We constantly read and hear about American students' low level of academic performance. They rank 23rd out of 57 nations participating in international testing. Researchers and public-policy makers have been trying to figure out the reasons for this abysmal show of intellectual power. The "education system" is usually blamed: different teaching methodologies, testing devices, and so on, and so forth.
In my opinion the problem has nothing to do with educational technicalities. It's has to do with obvious gradual degeneration of general public's intellectual abilities (blame it on the mobile devices' radiation, if you have to). Whatever the reason, fact remains: high-schoolers are doing worse and worse in all subjects.
The common sense should lead a logical person to a conclusion that the declining academic achievements translate into a reduction in college enrollments. If one cannot keep up in a secondary school, how can that person attempt to receive a quality post-secondary education, right? Wrong! Between 1989 and 1999 college enrollments increased only by 9%, but in the 10 years after that - by 38% (!!!), from 14.8 million to 20.4 million.
And, of course, it's not easy to get into Ivy League schools, which accept 10-20% of the applicants (well, my readers know my opinion about the quality of education there). Yet, more than 80% of colleges in this country accept every other applicant, and there are some with 100% acceptance rate. I mean, the colleges want money and they will lower their requirements to whatever levels in order to fill the seats in the lecture halls.
So, every year millions of young people who were not succeeding at the high school level enter post-secondary education system. Why do they do that instead of trying to start their own businesses, attempt creative pursuits, or go into honorable and well-paid blue collar trades, I have no clue, but it is what it is.
Now, those kids who had comparatively better grades, some artistic inclinations, and/or expect to utilize their parents connections in the future take pre-med, pre-law, finance, marketing, various arts and designs . Those who don't think, or don't need to think, about their survival head for liberal arts. So, who ends up taking accounting majors? Everyone else as long as they can count without using their fingers.
But accounting and taxation are not easy. To fully understand it one should possess propensity for conceptual thinking, analytical mind, ability to absorb high volumes of regulations, standards, codes. And I am just talking about basics. 30-35 years ago up to 50% of freshmen who signed up for accounting courses would drop out before the first midterm. Nowadays, they somehow struggle through and graduate. The best of them are snatched by the Big 4, the next tier by other large CPA firms and big-time corporations.
The rest end up in the small and midsize businesses and accounting firms. It's my plight to deal with them, exposing myself on daily basis to the devastating result of this natural selection process. In every company I observe the same thing: so much is wrong! The books of different corporations are co-mingled, revenues and costs recognized incorrectly, inventory is not valued properly, etc., etc. It's difficult for an entrepreneurial company to survive in the first place; the accounting incompetence drags them down even further.
Books are kept intuitively, as if rules and standards did not exist. The most shocking thing is that auditors look at all that and accept it. The main concerns appear to be that the bank balances are reconciled to the statements and the control accounts match with supporting schedules. The PRINCIPAL CORRECTNESS is irrelevant.
I give them the benefit of the doubt and let them explain themselves.
Me: Why doesn't your inventory in storage match with the warehouse's records?
Them: Because they don't account for the three lots that already been loaded on the trucks.
Me: Neither should you. That's inventory in-transit, not in storage.
Them (in complete seriousness): Oh, that's what "in-transit" mean.
And I have sad conversations like that practically every day. Pity the well-versed professional!
My book "CFO Techniques" can help these people to improve. Too bad my publishers are not doing match to deliver it into the potential readers' hands.
