Managerial Accounting: Free Choice

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Discussion Question

“Can you imagine accountants as American cowboys of the Wild, Wild West in the 1800s? I can. And they can be dangerous. Yeehaw! Yippee-i-o-i-a!”

(Cokins, 2013)

One of the readings this week is an article published in a blog by Business Finance which compares managerial accountants to cowboys in the Wild West. The main argument provided by the author stems from the many rules imposed on financial accountants and the comparative lack of rules for managerial accountants. In BUSI 1043 (Financial Accounting) we learned about the effects of Enron, World Com, and Arthur Anderson as well as many other companies who committed fraud and the resulting impact/creation of governing bodies. As a result of such scandals, many accounting standards were created with the purpose of trying to mitigate the risk of fraud occurring in the future. However, there are very few rules and regulations for managerial accountants (similar to the cowboys of the Wild West).

Do you agree or disagree with the author’s arguments? Please choose one section of the article and provide your thoughts and analysis.

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Managerial Accounting Student’s Name Institution Managerial Accounting I agree with Cokins (2013) that unlike financial accounting, managerial accounting is not subject to many regulations. Managerial accountants are free to choose any method to use to provide information to users, and when they are wrong, they cannot be prosecuted like financial accountants. The fact that they are free from IFRS and GAAP rules means that they determine on their own the quality of information they provide for users. The information they provide for the users, in this case, may not be verifiable and thus subjective. Therefore, it is not hard to imagine managerial accountants as American cowboys of the Wild West. In the section Who is to say what is correct?, Cokins (2013) points out that there are few or no standards at all that managerial accountants are required to follow. The author contrasts the case with financial accounting where there are thousands of rules that have to be follo...

Updated on January 26, 2024

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