Jugglingart.Org

Traditionally, accounting is the "enemy" of marketing people in some company. They always being brakes when marketing people work fast. Accounting people has always been a goalkeeper that reminds whether a sales target will be met or not. They also like to do a detailed analysis on the part where the achievement of a target even without going out the cause. These people also always keep an eye on cost accounting that have been defined and warn that cost-budget has been exceeded. Accounting people are always concerned about short-term bottom line. It's no good top line is reached without any profit.

But it all happened to the close company. When the company has become a public, the problem is different. Non-controlling shareholder of a company or minority shareholders only get quarterly financial reports. The share price was up and down, depending on the reports of which were released. Of course there are other factors such as management plans in the future, industry outlook, and situations that affect the macro.

That's where the financial statements to be one of the key indicators of the financial health of a company. When dealing with "outsiders", accounting people requested together with top management to provide optimism to the public as much as possible. Then went out “creative accounting” terms, as a team to create various ways to make a company look beautiful. Long-term sales contracts entered tricked that recorded revenue for the current year.

Depreciation on a fixed asset is made longer so that the cost burden smaller on current year. So is the amortization of the intangible asset. Not to mention asset revaluation or reassessment of existing assets in order to balance sheet look good. Creative marketing has always expected to make more value added to the customers. Creative accounting on the contrary, is very dangerous for capital market. Why?

Therefore, the minority shareholders are not always in advantages situation. There is asymmetric information between accounting management for management decision-making with public accounting that are too creative.

Enron and other public companies in the United States has become proof that they were playing with the quality of the company's financial health. It's the same with marketing people who do "play" with the quality of the product. Promising a good quality product with creative communication, but never to deliver it.

More dangerous to a company in the financial services industry that has very creative in developing their products. American financial crisis of 2008 prove that many financial products that are derivative from other products sold at high risk. Look sophisticated outside, but vulnerable inside.

This is exactly what happened in the United States, namely the sub-prime receivables property but packaged and sold again highly reputable company with a high price, too. That is lying to customers creatively. Marketing people are often accused of disinformation is not responsible. Marketing people are also accused of "push" an outrageous so customers "run" with embarrassment because of being chased. Marketing people are also often considered excessive promotion to get people to buy products that are not needed.

But it turns out the accounting and finance more "heavy". They played not on small things like marketing people. The impact they can make results in damage to the macro economy. Why? Due to impact to customers, investors, and even the larger institutions. Satire in the movie "Too Big To Fail" is a dirty disclosure practices of financial institutions in America that justifies any means. Finally, the U.S. government was forced to help a variety of companies that have already enlarged but hollow inside. Because if left unchecked, can lead to distrust macro that can destroy the national economy. That's why the accounting necessarily makes good corporate governance. This is done so that companies are always reminded to not do creative ways, but full of deceit.