Relation between accountancy and economics
Paper to be presented at the annual meeting of the American Association of Public Accountants, Denver, Colorado, Oct. 19-20-21, 1909
Abstract
All sciences are related to one another, more or less intimately, because they all have to do with the same world and all are the products of human intelligence, but there is a very close relation between accountancy and economics, since they both have to do with a relatively narrow field, the field of business activity. The accountant and the economist, however, look at the subject from different points of view and with different motives. The purpose of the economist is to satisfy his scientific curiosity and to advance human knowledge by discovering the facts and laws of economic life. He desires to understand the economic process, why men engage in the production of wealth, what and how they produce, how the product is exchanged and how distributed. Hence economics is a pure science, and the economist, as such, is engaged in the pursuit of knowledge for its own sake, and not, primarily, for any practical purpose. The results of economic investigation may be, and often are, of great practical value to the statesman, the business man or the social reformer, but the economist must not think too much of these practical ends, else he is likely to be biased, consciously or unconsciously, in his search for truth. Accountancy, on the other hand, makes a comparative study of methods of recording transactions, with the object in view of presenting to the proprietors or other interested persons an accurate statement of the financial condition of a business enterprise, and is a highly important, if not indispensable means to success in business. Accountancy, therefore, is a practical or applied science, existing as a means to a definite, practical end, the development of the art of bookkeeping, and standing in a class with those sciences which deal with methods of teaching, methods of government, business methods, methods of social reform.