TaxPersonal TaxLeader – 4 Feb

Leader - 4 Feb

Spreading the word helps us all

Accountants do not devote a lot of time to educating others about the mysteries of accountancy, but perhaps they should. In the modern business world, ignorance of accounting principles is a scourge which enlightened professionals fight every day.

Getting managers to understand financial management is a vital first step. The salesman who says he can’t understand his monthly report is likely to be the weak link that undermines the whole company’s performance.

But we need to go beyond the daily necessities. Accountancy is too important to be confined to the office.

Widespread accounting ignorance is evidenced every day, especially in political debates. As regards the NHS, politicians and public seem to believe they can pay less tax and still spend more on health.

Or take the debate on rail privatisation. Our feature on page 22 explains how the valuation of Railtrack’s assets allowed the company to throw a public smokescreen over its runaway profits while claiming to be investing millions in the railway. Change the valuation method and the picture is transformed.

Of course, accountants know how these things work. But those who shape opinion appear not to. Time was when accountants, like other professionals, made their money from just such ignorance. The reverse is now true. Making sure as many people as possible understand accountancy’s principles can only enhance the value of the profession to business and society as a whole.

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