Essay On Objectivity In Accounting

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Traditional Concept: Arnett (1961) arrives at the conclusion that objectivity exists when financial information is free from “personal opinion and bias”, it can be validated by an independent investigator and it is considered to be useful and reasonable to accountants. However, this concept fails to recognize the extent of professional judgement required across various elements of the accounting process. Perceptual Perception Concept: Wagner (1965) believes that professional judgement is one of the most important assets of the accounting profession and thus it cannot be equated to subjectivity because in that case objectivity and a profession can’t co-exist. Thus, objectivity is nothing more than the “Idea of a relative absence of perceptual defects (lack of competence and ethics) in exercising professional judgement”. According to Browns, Collins et al. (1993) the inherent need for exercising professional judgement arises due to…show more content…
Keeping these concepts and levels in mind, Wodjak believes that the accounting process is two levels from the pure sense of objectivity, however at the operational level, the accounting process is dynamic and as a result the concept of operational objectivity must constantly change to adapt itself to all the dynamic elements of the accounting process. In that sense, Wodjak states that the ‘existing accounting process’ lies in between perfect operational objectivity (i.e. programmable procedures) and unobjective accounting. This is similar to the notion by Davidson, who stated that essentially absolute objectivity in accounting can’t be achieved and rather states that objectivity is found in intersubjectivity, in relationships of people simultaneously reacting to others and ‘stimuli’ from a shared

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