Accounting is storytelling
Last week, I took a break from my podcasts and Audible and jumped into a couple of Q3 earning calls this week. Here are my non-objective observations:
Men, men, men ...
Most of these calls were men reporting results (CFOs, CEOs), men asking the questions (analysts, investors), and men answering the questions. No shade, just observations. The men were informed and straight to the point. I also listened to Block’s call led by their female executives. They were informed and straight to the point too and they took questions from other women and customers.
I like earning calls even if I am usually distracted and forget most of what I hear.
They felt familiar, a language that I understood, or that I had unconsciously assimilated. The words were music to my ears, lyrics that I could have written, and words like EBITDA, stock compensation, net income, and gross revenue were floating into my air and enchanting me. I geeked out, smiled, and felt validated. Somehow, I connected with all of the accountants inside of these organizations and felt all their emotions, their annoyances, and their struggles to get these words out, to provide the most accurate or appropriate reporting.
Accounting is information.
Accountants speak a special language, accounting, and rule the world and the market with it. Understanding the language of accounting is understanding the language of business. Accountants are the best source of information, they create information, collect it, collate it, translate it and manage it. They are storytellers, financial storytellers. They create, from the budget to the actuals, from journal entries to reconciliations. Accountants are undercover ninjas, under-covered as usually avoid the spotlights and usually are considered boring and unassuming. Maybe, it is because they are also tax torturers, and as such shaded by the unsexy, unavoidable burden of taxes. Many times, when I tell someone that I am an accountant, they undeniably ask me about taxes... Most accountants do not do taxes (I do not even prepare my tax return, but I do review it and audit it to the penny). Accounting is the information highway, it is the full circle, starting with bookkeeping, reporting (with US GAAP and IFRS), verification with audits, and consequential with taxes. Accountants are everywhere.
The stories told through these earning calls were fully curated, through investor relations and public relations.
Carefully crafted, behind the scenes, in that long list of accounts are the severance accounts, the allowances, the loss provisions, and the reserves. Some obscure estimates are backed up by models, projections, data, ... and other stories buried in the cemeteries of management intents. And like general history, financial history is written by the winners, and the winners always have a healthy cash balance on the balance sheets (or so I heard many times, this week).
I am going to put a reminder in my calendar to listen to the next quarter earning calls for some of the companies that are in the news for layoffs this week (the public ones). It is “magical” how the outcomes always benefit from human losses (literally). Humans were hired because the numbers were good and humans were laid off because the numbers are not good. Are the storytellers and financial historians responsible? If yes, what is their responsibility? Is accounting a double-sided knife?
