AI can automate routine tasks like invoices and data entry. Repetitive jobs can be handed off to AI systems. But accountants are still critical—they help design, train, and oversee the AI.
🧠 Analogy: Think of AI as a robotic assistant in a kitchen:
It can chop vegetables (routine tasks),
But you still need the chef (accountant) to create the recipe and taste the final product.
📊 Data Analytics
It's about spotting important trends by digging through data. Includes data visualization, which helps people see patterns clearly (e.g. graphs, dashboards). This helps businesses make better decisions using clean, organized data.
🧠 Analogy: Like using Google Maps traffic data to find the fastest route—data analytics helps you find the smartest path for the business.
⚖️ Ethics in Accounting
Accounting info must be trustworthy and useful. Ethics ensures accountants make decisions based on right vs. wrong, not just what's convenient.
🧠 Analogy: Accountants are like referees—they must enforce rules fairly, not favor one side.
Steps to making ethical decisions:
Identify the ethical concern
Analyze options and consequences
Make the most ethical choice
🕵️♀️ Fraud Triangle
Fraud doesn't happen randomly—three factors come into play:
Opportunity – The person sees a way to do it without getting caught.
Pressure – They feel pushed to do it (e.g., unpaid bills, debt).
Rationalization – They convince themselves it’s “not that bad.”
🧠 Analogy: It's like a locked treasure chest:
Opportunity is the key,
Pressure is the motivation to open it,
Rationalization is saying, "Well, the gold isn’t being used anyway."
📚 GAAP – Generally Accepted Accounting Principles
These are the rules of the game for accounting in the U.S. Accounting info must meet 2 key criteria:
Relevance – It must affect decisions.
🧠 Like GPS updates that show traffic jams—you’ll change your route only if the info is timely and helpful.
Faithful Representation – It must accurately reflect what happened in the business.
🧠 Like a photograph that shows exactly what the event looked like, not a cartoon version.
📐 Formulas at the Bottom
1. Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
🧠 Analogy: Think of it like average speed—if you drove 60 mph halfway and 40 mph the rest, your average isn’t 60 or 40, it’s the midpoint. Here we’re averaging the “size” of the company across time.
2. Return on Assets (ROA) = Net Income / Average Total Assets
🧠 Analogy: This measures how efficiently a company uses its stuff (assets) to make money—like asking, “For every $1 of equipment, how many cents of profit do we earn?”