There were times not long ago when in order to "work in Accounting" you had to have some formal knowledge of, at the very least, bookkeeping principles. When one dealt with manual cash receipts and disbursements journals, subsidiary and general ledgers, payroll transaction recording, at minimum she or he had to understand the principles of double-bookkeeping.
The technological advancements and computerization changed all that. Now, anyone who knows some Excel, quick enough to grasp menu-driven applications and doesn't suck at basic math is good enough to work in Accounting.
Don't get me wrong, I am a technology freak. Some people who know me long enough say that Technology is my middle name. Moreover, we, accountants, were some of the early beneficiaries of the computer coding: the first business data analysis compiler was written in 1957. Truth be told handling all those books manually was getting out of control.
However, hiding all the double entries behind the computer's screen, allowed for the situation we currently have, especially in small business environment: people without any accounting and/or finance foundation are allowed to mechanically perform important functions.
Here is a true story shared with me by one of my correspondent. Let's call her Lisa. When she took a CFO position in a law firm that employed over 500 people, the composition of her "Accounting & Finance" department was as follows: AP Manager (no accounting degree, 20 years of strictly AP experience), PR Manager (BS in General Business, prior experience in HR & Benefits), Staff Accountant 1 (BA in Psychology who was a daughter of a partner's friend), Staff Accountant 2 (BA in Child Psychology who started as a part-time office clerk when she was in HS and just stayed on), Financial Analyst (BS in Business Administration with above average Excel).
Is it surprising that the firm had a turnover of Controllers and CFOs at the rate of 4 per year in the past few years? They had great ideas what the company's record-keeping, analytical and reporting functions should be, but no one to whom to delegate the actual implementation. Is it surprising that the company never had audited financial statements?
At the first meeting with the Staff Accountant 2 (let's call her Sam), Lisa was told that Sam was "an accounting genius." Sam said, that she was so good at it, she got everything in a split second. A week later Lisa has discovered that all Bank Accounts in the Asset section of GL had reversed entries: receipts as credits and disbursements as debits. In other words, it replicated the bank statements instead of reflecting the company's transactions.
You think this law firm's accounting staff is unique? Nope, it happens everywhere. Look at the people responsible for financial functions in this young and hip company Quirky. I am sure these four women are bright and wonderful, but none of them have neither accounting nor serious financial background.
If this problem has affected you as well, please, do not hesitate to email me and share.