Accounting's Relationship with Other Key Disciplines

The Interdisciplinary Nature of Accounting

Accounting and Economics

Economics is the science that studies human behavior as a relationship between ends and scarce means which have alternative uses. When a person makes an economic decision, they primarily depend on accounting information. Micro-level data, arranged by the accounting system, is summed up to create a macro-level database. Accounting provides the basic data upon which economic models are developed. There exists a wide gulf between the economists' and accountants' concepts of income and capital. No doubt, accountants have derived the ideas of value, income, and capital maintenance from economists but have modified them to suit practical circumstances.

Accounting and Mathematics

A strong knowledge of arithmetic and algebra is a prerequisite for accounting computations and measurements. Presently, graphs and charts are widely used for communicating accounting information to users. Knowledge of geometry and trigonometry has become essential for a better understanding of the accounting communication system.

Accounting and Statistics

Both accountants and statisticians perform the primary functions of collecting, tabulating, analyzing, and presenting data. While accountants are mainly concerned with monetary data, they also deal with quantitative data. A statistician is concerned equally with both monetary and quantitative data. The use of statistics in accounting can be better appreciated in the context of the nature of accounting records.

Accounting and Law

Every business house must operate within a legal environment. The entity itself is created and controlled by laws. However, legal prescriptions about the accounting system are a product of developments in accounting knowledge. This means that legislation about the accounting system cannot be enacted unless there is a corresponding development in the accounting discipline. In this way, accounting both influences and is influenced by law.

Accounting and Management

Management is a broad occupational field that comprises many functions and the application of many disciplines, including statistics, mathematics, etc. Accountants are well-placed within the management team. Therefore, the accounting system can be molded to serve management's purposes.