What is accounting?
Accounting as defined by Merriam-Webster is, “the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results” (Merriam-Webster).
In laymen’s terms people who keep track of every transaction in the business world. Most people believe in the stereotype that an accounting job is a boring pencil pushing job and entails for a person to be sitting in a cubicle all day and those people aren’t wrong. Accounting is repetitive in the fact an individual is dealing with numbers all day, everyday and performing the same tasks with them just in different instances. Although people are wrong if they believe that accounting is insignificant or has no major effect on the world. If it weren’t for the morals and ethics of people doing these jobs, there would be a lot more corruption in todays world. Business men would take advantage of being able to forge their recorded accounts and make money from the process.
Another example of just how important it is for people in the accounting and finance field to have an ethical code is the house market crash of 2008. The movie "The Big Short" directed by Adam Mckay does a good job of explaining what led up to the house market crash. Simply put the housing market we’ve been told all of our life was strong and that there was no bubble. Although what people did not see, and business people choose to ignore was that there was a bubble in the housing market. The bonds in the housing market were actually full of bad bonds bundled together to make it seem that it was something new. Although when interest rates began to rise and housing prices started to drop defaults came into effect causing the bonds people thought were good to actually come crashing down and ultimately cause the house market crash. This event resulted in many people losing their homes and potentially their life savings as well. Accounting has an adverse effect on the world if used improperly without moral and social teachings.
Laudato Si excerpt
The excerpt from Laudato Si by pope Francis that I read was “Politics and economy in dialogue for human fulfilment”. The excerpt talks about how our way of life has been so driven by our economy and technology that we have lost some moral teachings along the way. People only want to see the maximization of profits or efficiency that we do not realize just how much resources we are exploiting from the environment to obtain the results. This is a big concern because the amount of resources we are consuming vastly out paces the ability of nature to recover from said collection. This obsession on producing results now and screwing a potentially better future is harming us and our ecosystem as a whole. The plowing of rainforests and burning of fossil fuels is changing our climate to the point of ecosystems being changed drastically and creating a bigger issue to solve in the future. It is said by Pope Francis, “Environmental protection cannot be assured solely on the basis of financial calculations of cost and benefits. The environment is one of those goods that cannot be adequately safeguarded or promoted by market forces” (Laudato Si 190). Our focus on our financial situation is placing future generations in a bigger hole with which they will have to solve at some point or face potentially dire consequences for the human species. Although accounting can’t exactly fix all these problems, but by acting with an ethical and moral mindset people are less likely to lose their money in scandals or corruption. Thus people will have a lower focus on their financial situation and more on their lives. Humans need to live a more meaningful life instead of the steamlined one we are living in as of now and find purpose in our activities. The activities must bring a positive effect into our life and make it enjoyable. By changing this we can create a more just society for the common good. By placing the environment first as a priority and having a lower interest on our own financial situation we can create a better world with more meaning to the individual lives.
Catholic Social teachings
I believe that the principle of catholic social teaching that can best be used to relate to the current issues is care for creation. Care for creation as explained by Pope Francis is, “creation is not a property, which we can rule over at will, or even less, is the property of only a few. Creation is a gift, it is a wonderful gift that God has given us, so that we care for it and we use it for the benefit of all, always with great respect and gratitude” (Pope Francis). This explanation by pope Francis can be applied to all the problems mentioned from the focus on financial stability. It tells us that the elites of the business world don’t follow the beliefs of the church and simply treat nature and individuals as resources to be exploited. That shouldn’t be the case at least in terms of accounting where it is possible to make a profit without exploiting much of nature or individuals. Although to achieve this goal is more difficult in reality and will require a change in the mindset of the people as well. In order to do so we can use accounting to record the number of resources we currently have to persuade big and small companies to use less resources but still make a profit. While this would come at a higher cost for companies to perform, one possible method is putting more effort into planting trees or supporting clean energy thus establishing what the company stands for. By taking a stance on cleaner and more renewable energy it would assist in changing the opinion of the consumers to buy their product in comparison to their competitor’s own product since the company would demonstrate that they align more with their own morals compared to others. Although one of the best courses of actions to take is for accountants to maintain an honest character. If something appears to be out of place in the books, such that the money is going into other accounts that it is not supposed to got to or if your bosses ask that you forget about some amount of money or change records then it falls on the individuals to say something to rectify the situation.
Politics and the economy must remain as separate entities because when combined they influence each other and when our political views mix into business only disaster awaits. Pope Francis addresses this and many other issues in the world in his book Laudato Si and tells that people must maintain their relationship with god because he shows us the way. Through the social catholic teachings, we learn to care for creation of everything as well as ourselves. People are economically driven now a day and this has lead to a suffering in the way of enjoying life. People have lost their purpose in life and feel as though they are being driven to work for the sake of providing for themselves and others, but Pope Francis argues that people need to find meaning in their lives through the activities they perform. In the aspect of accounting, Pope Francis’s teachings can be enlightened my career and others who follow this path. Through the Catholic social teachings, thee economy and people who work in the business world can find meaning in their lives and make a better impact on the world.