30+mba-第8章
按键盘上方向键 ← 或 → 可快速上下翻页，按键盘上的 Enter 键可回到本书目录页，按键盘上方向键 ↑ 可回到本页顶部！
————未阅读完？加入书签已便下次继续阅读！
all theoretically items of fixed assets； should be depreciated over their
working lives。 This is obviously a useless exercise and in practice these
items are wri。。en…off when they are bought。
Table 1。2 Example of a badly matched profit and loss account
Profit and loss account for January； year 20XX
￡
Sales ine for January 4；000
Less telephone bill （last quarter） 800
Profit before other expenses 3；200
22 The Thirty…Day MBA
Clearly； the level of ‘materiality’ is not the same for all businesses。 A
multinational might not keep meticulous records of every item of machinery
under ￡1；000。 For a small business this may represent all the machinery it
has。
Consistency
Even with the help of those concepts and conventions； there is a fair degree
of latitude in how you can record and interpret financial information。 You
should choose the methods that give the fairest picture of how the firm is
performing and stick with them。 It is very difficult to keep track of events
in a business that is always changing its accounting methods。 This does not
mean that you are stuck with one method forever。 Any change； however； is
an important step。
THE RULE MAKERS
The accounting professional bodies； with a li。。le prodding from governments；
are responsible for ensuring that accounting reports conform to
what are known as Generally Accepted Accounting Practices （GAAP）。 A
new entrant； International Accounting Standards； is challenging that term
as GAAP rules have been interpreted differently on different continents
and indeed largely ignored on others。
The rule book has to be adapted to acmodate changes in the way
business is done。 For example； international business across frontiers is now
the norm； so rules on handling currency and reporting taxable profits in
different countries have to be acmodated within a pany’s accounts
in a consistent manner。
Although an MBA isn’t usually expected to know all the rules； you
should be able to get up to date before any meetings where the subject is
likely to e up。 You can keep track of changes in pany reporting
rules on the Institute of Chartered Accountants’ website （icaew 》
Accounting and corporate reporting 》 UK GAAP）。
Protecting investors
When confidence in US businesses was rocked badly with a series of
high…profile financial frauds； Enron and World for example； the US
government introduced the Sarbanes–Oxley Act； known less monly
but be。。er understood as ‘The Public pany Accounting Reforms and
Investor Protection Act – 2002’。 The Act’s purpose is to close the loopholes
opened up by creative accountants； who are always devising ways to overstate
profits and understate liabilities； and so make it easier for shareholders
Accounting 23
to see how profitable a business really is。 The act doesn’t just apply to US
panies； any businesses with shares listed on a US stock market that
does business in the United States is swept into the net。 Check out
sarbanes…oxley for the low…down on that Act。
The UK version is The panies （Audit； Investigations and munity
Enterprise） Act。 You can read up on the UK rules at the Office of the
Public Sector Information （opsi。gov。uk 》 Legislation 》 UK 》 Acts 》
Public Acts 2004 》 panies （Audit； Investigations and munity
Enterprise） Act 2004）。
Auditors – the gatekeepers
All public panies； that is； those listed on a stock exchange； are required
to have an annual audit by a qualified accountant appointed by the directors
and approved of by the shareholders。 Any pany with outside
shareholders and indeed all but the smallest private panies are
required by law to be audited。 The auditors’ job is to examine the accounts；
ensure that they conform with the prevailing accounting rules and give an
opinion about the financial statements。 Though the auditors’ report may be
50 pages long； with a score or more footnotes； the findings are summarized
in a single sentence： ‘The financial statements give a true and fair view of
the state of affairs of the pany at （a certain date） and the financial statements
have been properly prepared in accordance with the panies Act
2006。’
The panies Act 2006； the longest Act ever introduced； has brought
in some tough rules on how auditors； among others； should report on
pany accounts。 MBAs； unless they are also accountants； don’t get
involved in doing audits。 But they are expected to know who’s who in the
auditing world。 Accountancy Age （accountancyage/resource/
top50） will keep you informed as to who’s who in the auditing world。
BOOKKEEPING – THE WAY TRANSACTIONS
ARE RECORDED
Until Luca Pacioli wrote what was in essence the world’s first accounting
book； over 500 years ago； accounting records were maintained in singleentry
format； one event merited one record。 This meant that errors could
be prevented only by a major duplication of effort； for example by having
different people making and counting up parallel records。 Pacioli； a
mathematician who worked for the Doge of Venice； came up with a system
of double…entry bookkeeping that required two entries for each transaction
and so provides built…in checks and balances to ensure accuracy。 Each
transaction requires an entry as a debit and as a credit。
24 The Thirty…Day MBA
To give an example； selling goods in a double…entry system might result
in two separate journal entries – a debit reducing the stock by ￡250 and a
corresponding credit of ￡250 of new cash in – a double entry （see Table 1。3）。
The debits in a double…entry system must always equal the credits。 If they
don’t； you know there is an error somewhere。 So； double entry allows you
to balance your books； which you can’t do with the single…entry method。
Pacioli’s genius lay in seeing that the ultimate balancing number in a
pany’s accounts was the profit or loss for the owners of that enterprise。
In fact he required at least two entries or as many as are required to balance
the books。 Let us take the above example to its logical conclusion。 On the
not unreasonable assumption that the business plans to make a profit from
selling goods； the figures will look rather different。 To keep the numbers
simple； let’s suppose the goods they sold cost them ￡125 （a 50 per cent
margin）； then the entries would be as follows。 Goods in stock go down by
￡125； while cash goes up by ￡250。 That net change of ￡125 is balanced by an
increase in profits of ￡125； so the assets and liabilities are kept in balance。
In this example； had the goods sold for less than was paid there would
have been a loss； which would have reduced the value of the owner’s stake
in the business by a corresponding amount。
This is all an MBA student needs to know about bookkeeping； the main
part of the knowledge they require is how to interpret the figures once
recorded。
CASH FLOW
There is a saying in business that profit is vanity and cash flow is sanity。
Both are necessary； but in the short term； and o。。en that is all that ma。。ers in
a business as it struggles to get a foothold in the shi。。ing sands of trading；
cash flow is life or death。 The rules on what constitutes cash are very simple
– it has to be just that； or negotiable securities designated as being as good
as cash。 Cash flow is looked at in two distinct and important ways： as a
projection of future expected cash flows； and as an analysis of where cash
came from and went to in an accounting period and the resultant increase
or decrease in cash available。
Table 1。3 An example of a double…entry ledger
General Journal of Andrew’s Bookshop
Date Description of entry Debit Credit
10 July Rent expense ￡250
Cash ￡250
Accounting 25
Cash…flow forecasts
The future is impossible to predict with great accuracy but it is possible to
anticipate likely outes and be prepared to deal with events by building
in a margin of safety。 The starting point for making a projection is to make
some assumptions about what you want to achieve and test those for
reasonableness。
Take the situation of High Note； a business being established to sell sheet
music； small instruments and CDs to schools
