Accountants are trained to think of themselves as value-neutral. Their job is not to say what should be done, but merely to convey faithfully what has been done. Yet there are some common positions that many accountants hold regardless of which company they work for, regardless of the specific laws and customs, regardless of whether permitted to give advice or not.
I found these four beliefs in each accountant I asked about them. They seem to be basic assumptions, learned in the first few days of training and never discarded.
A bunch of accounting beliefs, all of which I find to be wrong:
- Being an accountant is boring.
- All accountants are boring.
- Accounting is boring.
- Accounting is tedious.
- Accounting doesn’t require creativity.
- Accounting is just about numbers, not knowledge.
- The goal of accounting is to ensure that everyone pays their fair share of taxes and that companies report profits that reflect the value they create for investors.
What do accountants think about jobs and money?
- Accountants believe that the best way to look at a business is as a part of the economy, and that to understand a business, you need to understand the economy.
- Accountants believe that management will care about information if it is presented in a way that makes sense and shows what matters.
- Accountants believe that if they do their job right, management will listen, and will value their work.
- Accountants believe they contribute to society by making sure people have correct information on which to base decisions.
- Accountants believe that anyone who wants to criticize accounting standards should propose better ones.
- Accountants believe they can’t really be called experts unless they know both what the rules are and how they work in practice.
- Accountants believe there is more than one true way to do things, and that different approaches can each be valid.
Accountants like numbers and like order. To accountants, history is a series of accounting periods, and the past is what has happened up to now. The present is accounted for; the future is subject to prediction and planning. The past and present fill up the ledger; the future calls for judgment and decision.
Accountants like systems: classifications and rules and procedures. This is not just because they have to deal with complex organizations, but also because they have to deal with complex people who are resisting being classified, ruled, or planned.
Accountants value competence as a moral virtue, as well as a practical necessity. By competence they don’t mean doing something without error, which would be impossible anyway; they mean doing it right . Accountants have a deep respect for standards of performance that can be objectively measured .
Accountants prefer precision to accuracy . Precision means getting the same result every time you do a calculation. Accuracy means getting the right result every time you do a calculation. Accountants understand that their calculations will never be perfectly accurate, but they insist on precision anyway—preferably achieved by using simple rules that always give the same answer no matter who is doing the work.”
What do accountants do? Their clients want to know how much money they have and, more important, whether they are going to run out. Accountants answer that question by comparing financial positions with norms: other companies in the same industry or, for individuals, their own past performance.
After the comparison comes the advice: “Don’t spend too much,” or “Invest in this,” or “Lend your brother-in-law $50,000.” Accountants provide reassurance.
The CPA exam is not designed to test your knowledge of accounting. It is designed to test whether you are able to read the mind of the credit committee that will decide whether to hire you.
The single most important thing is that you understand that. The most important question on your exam is not whether you know how to calculate the depreciation on a fleet of trucks. The most important question is whether you can figure out which parts of the depreciation calculation are important to the credit committee, and why.
What does it mean for something to be important? It means that if this thing is wrong, they will think badly of you, even if everything else you do is right.
When accountants describe someone as “aggressive,” they are using a technical term. They mean that when this person thinks there might be an improvement in net income, he or she will risk his or her career trying to make it happen, even if there is no evidence at all that the improvement will show up. An aggressive accountant will go to great lengths in order to make sure he is never criticized for producing a conservative estimate.
A conservative accountant has exactly the opposite fear. She wants to make sure she never gets blamed for missing an opportunity for improvement, even if that means making things up.