Refining accounting for tomorrow

Accounting is a technical, social, and moral practice concerned with sustainable resource use and proper accountability to stakeholders, not just shareholders, to enable the flourishing of organisations, people, and nature.
Carnegie, Parker and Tsahuridu (2021 a Carnegie, G., Parker, L. and Tsahuridu, E. (2021a), “It’s 2020: what is accounting today?”, Australian Accounting Review, Vol. 31 No. 1, pp. 65-73, (first published, 22 November 2020). , b Carnegie, G., Parker, L.D. and Tsahuridu, E. (2021b), “Redefining Accounting for Tomorrow”, IFAC website, 6 April 2021. )

Accounting is a multidimensional practice. Carnegie, Parker and Tsahuridu (2021a, p. 69; 2021b) proposed the following definition: “Accounting is a technical, social and moral practice concerned with the sustainable utilisation of resources and proper accountability to stakeholders to enable the flourishing of organisations, people and nature”.

“Accounting is not a mere neutral, benign, technical practice” (2021a, p. 73). It needs to synthesise and prize ethical rigour, social responsibility and moral purpose alongside technical mastery.

Presently, accounting and accountants seem to be stuck in a narrow, technicist mindset. As a combined technical, social and moral practice, the following key questions are posed for the effective operationalisation of this definition in practice (Carnegie et al., 2023b):

• Technical practice: How do we do accounting? What conventions drive what accounting fails to do?
• Social practice: What does accounting do? What are the impacts of accounting in the world?
• Moral practice: What should accounting do? What should accounting not do?

This definition of accounting and the framework of key questions portrayed presents an impetus to accounting’s future leadership in shaping a better world. This necessitates shaping a fairer and more sustainable world, adopting and instigating UN SDGs-related solutions to the challenging issues facing the world.

Carnegie, Gomes, Parker, McBride and Tsahuridu (2024) emphasise the importance of accounting to extend, and move positively towards, emphasising and integrating the 1) technical, 2) social and 3) moral practice dimensions in accord with the discipline’s essence. These dimensions constitute and portray the essential public interest obligations to be consciously met in everyday professional accounting practice. For a diagrammatic representation, see Figure 3 “Public interest framework for multidimensional accounting” (2024, p. 1543).

Carnegie et al. (2024, p. 1552) conclude “This journey has already started! Get a ‘ticket to ride’!” This ride is for those who desire for accounting to reach its full potential and who want to contribute to the process of actively realising its potential. This occurs when accounting, serving the public interest as its mission, aspires in thought, practice, regulation and innovation, to stimulate the betterment of humans and non-humans alike. This is a fair and equitable world, one that steadfastly prizes the conservation and preservation of the natural environment and the protection and longevity of planet Earth.

Garry Carnegie
Emeritus Professor of RMIT University
22 October 2024

Garry Carnegie is an Emeritus Professor at RMIT University and previously served as the head of its School of Accounting until 2017. Before his academic life, Garry worked in IT, professional accounting and financial services. He is an associate editor of Accounting, Auditing & Accountability Journal and joint editor of the EE Handbook of Accounting, Accountability and Governance.

Carnegie’s PhD research was on pastoral accounting in the Western District of Victoria, Australia from 1836 to 1900 (as part of the Colony of New South Wales to 30 June 1851) during the British colonisation period when accounting was unregulated. In his conclusion, Carnegie (1997, pp. 246-247) Carnegie, G.D., (1997), Pastoral Accounting in Colonial Australia: A Case Study of Unregulated Accounting, New York and London: Garland Publishing. stated:

Whatever the future holds for accounting, it is important for accountants, accounting standard-setters, and regulators among others to reflect on Porter’s statement: “There is strength in numbers, and anyone who proposes to wield them more effectively must ask not only about their validity but also about how the world might be changed by adopting new forms of quantification.” Porter, T.M., (1996) Porter, T.M., (1996), Making things quantitative, in Power, M. (ed.), Accounting and Science: Natural Inquiry and Commercial Reason, Cambridge University Press, pp. 36-56 (first published in 1994 in Science in Context. Vol. 7, No. 3, Autumn, pp. 389-408.

This sums up well his motivations for contributions to date with a personal commitment for accounting to realise its full potential in shaping a better world in the public interest.

It is timely to discard narrow depictions of accounting such as “accounting is the language of business” or continuous claims of “decision-usefulness in financial reports”, without awareness of accounting’s effects or impacts in the world, particularly on humans and nonhumans alike, seeking sustenance and good health from Planet Earth.

Carnegie may be contacted by email. His work is accessible through Academia.edu.

Carnegie, G., Parker, L. and Tsahuridu, E. (2021a), “It’s 2020: what is accounting today?”, Australian Accounting Review, Vol. 31 No. 1, pp. 65-73, (first published, 22 November 2020).

Carnegie, G., Parker,  L.D. and Tsahuridu, E. (2021b), “Redefining Accounting for Tomorrow”, IFAC website, 6 April 2021.

Carnegie, G., Parker,  L.D. and Tsahuridu, E. (2022), “SOS Accounting Educators: Developing Accounting and Accountants for a Better Future”. IFAC website, 19 April 2022.

Carnegie, G. and Rose, J. (2023a) “How Should we Redefine Accounting?”. ICAEW Insights, 14 April 2023.

Carnegie, G., Parker, L.D., and Rose, J. (2023b) “Redefining Accounting for Shaping a Better World and a More Attractive Profession”, ICAS News, 16 November 2023.

Carnegie, G. and Rose, J. (2024) “Embrace Broader Definitions of Accounting to Help your Students Operate Sustainably”, Times Higher Education, 8 March 2024.

Carnegie, G.D., Gomes, D., McBride, K., Parker, L.D. and Tsahuridu, E. (2024), “How Accounting Can Shape a Better World: Framework, Analysis and Research Agenda”, Meditari Accountancy Research, Vol. 32 No. 5, pp. 1529-1555.