PROBLEMS IN IMPLEMENTING THEORETICAL CONCEPTS IN PRACTICAL ACCOUNTING

 

PROBLEMS IN IMPLEMENTING THEORETICAL CONCEPTS IN PRACTICAL ACCOUNTING

Following are the problems in implementation of theoretical concepts in practical accounting which may be faced by you as an Accountant-

⮚      Theory is an ideal which you as an accountant may not be able to make reality due to the everchanging accounting practices of the world. You have to stay on your toes. There is always some or the other new technique or technology that is being introduced for more accurate accounting.

⮚      Some theories are outdated and thus may require adaptation with respect to the modern methods. But that will require time and effort. It is easier for you as an accountant to develop a new practice on the scenario around you rather than develop on a theory that may not be useful.

⮚      Some theories lack the understanding of the social aspect of the business and our environment that has changed overtime. You as an accountant may notice a lot of changes from old times.

⮚      The theoretical concepts are not concerned with judging the practicality of the outcome of accounting practice, instead it focuses upon judging the channels of manipulation of input into outcome.

⮚      As per the theories and concept , money is given the priority and time is not taken seriously. This is a grave mistake as the value of money varies with respect to time continuously.

⮚      The theories are not up to date with the procedure of accounting. You as an accountant must have noticed that earlier there was a lot of secrecy associated with procedure as well as records of accounting, now it is very difficult to maintain that secrecy with everyone so your company usually knows everything you do too.

⮚      You as an accountant should know that the laws and regulations are not the same as well, things are changing with respect to relation with other countries or the economy of the world.

⮚      There is a small issue that some theories conflict with each other. You as an accountant may get confused as to which of these to follow and how to avoid conflict thus you avoid using theoretical concepts completely.

⮚      The theories and concepts are set by rigid logic and thus there is not much breathing room for change. Even if you do decide you want to change you will have to take a considerable amount of things into consideration. It is a difficult procedure with no guarantee of success.

⮚      There are different kinds of theories, some are deductive, some based on principles. You as an accountant must know that these deductive approaches are not simple to understand and they are also difficult to operate. There are certain loopholes in their assumptions, propositions and postulates that can be exploited ( in a manner that may be harmful to your organization). It can also therefore lead to misleading conclusions and thus cause issues for your organization. It can be influenced by personal bias and can be manipulated by different parties of interest. In turn harming your organization.

⮚      The theoretical concepts can adapt with change in scenarios of world changing events for example- Coronavirus hitting the earth.

⮚      The theories are not up to date with the current accounting scenario and thus you as an accountant may not see any use to these theories. But at the same time, you should not overlook them as they are made with careful observations and they were made in a time when the technology was not as good as ours. So, we should keep in mind that these theories must have something of value as they helped the accountants to maintain records with less resources, they must have some creative innovations to them.