Tutor’s perspective – Interview

“Accounting is sometimes fun…” Interview with László Szívós about his course, Managerial Accounting

Professor Szívós, could you tell us a few words about the course? This is really an intro to accounting. We’re going to cover all the basic accounting concepts, discuss the various financial statements like income statement, balance sheet, cash flow statement etc. Understanding how such statements are compiled makes one able to see what the various figures that show up in these statements tell us about the company.

Is it then not intended only for future financial officers and accountants? Definitely not. The ability to understand these statements is crucial for all decision-makers. Suppose one of your buyers applies for a commercial loan and you have to decide how much to offer and what payment deadline to set. Or you are in the process of sourcing a new supplier and you want to make sure that it won’t lag behind with the deliveries because of some financial trouble. If you want to make such decisions, you have to be able to read their financial statements. Or if you want an example on a personal level, imagine that you’re an engineer working at the company’s research lab, your bonus is tied to the profitability margin or some other financial indicator, and you’re considering hiring new workforce or purchasing new equipment, then you may want to know how this decision will be incorporated into your bonus. And decisions are one thing. The other is that if you don’t understand accounting concepts, you’ll have difficulties communicating with the financial department. You tell them that you have to make certain purchases and then you are dumbfounded if you are asked whether it’s going to be OPEX (operating expenditure) or CAPEX (cap i tal expenditure).

So, you’re saying that a certain level of understanding of accounting is needed everywhere in the for-profit sphere. Yes. The picture that accounting matters only for those who like sitting in the backroom and doing Excel tables is false. In fact, accounting courses offered by professional training schools for non-accounting professionals always fill up, because people who merely wanted to pass their accounting exam as students realize in real life that they need that sort of knowledge. And talking about false stereotypes, it is not true either that the production of a statement is a kind of blind algorithmic process. One also needs sound professional judgment, like when you work for an airline and need to set up a provision to compensations for lost baggage or expenses in relation to frequent flyer cards. No textbook will tell you how to do that.

László Szívós is an assistant professor at the Department of Finance and Accounting. Mem ber of ACCA (Association of Chartered Certified Accountants), with a REFA international controlling certificate. Within the framework of ACCA he has been preparing auditors for financial accounting and performance management examinations in English in several countries in Europe. He has actively participated in the development of corporate controlling systems and management information systems as a consultant.

You make it seem like accounting is sometimes fun. Certainly. If you ask me, you may live without understanding accounting, but it is not worth it.