Very many people have accused accountants for being frugal and cost conscious. But let’s face the fact, fortune are never built on careless spending and poor financial management. Accounting in its broadest sense is all about cost savings, allocation and sound management of scarce resources (assets).
We will never cease to experience cycles of economic crisis if world economic does not put on their resource management thinking hats like the accountants do.
Cost accounting and management accounting are aspects of accountancy that I enjoy most because of the fact that they focus on cost savings and process improvements. If you take a closer look at the recurring economic crises, you will notice a pattern. Things immediately go wrong when nations start being wasteful and careless with their spending. What surprises me most is the fact that economists of the medieval days have identified this cause but carelessness and lack of financial discipline keeps dragging our economies through these recurring financial crises.
Looking at the global economy from the auditing perspectives, if government officials should think like auditors, internal controls would be upheld in the governance of the affairs of the state. Deviations from control objectives will quickly draw the attention of the policy makers to the deteriorating economic indicators. What value does a policy maker who cannot decipher processes that creates value from those processes that does not create value?
Okay, let us now make our case from the financial management perspective of accounting. Accountants manage the working capital of business so as to always strive for that optimal balance where the cost of having working capital is at its minimum. This saves valuable resources that are then transferred to the areas of a business that needs them most. Same ideology should be employed in the management of economic variables. Governments should continually keep an eye on the working capitals of the state in order to determine the optimal level of economic flow, take accounts payable management as an example.
My argument is that it is time that the qualified accountants are given chance to become the policy makers since the economists has always been succeeding in taking us backwards all the time. A wind of change needs to blow, a change that will make political leaders start seeing the management of the economy as a process that is hinged on sound financial management and cost savings.