Are accountants educated to understand accountancy?

[badboy2]

An experienced accounting apprentice told me that the incomplete records and accounting models used in classrooms are extremely simplistic. It should be possible to create software simulations that would capture the great complexity of the accounting systems of real companies in condensed versions of those systems. Those simulations could be designed to allow accountancy students to perform the complicated bookkeeping and accounting entries that practising accountants had to do in the pen and ink days. How can accountants learn accountancy if software packages do the entries for them?

Accounting is simple. Debits equal Credits. Anyone who tells you anything else is a spoofer.

Anyone who doesn't understand the debits and credits of the journal they are entering is a monkey just processing data.

Because it is so simple mad things can happen.

For example

A loan

DR Cash CR Liabilities

A Sale

Dr Debtors CR Sales

So a monkey could accidentally book a loan as a sale. However if someone thought about it for 5 minutes then they would understand what was happening. Perhaps your friend is not in the right career?

Generally when people construct complex accounting structures, its because they don't understand what they are doing or are trying to hie something - SPV's for NAMA are a case in point.

[Rich OC]

Accounting is simple. Debits equal Credits. Anyone who tells you anything else is a spoofer.

Anyone who doesn't understand the debits and credits of the journal they are entering is a monkey just processing data.

Because it is so simple mad things can happen.

For example

A loan

DR Cash CR Liabilities

A Sale

Dr Debtors CR Sales

So a monkey could accidentally book a loan as a sale. However if someone thought about it for 5 minutes then they would understand what was happening. Perhaps your friend is not in the right career?

Generally when people construct complex accounting structures, its because they don't understand what they are doing or are trying to hie something - SPV's for NAMA are a case in point.

The problem is that some people don't book loans as sales accidentally, or, more seriously, book expenses as assets (Enron was the classic example).

Most of the complications that arise come about because of attempts to structure things in a particular way for tax purposes.

[badboy2]

Us Management Accountants rock. We're fukking legendary.

+1

[Disabled student]

+1 What's REALLY missing from the professional colleges in my opinion is a course on ethics and their application. Accountants understand the rudiments of putting figures in boxes - very few understand the implications the figures they manipulate have on people's lives.

You got that right. None of these college/universities don't want to know it as the Governance code of conduct is a joke here also in addition to that, weaker laws in respect of white collar crime as compared to the States.

For instance Ffynes, Fingelton, S Fitzpatrick et al all of these cases are walking free just a slap on the wrists.

[badboy2]

The problem is that some people don't book loans as sales accidentally, or, more seriously, book expenses as assets (Enron was the classic example).

Most of the complications that arise come about because of attempts to structure things in a particular way for tax purposes.

Absolutely. All these "errors" were not accidental.

However that proves there is a problem with oversight and auditing, not a lack of understanding of basics leading to accidental losses.

The moron who decided to put NAMA in an SPV has a great understanding of the basics.