THE POWER OF ACCOUNTING
Many (if not all) countries in sub-Sahara Africa are rich in resources and at the same time are considered poor countries. Why? “Poor resources management” is usually the vague response to this question.
One of the root causes of poor resources management is little or zero accountability. Poor accountability results in little or no responsibility, hence the prevalence of poor governance and inefficient/ineffective resource management at various levels of society – individual, organizational and national.
Strong accounting and financial management practices are central to accountability.
Accounting is the orderly and systematic recording of financial transactions with the objective of providing relevant information (various reports – profitability, financial position, cash flows,) to a variety of stakeholders (business owners, managers, governments, public, employees, suppliers, clients, the state, etc.). It is said that you cannot manage what you do not measure. Accounting provides the necessary measure for successful management of resources.
Thanks to accounting principles/practices, multinational companies can operate across numerous countries successfully. The accounting profession is well structured and plays a central role in the economies of developed countries. The same cannot be said for developing countries – the consequence is poor resource management.
A sustainable solution to the problem of poor resources management in Africa is to build an accountability culture by promoting financial education. Accounting is a powerful socio-economic development tool that has been neglected by African societies for too long – it is about time to redress this issue.
International Accounting Day is celebrated on November 10th every year to recognize the important role that accountants/accounting plays in supporting the growth of organizations and economies and helping people navigate the complexities of finance.
Africa Finance Academy (AFA) will join the celebrations by running a campaign (online and face-to-face) to showcase the ‘Power of Accounting’ during the month of November 2024. Stay tuned for more information in the coming days.
