How many languages are spoken by your accounting staff? Perhaps some will recall studying Spanish or French during their high school and college days. Those of us who studied Latin recall that it is a dead language and no longer used to converse verbally. (Pig-Latin does not count.) Last year one of our interns was studying Chinese Mandarin at Wofford College. Some of our staff in the past have been bi-lingual in English and Spanish. And very few members of SCACPA may know that I was a Vietnamese linguist in the US Air Force many, many years ago. I can still count to ten in four languages, but that is about it for me. My Spanish is very limited, but somehow gets expanded. I can say “thank you” in Chinese, Japanese, Spanish, Portuguese, Vietnamese, Korean, Italian and Romanian. And I can say “taxi” in almost any language. So I would conclude that I am multi-linguistically gifted (with noticeable limitations).
I would propose that all CPAs are multi-linguistically gifted. That is because I believe that “accounting” is the language of business. As accountants prepare financial statements, we communicate the current health (balance sheet) and history (profit and loss with statement of cash flows) of the business entity. We are the messengers for the banks, investors and government reporting agencies. Our responsibility is to prepare correct financial statements in order for the users to gain an understanding of the business entity. The language is somewhat limited (assets, liabilities, equity, revenue and expenses), but can be very specific (Bond Premium Discounts, Deferred Tax Charges, etc.). There are two basic dialects (debits and credits). Of course there is often confusion that can quickly be more complicated once we try to explain book accounting (GAAP) and why it does not agree with tax accounting. EBITA is a foreign word known and understood mostly by accountants. And we are saved by the footnotes that can further communicate and add clarity (with a few exceptions…Deferred Taxes).
I would also propose that our work papers are tools of communication. Many years ago I was taught that any work paper should stand on its own; explain the purpose, source and conclusion of the topic it is addressing. Well prepared work papers are easy to read and appreciated by the reviewer and/or auditor. Appropriate work papers will contain distinct tick marks and cross references that clearly communicate to the reader. Without work papers, most statements are like Latin, a dead language.
So to all my fellow accountants, I congratulate you for your multi-linguistic skills. May your debits always equal your credits. May your prior period adjustments be little to nil. May your statement of changes in stockholders’ equity always tie to the prior year financial statements. And may you quickly complete all those statements of changes in cash flow without pulling your hair out.
Blogger: Charles ‘Eddie’ Brown, CPA