The bible is abounding with dictums that touch on various professions and which can act as starting points for individuals interested in developing higher moral standards in business. It is rich with accounting concepts that can be inferred directly or indirectly. These include financial managementand management accounting. The concepts of accounting and finance management can be traced back to the time of creation. Eve and Adam were assigned the responsibility of overseeing the Garden of Eden (Gen. 1:28); Noah was tasked with building the ark where he was to build a structure whose magnitude had not been witnessed before (Gen. 6). Additionally, Egyptian monuments such as the pyramids are a reflection of the practices of managing resources. Accounting and finance is applied to every aspect of human life. In the present world, these concepts are well-developed fields of study with a variety of techniques and mechanisms to achieve their purposes. This essay explores and traces several underlying currents in accounting and finance principles as inferred from the bible. To achieve this, it will discuss major accounting and finance concepts and how they have been manifested in bible verses.
Many verses in the bible touch on internal controls, this is expected, given that large amounts of finances were involved, and mechanisms for internal oversight were necessary. The bible discuses modern accepted accounting and finance concepts such as separation of duties, restricted access to assets, and dual custody of liquid assets. The justification for the putting in place of internal controls is that if employees get loopholes to steal, they are likely to succumb to the temptation. Thus, there is a need to have systems that minimizes this temptation. In Micah 7:5-6, the bible in relation to internal controls states: “Do not trust a neighbor; put no confidence in a friend.” This is a negative conception of human nature, but it describes the logic behind the need for internal systems for control. It also reflects on the healthy skepticism that auditors should have. As a result of this view of human nature, the bible discusses how the Israelites practiced the dual custody of assets as a measure of internal control. This concept isindepthly described in 2 chronicles 24:11 where it states: “Whenever the chest was brought in by the Levites to the king’s officials and they saw that there was a large amount of money, the royal secretary and the officer of the chief priest would come and empty the chest and carry it back to its place.” In this case, representatives of the high priest as well as the king’s secretary had joint custody of the fund. It is also worth noting that the Levite tribe kept a control total of the funds to ensure that all funds reached their destination.
One of the predominant objective of accounting as a profession is to monitor the performance of resources. It also aims at ensuring that agents and outsiders are not given any leeway to defraud an accounting entity. The bible in 2 Kings 12:16 presents a narration of the building of the temple. It states: “No accounts were kept with the men to whom the money was paid over to be spent on workmen since they were honest in their dealings.” This is repeated in 2 Kings 22:7. It can be inferred that accounts during this period would have been kept if the contractors were considered less than honest. Therefore, the bible points out that accounting is necessary to monitor and reduce fraud. It also provides reasons for the necessity of monitoring agents. In the New Testament, a parable is narrated about a steward. In the parable, the owner is made aware that his steward is misusing and wasting his money. Luke 16:2 says: “So the rich man called for his manager and said to him, ‘What’s this I hear about you? Let me examine your books. It’s obvious that you can’t manage my property any longer.” This parable reflects the role that accounting played during this time. It was used as a control device to monitor performance. It also suggests that the master ought to have insisted on periodic accounting reports to assist him in detecting the shortcoming of his stewards with regards to resource use.
Accounting also serves as a channel through which disputes can be resolved between parties. It ensures that debtors and creditors agree on the amounts due and that parties involved in a particular business undertaking know their share of earnings. This point is put forward in ecclesiastics 4:1-2 where the bible states: “The following things you should not be ashamed of— keeping strict accounts with a traveling companion.” The underlying concept being conveyedin this verse is that the maintenance of accounts serves the purpose of reducing conflicts between travelers or business partners.
Integrity and Values
The bible states that the custodians of funds were to be men of integrity in 2 Corinthians 8:16-17 Apostle Paul sends Titus together with two brothers to collect a fund from the Corinthians. He exalts their uprightness and in 2 Corinthians 8:20 says that he opted for the three people in order that: “We want to avoid any criticism of the way we administer this liberal gift [the money that had been given for the Christians in Jerusalem]. For we are taking pains to do what is right, not only in the eyes of the Lord but also in the eyes of men.” This clearly shows that sending more than one person who is regarded as honest would minimize the possibility of fraud and would reduce the people’s concern about fraud.The need for honesty in employees and dual custody is depicted in John 12:6 in discussing Judas as the treasurer: “… he [Judas] was a thief; as keeper of the money bag, he used to help himself to what was put into it.” Later experiences revealed that Judas was dishonorable, and the absence of dual custody gave him a loophole to steal. Thus, the consequences of poor control are pointed out in the bible.
Accounting inventory system
The bible provides very little in terms of describing how to account for transactions. Only in Ecclesiasticus does the bible touch on the necessity for an accounting system. In Ecclesiasticus/Sirach 42:7, the catholic bible states: “Whatever you deposit,whether by number and weight,and whatever you give or receive,put everything in writing.” This verse clearly reflects the need for an inventory system. Additionally, the last part of the verse can be taken to imply that accounts for all revenues and expenses ought to be maintained.However, the bible fails to provide information with regards to how systems of accounting should be organized or the wayfinancial reports should be organized. It discuses the need for financial reporting.Notably, the bible notes that accounting and financial reporting are necessary steps toavert fraud, to monitor instruments, and to minimize conflicts over the use of resources.
Balancing forms one of the fundamental elements of accounting. Deuteronomy 25:13-16 states: “Do not have two differing weights in your bag—one heavy, one light.Do not have two differing measures in your house—one large, one small.You must have accurate and honest weights and measures, so that you may live long in the land the Lord your God is giving you.For the Lord your God detests anyone who does these things, anyone who deals dishonestlyof the Lord your God is giving you. For the Lord your God detests anyone who does these things, anyone who deals dishonestly.”
The maintenance of honest weights and measures is an important principle in the bible. Leviticus 19:35-36 states: “Do not use dishonest standards when measuring length, weight or quantity.Use honest scales and honest weights, an honest ephahand an honest hin.” This can also be taken to denote the importance of keeping honest accounting records. All forms of misrepresentation are inappropriate. Professionals in the fields of accounting and finance have an ethical obligation to ensure high levels of ethical behavior are practiced by clients, and deceptive practices are avoided.
The bible does not contain much about managerial accounting as it does about internal controls;however, it mentions a broad range of managerial topics in finance and accounting. The bible makes allusions to budgeting and the importance of participatory budgeting. Additionally, the bible provides advice on how to evaluate a product.Luke 14:28-29 talks about budgeting in business planning. It says: “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?” This verse refers not only to the project budgeting but also to finances and cash flow forecasts. This concept is further mentioned in the bible in the context of participatory budgeting. Proverbs 15:22 states: “Plans fail for lack of counsel, but with many advisers they succeed.” This verse is consistent with the spirit of participatory budgeting.Finally, the bible touches on decision making with regards to product analysis. In Ecclesiasticus/Sirach 7:22-23, the catholic bible states: “Take good care of any animals you own. If they make money for you, keep them.” This clearly demonstrates that the bible does not concern itself with the need to use the contribution margin of a product or to consider externalities.
In conclusion, it is apparent that many of the financial and accounting concepts that are in application in present day businesses were in use from the beginning of time. The rationale for financial management and accounting was recognized in earlier times, with concepts such as internal controls, participatory budgeting, balancing, monitoring and other widely used terms of financial management and managerial accounting having been in use since the beginning of time. Therefore, a large section of present accounting and financial thought can be traced back to biblical times.
Bible Gateway. (n.d.). King James Version. Retrieved from Bible Gateway: https://www.biblegateway.com/versions/King-James-Version-KJV-Bible/#booklist
Ecclesiasticus / Sirach. (n.d.). Retrieved from Catholic Bible Online: http://www.catholic.org/bible/book.php?id=28
Gellis, H., Giladi, K., & Friedman, H. H. (2002). Biblical and Talmudic Basis of Accounting Ethics. The CPA Journal, 9(2).
Hagerman, R. L. (1980). Accounting in the Bible. Accounting Historians Journal, 7(2). Retrieved from http://www.accountingin.com/accounting-historians-journal/volume-7-number-2/accounting-in-the-bible/
Wild, J., Shaw, K., & Chiappetta, B. (2012). Fundamental Accounting Principles (21 ed.). McGraw-Hill/Irwin.
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