Posted by: Brian Clarke | November 17, 2010

The nuts and bolts of the job

I have come across an interesting (and disturbing) post by a New Zealand Chartered Accountant. In it, he points up the lack of fundamental accounting knowledge among those accountants in some larger organisations, who really ought to know more about their subject.

When I was training, I was taught that a basic test of an accountant was to ask “In a particular situation, where exactly would you put the debit, and where do you put the credit?” Plenty don’t really know; they let the software do the work, and end up not knowing if the software has made a mistake, or if they have.

I had a personal illustration of this in my final year of training. I was doing some work at an organisation, which had an auditor in from what is now one of the Big 4. A qualified Chartered Accountant with Manager status, and he had to ask my advice about the bookkeeping…

The ledgers of a business hold the basic facts about that business. If you don’t know and understand what is in them, you don’t have a proper basis for opinions. And if you don’t have a proper basis for opinions, why are you offering any?

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