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Justice and Accounting Justice – Detailed Analysis

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Justice and Accounting Justice – Detailed Analysis, After Providing Complete Details for Truth and Accounting Truth, here we are providing complete analysis for Justice and Accounting Justice. there are certain restrictions of using the word ‘fairness’ in accounting. Judgments of fairness are not always made in a manner that is consistent with economic rationality. Instead, judgments of fairness are guided by a number of psychological principles (Kahneman et al, 1986). In an award winning article, Chris Cooke (1986) differs with Rawls that fairness is a conception of justice. According to his view, the concept of fairness and justice is distinct from one another and prevalently, the concept of justice is inherently more important than fairness. In accounting his axiom is more apt when he (Cooke) says that it is generally agreed that the basic concept of social justice is that people must receive from the state their dues.

Concept of fairness was described as the common factor of ‘control’ in fairness rather than justice in it. He (Cooke) denied the notion of relevant reasons in every inequality. If justice determines the citizen’s position is due to ‘relevant reasons’ then fairness is about a citizen’s position determined by factors within its control as approved to influence by luck. This is the principal difference between justice and fairness.

Justice and Accounting Justice – Detailed Analysis

In accounting too, the equality of opportunity may stand as a crude yardstick to measure fairness. A fair society is one governed by the principle of equality of opportunity. Cohen (2009) describes three types of equality of opportunity; firstly, there is the traditional view of equality of opportunity whereby differences of outcome are not affected by gender, race, sexuality, etc. Secondly, conception of equality is described as left-liberal view. This equality removes the socially constructed states restrictions.

Must Read – Truth and Accounting Truth – Detailed Analysis

The last one is the socialist version of equality of opportunity is the only one that is fair, this means that fairness is egalitarianism. Rawls (1958) rejects egalitarianism, but claims to support fairness and thus, misses this aspect of “control” that is crucial to fairness. In accounting, the aspect of control and equality of opportunity both are important.

Judgment in accounting does not mean to adhere to the accounting standard or accounting rules only. Accounting justice handles the issues like selection of the best alternative ways of recording the events, to adopt the right measure, to improve the shareholders wealth, to protect the environment and to contribute a part of their earnings to develop the society, irrespective to their attachment with the business.

Accounting justice is much nearer to the meaning of rationality. Accounting prudence is the most coveted issue to the investors. Judgment in accounting does not mean to adhere to the accounting standard or accounting rules only. Accounting justice handles the issues like selection of the best alternative ways of recording the events, to adopt the right measure, to improve the shareholders wealth, to protect the environment and to contribute a part of their earnings to develop the society, irrespective to their attachment with the business. If accounting handles the data related to the past, the judgment relates with the projection to the future.

Accounting judgment may face a conflict of interest. The interest of the organisation may vary with the interest of the investors in short run. The integrity of the accountants may resolve the conflict with their judging ability. Basically, there are two issues on accounting judgment. One, which is related to the strategy, objective and planning and the other deals with the activity, requires implementing such strategy. Accounting and reporting judgment requires a proper posting and adjustment of figures to serve the interest of all related groups in an egalitarian approach. Such kind of treatment needs a detachment of self from the situation.

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About Raju Choudhary

Article by Raju Choudhary Raju has written 537 articles. If you like This post, you can follow CAknowledge on Twitter. Subscribe to CAknowledge feed via RSS or EMAIL to receive instant updates.

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