Accounting: A Very Short Introduction

Very Short Introductions #383

by Christopher Nobes

If you read the 'business pages' of a newspaper or if you listen to the financial news on television or radio, you will often hear terms such as 'liability', 'balance sheet' or 'earnings'. These terms turn up in non-financial contexts as well: 'he was more of a liability than an asset'. If you invest in shares, manage your family's personal finances, or sit on a committee of the property company which owns your apartment, you will receive financial statements. If you are a manager in a company, a hospital or a school, you will see accounting information often.

This Very Short Introduction provides a guide to understanding and using accounting information. Christopher Nobes explains the main areas of accounting work, from bookkeeping and financial reporting to auditing and management accounting. Terms like 'debits', 'pre-tax income' and 'goodwill' are simplified and explained, making accounting a more approachable, understandable topic.

About the Series:
Oxford's Very Short Introductions series offers concise and original introductions to a wide range of subjects--from Islam to Sociology, Politics to Classics, Literary Theory to History, and Archaeology to the Bible. Not simply a textbook of definitions, each volume in this series provides trenchant and provocative--yet always balanced and complete--discussions of the central issues in a given discipline or field. Every Very Short Introduction gives a readable evolution of the subject in question, demonstrating how the subject has developed and how it has influenced society. Eventually, the series will encompass every major academic discipline, offering all students an accessible and abundant reference library. Whatever the area of study that one deems important or appealing, whatever the topic that fascinates the general reader, the Very Short Introductions series has a handy and affordable guide that will likely prove indispensable.

Genres: Economics, Business, Accounting, Nonfiction, Finance, Reference

137 pages, Paperback

First published May 1, 2014

Reviews

[Lord_Humungus · Rating 4 out of 5]

This book is correct and would have earned three stars. I give it the fourth because the first chapters contain the first explanation about double-entry bookeeping I've come across that I actually understood. And when you understand the gist of it, it feels glorious.

That was my objective and the book fulfills that promise in a really fantastic, very enjoyable fashion: the autor puts you in the role of an italian merchant of the XIII century that has to manage a very simple firm. Then he gradually complicates things. I finally understood what a "credit" and a "debit" are; the double-entry concept; and the different parts of a balance sheet. All that, coupled with a very easy page on Investopedia about how to build a system with Excel (really simple: put each account in a column; each transaction in a line; debits with a positive sign and credits with a negative; all lines have to sum cero) has permitted me to have a family accounting system, very useful for some of my everyday transactions.
The rest of the book I found less interesting: it deals with the different jobs an accountant faces: audits, management consulting, financial advice, etc. It will not permit you to deeply analyze the accounts of a firm you want to invest on. Only to get some ideas about how firms make decisions, how they budget, etc.
It has a bibliography, a glossary, and an index.

[M. · Rating 4 out of 5]

It did a great job summarizing accountibg history, logic, flaws, and uses.

For an accountant like me, it was a good refresher of how it all started, for others, non accountants, it will make them appreciate our work more.

Note: this book was published before the new definitions for assets and liabilities, and before IFRS 16-Leases. So some information on their regard is no longer true

[Eugeniu · Rating 4 out of 5]

Finally got debit vs credit. Enjoyed the historical intro.

[D.K. Powell · Rating 3 out of 5]

I have often wondered what the difference between accounting and book-keeping is. As a 'sole trader' both as teacher and, in latter years, as writer I tread the thin line between just needing to keep accurate accounts for the taxman and needing an accountant to do the job for me.

In the past, I've always assumed that the common wisdom that 'an accountant should save you more money that it costs to employ him' was simply because he/she would know more about the law of taxation and be better able to do the math. What then, is the role of a book-keeper? You can spend years (and a lot of money) doing either book-keeping or accountancy courses so it seems both ought to require a great deal knowledge of maths and law, surely?

Christopher Nobes book gives the answer to this in one simple way: accountancy is fiction.

I am possibly overstating the issue here but I'll stand by it in the sense that Nobes lays clear the nature of the murky waters of the accountancy world. The book-keeper, it seems, just has the job of putting down the ins and outs of a business and making sure everything is properly receipted and documented. The accountant, by contrast, makes decisions about the nature of these things; is something a profit? A commodity? An expense? An investment? The larger the company, the more complex and 'fudgey' the decisions will be. Then comes the aspect of budget control and assessments to predict the future. Here the skill of the accountant can make or break a company as their records and evaluations dictate how department budgets will be spent and how a company is thought to be progressing. There are often multiple ways the same figures can be interpreted and used.

Nobes is quite open about the subjective nature of all this - as he is about the question mark of who is watching those paid to do the watching. As the biggest companies go to 'the big four' and accountants in these firms can spend their entire careers working full-time for a client company doing their accountants, it is inevitable that loyalties are formed, conflict of interests occur and, perhaps, market crashes take place...?

My criticism in all this is that Nobes goes into quite technical detail quite fast and leaves one a little bewildered at times and, frankly, a bit bored. I'm not sure if there is a better way of writing this kind of stuff (I'm not an accountant after all, but maybe that's the point) but for an 'Introduction' one might assume that the material covered will be more clearly explained and perhaps a little more entertainingly too. After all, it's not meant to be a book warding people away from foolish notions of careers in accountancy! It's meant to inform, challenge and perhaps even encourage - or at least I would think so.

For me, I have my answers now: I have no interest in accountancy. Book-keeping will be useful and it sticks with hard facts of numbers; I can cope with that. That's my route and I am happy that Christopher Nobes gave me that, at least.

[Ololol · Rating 5 out of 5]

Great little book for an introduction to accounting. Read this to aid with a uni exam and the book gives really clear definitions and examples. First time I have been able to really understand accounting.

[Steven Doran · Rating 3 out of 5]

Pleased to report that this was elegant & informative.
Cool that auditing got its break in the Industrial North.

[Peter · Rating 3 out of 5]

The British Professor of Accounting published Accounting: A Very Short Introduction in 2014. Nobbes writes he “is a qualified accountant, a professor of accounting, and a former co-writer of accounting standards” (Nobbes 154). The book has a section on illustrations. The book has a glossary and an index. The book has section entitled “further reading” (Nobbes 161-162). The first chapter is an introduction to the field of accounting. The second chapter is on the history of accounting. The third chapter is on “the fundamental of financial accounting” (Nobbes 49-69). The fourth chapter is on the financial reports that were written for publicly traded companies. The fifth chapter is on different standards of accounting methods and standardization. Chapter 6 is on “regulations of financial reporting” (Nobbes 103). This chapter also covers an introduction to auditing. The last two chapter covers an introduction to management accounting. Management accounting is accounting for “the managers of the firm” (Nobbes 123). It may be worth noting the book was published before Great Britain left the European Union. I do not know if this event has affecting accounting practices in Great Britian. I read the book on my Kindle. Nobbes’ short introduction to accounting is a well-done introduction to the field of accounting.

[Callum Soukup-Croy · Rating 4 out of 5]

A good introduction to the topic that covers the most relevant bases as well as offering a brief history of the profession. Accountancy is an ever-changing environment and a couple of the concepts and standards mentioned have since been replaced but that does not impact the overall points that a reader would take away. As an accountant myself, I would recommend this to anyone who wants a brief account (no pun intended) of what we actually do.

[Sasha Boersma · Rating 5 out of 5]

Very short, overly simplified accounting 101 book. It's a small pocket-sized book. Great little reference for new business professionals to keep on hand.

[Mills College Library]

657 N744 2014

[Jonathan Latshaw · Rating 4 out of 5]

I’m a big fan of these, “A Very Short Introduction” books. I find them fascinating. A good introduction to the world of accounting.

[Alex · Rating 4 out of 5]

Knepig men intressant