A Counting School - Hardcore Chartered Accountancy

since 1494

At the risk of sounding over-dramatic

Whenever an auditor is finding their work a bit boring, they need to remember: it helps keep modern civilziation from collapsing.

Financial markets are, despite being a vehicle for creating a secular-materialistic world, simply impossible to maintain without huge reservoirs of faith.

Of course, it's not a traditional type of religious faith - no water-into-wine miracles here - but it very much relies on people believing in certain things.

For example, money is based on belief. Belief that other people will agree with you that it's worth something valuable.

Since governments moved off the gold standards, money became detached from any real object - it's just a coin or a piece of paper.

And, at the risk of grossly over-simplifying things - its value stems from the strength of the economy from which it is issued.

Controlled supply of cash from a healthy developed nation with a balanced budget? Strong, "hard" currency.

Contrast that with the opposite - countries where the government is prone to print up more bills whenever it feels like it - a loose supply - and sketchy companies.

Disaster.

I'll sit around a bit longer some time soon and make an explicit link between hard currencies and auditors, but it's there. Only in a country with a strong regime of accountability - achieved through independent verification of financial statements which reduces the risk of shysters and con artists stealing investors' cash on a regular basis - can you hope to enjoy a strong economy with a hard currency and all the attendant luxuries.

Anyone who has gone through the academic treadmill of an undergraduate degree in Commerce should be able to piece together the reasons I've left simply implied in the last paragraph. For everyone else, I'll be happy to explain the logic that fills up the holes in the above statements.

But it's late and I really need to get some sleep right now.
Posted: May 29 2007, 09:56 PM by Krupo | with no comments
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