Accounting is an interesting field of study that has many uses in society.

In fact, accounting is useful in every profit-seeking business organization that has economic resources such as money, machinery, and buildings. The assignment will look at two side of the coin in order to discuss why it is necessary for a Human Resource Manager (HRM) to study accounting and why it is not necessary for a HRM to study accounting. The assignment will define the key words that are Human Resources Manager and accounting, and then the assignment will discuss the points in support, lastly the reasons for against and conclusion. Accounting is the language of business since all business purpose is to communicate. It also service as a language to provide financial information about not-profit making organizations such as the churches, government, charities, fraternities and hospitals. The American Accounting Association defines accounting as the process of identifying, measuring and communicating economic information to permit informed judgments and decision by users of information. 1 A Human Resources Managers manages the needs of companys employees. They develop and manage employment programs, salary compensation and job evaluations, benefits, promotions, equal opportunity initiatives, and education and training.2 Nevertheless, the HRMs function is to be responsible for ensuring that capable employees are given opportunities to succeed in a safe work environment.3 In addition it is also concerned with issues such as continuing education for employees, health and safety of the workforce, diversity in the workforce. The HRM use accounting information to determine employers monthly, retirement, and vacation earnings. Also human resource personnel rely on accounting information to show compliance with health and safety regulations. However because of the above mentioned reasons, it is necessary of a HRM to study accounting. Accounting is a professional qualification which will allow you to work as an accountant once you graduate. A HRM should do accounting even though he or she will not work as an accountant upon graduating to enable her or him to understand financials, analyze numbers and analyze the accounting impact of ones major decisions.4 It is very necessary to learn the basics of accounting so that the next time you see financial reports, you will at least know what it is you are reading. Accountants prepare the financial reports of their clients or their companies and present the reports during meetings. Management often does not include accountants but include the HRMs. Hence the need for the HRM to learn the basic of accounting so that during the meetings when the financial reports are presented, they are not
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all alien-sounding and alien looking. Also it makes it easier for an accountant and HRM to talk about the report since the HRM understand what it is all about. The studying of accounting is also necessary of HRMs so that they learn the language accountants use. The knowledge of accounting will enable a HRM to become familiar with the language and terminology used by accountants.5 There are words and phrases like revenues, expenses, net income, return on investment, balance sheet, income statement, and statement of cash flows that one will learn from the study of accounting. Hence this will make it much easier to discuss with accountants any issues arising from the reports that they prepared .The knowledge also give HRMs the ability to check the reliability of information presented to them and the ability to debate on equal terms with accountants. In addition studying accounting enriches HRMs with the ability to analyze their numbers. There are questions that management and clients ask accountants whenever they see the financial reports such why did the sales increase? , where did our money go? , why did our expenses increase and other questions.6 Management and clients have their own ideas of profit, cash position, sales and expenses but oftentimes these ideas do not really coincide with the accounting concepts. Hence the knowledge of accounting will make it easier for management and everybody to analyze the numbers in the financial reports with or without the help of the accountants, as these are the ones that go out to the public for consumption. Moreover, through the study of accounting you get to analyze the accounting impact of your major decisions. Let face it. Accounting is reactive, the accountants, only record transactions after they are done.7 By that time, managements decisions have already been made and it is already too late to address these decisions in case they have a negative impact on the financials of the entity. Therefore if, management knows managerial accounting, or at least, keeps in mind that any decisions it makes might have accounting impact, then management may run some accounting numbers or even consult their accounts before going through the transactions. Furthermore, accounting has the primary role to provide useful information for decisionmaking needs for investors, lenders, owners, managers, and others both inside and the outside.8 Apart from that accounting enriches a HRM with knowledge of planning; controlling and fulfillment of legal requirements. Planning and controlling are essential part of a successful
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business. Without them, a business might not be able to succeed, grow and flourish, A HRM will use the entitys agreed long and short term plans to help control the day to day activities of the entity. Planning and controlling ensures that one person checks someones work making it difficult to fabricate accounting data and steal from the company. Accounting provides basis for these controls and checks to see if they are being enforced. The studying of accounting is necessary because it has earned some people leadership positions such as senior management positions in large firms.9 No one can be absolutely sure where their career is likely to take them therefore the importance of studying accounting. Once in leadership coupled with knowledge of accounting, one will help his or her entity to grow and flourish. Basically the more knowledge of accounting that you have as a manager, the more influence that you will be able to exert. Accounting is the backbone of the business financial world. Therefore the learning of accounting will offer one a bewildering array of career opportunities to suit all the interests including traditional auditing and assurance work, management consulting, corporate finance, IT consulting, tax planning, human resource(HR) and insolvency.10 Nevertheless any career that is associated with accounting is very rewarding in salaries and attracts so many top graduates to the career. Accounting information is usually compiled on the basics of a series of assumptions and estimates.11 Also accountants recommendations are largely based on what they think and there is no reason why you should not challenge what the accountants is telling you. This would be very difficult if you have no idea what accountants are talking about. Therefore the importance of studying accounting as a manager will make you know where the accountants have got their figures from and what they have done to arrive at them. In the end this will give you a much stronger position to challenge their findings and recommendations. In simple word, there is no reason why accounting should be considered unnecessary because accounting is simple to record and show the results of company operating and financial position. Although not every human being on earth might hold the above view to be true. However, some people might say it is unnecessary to study because of how easily one can lose their reputation over making accounting errors. People have lost faith in accountants. Accountants and the accountancy profession have lost their reputation of honesty and probity
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due to accounting practices. 12The public have become suspicious of what accountants do when they realized that accounting procedures involved a considerable amount of individual judgments. Hence a HRM will prefer accounting is left to accountant to deal with. The accounting errors and frauds is one of the reasons that a HRM consider accounting to be unnecessary to study. Accounting errors can have adverse effect s on the operations of the entire business.13 All departments like marketing, human resource, research and production are connected with accounting and finance department. A single mistake in accounting department can disturb the normal working of all the departments. Even share markets share value may decrease with accounting errors. Also employees can break relations with your company, if your companys accountant did make a mistake in the pay roll and salary providing system. Hence the reason why a HRM will prefer it is left to accountants to deal with so that when errors take place he or she can easily blame accountants for the accounting errors. The studying of accounting can be assured to be unnecessary by the HRM because accounting requires dedication, long hours of studying, good study habits and techniques, much more time than most courses. Excellent math skills are also needed for one to understand accounting and most people hate mathematics which might seem unnecessary for HRM who knows that accountants will be hired by the entity to do the work of number crunching for him or her. Also accounting tends to be boring because it requires total concentration, it is very expensive, time consuming and cumbersome to solve. Therefore, the mentioned reasons make it unnecessary for an HRM to study accounting. In conclusion, as Human Resources Managers we need accounting because its the only way for business to succeed, grow and flourish, and help one budget they meager earnings. In addition, in all aspects of life and business accounting is involved. The assignment has discussed the reasons why Human Resources Managers need to learn accounting and also has looked at the reasons why a Human Resources Manager may not need to learn accounting. The reasons were difficult to obtain on the reasons for against part. Hence a few disadvantages were used to discuss them. In simple words accounting is very much needed by Human Resources Managers and there are no reasons why Human Resources Managers should not study it because it is very simple, exciting and interesting to study.

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ENDNOTES

Rodger, H. Hermansion, James Don Edwards & R.F Salmonson. Accounting principles

special edition. (Texas: Business Publications Inc., 1987), p.5. OR Steven Jackson, Roby Sawyers & Grey Jenkins. Managerial Accounting. A focus on Ethical Decision making fourth edition. (Canada: Thomson, South-Western, 2008), p.3. OR http://www.Accounting.Thomsonedu.com/accounting OR www.thsonedu.com.
2

Human Resources Manager. Job Description, career as u Humancareers.

http://www.stateuniversity.com/pages/2.......
3

Ainsworth Deines. Introduction to Accounting: An Integrated Approach, 3rd edition. (New

Year: McGrath Hill/Irwin, 2004), p.3 OR Online Learning Centre with powerweb. http://www.mhhe.com/ainswroths3e
4

Why You Need to Learn Accounting (the Basics, That Is)

http://www.emievil.hubpages.com/hub/why-You-Need.......
5

J. R. Dyson. Accounting for Non- Accounting Students Sixth edition. (England: Prentice Hall;

2004), p.49.
6

http://www.emievil.hubpages.com/hub/why-You-Need...... http://www.emievil.hubpages.com/hub/why-You-Need Jackson etal. Managerial Accounting, p.3.

Home>Departments>Accounting and Finance>undergraduate programmes>why study

Accounting and Finance? http://www.lums.lancs.ac.uk/../whyaccfin/

10

http://www.lums.lancs.ac.uk/../whyaccfin/ Dyson. Accounting for Non- Accounting Students, p.333-334. Dyson. Accounting for Non- Accounting Students, p.333-334.

11

12

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13

Accounting Education, August, 4, 2010, Disadvantages of Accounting.

http://www.svtuition.org/20/01/08/disadvantages

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