Franciscan University Thread

[Slappo]

What do accountants do other than taxes?

I'll list out some of the fields for the State of Alaska for governmental accounting. Businesses will have similar processes (although maybe not as segregated depending on the size), but they operate differently seeing as they are for profit and their budgets are not statutorily set.

• Accounts Payable handle the payment of bills, invoices, contracts, ensure that financial resources are properly obligated (if you have a $10 million dollar contract but only receive invoices monthly, you'll want the entire $10m obligated in your accounting system to ensure you have set aside the budgetary authority to pay those bills when they are sent in). This is pretty straight forward.
• Accounts Receivable offices handle incoming revenue, grant payments, payments from vendors doing business with the State (licensing fees, training fees, DMV fees, fines, penalties, etc. depends on what area you work in).
• Grants Administration - There's two sides to grants, applying for and recieving them, and then ensuring that you are meeting federal compliance requirements. Applying for and recieving grants isn't really an accounting duty, but ensuring compliance with federal regulations is the accounting side (earmarking funds, ensuring subgrantees are providing required information and submitting reimbursement for allowable costs)
• Statewide Finance office - this office prepares financial statements at fiscal year end (about a 2-3 month process), provides guidance to the rest of the State on accounting practices, provides training for proper use of the accounting system and databases, 
• Auditing - for governmental accounting auditor's audit the financial statements, perform an annual audit for all federal grants and aid to ensure compliance with federal regulations, complete performance audits for boards (board of chiropractors, police standards board, etc) to ensure the boards are fulfilling a public need, and complete special audits as requested by the legislature. In Public Sector accounting (a.k.a, Wal-Mart, Best Buy, Apple, etc) they would audit the annual financial statements and review the quarterly financial statements to ensure they are accurately representing the financial position of the business. Investor's rely on financial statements, so the statements have to be audited by an independent party that basically gives a thumbs up or thumbs down to them being reasonably accurate and reliable.
• Capital Asset Accounting - (in the business world this would be Property, Plant, and Equipment + Intangible Assets) this would be keeping track of all of the long lived assets that require being depreciated or amortized over the anticipated useful life of the asset. Buying a building isn't an expense for a single operating year, so only the cost of the building that is associated with that operating year should be expensed in the operating year. There's also depletion for equipment and land for mining of natural resources depending on the business your in. Intangibles would include patents, trademarks, copyrights, franchises etc.

 

Upper level accountants working for a business are going to be doing things like providing opinions on the financial ability for a company to expand, delve into new markets, etc.So accountants can also serve in an advisory capacity.

 

Then there's tax accounting which involves more than just preparing taxes, but also making business decisions on what can be done to decrease tax liability.

 

There's a lot more but I don't have time to get into it all. To quickly list a few more area's, there's also things like stocks/bonds/mutual funds, but that's more the field of finance than the field of accounting, although stocks/bonds/mutual funds all have to be accounted for in financial statements, so there's some crossover. CPA's are valuable assets in a civil courtroom for litigation. They are also valuable for negotiating contracts as they can prepare the cost benefit analysis type stuff.

[Slappo]

I'm saying that you need higher cognitive math ability to complete an engineering degree vs accounting.  If you think you can "memorize" the math involved, well, you can't.  That's where those extra 4-5 years of math come in.
 

No you memorize the principles behind the math equations...

 

Yes to be good at engineering you need to have a much higher level of math then accounting. I never argued that. What I am saying is that accounting is more than "simple math". Engineers can do calculus no problem, but they have no clue what a balance sheet is... I know because I'm on a non-profit board with an engineer and I'm the treasurer...

 

There's a reason that all four parts of the CPA exam have a failure rate of more than 50%. It's because accounting takes a lot more than just some simple math and "hard work".

Edited February 8, 2014 by Slappo

[Deus te Amat]

Now this is my type of conversation.

 

 

What I think Notre Dame is trying to say is this lovely summarization I found on the internet:
 

 

The main difference between mathematics and accounting is the defined purpose in accounting. A mathematician will use a variety of formulas to try and determine how much fuel is required for a rocket to successfully land on the moon, while an accountant has very stringent equations that he uses to determine quantitative numbers for financial reports.

The best example to give would be the difference between a cowboy and a jockey. When a cowboy rides a horse, he has several goals to accomplish and several different ways to accomplish those goals. A jockey is only interested in running the horse through the race course and finishing first. They are both riding a horse, but they have very different approaches.

Accountants follow a standard set of rules and formulas to reach their end. No one said it wasn't hard -- there is a lot of work involved and much of it is difficult, but once you have a grasp on those rules and know how to apply them, you then know how to go from A to B for every scenario. 

Mathematics is a much more diverse and intricate field then most people think, especially if you have never taken a mathematics class beyond Calculus. If all that math consisted of was algebra, geometry, trig, and calculus, then I would say that FP and Slappo are right, math is essentially easy and accounting is math. To this, I say

 

 

But math is really the art of problem solving. It is taking the information you have, which is usually quite limited, and deriving every possible truth from it that you can. It is philosophy without words. It is constructing the universe from a few essential truths. And there is never just one right way to find the solution. It does not mean memorizing a few books of rules and scenarios, it is constantly growing, changing -- and the mathematician does not need to know all of the changes in order to solve the problem. From knowing the rules of the system, the mathematician can solve any problem within the system, without a structure to guide him. It is beautiful. It is mysterious. It is the hardest thing I've ever done in my life.

 

Math is amesome.

Edited February 8, 2014 by Deus_te_Amat

[Catherine Therese]

We all use math every day;
to predict weather, to tell time, to handle money.
Math is more than formulas or equations;
it's logic, it's rationality,
it's using your mind to solve the biggest mysteries we know.

[Slappo]

Accountants follow a standard set of rules and formulas to reach their end. No one said it wasn't hard -- there is a lot of work involved and much of it is difficult, but once you have a grasp on those rules and know how to apply them, you then know how to go from A to B for every scenario. 

Mathematics is a much more diverse and intricate field then most people think, especially if you have never taken a mathematics class beyond Calculus. If all that math consisted of was algebra, geometry, trig, and calculus, then I would say that FP and Slappo are right, math is essentially easy and accounting is math. To this, I say

 

The thing is NotreDame and I aren't comparing an accountant to a mathematician, but an accountant to an engineer. Both accountants and engineers use mathematics to varying degrees, engineers moreso than accountants, but both fields require more than just math, and NotreDame, from my prospective, was limiting accounting to mathematical equations used.

 

Also... that quote about accountants applying a set of principles and equations to prepare a set of financial statements is severely underplaying what is actually required. It isn't a black and white "this is what happened so X is what you do, that is what happened so Y is what you do." If it were that simple, then all you would need is software programmed to do everything for you (like turbotax... which is why tax accounting smells of elderberries). That software program doesn't testify in court about financial statement fraud at Enron though.

Edited February 8, 2014 by Slappo

[Deus te Amat]

The thing is NotreDame and I aren't comparing an accountant to a mathematician, but an accountant to an engineer. Both accountants and engineers use mathematics to varying degrees, engineers moreso than accountants, but both fields are more than mathematical equations. The equations to do things like apply the laws of physics to calculate the necessary strength of materials for a bridge to withstand X amount of weight have already been developed. An engineer has to apply those equations and take into account the differing variables for the particular bridge he wants to build.

 

Also... that quote about accountants applying a set of principles and equations to prepare a set of financial statements is severely underplaying what is actually required. It isn't a black and white "this is what happened so X is what you do, that is what happened so Y is what you do." If it were that simple, then all you would need is software programmed to do everything for you (like turbotax... which is why tax accounting smells of elderberries). That software program doesn't testify in court about financial statement fraud at Enron though.

 

In that case, I would say that you are hindered by the rules constraining your actions, where the engineer has more freedom for creativity of design. Different modes of difficulty entirely.

[Slappo]

In that case, I would say that you are hindered by the rules constraining your actions, where the engineer has more freedom for creativity of design. Different modes of difficulty entirely.

 

You really have to define difficulty there. Simply having more room for creativity doesn't make something, by nature, more difficult.

 

Also, engineering is a much broader field of study than accounting... medical engineering, mechanical, civic, software, .... the list goes on. Software engineers are limited by the capabilities of the hardware available to them and the current level of technology, other engineers are limited by the laws of physics, depending on what an engineer is doing he is limited to, for instance, the location he's allowed to place the bridge and the budget he is allowed to build it with.

 

If difficulty was based on level of freedom for creativity, then teaching would be the most difficult field, oh wait no art would because there is unlimited creativity, no wait... TEACHING art would because you have to teach unlimited creativity! Mind blown... haha

Edited February 8, 2014 by Slappo

[Deus te Amat]

You really have to define difficulty there. Simply having more room for creativity doesn't make something, by nature, more difficult.

 

Also, engineering is a much wider field of study than accounting... medical engineering, mechanical, civic, software, .... the list goes on. Software engineers are limited by the capabilities of the hardware available to them and the current level of technology, other engineers are limited by the laws of physics, depending on what an engineer is doing he is limited to, for instance, the location he's allowed to place the bridge and the budget he is allowed to build it with.

 

If difficulty was based on level of freedom for creativity, then teaching would be the most difficult field, oh wait no art would because there is unlimited creativity, no wait... TEACHING art would because you have to teach unlimited creativity! Mind blown... haha

 

I said different modes of difficulty. That neither implies that one is more difficult than the other, nor that you can compare their level of difficulty at all. It seems that the accountant's difficulty lies in figuring out how to accommodate the equations to fit a very specific set of rules and conditions -- there is a very specific reason why I did not pursue a career in accounting, and it has to do with the strict attention and adherence to detail that this entails. Excuse me while part of me dies a slow death. 

 

I am not an engineer. I do not want to be an engineer, and I do not know enough about engineering to further elucidate its inherent difficulties. But from everything you have said about accounting, I will say that it seems that accounting is more than "simple math and hard work", yes, but that the "more than" part does not seem to come from the difficulty of the mathematics, but rather the knowing of when and how to apply certain rules to the math.  

[Slappo]

Sorry I thought you were trying to say engineering is so much more difficult than accounting that the two can't be compared.

[Deus te Amat]

Sorry I thought you were trying to say engineering is so much more difficult than accounting that the two can't be compared.

 

I am not a fool.

 

Pure mathematics is obviously the most difficult of all.

[Slappo]

I am not a fool.

 

Pure mathematics is obviously the most difficult of all.

I thought I already proved that teaching art is the most difficult.

 

After all... mathematics is only one form of art.

[Deus te Amat]

Obviously teaching something is more difficult than learning it, because you have to have absorbed the material completely in order to be able to teach it properly.

 

Teaching aside, I would argue that engineering uses a higher form of mathematics than accounting, and that, in terms of just mathematics, the math engineers use is inherently more difficult. Would you agree?

Edited February 8, 2014 by Deus_te_Amat

[Slappo]

Just saw the edit - yes engineers use more complex mathematical equations and require much more mathematical education than accountants. To qualify for a CPA the highest level math course needed is Math 107.

Edited February 8, 2014 by Slappo

[Deus te Amat]

Just saw the edit - yes engineers use more complex mathematical equations and require much more mathematical education than accountants. To qualify for a CPA the highest level math course needed is Math 107.

 

 

Well then. I think we're all happy now. Time for bed!

[NotreDame]

this is dumb.