Search This Blog

Saturday, August 19, 2006

THE GAME OF ACCOUNTING

Accounting is not amongst my favorite MBA topics, however lately I have developed a kind of fascination for the topic. Not because the degree of my liking for the topic has changed but because I come across numerous occasions where I can see the “magic” of accounting. Be it Financial Accounting or Managerial Accounting, the fun always exists. You want to change the cost of your product…change the theory of accounting…. and voila….your product suddenly looks so cheaper without any change in production technology. You were running into losses with your product… apply Activity Based Costing in your accounting book and see the change which will bring back your good old days. You can play with depreciation and save taxes only to realize that the net income has fallen while taking care of the depreciation. These are just a few examples of this enigmatic subject.
Modern day Accounting is much more than just maintaining the accounts. It is much more of a decision making tool which can change the complete look of the financial situation of an organization. And the interesting fact is that sometimes the games of accounting cross the borderlines of ethical business… and this is when the biggest frauds of corporate world are scripted.

No comments: