Are accountants educated to understand accountancy?

[patslatt]

..............

It is hard to know where to start. As others have mentioned you are possibly confusing accounting technicians with accountants. Also your anecdote (upon which thread is based) is unclear. For example in a complex accounting system you could enter a journal which might be automatically part apportioned to multiple cost and profit centres ... deep inside an accounting system whether a transaction is a debit or credit is arbitrary. For example we could have an internal "wash" account book ... entering credits on it might cause real world debits. I've seen accounts charts/paths which have been 7 deep (so 7 pairs of credits and debits to wash through) which can involve multiple splits ... one I examined entering a single journal would (on close) trigger journals over 14+ accounts.

Complex accounting journals will be confusing to a novice, also you appear to be conflating bookkeeping with accountancy ... accountancy includes taxation, legal/regulatory issues ...

This whole thread is based on a vague anecdote and a limited understanding of accountancy. My advice would be to delete it.

cYp
( I am not an accountant and believe there to be serious flaws in aspects of modern accounting but this is not the thread to raise serious issues)

The most important job of accountancy is keeping accounts, preparing financial statements and tax returns. There is an overlap between the work of bookkeepers, accounting technicians and accountants, with the accountants supervising the technicians and apprentice accountants. My point is that accountants are not as well trained academically in accounts as they could be under the present accounting educational systems with their very simplistic accounting models.

[Dublinguy]

There are 2 issues to consider here.....

1 - Are accountants expected to understand accounancy and why/how things happen? Yes and to do that you don't need to use complicated methods of teaching you can do that simply......everything comes back to the 2 fundamental blocks of accounting as I see it -
Dr Inc in Assets/Expenses
Cr Inc in Liabilities/Gains

Double entry bookeeping should ensure there is no non-balancing of Trial Balances...

2 - Are accountants expected to be systems experts and understand how an accounting package works? No they are not because as long as they understand the principals of accounting they don't need to know the system.

Bookkeepers need to know how to do simple accounting
Accounting technicians need to know how their accounting package works
Accountants need to understand accounting without needing to know how the system works...

Technicians have a harder time moving roles as they understand a particular role....accountants can move easily to any industry as they understand accountancy theory and practice rather than a system...

[Dublinguy]

*falls asleep at most boring thread ever*

Accountancy is boring to the average person,but it can be interesting to those with very quick minds for numbers and for the complicated logic of accounting double entry systems.

Your just showing your ignorance as most very good accountants don't even do accounting work anymore..

[cyberianpan]

The most important job of accountancy is keeping accounts, preparing financial statements and tax returns. There is an overlap between the work of bookkeepers, accounting technicians and accountants, with the accountants supervising the technicians and apprentice accountants. My point is that accountants are not as well trained academically in accounts as they could be under the present accounting educational systems with their very simplistic accounting models.

Your point is that accountants are not trained in the technical detail of accounting systems. There is no need for them to be, in fact for 2 large Irish companies I can think of the "business systems manager"/"super user" for Finance was not an accountant.

Yes to some extent accountants may supervise "finance operations" but they don't need to know the exact design of every wash book, that design was proven once (during original package build and then local testing).

Again you are talking out your other end here, largely speaking the duties of accountants and accounting technicians are very different.

cYp

[L.O. Dublin S.C.]

An accountancy student casually remarked to me that it's hard to know where the debit and credit accounting entries are going when using software accounting packages. By contrast,an accountant entering books by hand in the pen and ink days had to put the entries in the correct accounts and make sure that the entries balanced at the end of the accounting period.

Isn't this taught in the classroom? I don't think so. Classroom bookkeeping and accounting exercises are very oversimplified compared to keeping the books of a business which can be extremely complicated in practice.

Is it possible to teach this level of complexity in the classroom? Possibly. Accountants in the pen and ink days used to teach apprentices starting out through "incomplete records". The records comprised a box of invoices, receipts and cashier records. The apprentice sorted them by expense category and created a full set of books and records,including financial statements and tax returns. It should be possible to recreate this accounting world in the classroom through hypothetical records of invoices,receipts and cashier records. After the student had completed full sets of books in a few cases,say retail business, increasing complexity could be introduced to cases by introducing complicated accounting ledgers in which the student would be required to make entries for incompleted periods. This would be time consuming unless the cases were carefully selected and edited to provide condensed accounting experience.

As far as I know,accountancy is not taught in this way. Which raises the question, are accountants educated to understand accountancy?

Having done accounting at school and currently doing it in collage, I can say the L.C. Accounting is entry level accounting. I've repeated most it in my first year of college.

As for your reformed option. It definitely deserves a fair hearing but my problem would be practicality. My L.C. Accounting teacher was very good, knew his stuff and was very helpful. However, the truth is that the class wasn't helpful at all. My teacher had to teach the higher group, three out of eleven, between four o'clock and six o'clock three days, sometimes five days, a week. The regular class, ordinary taught with both present, was disruptive, unwilling and had a devil may care attitude.If the course was your verision, we'd never have gotten through it. We bearly got through what we had. From January to May in my sixth year, I had to get grinds.

In my opinion, if, like me, you want to be an accountant, do Accounting at L.C. and the take it in college afterwards. It isn't essential but it helps.

[myk]

someone needs to get a life and start to worry about more important things

Maybe if accountants understood accountancy better,the losses of hundreds of billions by international banks in the international financial bubbles could have been prevented.

Oh my God! Such losses do not occur because of errors in double entry bookkeeping. They are due to management policy. And the big accounting scandals such as Enron don't happen due to errors in double entry bookkeeping either, they happened due to departures from or abuse of accounting standards and that is the sort of thing that is focused on in accounting college courses and accounting professional courses. That is what separates accountants and bookkeepers!

[zakalwe]

someone needs to get a life and start to worry about more important things

Maybe if accountants understood accountancy better,the losses of hundreds of billions by international banks in the international financial bubbles could have been prevented.

Oh my God! Such losses do not occur because of errors in double entry bookkeeping. They are due to management policy. And the big accounting scandals such as Enron don't happen due to errors in double entry bookkeeping either, they happened due to departures from or abuse of accounting standards and that is the sort of thing that is focused on in accounting college courses and accounting professional courses. That is what separates accountants and bookkeepers!

absolutely, enron involved related parties (frs8) lending money who were not recorded as related parties.

and off balance sheet accounting (permitted under irish gaap but not ifrs) collapsed barings.

the current subprime problems originated from avoiding the requirements of BASEL1 and capital adequacy ratio. selling mortgages off the balance sheet, freeing up more capital introduced moral hazard in the writing of mortgages and deterioration of credit quality of mortgages.

none of those were based on lack of understanding of double entry, but on avoiding accounting or regulatory requirements.

[odie1kanobe]

Dear Boy

You ae talking about someone who enters items into a software package NOT an Accountant.

He is doing his professional apprenticeship and keeping accounts of companies in an accountancy practice. Apprentices do very important professional work while their bosses are out schmoozing clients.

Thereby making your title null and void as he is not an accountant.

[fooldontsee]

*falls asleep at most boring thread ever*

You might aswell be a rocket scientist accountant to be able to balance brought forwand, credit and debit account and trial balance to balence the sheet anyways. l.o.l

[myk]

solicitors have apprentices, accountants have trainees