The fact that accountancy is the universal language of money means that politics cannot thrive without having people who fluently speak the language of money play a key part in the political economy. Accountants no matter how hard they try to keep away from being associated with politics can’t seem to run fast enough to get away from anything politics – directly or indirectly.
The importance of accounting in the overall political economy cannot easily be ignored by anyone. The ancient politicians understand this idea very much that they often work hand in hand with accountants and business owners – hence, business and politics are working together.
Role of accountants in political economy
Let us start by having an understanding of what political economy is before discussing the roles of accountants in political economy.
What is political economy?
For the purpose of this article, we define political economy as the collective efforts of players in human race with the sole aim of harmoniously enhancing standards of living. Whether you are Capitalist, Socialist or a Communist does not make any difference when it comes to the role of accountants in ensuring that the ultimate aim of our existence is met.
This article is not about a campaign for accountants to become politically affiliated – in fact, the professional accountancy bodies heavily frowns at accountant playing partisan politics. However, nothing stops accountants from playing their roles in political economy.
Three (3) broad functions of accountants in political economy
- Transparent and understandable stewardship reporting role
For the three types of political economy to thrive, transparent and understandable stewardship reporting must be at the forefront of things. No other profession is more equipped than the accountancy profession to make this information available. A lot of work and efforts has been put in by various focus groups and accounting standard setting organizations to ensure that high quality accounting information are consistently produced so as to meet the needs of various users of accounting information. Accounting as a profession is continuously evolving to keep up with the needs of all stakeholders in the different political economy.
- Investment appraisal role
Without investment, no form of political economy will achieve its acclaimed manifesto. The capitalist camp will for example be more interested in making investments with non-negative NPVs, and that is where accountants come in very handy. Accountants are involved starting from identifying investment appraisal relevant cash flows to actually applying different types of investment appraisal.
- Auditing and accountability assurance role
This has been a very short post written to attend to an email sent to me by one of the readers of accountant next door requesting that I comment on the roles of accountants in political economy. Paul, in my reply to your mail, I promised to share my thoughts on this here by way of post, I hope your question is answered? Feel free to reach out to me with further questions.