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MarketingAccounting may beis the outwardoperating narrativesystem of amodern company,enterprise: butit itsconverts strategycomplex iseconomic ultimatelyactivity governedinto bynumbers anthat inwardguide discipline: how leaders measure performancedecisions, allocateshape scarce resourcesincentives, communicateand—when trade-offs,done and protectwell—earn trust in what getsis reported. This definitive collection brings together investors, regulators, academics, executives, and writers whoseto remarks onilluminate accounting andas measurementa illuminatebusiness thelanguage, philosophya behinddiscipline sustainableof marketing—wheremeasurement creativity is constrained by numbers,and valuation, and integrity,a andgovernance mechanism where credibility with customers, employees,transparency and capitalintegrity marketsdetermine isthe earnedcredibility throughof transparent,markets high-qualityand reportinginstitutions.
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== TheAccounting as the language of accountable growthbusiness ==
| image = johann-wolfgang-von-goethe.jpg ▼ | text = “Double-entry bookkeeping… is one of the finest inventions of the human mind, and every prudent master of a house should introduce it into his economy.”<ref>{{cite web |title=Second Luca Pacioli Lecture |url=https://www.ecb.europa.eu/press/key/date/2007/html/sp071114.en.html |website=European Central Bank |publisher=European Central Bank |date=2007 |access-date=2025-12-30}}</ref> ▼ | author = Johann Wolfgang von Goethe (through a character in *Wilhelm Meister’s Theatrical Calling*) {{Johann Wolfgang von Goethe/attribution}} ▼
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| text = “Obviously,People youare haveaccustomed to know accounting. It’s the languagethinking of practicalaccounting businessas life.dry Itand wasboring, a verynecessary usefulevil thingused to deliverprimarily to civilization…prepare double-entryfinancial bookkeepingreports wasand asurvive hellaudits, ofbut anthat invention…is althoughbecause accounting is thesomething startingthat place,has it’sbecome onlytaken a crudefor approximationgranted.”<ref>{{cite webbook |titlelast=A Lesson on Elementary, Worldly WisdomRies |urlfirst=https://ritholtz.com/2014/09/charles-mungers-speech-at-usc-business-school-1994/Eric |websitetitle=The BigStartup PictureWay |publisher=Ritholtz Wealth Management |date=1994Crown |access-date=2025-12-302017}}</ref>
| author = CharlieEric MungerRies, vice chairman of Berkshire HathawayAuthor {{CharlieEric MungerRies/attribution}}
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| text = It sounds extraordinary, but it’s a fact that balance sheets can make fascinating reading. <ref>{{cite web |title=10 Funny and Inspirational Quotes for Accountants |url=https://www.btpartners.com/technology-blogs/10-funny-and-inspirational-quotes-for-accountants |website=BT Partners |date=2020-05-05 |access-date=2025-12-26}}</ref>
| text = People are accustomed to thinking of accounting as dry and boring, a necessary evil used primarily to prepare financial reports and survive audits, but that is because accounting is something that has become taken for granted.<ref>{{cite book |last=Ries |first=Eric |title=The Startup Way |publisher=Crown |date=2017}}</ref>
| author = EricMary RiesArcher, AuthorBritish scientist {{EricMary RiesArcher/attribution}}
| image = elvis-presley.jpg ▼ | text = I have no use for bodyguards, but I have very specific use for two highly trained certified public accountants. <ref>{{cite web |title=Elvis, Taxes, and the CPA Dilemma: Why Your Bodyguard Should Be an Accountant |url=https://www.jsmorlu.com/ceo-corner/elvis-tax-cpa/ |author=John S. Morlu II |date=2025-12-01 |website=JS Morlu Blog |access-date=2025-12-26}}</ref> ▼ | author = Elvis Presley, American singer and actor {{Elvis Presley/attribution}} ▼ }}
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| image = warren-buffett.jpg ▼| {{Quote
| text = “It’s wild that we are not teaching all of our middle schoolers and high schoolers how to manage household finance, understanding things like credit and interest and risk… You need to go in recognizing the house always wins on average… We must learn to speak the language of business.”<ref>{{cite web |title=Financial Literacy Starts Young |url=https://www.gsb.stanford.edu/insights/financial-literacy-starts-young |website=Stanford Graduate School of Business |publisher=Stanford University |date=2021 |access-date=2025-12-30}}</ref>
| text = You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself. <ref>{{cite book |last=Buffett |first=Mary |title=Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage |publisher=Scribner |date=2008}}</ref> ▼ | author = WarrenEd BuffettdeHaan, CEOaccounting ofprofessor Berkshireat Stanford Graduate School of HathawayBusiness {{WarrenEd BuffettdeHaan/attribution}}
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| image = charlie-munger.jpg ▼| {{Quote
| text = “It’s“Obviously, wildyou thathave weto areknow notaccounting. teachingIt’s allthe language of ourpractical middlebusiness schoolerslife. andIt highwas schoolersa howvery touseful managething householdto finance,deliver understandingto thingscivilization… likedouble-entry creditbookkeeping andwas interesta andhell risk…of Youan need toinvention… goalthough inaccounting recognizingis the housestarting alwaysplace, winsit’s ononly average…a Wecrude must learn to speak the language of businessapproximation.”<ref>{{cite web |title=FinancialA LiteracyLesson Startson Elementary, Worldly YoungWisdom |url=https://wwwritholtz.gsb.stanford.educom/2014/insights09/financialcharles-literacymungers-startsspeech-youngat-usc-business-school-1994/ |website=StanfordThe GraduateBig School of BusinessPicture |publisher=StanfordRitholtz Wealth UniversityManagement |date=20211994 |access-date=2025-12-30}}</ref>
| author = EdCharlie deHaanMunger, accountingvice professorchairman atof Stanford Graduate School ofBerkshire BusinessHathaway {{EdCharlie deHaanMunger/attribution}}
| image = luca-pacioli.jpg ▼ | text = “The books cannot be closed unless the debits equal the credits; when the debit and credit have been separately summed, the two sums shall be equal.”<ref>{{cite book |author=Luca Pacioli |title=Paciolo on Accounting |translator=W. W. Cooper and Yuji Ijiri |publisher=Richard D. Irwin |date=1963 |pages=175 |oclc=221005624}}</ref>
| author = Luca Pacioli, Renaissance mathematician and “father of accounting” {{Luca Pacioli/attribution}}
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== Measurement, incentives, and valuation discipline ==
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| text = Companies run by engineers don’t make money, but companies run by accountants don’t make anything at all. <ref>{{cite web |title=Accounts Payable Quotes: Advice, Sayings, and Accounting Knowledge from the Experts |url=https://www.netsuite.com/portal/resource/articles/accounting/accounts-payable-quotes.shtml |website=NetSuite |publisher=Oracle Corp. |date=2020-11-20 |author=Bridget McCrea |access-date=2025-12-26}}</ref>
| author = Peter Krueger {{Peter Krueger/attribution}}
▲| image = warren-buffett.jpg
▲ | text = You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself. <ref>{{cite book |last=Buffett |first=Mary |title=Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage |publisher=Scribner |date=2008}}</ref>
| author = CharlieWarren MungerBuffett, vice chairmanCEO of Berkshire Hathaway {{ CharlieWarren MungerBuffett/attribution}} ▼ }}
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| image = warren-buffett.jpg
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| text = “InTo insurance,be as elsewheresuccessful, theyou reactionshould ofconcentrate weakon managementsthe toworld weakof operationscompanies, isnot often weakarcane accounting mathematics.” <ref>{{cite web |title=BerkshireThe Hathawayworld’s Inc.best 1982investors Annualoffer Shareholdera Lettersecret on how to outperform the market in the long-run |url=https://www.berkshirehathawayvalens-research.com/lettersinvestor-essentials-daily/upld-upland-software-worlds-best-investors-offer-secret-outperform-market-long-run/1982.html |website=BerkshireHathaway.comValens |publisher=Berkshire HathawayResearch |date=19832021-10-26 |access-date=2025-12-3026}}</ref>
| author = Warren Buffett, investor and CEO of Berkshire Hathaway {{Warren Buffett/attribution}}
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== VolatilityRisk, riskvolatility, and managerial judgment ==
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| text = I thought I could start over, you see. But now I know you can never start over. Not really. You think you have control, but you are like a fly in somebody else's web. Sometimes I think that's why I like accounting. All day, you are only dealing with numbers. You add them, multiply them, and if you are careful, you will always have a solution. There's a sequence there. An order. With numbers, you can have control. <ref>{{cite book |last=Obama |first=Barack |title=Dreams from My Father: A Story of Race and Inheritance |publisher=Times Books |date=1995}}</ref> ▼ | text = To be successful, you should concentrate on the world of companies, not arcane accounting mathematics. <ref>{{cite web |title=The world’s best investors offer a secret on how to outperform the market in the long-run |url=https://www.valens-research.com/investor-essentials-daily/upld-upland-software-worlds-best-investors-offer-secret-outperform-market-long-run/ |website=Valens Research |date=2021-10-26 |access-date=2025-12-26}}</ref>
| author = WarrenBarack BuffettObama, CEO44th President of Berkshirethe United HathawayStates {{WarrenBarack BuffettObama/attribution}}
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| text = Managers thinking about accounting issues should never forget one of Abraham Lincoln's favorite riddles: How many legs does a dog have, if you call a tail a leg? The answer: Four, because calling a tail a leg doesn't make it a leg. <ref>{{cite web |title=Warren Buffett Says This 1 Simple Habit Is the Key to Success. Here Are 19 Times He Did It in Public |url=https://www.inc.com/bill-murphy-jr/warren-buffett-says-this-1-simple-habit-is-key-to-success-here-are-19-times-he-did-it-in-public.html |author=Bill Murphy Jr. |date=2020-02-14 |website=Inc. |access-date=2025-12-26}}</ref>
▲ | text = I thought I could start over, you see. But now I know you can never start over. Not really. You think you have control, but you are like a fly in somebody else's web. Sometimes I think that's why I like accounting. All day, you are only dealing with numbers. You add them, multiply them, and if you are careful, you will always have a solution. There's a sequence there. An order. With numbers, you can have control. <ref>{{cite book |last=Obama |first=Barack |title=Dreams from My Father: A Story of Race and Inheritance |publisher=Times Books |date=1995}}</ref>
| author = BarackWarren ObamaBuffett, 44th PresidentCEO of the UnitedBerkshire StatesHathaway {{BarackWarren ObamaBuffett/attribution}}
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== Integrity , transparency, and public trust == ▼
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| text = Managers“We thinkingmust aboutnot accountinglet issuespressures shouldto neversatisfy forgetWall oneStreet ofexpectations Abrahamor Lincoln'sunrealistic favoritedemands riddles:to Howdeliver manya legscertain doesquarterly aearnings dogresult have,lead ifus youto callcompromise athe tailquality aof leg?our Theaccounting answer:and Four,financial becausereporting. callingWe amust tailadhere ato legthe doesn'thighest makequality it a legstandards. ”<ref>{{cite web |title=WarrenA BuffettPartnership Says This 1 Simple Habit Isfor the KeyPublic to Success. Here Are 19 Times He Did It in PublicTrust |url=https://www.incsec.comgov/bill-murphy-jrnews/speech/warren1998/1998-buffett-says-this-1-simple-habit-is-key-to-success-here-are-19-times-he-did-it-in-public.html89 |authorwebsite=BillU.S. MurphySecurities Jr.and Exchange Commission |publisher=SEC |date=20201998-0209-14 |website=Inc.28 |access-date=2025-12-2630}}</ref>
| author = WarrenArthur BuffettLevitt, CEOchairman of Berkshirethe HathawayU.S. Securities and Exchange Commission {{WarrenArthur BuffettLevitt/attribution}}
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▲== Integrity and public trust ==
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| text = “We“History, mustcommon notsense letand pressuresexperience totell satisfyus Wallthat Streetat expectationsthe orheart unrealisticof demandsour tomarkets deliverare afaith certainand quarterlytrust earningsin resultthe leadhonesty usof tocorporate compromisefinancial therecords. qualityOne ofwho ourweakens accountingthat andtrust financialwithout reporting.good Wecause mustdoes adhereno toone the highest qualitya standardsservice.”<ref>{{cite web |title=A Partnership for the Public Trust |url=https://www.sec.gov/news/speech/1998/1998-89 |website=U.S. Securities and Exchange Commission |publisher=SEC |date=1998-09-28 |access-date=2025-12-30}}</ref>
| author = ArthurByron LevittWoodside, chairmanformer ofSEC thecommissioner U.S.(as Securitiesquoted andby ExchangeArthur CommissionLevitt) {{ArthurByron LevittWoodside/attribution}}
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| text = “When any cunning man keeps two books, one with honest entries and the other with false, he hides the truth, and you cannot rely on it; therefore be careful to keep your books with truth and integrity.”<ref>{{cite book |author=Luca Pacioli |title=Paciolo on Accounting |translator=W. W. Cooper and Yuji Ijiri |publisher=Richard D. Irwin |date=1963 |pages=12 |oclc=221005624}}</ref>
| author = Luca Pacioli, Renaissance mathematician and “father of accounting” {{Luca Pacioli/attribution}}
| text = “History, common sense and experience tell us that at the heart of our markets are faith and trust in the honesty of corporate financial records. One who weakens that trust without good cause does no one a service.”<ref>{{cite web |title=A Partnership for the Public Trust |url=https://www.sec.gov/news/speech/1998/1998-89 |website=U.S. Securities and Exchange Commission |publisher=SEC |date=1998-09-28 |access-date=2025-12-30}}</ref>
| author = Byron Woodside, former SEC commissioner (as quoted by Arthur Levitt) {{Byron Woodside/attribution}}
▲| image = charlie-munger.jpg
| text = “No CEO examining books today understands what the hell is going on… Accounting has steadily degraded over the past 30 years, and accounting firms have sold out time after time.”<ref>{{cite web |title=Chatting With Charlie: The Mark Twain of Finance |url=https://law.stanford.edu/stanford-lawyer/articles/chatting-with-charlie-the-mark-twain-of-finance/ |website=Stanford Lawyer |publisher=Stanford Law School |date=2003 |access-date=2025-12-30}}</ref>
▲ | author = Charlie Munger, vice chairman of Berkshire Hathaway {{Charlie Munger/attribution}}
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| text = “When accounting practices are defined more by gimmickry than by their representation of underlying business conditions, public trust is jeopardized.”<ref>{{cite web |title=A Partnership for the Public Trust |url=https://www.sec.gov/news/speech/1998/1998-89 |website=U.S. Securities and Exchange Commission |publisher=SEC |date=1998-09-28 |access-date=2025-12-30}}</ref>
| author = Arthur Levitt, chairman of the U.S. Securities and Exchange Commission {{Arthur Levitt/attribution}}
▲| image = johann-wolfgang-von-goethe.jpg
▲ | text = “Double-entry bookkeeping… is one of the finest inventions of the human mind, and every prudent master of a house should introduce it into his economy.”<ref>{{cite web |title=Second Luca Pacioli Lecture |url=https://www.ecb.europa.eu/press/key/date/2007/html/sp071114.en.html |website=European Central Bank |publisher=European Central Bank |date=2007 |access-date=2025-12-30}}</ref>
▲ | author = Johann Wolfgang von Goethe (through a character in *Wilhelm Meister’s Theatrical Calling*) {{Johann Wolfgang von Goethe/attribution}}
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▲| image = warrencharles- buffettlyell.jpg
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| text = “WeNever mustcall guardan theaccountant integritya ofcredit theto process.his Inprofession; doinga sogood weaccountant will strengthen investor confidence, achieveis a higherdebit qualityto ofhis financialprofession. reporting and serve the best interests of our Nation.”<ref>{{cite web |title=AGet Partnershipto forKnow theConductor. We Think You’ll PublicLike (and Trust) It. |url=https://wwwharmonate.sec.govcom/news/speech/1998/1998get-to-know-conductor-we-89think-youll-like-and-trust-it/ |websitedate=U.S. Securities and Exchange Commission2021-04-23 |publisherwebsite=SECHarmonate |date=1998-09-28Blog |access-date=2025-12-3026}}</ref>
| author = ArthurCharles LevittLyell, chairmanScottish of the U.S. Securities and Exchange Commissiongeologist {{ArthurCharles LevittLyell/attribution}}
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▲| image = luca-pacioli.jpg
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| text = “The“We booksmust cannotguard bethe closedintegrity unlessof the debitsprocess. equalIn thedoing credits;so whenwe thewill debitstrengthen andinvestor creditconfidence, haveachieve beena separatelyhigher summed,quality of financial reporting and serve the twobest sumsinterests shallof beour equalNation.”<ref>{{cite bookweb |authortitle=LucaA PacioliPartnership |title=Paciolofor onthe AccountingPublic Trust |translatorurl=Whttps://www.sec.gov/news/speech/1998/1998-89 W|website=U.S. CooperSecurities and YujiExchange IjiriCommission |publisher=Richard D. IrwinSEC |date=19631998-09-28 |pages=175 |oclcaccess-date=2210056242025-12-30}}</ref>
| author = LucaArthur PacioliLevitt, Renaissancechairman mathematicianof andthe “fatherU.S. ofSecurities and Exchange accounting”Commission {{LucaArthur PacioliLevitt/attribution}}
}}
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| image = charleswarren-lyellbuffett.jpg
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| text = Never“In callinsurance, anas accountantelsewhere, athe creditreaction toof hisweak profession;managements ato goodweak accountantoperations is aoften debitweak to his professionaccounting. ”<ref>{{cite web |title=GetBerkshire to KnowHathaway ConductorInc. We1982 ThinkAnnual You’llShareholder Like (and Trust) It.Letter |url=https://harmonatewww.berkshirehathaway.com/get-to-know-conductor-we-think-youll-like-and-trust-itletters/1982.html |datewebsite=2021-04-23BerkshireHathaway.com |websitepublisher=HarmonateBerkshire BlogHathaway |date=1983 |access-date=2025-12-2630}}</ref>
| author = CharlesWarren LyellBuffett, Scottishinvestor geologistand CEO of Berkshire Hathaway {{CharlesWarren LyellBuffett/attribution}}
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| image = charlie-munger.jpg
| {{Quote
| text = I“No wouldCEO argueexamining thatbooks atoday majorityunderstands ofwhat the horrorshell weis facegoing wouldon… notAccounting havehas happenedsteadily ifdegraded over the accountingpast profession30 developedyears, and enforcedaccounting betterfirms accounting.have sold out time after time.”<ref>{{cite newsweb |title=MungerChatting onWith theCharlie: 'Asininities'The ofMark Today'sTwain Regulators and Businessof LeadersFinance |url=https://wwwlaw.theatlanticstanford.comedu/business/archive/2009stanford-lawyer/05articles/mungerchatting-onwith-charlie-the-asininitiesmark-twain-of-todays-regulators-and-business-leaders/17894finance/ |workwebsite=TheStanford AtlanticLawyer |datepublisher=2009-05-20Stanford Law School |authordate=J.J. Gould2003 |access-date=2025-12-2630}}</ref>
| author = Charlie Munger, vice chairman of Berkshire Hathaway {{Charlie Munger/attribution}}
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== Culture, craft, and the human side ==
▲| image = elvis-presley.jpg
▲ | text = I have no use for bodyguards, but I have very specific use for two highly trained certified public accountants. <ref>{{cite web |title=Elvis, Taxes, and the CPA Dilemma: Why Your Bodyguard Should Be an Accountant |url=https://www.jsmorlu.com/ceo-corner/elvis-tax-cpa/ |author=John S. Morlu II |date=2025-12-01 |website=JS Morlu Blog |access-date=2025-12-26}}</ref>
▲ | author = Elvis Presley, American singer and actor {{Elvis Presley/attribution}}
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| text = ItI soundswould extraordinary,argue but it’sthat a factmajority thatof balancethe sheetshorrors canwe makeface fascinatingwould readingnot have happened if the accounting profession developed and enforced better accounting. <ref>{{cite webnews |title=10Munger Funnyon andthe Inspirational'Asininities' Quotesof forToday's AccountantsRegulators and Business Leaders |url=https://www.btpartnerstheatlantic.com/technology-blogsbusiness/10archive/2009/05/munger-funnyon-andthe-inspirationalasininities-quotesof-fortodays-accountantsregulators-and-business-leaders/17894/ |websitework=BTThe PartnersAtlantic |date=20202009-05-0520 |author=J.J. Gould |access-date=2025-12-26}}</ref>
| author = MaryCharlie ArcherMunger, Britishvice scientistchairman of Berkshire Hathaway {{MaryCharlie ArcherMunger/attribution}}
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