Once, the world seemed neatly divided: physics belonged to the sciences, engineering to its own proud tradition, mathematics to its eternal certainties and accounting, quietly, to the art of recording transactions. It was meticulous and important, but not, most would have said, a science. Today, the boundaries have blurred. Data pours through every crevice of modern business. Accountants are expected not just to record numbers, but to wield technology, master analytics, and anticipate the future with predictive models. It is tempting, then, to group accounting with the revered STEM disciplines, Science, Technology, Engineering, Mathematics, and indeed, some have begun to do just that.

The argument, on its surface, is compelling. Modern accounting demands a fluency in systems automation, data analytics, and algorithmic thinking. Financial audits often require an understanding of big data, cybersecurity risks, and complex risk models. Certain university programs even classify accounting within STEM categories, granting their students access to benefits traditionally reserved for engineers or physicists. And yet, despite the technological evolution of the accountant’s toolkit, there remains a sense that accounting is not quite the same as physics or engineering, and perhaps never will be.

The heart of the distinction lies not in the tools used, but in the nature of the reality being measured. When a physicist measures the acceleration of a falling object, the laws they reference are indifferent to human interpretation.

Gravity does not require consensus. When an accountant measures profit, however, the “laws” are human constructions, endlessly reinterpreted, amended, and debated. Profit, revenue, asset are not constants of nature, but agreements among people, crafted by committees, susceptible to politics, judgment, and even cultural differences.

Take, for example, the recent case of Thames Water. Under the Companies Act 2006, a company may only pay dividends if it has sufficient distributable reserves, that is, profits that are realised, not simply imagined.

Yet for years, Thames Water has, quietly and systematically, manufactured distributable profits through creative but permissible’ accounting techniques. In their accounts for the year ending March 2023, Thames Water disclosed the capitalisation of £215.2 million of borrowing costs, following £114.8 million the year before. By treating interest expenses as investments rather than costs, Thames Water, inflated its asset base and its distributable reserves by some £330 million over just two years. A strategy hauntingly similar to the one once employed by Carillion, whose tragic collapse still echoes in boardrooms and pension funds alike.

Thames Water also capitalises a portion of its repair and maintenance expenditure, claiming, in ‘Key audit matters’ with an almost weary sigh, that “differentiating between enhancement and maintenance works is subjective.” And indeed it is. With such broad discretion, it becomes possible to transform everyday upkeep, the financial equivalent of oiling a rusty hinge, into a gleaming new asset, silently growing distributable profits without a corresponding growth in genuine strength.

Over decades, such decisions compound. Billions of pounds, conjured not by productivity or innovation, but by interpretation and narrative. This fluidity is not unique to Thames water. It is written deep into the architecture of modern accounting standards.

Consider IFRS 3: in business combinations, companies can choose between the fair value method or the proportion of net assets method, even within the same year for different acquisitions. Two companies, acquired days apart, might be accounted for under entirely different regimes, producing two entirely different pictures of financial health. Or take the treatment of goodwill: under IFRS 3, goodwill remains on the balance sheet indefinitely, subject only to periodic impairment reviews, while under UK GAAP, it must be amortised over time.

Such fundamental differences cannot coexist in a field governed by immutable laws. They can only exist in a field governed by human compromise. In fields like physics or chemistry, human error is a deviation from the truth. In accounting, human judgment is part of the truth. Perhaps it is no accident that the word “account” shares roots with storytelling. To account for something is not merely to measure it; it is to frame it, to justify it, to narrate it within a shared understanding of meaning. In this light, the inclusion of accounting within STEM is understandable, but incomplete.

It captures the rigour, the technical complexity, and the sophistication of the modern accountant’s world. But it risks obscuring the profound, uncomfortable fact that numbers in accounting do not stand alone; they are always tethered to human hopes, compromises, and sometimes, convenient illusions. If anything, appreciating this difference makes one respect accountants even more. They are not merely technicians. They are interpreters of a world that is constantly shifting, endlessly debatable, and often morally fraught. And so, a question lingers, unanswered but necessary:

Should we be relieved, or troubled, that one of the most important languages of modern life, the language of profit, loss, value, is not a science at all, but a kind of human poetry disguised in numbers? Perhaps, in a world increasingly obsessed with precision, there is a quiet wisdom in remembering that some of our most vital systems remain irreducibly human. Messy, beautiful, fallible, and, for that reason, deserving of our scepticism, as well as our trust.