Is there a place for creativity in accounting or are accountants meant to be ‘by-the-book’ bean counters that popular culture makes them out to be?
The answer? Both
The words ‘creative’ and ‘accounting’ are rarely spoken together because they give the impression that uncertain accounting practices are taking place. This however is not always true.
Creative accounting can be defined in a number of ways also called aggressive accounting. Creative accounting is a process whereby accountants use their knowledge of accounting rules to control the figures reported in the accounts of a business.
First let’s discuss when an accountant should not be creative. This should go without saying, but unfortunately we have all seen situations where an accountant bends, or even breaks, the rules to achieve results. Accountants are trusted by those that rely on their information to work within an environment of legal and ethical guidelines. Accountants should always stand by these ethical guidelines. Furthermore, when it comes to the International Financial Reporting Standards, Generally Accepted Accounting Principles, and Generally Accepted Auditing Standards an accountant should never compromise.
Now let’s discuss if there is room for creativity.
Forensic accountants are trained to look beyond the numbers and deal with the business realities of situations. Analysis, interpretation, summarization and the presentation of complex financial and business related issues are major aspects of the profession. A forensic accountant will also be familiar with legal concepts and procedures. They use their accounting skills to investigate fraud or embezzlement to analyze financial information for use in legal proceedings.
When given a problem, there are often various ways to reach the solution. For example, there are cases where you approach a problem only to find that you didn’t have access to a reliable source of data that would allow you to solve the problem. Using your creativity, you can look back at the initial problem and figure out what other routes or sources of evidence you can use to achieve the same result.
Creativity in forensic accounting can also include embracing new technology and using new or existing technology to gather, summarize, and communicate information to the client. At times there may be a huge amount of documents available during a forensic investigation. The ability to be creative in finding the specific documents useful in a particular case will help prevent getting lost in the details and save both time and money. Finally, creativity is also needed to explain the often complex work performed in a manner that can be understood by those without a background in accounting or finance.
Accountants in leadership roles can use creativity to help their company or client in achieving specific results. This may relate to business development, investment opportunities, and other forms of business planning. Business planning, at its core, is a creative process. An accountant knows the numbers and often has the power to oversee valuable information unknown or not well understood by management. Carrying this information over in a creative and effective manner may help in achieving an organization’s objectives or avoid an organization from making a costly mistake.
Company’s can also use creativity to engage its workforce, which will help attract and retain quality employees. While many of you probably know the general, simple ways to keep employee’s positive, engaged, and productive such as flexible work schedules and casual dress days, what about getting creative and going above and beyond this?
One idea can be to include employees in creative marketing techniques such as weekly blog posts. This will provide a platform for employees to display the range and depth of experience among the firm’s staff or firm-sponsored networking opportunities. This will not only engage employees, but it could also attract new clients and help maintain relationships with existing clients.
There is room for accountants to be creative in the right setting. Obviously certain roles, organizations, and situations will allow for more creativity than others. Regardless, knowing when and how to utilize creativity will help separate you from the pack.
On the one hand, accountants must follow the rules. On the other hand, accountants should creatively think about presenting information in ways that they are most useful and clear to users. Balance is the key.
If you are looking to add creative accountants to your company, let us help!
We are looking forward to hearing from you.