Did you know that accounting is more of an art than a science? I have a bachelor of science degree (and a master's degree) in accounting, but after 9 years in public accounting I know that it truly ought to be a bachelor of arts degree.
There is the too-oft told joke:
CEO to the CFO in the CFO's office: "What is 2 plus 2?"
The CFO gets up from his desk and closes the door before replying "What do you want 2 plus 2 to be?"
I can't begin to tally the number of times clients have wanted the numbers on their financial statements to say one thing (i.e. very profitable) and the numbers on the tax return to say the exact opposite (i.e. "Leave me alone I don't have any money to pay taxes").
My response, always made tactfully, is that you can't have your cake and eat it too. That is another blog for another day.
BEAUTY IS IN THE EYE OF THE BEHOLDER
Just the other day one of my coworkers came to me looking for help. He was working on the financial statements for a government entity. One of their main functions is to provide housing assistance for low-income households. They write checks to landlords and get reimbursed from the federal government for what they spent and an administrative fee. The financial statements had on them as their main expense "Welfare" and then X million dollars. This coworker came to me and said the client didn't like the word "Welfare" and wanted us to do something about it.
So accountant that I am, my first response was simply..."isn't that what it is?" Consternation appeared on my coworker's face. OK, let me go grab my thesaurus and find a synonym for "welfare"! NOT REALLY, but what am I supposed to do. Thinking quickly I said let's change the expense to "Housing assistance". Based on the fact that I haven't heard anything from the client or coworker, I assume this more palatable and politically-correct description of what they did was acceptable to the client.
A ROSE BY ANY OTHER NAME...
Another client decided to take some of their company's (ME ME ME, Inc.) money and invest it in a new company (I M RISKY, Corp.) that will provide products and services to their company (ME ME ME, Inc.)--if this new company (I M RISKY, Corp.) doesn't crash and burn. The best part of all of this was that the business owners were getting a percentage of ownership in I M RISKY, Corp. for what money "they" invested. They didn't invest their money, but rather ME ME ME, Inc.'s money!
So now they want me to call the money spent by ME ME ME, Inc. a "deposit". Their contention, of course, is that ME ME ME, Inc. will some day get products and services from I M RISKY, Corp. at no charge until the "deposit" is used up. Then I M RISKY, Corp. will start charging ME ME ME, Inc. for its products and services. Have I lost you yet?
What do you call a deposit? A deposit is something you get back if you do or don't do certain things. For example, if you don't trash the apartment you're renting you get your deposit back at the end of the lease. In Maine you get 5 cents back for returning plastic bottles. Somehow they charged you a nickel extra and you only get it back when you return the empty bottle. That was some Seinfeld episode with Kramer and Newman.
A deposit is not ME ME ME, Inc.'s money invested on behalf of the company's owners in I M RISKY, Corp.!!! Why does this have to be a "deposit" on ME ME ME, Inc.'s financial statements? Well because ME ME ME, Inc. had a bad year and anything to paint a better picture to the bank is worth exploring.
Well I had better get back to work...just got a call from a client who wants to go on a cruise and call it a business expense. Time to break out my "art supplies"--spreadsheets and mechanical pencils--and begin to create a masterpiece from the simple canvas of an IRS tax form!
Rembrandt, Monet, Van Gogh...you've got nothing on me! Maybe that's why accountants have to sign people's tax returns. Why not? Don't most artists sign their work!
Maybe I will join the Screen Actors Guild or even worse the Democratic Party! Aren't those requirements for artists like myself?
3 comments:
I love the last paragraph about YOU being an ARTIST because you SIGN the tax return. Deep, Paul, Deep.
I had a route when I was a kid, too. I hated that collection business, and the dogs that chased me two blocks! Don't know which was worse.
I tossed a weekly greensheet to every house within 5 blocks and was told to collect eventhough they had no subscriptions. Ha! Most just told me to shove off, or something like it. One cold windy day I tossed the whole lot into the dumpster behind the super. Then went home and back to bed.
What's the point of having cake if you can't eat it?
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