President Obama brushed off criticism over his administration's inaccurate reporting on job creation Wednesday, telling Fox News the accounting is an "inexact science" and that any errors are a "side issue" when compared with the goal of turning the economy around. He said job growth is his No.1 responsibility.Well as an accountant, I can confirm that it is true: accounting is an inexact science. Unfortunately for Ken Lay, the court didn't accept that as a valid excuse for the massive Enron fraud. Nevertheless, it's true. So when it turns out that government run health care is not "deficit neutral" but actually breaks the bank, well, refer to the accounting truism noted above.
There are some interesting implications of this theorem of accounting inexactitude. Here are some practical applications of this rule: "Accounting is an Inexact Science."
1. The IRS audits you and finds out you substantially understated your taxable income. What is your excuse? Refer to the theorem.
2. You retire as trustee of your company's pension fund and take a healthy percentage of the fund with you to the Bahamas. When the cops show up at your door, yep, just recite the accounting theorem of inexactitude.
3. You are a mechanic and you tell a customer that his car repair will cost $500. When it's finished, you give him a bill for $2,500. When the customer screams, you gently remind him that "accounting in an inexact science."
Yes, as an accountant, I can tell you that accounting is an inexact science. But not THAT inexact, for pete's sake.
Read it all here.