A recent publication by Ralph W. Estes, Accounting and Society, is a microcosm of the broader phenomenon of the socialized accountant. Its contents report on such activities as accounting aid societies; the role of accountants in the renaissance of our cities; improving the efficiency of our criminal justice systems; the accountant's participation in environmental management; and his or her role in labor relations, political campaigns, and divorce litigation. One item propositions "Accountants: The Arts Need You," while another shows "How Accountants Can Fight Organized Crime." And this book is but one volume in the growing library on social accounting.
The U.S. business firm, voluntarily and through compulsion, is exhibiting a greater responsiveness to the need for social reporting. Professor Sidney Jones has examined the annual reports of fifty-five major corporations from Fortune's list of 500, over the ten-year period 1960-1970, and tabulated the growing number of comments on corporate social responsibility. Abt Associates Inc. have devised examples of what income statements and balance sheets might look like within a comprehensive schema of social financial reporting. Their format extends the audience for financial statements beyond the investor to include employees (the staff), the community, and the general public.
Social reporting will be accompanied by social auditing, and the foundation for the latter is being laid now within the profession and on the part of a variety of other interest groups, including the Ralph Nader organization. Underlying all of the activities in this important area is the need for better measures, particularly those which distinguish between positive and negative social action.
The need for better measures is urgent. Not only are qualitative factors virtually absent in existing measures, but the quantitative ones which do exist often measure the wrong thing. Thus, for example, vast sums are spent on curing disease but little on preventing it. Law enforcement budgets rise in proportion to the crime rate-a correlative which raises questions as to which way the cause and effect flows. Federal programs involving billions of dollars are started, limp along, or are abruptly canceled without solid indication at any point as to their effectiveness. The need for better measures is as crucial to the executive suite as it is to the government bureau. Business enterprises still are unable to assess with accuracy the benefits of advertising or research and development, not to mention such esoteric areas as goodwill or contribution to social welfare. Even such primitive needs as the gauging of clerical and administrative efficiency await solution.
The confluence of social reporting and improved measurement will result in macro-models of accounting which will raise the accountant's perspective above the immediate client situation to an appreciation for the systemic world in which one firm's activities are seen to impinge on those of others in the industry, and that industry with other industries, and so forth to interaction among national accounts.
From humble beginnings, the accounting function has progressed from accounts of men to those of nations, and soon to resource flows within societies and among nations.
The dynamics of change are guided by a sense of the future and, accordingly, the rapid changes within the accounting profession in recent years have been accompanied by a growing interest in futurism. The future can be approached conceptually in one of two ways: teleologically or ontologically. The teleological view conforms with such notions as manifest destiny, fatalism, or predestination, which would hold that the accounting function is being guided and shaped by forces essentially beyond its control. By contrast, Robert U. Ayres notes that the "ontological view is that invention and innovation are visible manifestations of a self-generating process or an institution having a dynamism and life of its own." The latter view looks primarily to intrinsic motivators as the determinants of change. Probably the truth lies between these extremes such that external and intrinsic forces combine to make institutions more compatible with their environments. The compromise position is most descriptive of the way in which the accounting profession appears to relate to the future.
John L. Carey's book 'The CPA Plans for the Future ranks' among the first formal efforts in accounting to part the veil and peer curiously into years ahead. As the study was published in 1965 it is possible for us to look back from our position in the 1970's and note that Carey's perspective into the future was right in more instances than it was wrong. A bolder effort at futurism was made in California in 1970 when Arthur M. Sargent gathered together some seers in accounting and asked them for a scenario of public accounting in 1980.
He foresees that accounting occupations will become more attractive with much of the drudgery handled by computers and by paraprofessionals who do not expect to be promoted without further education. In education, he predicts that accounting will become a first class citizen in the university, attracting students of superior quality. "Of special satisfaction to me," he notes, "is the thought that our status is higher because we responded positively to the demands to broaden our scope and elevate our rigor. We removed the insular walls that would have eventually trapped us in oblivion. At no time was accounting more essential and exciting than it is today."
The cornerstones of the future are hewn from appreciation and self-image. Appreciation is not casual sensations, but disciplined perception and judgment, as we have noted already. Self-image, in turn, is the most influential factor in determining how we appreciate and respond to the changing world about us.
From these points of departure, accountants will embrace existing methodologies which deal with the future in formal ways and contribute to the development of new ones. These methodologies range from traditional forecasting to more sophisticated techniques such as Delphi, scenario formulation, systems dynamics, morphological analysis and synectics.
Briefly, Delphi employs a formal procedure for arriving at a consensus among a panel of experts. A scenario consists of a hypothetical sequence of events which lead to an envisioned outcome. Herman Kahn is the leading exponent of this approach, and a number of his studies have enjoyed wide publicity.
Systems dynamics, the brain child of Jay W. Forrester, uses the power of the computer to analyze what Ashley refers to as "richly joined subsystems." While Forrester's conclusions have been criticized because of his doomsday projection of trends based on the limitations of current technology, systems dynamics as a technique has proved to be highly useful.
Morphological analysis attempts to list and enumerate combinatorially an exclusive and total set of solutions to a given problem. Synectics is a "creative problem-solving technique" which uses analytic group discussions and brainstorming sessions to force, monitor, and replicate the unique solutions which often emerge from communal decision processes.
These and many other methods will be integral to accounting in the years ahead. To probe the future, accountants will join hands with futurists, management scientists, computer experts, and many other specialists.
Expanding horizons in accounting create problems as well as opportunities. The true mark of a living profession is measured not solely by its ability to seize opportunities but also by its willingness to assess its strengths and weaknesses in a spirit of objectivity and complete candor. A living profession is catalytic of change but also demonstrates an ability to listen and learn. When convinced that it is right it will press forward and accept risks; but it also knows when to back-track gracefully when it is shown to be wrong.
There are five areas in which the profession's ability to cope with change has been tested with the greatest severity: (a) the legal environment, (b) technological change (especially the computer), (c) obsolescence, or the need to continue to learn, (d) equality of opportunity, and (e) organizational adaptation.
