Accounting Matters

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Or does it? I’m tempted to question whether the accounting profession matters. (I know that it does, but I’m entitled to some sarcasm.) Why bother with all the work when it all goes to pot in the end? Has accounting theory and practice, hammered about by political compromise, become so convoluted that even the brightest accountants and auditors risk doing their profession a disservice? If accounting matters, why?

WHAT’S THE PURPOSE OF ACCOUNTING?

There’s a fairly simple purpose to accountancy: to ensure trusted (and timely) reporting of relevant information for actionable and reasonable decision-making. Auditing assures that the meaning of what’s accounted for matches the veracity of what’s stated (at least as close as possible).

Accounting and auditing are rooted in these two straightforward premises. Although simple in premise, each can be enormously complex in practice. Furthermore, the theories which articulate the foundation that supports expertise in reporting can themselves be complex. Theory in accountancy is just as critical as it is in physics or chemistry or mathematics. Science, not superstition, is the basement of a sane economy.

OK, BUT WHAT’S ACCOUNTING GOT TO DO WITH ME?

But accounting is more than a theory or a practice: it’s a language.

In order for us to have any conversation about economics or finance or treasury matters, we need our language to be clear and free of corruption. A language, once muddled or corrupted, will corrupt the speakers. It will corrupt the community. So when the language of accounting breaks down, stutters, mumbles and slowly but eventually conveys poetic lies, an entire economic system begins its erosion: what was once a civilization transforms into a dysfunctional family.

Accounting has everything to do with you.

DO WE CARE?

I don’t fully understand the details of the mortgage-back securities travesty crime blunder. I’m guilty of being focused on my corner of the world. Still, I suspect that if we want to understand what went wrong then we’ll need to figure out where along the way the language of accounting, once convoluted or corrupted, generated confused speakers and disoriented listeners.

The purpose of any language is simple: to convey meaning among ourselves. The loss of a language is the loss of an important part of meaning. It’s the loss of culture. Everyday, languages around the world die and we don’t care. The language of the governing brain of our culture is accounting. What do we lose when that language is lost? Do we care? I guess that’s the question facing us today: do we care?

Accounting matters. Language matters. Meaning matters. If we don’t know how to speak in a trustworthy language, how do we expect to send and receive the right signals? How do we know the difference between the right signals and the wrong signals? Signals, of course, mean nothing without interpreters. And that’s why accountants and auditors matter: they are interpreters.

Accountants are the unacknowledged interpreters of the economic world.

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Time to Fly Through the Coming Economic Gloom

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Time is a funny thing. For those of us who don’t live at the quantum-level scale, time moves like an arrow in a forward direction. Business decisions move along the same direction. Your business can’t move forward if you lose your sense of temporal direction.

The best thing about the coming collapse of many industries is this: if you’re smart and ballsy and willing to offer things of value and meaning to others over a long span of time, you’ll do well. If, however, you program yourself for doom, your doom will be automatic. You’ll be a slave to the doom-machine in your own head.

Should we be furious about the stupidity of a certain class of consumers? Yes. Should we be furious about the failure of our auditors? Yes. Should we be furious about the costly ignorance of our political system? Absolutely. Rage against the machine is perfectly justified. Rage, no matter how deserved, doesn’t accomplish nearly as much as fortitude.

Time doesn’t go backwards and nor should your focus.

Time, like an arrow, flies forward (duh). If you want to get through the recession or depression or whatever the hell is in store for us, you need to move forward too.

Nothing lasts forever. Time has no time for it’s own long tail. And, frankly, nor do you.

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A Bad and Meaningful Day

Optimist or Pessimist? You Decide

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On a bad day, when one moment hits you hard, it’s easy for you to stretch the moment over the rest of the day. Our brains are probably wired that way.

I wonder how much we lose from bad days. The self-help crowd tells us to turn our dangers into opportunities. And I buy into that philosophy myself, usually.

Sometimes, however, a good day gone bad is just how things are. Happenings. You can read all sorts of meaning into anything that happens. If you’re optimistic, the meanings are bright. If you’re pessimistic, the meanings are dark.

But: if you pay close enough attention to that edge between optimism and pessimism, between bright and dark, you have a chance at experiencing something beyond optimism and pessimism: sight. Seeing things as they are, no matter how painful or pleasant, is really the only way to get to the truth of your life.

I don’t know what the mutual truth of our lives is. I don’t know your truth; maybe you don’t either. If I had to bet on that shared value, I’d say something good would come out of our mutual understanding. This universe permits synergy, which might be how good prevails over bad. Just a thought.

Today, I had a bad day. A bad thing happened and it hurt. That’s now a truth of my life. I don’t need to share the details with you, but I think you understand.

If I had to start today over again, I’m not so sure I would change things. There’s something about a bad day that has meaning. I suppose it’s up to us to choose the meaning and hope it matches the truth.

I hope you enjoy the rest of your day. What’s more, I hope you find meaning in whatever kind of day you’ve had. Because if you had a good day, then it means the world isn’t all bad. I’m cool with that. Are you?

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