Meant to Do” Retrieved from http://agilelifestyle.net/the-personal-hedgehog-concept

Phlegm, Eugene. “CPA Journal Online.”NYSSCPA.ORG | The Web Site of the New York State Society of CPAs. N.p., n.d. http://www.nysscpa.org/cpajournal/1997/0897/aug/NV7.htm

Gerzon, Mark. Leading through conflict: how successful leaders transform differences into opportunities. Boston, Mass.: Harvard Business School, 2006. Print.

Baysden, Chris. ” Demand for accounting grads reaches all-time high.” Journal of Accountancy. N.p., n.d.

Hagel, Jack. ” Softer skills for a broader role.” Journal of Accountancy Retrieved from http://www.journalofaccountancy.com/Issues/2013/Feb/20126846

“CPA Horizons 2025: A Road Map for the Future.” Journal of Accountancy. Retrieved from: http://www.journalofaccountancy.com/Web/20114688.htm

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