Accounting Systems in Neoliberal Society

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Introduction

The role of accounting and various accounting systems in neoliberalism has been extensively studied since a free-market economy cannot successfully exist without proper financial sector management. The concept of neoliberalism encompasses deconstructing governmental ownership and control of businesses in various spheres of the state and society (Gilbert, 2021). Furthermore, it involves “privatization, deregulation, the dismantling of social welfare apparatus, and tax cuts” to regulate the economy and make goods and services available to all (Gilbert, 2021, p. 3). Although accounting primarily focuses on controlling and establishing accounts, fund transfers, and analyzing other monetary operations, its goal in a larger neoliberal sense is to create a cohort of financially responsible citizens (Gilbert, 2021). However, this area is poorly explored; hence more research should be performed to find effective accounting systems and develop technologies to build a neoliberal society. Implementing novel accounting systems and software to store essential data and regulate various business processes will help generate an ethical and fair neoliberal society.

Accounting and Accounting Systems

Accounting systems are widely believed to help operationalize social structures and institutions. Indeed, accounting is a tool used for calculating, tracking, and managing various processes within organizations and contemporary society, in general, since many operations have become monetized (Chow & Bracci, 2020). Even social care and aid programs for vulnerable population groups involve financial transfers (Chow & Bracci, 2020). These automated methods allow accountants to control purchases, sales, income, expenses, cash flow, and other money transfers (Ginting, 2022). The two main advantages of accounting systems are the facilitation of all business and non-business financial processes as well as the minimization of errors that may frequently occur with manual calculations (Ginting, 2022). It appears that the modern world cannot operate properly without the knowledge, skills, and technologies relevant to accounting.

The accounting system simplified and automated many financial processes and procedures. The main features of these systems include an interactive dashboard, cash flow monitor, financial report generator, automated bank reconciliation program, e-invoicing, and budget management (Ginting, 2022). These programs and software allowed to increase the speed and accuracy of transactions and other monetary operations, eliminating the need for unnecessary paperwork and the possibility of human error.

What Is a Neoliberal Society?

Most modern countries have established neoliberalism, which has a wide range of meanings but primarily involves market relations in society. Indeed, according to Alexander and Fernandez (2021), this concept, which incorporates politics and economics, translates market metrics and dimensions to all aspects of people’s lives. Furthermore, neoliberalism states that individual freedoms are guaranteed through “the freedom of the market and trade” (Alexander & Fernandez, 2021, p. 370). The latter explains the political part of this term because these guarantees are often ensured by the state. Aside from the practice of privatization and decentralization, neoliberalism can also be described in terms of individual and business freedom. Indeed, it is “a theory of political, economic practices that proposes that human wellbeing can be best advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework” (Alawattage & Wickramasinghe, 2018, p. 102). The latter is characterized by free trade, free market, and private property rights (Alawattage & Wickramasinghe, 2018). Market relations play an essential role in neoliberal society, but it does not suggest that it is the only defining feature of it.

Neoliberal groups support democracy, but they believe that it should be limited for the benefit of economic prosperity and freedom. Indeed, the plurality of ideas in such a regime leads to decisions that will likely benefit the majority (Alexander & Fernandez, 2021). However, in some societies, opinions that play a role in producing policies primarily stem from the elite groups and organizations that do not always consider the interests of their citizens (Alexander & Fernandez, 2021). The antidote to that is supporting non-governmental organizations (NGOs) that want to solve various societal and environmental problems (Alexander & Fernandez, 2021). In fact, NGOs are essential components of neoliberal societies because they strive to generate or preserve non-tangible values.

One of the essential features of neoliberalism is a free market. In fact, the latter is attained not by the complete elimination of governmental control. Neoliberalists do not want state control but the facilitation of the market by the government (Alawattage & Wickramasinghe, 2018). The outcome is that politicians interfere more with the economy, but it is not a conventional control as during other regimes (Alawattage & Wickramasinghe, 2018). It means that a country becomes market-focused rather than government-centered, creating more business and entrepreneurship opportunities in that society.

As compelling as it seems, neoliberalism possesses one substantial disadvantage: the significant difference in income and wealth distribution in society. The wealthy minority has more power and influence than ordinary people (Alexander & Fernandez, 2021). Nevertheless, many affluent people and groups are involved in charity, which is a powerful way to mitigate the abovementioned drawback of neoliberalism. For example, Bill Gates has donated $3 billion to public education since 1990, and Mark Zuckerberg gave $100 million in donations to primary educational institutions in New Jersey (Alexander & Fernandez, 2021, p. 381). Moreover, if the groups that can lobby the state laws to improve social benefits, this disadvantage will become hardly be noticed by the majority.

The Role of Accounting in Neoliberalism

As the earlier examples show, almost any interaction in a neoliberal society involves financial processes. Indeed, donations, as well as social aid, require controlling monetary transactions to organizations and individuals (Alexander & Fernandez, 2021). Furthermore, citizens of any country are often obliged to pay taxes to the state. Thanks to automated accounting, this process has become more straightforward and comfortable both for taxpayers and governments (Alexander & Fernandez, 2021). Well-functioning neoliberalism appears to demand advanced accounting systems and technologies to maintain the accuracy and transparency of these interactions and exchanges.

The Logic Behind Neoliberal Market

The idea that neoliberalists promote a completely uncontrolled economy is a myth because market relations require continuous intervention and regulation of the state. After all, businesses and industries depend on such external forces as politics. A government cannot leave markets without attention because the country has legislative requirements for the type of products that can be sold, their quality and standards, prices, taxes, and advertisements (Alawattage & Wickramasinghe, 2018). Still, it cannot be viewed as a control per se but a centralization of political decisions around the economy.

Institutions That Play a Role in Neoliberal Society

Various organizations, from for-profit companies to research institutions, participate in building a neoliberal society. Such regulatory bodies as the New York Stock Exchange and National Association of Security Dealers Automated Quotation System or funding agencies like IMF and the World Bank are essential to market regulators (Alawattage & Wickramasinghe, 2018). Furthermore, corporations such as Google, Apple, Amazon, and Facebook contribute to maintaining neoliberal ideology by constantly creating goods, services, and financial gain (Alawattage & Wickramasinghe, 2018). Moreover, nonprofit organizations and NGOs play a critical role in the market economy since they serve as the inspiring force for profit generation to resolve a wide range of existing societal issues. These problems include corruption, poverty, unemployment, hunger, unsustainability, discrimination, and many others (Alawattage & Wickramasinghe, 2018). The importance of market relations and the finances they constantly produce can be seen in the fact that many of these issues cannot be solved without monetary investments.

Neoliberalism Is Not Only About Profit

Although many believe that the only focus of neoliberalism is economic profit, its true goal can be seen in the concept’s title. It is often claimed that “neoliberalism diffuses, infuses, and confuses the conventional boundaries between the economy, policy, and society” because “everything is seen as operating in a market” (Wickramasinghe et al., 2021, p. 494). Nevertheless, liberalism part signifies individual and collective freedom, which is impossible without financial prosperity in modern times (Vallier, 2021). Hence, neoliberalists place much emphasis on economic growth and development because no society can be prosperous without being able to pay for various goods and services essential nowadays.

Since neoliberals are often against excessive government control of the business sector, it is believed that adequate support of public goods and corporate social responsibility is impossible in such a state. Nevertheless, neoliberalism ensures that the vulnerable population is protected and social insurance is available to the citizens (Vallier, 2021). Moreover, neoliberals were perceived to only value market relations, consumerism, and competition (Vallier, 2021). However, neoliberals do not dictate how people live, what ethical values to hold on to, and what religion to practice because it is the goal of other schools of thought and philosophical teachings. Therefore, it is almost unfair to state that it promotes a pure financial attitude to life because neoliberalism focuses on building a prosperous economy.

Ethics of Accounting and Neoliberalism

The question of the ethics of neoliberalism and accounting systems arises, especially in the context of poor counties. The problem is that this ideology seems to force low-income economies to practice open-door policies and minimal governmental control (Bakre et al., 2021). It appears to demand significant expenses on technologies that are not a primary necessity for those states (Bakre et al., 2021). It may not be ethical to impose neoliberal values and accounting standards of wealthy nations on emerging countries (Bakre et al., 2021). However, the ultimate goal of modern accounting systems and neoliberal society is to build a prosperous economy and hence ensure that citizens’ quality of life is high. Additionally, these technologies offer transparency and increased efficiency in all financial operations (Bakre et al., 2021). Therefore, it is moral to propose this approach in the economy to developing economies to reduce the rate of corruption that often prevents these countries from improving and growing.

Another ethical question to consider in accounting is fraudulent action. Indeed, the risk of fraud increases when it comes to financial operations and money transactions (Cooper et al., 2013). The main problem of fraudulent conduct in the accounting of the market economy is that it primarily affects vulnerable population groups and rarely harms corporations’ profit (Cooper et al., 2013). The possible solution to this problem is the implementation of accounting technologies in this field to diminish the chances of deception since modern software eliminates the need for human intervention in most processes and calculations.

Applying Accounting Technologies to Build a Neoliberal Society

It is evident from above that the goal of neoliberalism is not to show people how to live in a correct and moral way. Instead, its main function is to ensure that the standards of people’s lives are high enough to give individuals opportunities to focus on education, spiritual growth, and personal development (Vallier, 2021). A prosperous market economy is an essential element of all advanced nations with good education, health care, and innovative development since all these spheres require significant finances. Thus, accounting systems can become effective technologies for regulating and improving the quality of economic relations in a neoliberal society.

Technological advancements made it possible for accounting and market relations to magnify their effectiveness. Innovations such as artificial intelligence (AI), cloud computing, quantum computing, 5G networks, autonomous robots, and blockchains made a tremendous contribution to accounting and businesses (Marr, 2020). Indeed, AI and robots not only allow us to make quick calculations but also predict customer behavior and changes in the economy (Marr, 2020). Furthermore, cloud and quantum computing increased the possibilities of managing big data, which is essential for accounting in the modern world (Marr, 2020). Blockchain, which is a system of digital transactions in public and private networks as well as for cryptocurrencies, made financial operations more transparent, facilitating trustful relationships between companies (Fogden, 2021). When businesses have open and candid interactions and processes, the public, which is very much dependent on the economic and political relations within the country, may be transformed into a more humane society.

Problems with Accounting Technologies and How to Overcome Them

Even though the advancement of technologies, especially AI, quantum computing, and robots, has made accounting faster and more transparent, some issues still exist. For instance, according to Van den Bussche and Dambrin (2020), such popular accounting management platforms as Airbnb, TripAdvisor, and even Amazon have service and product reviews not written by customers. Such practices elicit significant doubt and concern about the quality of the offered items. Although this example does not involve financial operations, it results in purchases that may be disappointing for consumers. It puts the whole notion of the free market at risk, showing that the lack of control is dangerous.

When introducing new prices or controlling changes in market values, people can intervene, increasing the risk of human bias and fraud. The latter is defined in accounting as the creation of false financial statements or cash and inventory theft (Jones, 2010). For example, it was revealed that the annual cost of fraud in the United States is approximately $400 billion, which primarily affects small businesses (Jones, 2010, p. 8). Furthermore, according to the 2004 KPMG survey in Australia and New Zealand, more than 27,000 instances of fraudulent acts were determined (Jones, 2010, p. 8). Thus, the incidence of such situations can be achieved by minimizing human intervention in accounting processes in business. It can be achieved by further advancing the technologies through continuous training of neural networks and AI. For now, it is crucial to ensure regular governmental inspection of pricing strategies in companies with a large impact on people’s lives.

The Importance of Flexibility in Neoliberal Accounting

As it can be deduced from the above, accounting systems used for building a neoliberal society should simultaneously possess freedom and some degree of control. Indeed, according to Jones (2010), working within the regulatory framework is critical to ensure that accounting processes are fair, ethical, and valuable. If financial processes are excessively controlled, it eliminates flexibility and freedom of choice essential in the market economy (Jones, 2010). In contrast, if control is completely removed, the risk of fraud rises, eventually ruining neoliberalism’s primary purpose of building profitable businesses and robust economies to improve people’s lives (Jones, 2010). Hence, a balanced approach to regulating accounting systems is required to create a prosperous neoliberal state.

Conclusion

Accounting systems are essential for building a robust neoliberal society. The speed and automation that these technologies offer made it possible to reduce human intervention in financial processes. The main goal of neoliberalism is a free-market economy that generates profit due to minimal governmental control. Thus, the accounting management systems that implement artificial intelligence and quantum computing can help succeed in this goal. However, it is critical to resolve fraud issues at the stages where people still participate in making decisions about finances. Otherwise, losses associated with deception and falsification will negatively impact true neoliberal ideology. Notably, the latter’s idea is not to teach people about moral conduct but to improve the quality of citizens’ lives so there will be no need for corruption and illegal actions. Overall, the combination of advanced accounting technologies and neoliberal values can produce a prosperous economy.

References

Alawattage, C., & Wickramasinghe, D. (2018). Strategizing management accounting: Liberal origins and neoliberal trends. Routledge.

Alexander, J., & Fernandez, K. (2021). The impact of neoliberalism on civil society and nonprofit advocacy.Nonprofit Policy Forum, 12(2), 367-394.

Bakre, O. M., McCartney, S., & Fayemi, S. O. (2021). Accounting as a technology of neoliberalism: The accountability role of IPSAS in Nigeria.Critical Perspectives on Accounting, 1-15.

Chow, D., & Bracci, E. (2020). Neoliberalism, accounting, and the transformation of subjectivities in social work: A study on the implementation of personal budgets.Financial Accountability & Management, 36(2), 151-170.

Cooper, D. J., Dacin, T., & Palmer, D. (2013). Fraud in accounting, organizations and society: Extending the boundaries of research. Accounting, Organizations & Society, 38(6-7), 440-457.

Fogden, T. (2021). Top four accounting trends for 2022 and beyond. Tech.Co.

Gilbert, C. (2021). Debt, accounting, and the transformation of individuals into financially responsible neoliberal subjects.Critical Perspectives on Accounting, 77, 1-21.

Ginting, A. (2022). Accounting system – Definition, element, benefits, characteristic, and feature. BusinessTech Hashmicro.

Jones, M. J. (2010). Creative accounting, fraud and international accounting scandals. John Wiley & Sons.

Marr, B. (2020). The 6 biggest technology trends in accounting and finance.Forbes.

Vallier, K. (2021). Neoliberalism. In E. N. Zalta (Ed.) The Stanford Encyclopedia of philosophy. Metaphysics Research Lab.

Van den Bussche, P., & Dambrin, C. (2020). Peer-to-peer evaluations as narcissistic devices: Fabricating an entrepreneurial community. Accounting, Auditing & Accountability Journal, 34(3), 505-530.

Wickramasinghe, D., Cooper, C., & Alawattage, C. (2021). Neoliberalism and management accounting: Reconfiguring governmentality and extending territories. Accounting, Auditing & Accountability Journal, 34(3). 489-504.

Click Here To Order Now!